The Wisconsin Manufacturers & Commerce (WMC) released its 2003 CEO Survey this week and it reveals a telling statement on health care.  The survey, which has been conducted annually since 1997, queries Wisconsin CEOs on a number of business issues and indicators, including health care costs.

 The survey confirms that health insurance premiums continue to increase, with 69.7% of respondents seeing an 11- 20% increase this year and 18.2% reporting increases of 21-30%.

 However, almost none of the respondents see government playing a role in addressing this problem.  When asked specifically what state government could do to help their business, only 3.4% indicated take steps to make health care more affordable.  And when asked what state government could do to improve the business climate, only 3.2% identified affordable health care as an issue for government involvement.

 “The survey found that while costs are rising, Wisconsin employers do not see the heavy hand of government as an answer,” said WMC spokesman Jim Pugh.  “This underscores the business community’s belief in the health care marketplace and strategies that will make that marketplace work better.” When asked how they will deal with health care costs (a multiple answer question), 78.8% of CEOs said they would increase employee contributions, with 36.4% indicating they would decrease benefits. 

 “The WMC survey confirms that employers in this state, who pay the vast majority of health insurance premiums, are not looking for big government solutions,” said WHA Sr. Vice President Eric Borgerding.  “Clearly, the increases we are seeing in health insurance premiums will require us all to step back and take an honest look at how we deliver, but almost more importantly, how we consume health care services in the marketplace.  That is where we will find real solutions and WHA will continue working with our partners in the business community to make that happen.”

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In a week that provided more good news /bad news than legislative conclusions, the Senate Finance Committee began markup of Senators’ Grassley (R- IA) and Baucus (D-MT) Medicare Modernization / Prescription Drug legislation. With a letter of support from President Bush for meaningful reform and inclusion of rural hospital provisions that were dropped from the tax cut bill passed in May, committee co-chairs presented a Medicare bill that includes provisions to permanently equalize the standardized rate, physician payment improvements, critical access hospital payment improvements and additional fixes for Medicaid DSH. With a 16-5 vote for passage, the bill moves to the Senate floor next week.

 “While the Senate provided good news with their comprehensive approach to Medicare payment reform and prescription drug benefit, the bad news in the House sets up what looks to be a contentious and possibly divisive battle for any type of Medicare reform for this session,” said WHA President Steve Brenton. “ WHA will continue to work with Wisconsin’s House members to solidify their historic support for the notion that any new cuts on top of already inadequate Medicare payments are unacceptable.”

Both houses hope to complete their work on Medicare before the July 4 break.  Should that occur, a conference committee will be appointed to assemble the final bill.

Speaking at the June 11 Public Policy Council meeting, Department of Administration Secretary Marc Marotta described working with the Wisconsin Hospital Association on the issue of privatizing hospital data.   “I think working with you on a number of issues, on privatizing the data collection process for example, is an example of how we can learn a lot from WHA about what makes a process more economical and more efficient,” Marotta said.  “By and large, this (data privatization) is something that will work out very well,” Marotta added. 

 Marotta said tough choices were made as the Governor developed his budget.    “We support addressing the health care workforce shortage.  The graduate medical education and rural supplement cuts were very tough; we tried to basically avoid a larger cut in reimbursement rates.  Those were the choices before us.  We will protect Wisconsin’s priorities in this budget.”

 When asked why he took the job as secretary of the Department of Administration in what are arguably some of the most difficult budget times in recent memory, he smiles and recalls his days as a college basketball player at Marquette University. 

“Working on this budget is a lot like playing basketball…sometimes people boo you,” he said.  But the important part is that he kept playing, even when the odds were against him.  That is not unlike the economic climate that Wisconsin is facing as it battles a budget deficit nearing $3.2 billion.

 How did the state budget end up in crisis?  Marotta gave three reasons:

1.Poor fiscal management in the state.  “Decisions were irresponsible,” Marotta said.

2. Bad trends.  The medical assistance budget has grown 37% since 2000, and there is significant pressure on that budget.  “We wanted to make sure that we provide medical assistance for the most needy and that we don’t     cut eligibility.  We didn’t want to slash and burn the program’s budget,” Marotta said.

3.Sluggish economy.  “A bad economy exposes fiscal irresponsibility,” Marotta said.

 “The first meeting we had in the transition office, we vowed that we weren’t going to raise taxes.  We are already heavily burdened, it was not just a political promise, we believed in it.  We can’t increase the tax burden,” said Marotta.  “Wisconsin will go from number 3-4 in the country for taxes to falling out of the top ten just by holding the line as other states raise taxes to cover their budget deficits. We said, let’s do it once and do it right.  We don’t want to go back in the Fall, we want to do it right the first time.” 

 On the Governor’s budget proposal to use $200 million from the Patient Compensation Fund (PCF) to help fund Medical Assistance, Marotta said they felt with a balance of $600 million in the PCF, a portion of it could be used to safely plug gaps in MA.  ”We never thought there was any risk that there would be a problem with that fund, in fact, the state had a guarantee,” according to Marotta. 

 The Joint Finance Committee removed the $200 million from the PCF and used  general purpose revenue (GPR) in its place. However, there could be a substantial hole in the MA budget—$130 million to $200 million—even after the budget is signed into law.  The amount of the shortfall depends in large part on how much, if any, additional federal funding will come from pending MA waivers.  According to Marotta, if there is a hole, some providers “will have to make sacrifices in this budget or in the next round.”  At the same time, Marotta commended WHA for its responsible approach to the state’s budget dilemma. 

 Glen Grady and Paul Spaude, both members of the Public Policy Council, asked Marotta to be mindful of the balance between compliance with rules and regulations and what is appropriate, during a time of low reimbursement rates.

 “There has to be a regulatory shift in point-of-view as surveyors divorce themselves from the value proposition.  They don’t take into consideration the economics of the institution and industry,” Spaude said.  “The role of government is to look at the value proposition.”  

 In response, Marotta encouraged WHA and their member hospitals to bring these kinds of issues to the attention of the Doyle Administration as they work to make government more efficient.  “As we did with the health information initiative, you can help identify a number of regulatory areas that are duplicative or redundant, we would like to discuss those opportunities with you. “

 WHA President Steve Brenton told Marotta that in his visits with WHA members in all parts of the state, the #1 concern is the workforce shortage, and it will continue to be a chronic challenge.

 “These are careers, not just jobs.  My sense is that the technical college system has really stepped up to the plate to try to open new programs to meet the demand that is out there,” Brenton commented.

 Marotta said the Doyle administration is very supportive of the technical college system and that Governor Doyle’s budget included $15 million in funding for the WTCS, much of which is targeted at health occupation training.  Despite the difficult budget situation, Joint Finance Committee was able to preserve this important funding.   
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Significantly, WHA finished in the top tier of hospital associations in the nation in a variety of categories, including:  Understanding the Needs of its Members, Responsiveness to Member Issues and Priorities, and Effectiveness in Assisting Members with those Issues and Priorities.  And WHA’s overall performance score of 96% (Excellent/Good) ranks sixth in the nation and represents a 15% improvement from the 1996 survey.

 As a trade association with a revenue stream largely driven by member dues and programming success or failure determined by member participation and leadership, survey results represent an excellent report card.  WHA’s overall value rating of 92% (Excellent/Good) ranks fifth in the nation and demonstrates incredible improvement since 1996.  And members view their personal participation in Association activities as rewarding, useful and necessary work at a high level…93%…again, a top five ranking!

The 2003 member survey will be used as a primary resource document for the WHA board planning session this summer.  Results will be used to validate current WHA issue priorities and applicable programming and identify areas of member expectations where new and/or refocused programming will help maintain these top scores in the future.

Next week’s column will identify several of those “new opportunities.”

CMS Issues Final Rule for Medicare Outlier Payments

The Centers for Medicare and Medicaid Services (CMS) has published the final rule for Medicare outliers.

There have been some significant changes to modify the outlier payment methodology to address what CMS believes has been a “gaming” of the outlier system. This has led to larger than expected outlier payments over the last several years. The final rule requires the use of more recent cost-to-charge ratios (CCRs), which are used to calculate per case costs for purposes of determining whether a case qualifies for outlier payments. The rule also requires a new “reconciliation” process for certain hospitals identified as having disproportionately high growth in charges and outlier payments. Finally, the rule eliminates the use of statewide CCRs for hospitals that have extremely low CCRs. Statewide averages have been viewed as one of the “gaming” tools by hospitals seeking to increase their outlier payments.

There are several changes to the outlier payment methodology. For copies of the rule as well as a summary, go to the Finance and Data section of the WHA Web site at: http://www.wha.org/financeAndData/ and click on the inpatient PPS area.

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WHA has received several questions regarding the national safety goal to implement a process to mark the surgical site and involve the patient in the marking process. Most questions are related to whether this process should mark the surgical site or mark the non-surgical site in procedures with a right/left distinction. According to the Joint Commission on Accreditation of Healthcare Organizations, “The Goal specifies marking the intended site of the procedure. Marking only the non-operative site is unacceptable. Several cases of wrong-patient surgery have occurred in organizations that have a policy for marking only the non-operative site. Many experts advise that marking the non-operative site should not be done even in addition to marking the intended site.”

Creating a consistent process from institution to institution will reduce the likelihood of error by physicians and staff that work in more than one institution, or change their place of practice over time.

If you have any questions or comments regarding this safety goal, contact Dana Richardson at 608-274-1820 or drichardson@wha.org.

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The deadline for submitting WHA and ACHE annual award nominations is July 11, and it’s right around the corner. Nominations are now being accepted for WHA’s annual Distinguished Service Award and Trustee Award, as well as for the ACHE Young Healthcare Executive Award. These important awards recognize those who display leadership, dedication and professionalism to their community or their association.

Now is your opportunity to nominate someone in your region, in your hospital or on your Board of Directors who deserves the honor of being nominated for one of these prestigious awards:

ü       Distinguished Service Award is presented to a senior health care executive who has made an exemplary commitment to WHA and the community he/she serves.

ü       Trustee Award honors a trustee of a WHA member organization who has made an exemplary commitment to his/her community and to the organization on whose board he/she serves.

ü      ACHE Young Healthcare Executive Award is presented to a member of the American College of Healthcare Executives under the age of 40 who has shown exceptional professional development. 

Details about the nomination process and criteria for nomination can be found in the annual awards brochure on the WHA Web site at www.wha.org.  For more information, contact WHA’s Executive office at 608-274-1820.  

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The Centers for Medicare & Medicaid Services (CMS) announced June 6, 2003 that it intends to refine and expand coverage of implantable cardioverter defibrillators (ICDs) for Medicare beneficiaries.

“By expanding our coverage policy we are making an important technology available for more Medicare patients who would benefit from it,” said CMS Administrator Tom Scully. “Like all CMS coverage determinations, this is based on a thorough review of the available scientific and clinical evidence.”

An ICD is implanted in a patient’s chest to monitor heart rhythm and deliver an electrical shock when a life-threatening ventricular arrhythmia is detected. It already is covered for a variety of indications.

CMS received a request to expand these indications to include patients with a prior heart attack and an ejection fraction of less than 30 percent without requiring evidence of arrhythmias.

Guidant Corporation and Medtronic Incorporated, manufacturers of these devices, submitted requests to CMS to expand Medicare coverage of ICDs based on the results of the Multicenter Automatic Defibrillator Implantation Trial II (MADIT II). Some of the MADIT II population, but not all, will be included in the new coverage.

 A National Coverage Determination will be published in the Federal Register. Instructions will be issued to the contractors who process and pay Medicare claims before the new coverage becomes effective. This normally takes about six months.  

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With the first half of the year almost over, we can certainly report that the medical malpractice arena has been a challenge for Wisconsin hospitals. From all indications, conditions in the remaining half of the year will worsen. 

 Read the entire article in Solutions Spotlight, included in this week’s packet or contact Fitzgerald, Clayton, James & Kasten at 608-268-1815 or WHA Financial Solutions at 800-362-7121 for more information.  

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AHRQ announces the third event in its new series of five free Web-assisted audio conference calls on bioterrorism and health systems preparedness. The third Web-assisted audio conference is scheduled Tuesday, June 17, from 1-2:30 p.m., Central Time (C). It will focus on surge capacity assessments and regionalization issues. These 90-minute audio conferences are designed to share the latest health services research findings, promising practices, and other important information with State and local health officials and key health systems decision makers.

 Visit http://www.hsrnet.net/ahrq-ulp/bioterrorism to see the agenda and sign up for Event #3.  

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Healthy Wisconsin Exceeds Half Way Mark to Goal 

In week four of the 2003 Healthy Wisconsin Campaign, receipts total over $70,000 in conduit, State PAC and AHAPAC support.  Early contributors have shown great support and position Healthy Wisconsin to support many critical races in the election season to come. This year it is important to build support for the AHAPAC, which supports Federal candidates for office in addition to the conduit and State PAC. Healthy Wisconsin is an important part of advocacy for Wisconsin hospitals. Any questions about Healthy Wisconsin can be directed to Ann Lucas at (alucas@wha.org ) or by calling 608-274-1820.  

              SENATE (100-249)                        

             CLERK (1-74)

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HHS Announces Applications for J-1 Visa Waivers 

The Department of Health and Human Services announced that applications are available to request waivers of the two-year foreign residence requirement for physicians with J-1 visas. According to the notice in the June 12, 2003 Federal Register, primary care physicians and general psychiatrists who have completed their primary care or psychiatric residency training programs are eligible to apply for the waivers. They must agree to deliver health care services for three years in a primary care or mental health professional shortage area, or medically underserved area or population. The petitioning health care facility must establish that it has recruited actively and in good faith for U.S. physicians in the recent past, but has been unable to recruit a qualified U.S. physician. For more, see the notice at http://www.access.gpo.gov/su_docs/aces/fr-cont.html under “Health and Human Services Department.”

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Standridge joined Covenant Healthcare System in September, 2001, as vice president, operations. Before joining Covenant Healthcare, Standridge served in various administrative positions for Hurley Medical Center, a 445-bed teaching hospital and regional referral center providing tertiary medical care in Flint, Michigan. Her most recent positions there were administrator for general medicine and oncology and administrator for corporate health, cardiology, oncology and geriatric services. She has over twenty years of health care experience including experience in rehabilitation therapy and management, community health education, worksite wellness program development and delivery, service line management, and operational leadership.