Ongoing Congressional scrutiny of not-for-profit hospitals may be opening what WHA President Steve Brenton called a "Pandora’s Box" of questions and challenges for not for profit hospitals.

"This issue is not going to blow over," Brenton warned members of WHA’s Community Benefit Task Force that met in Madison on June 2. "There is a level of passion on this issue in Congress, and they are taking a hard look at the hospital tax exemption fueled in part by the billing and collection issue and in part by the perception that some hospitals are behaving more like competitive businesses than like community-based social institutions."

Task Force Chair Bob Fale, president and CEO of Agnesian HealthCare in Fond du Lac, reviewed several key documents with the group, including a letter drafted by Sen. Chuck Grassley (R-Iowa), chair of the Senate Committee on Finance. This committee is responsible for tax legislation and oversight.

Grassley posed a set of questions to 10 major hospital systems that asks for information about issues including charitable activities, patient billing, and ventures with for-profit companies and hospitals. (See letter at www.wha.org/financeAndData/commbenefits.aspx).

Brenton said Grassley’s questions are tough and "may have surprised a few people." But, Brenton added, it underscores just how important the work of the Community Benefits Task Force is.

AHA Board member Bill Petasnick, president and CEO of Froedtert and Community Health, said AHA expects a fairly strident discussion on tax exemption in Congress. He said members of Congress are increasingly "questioning the whole notion of tax exemption."

He added, "We need to be proactive in Wisconsin. Even though it has not surfaced as an issue at the state level, it could surface quickly, and we need to be prepared to quantify community benefits in a way that is consistent across all hospitals."

WHA Senior Vice President George Quinn told the group that one of the most significant comments from CMS and from the GAO was that they found no real difference in the amount of community benefits when not-for-profit hospitals and for-profit hospitals are compared nationally. Further, both agencies found it difficult to compare the level of community benefits among hospitals.

"That finding, and the entire environment surrounding not-for-profit hospitals right now," Quinn said, "means we need to start with a common definition on what constitutes a ‘community benefit’ and start collecting data from our hospitals that can be used to design statewide and local messages that let people know what makes hospitals unique, so they know why we earn a tax-exempt status in the community."

The first step, according to Fale, is to begin organizing to collect data and information from WHA members that will be useful in explaining what hospitals contribute to a community. Fale asked for volunteers for two workgroups -- one with a focus on data, and one on communications.

Brian Potter, WHA vice president of finance and operations, said the WHA Information Center already collects data that will be useful in quantifying some community benefits, but not all. Finding a way to collect the additional information that will be needed, without adding to the paperwork burden hospitals already face, will be a priority for that workgroup.

Task Force members agreed that while data is important, the "real life stories" get to the heart of what makes hospitals so unique. How a hospital impacts the lives of people at the very moment they need care the most, 24 hours a day, no matter whether they can pay for it or not, drives to the issue of why hospitals are "different."

Mary Kay Grasmick, WHA vice president of communications, said the work group on communications will take two sets of information, the stories and the data, and combine it to reinforce an overall message.

Task Force member John Kosanovich, president of Watertown Memorial Hospital, pointed out that hospitals can’t just contribute to the community at the same level or do the same thing that other industries do, and demonstrate that they are unique.

"We need to be careful that the activities and contributions that we make in our communities are either unique or that we do more of them than other businesses, or we won’t pass the test if we are trying to prove that we are different from businesses that are taxed," Kosanovich said.

In closing, the Task Force agreed to send two recommendations to the WHA Board:

1. Accept staff recommendation to create two workgroups -- one to work on data collection, and one on communications. The goal is to develop more specificity in how community benefits are reported.
   
2. Suggest to the WHA Board that WHA recommend that all hospitals develop a community benefits plan with some level of community input in a format that is designed to be reportable.

Brenton said in addition to the above recommendation, the WHA Board will take up the issue of community benefits as part of the Association’s overall transparency agenda during their planning session this July.

Nationally, there has been a lot of media attention focused on hospitals. Everything from our charity care policies to our billing and collection practices has been questioned. We know that as local, state and even the federal government struggle with budgets and look for new revenue sources, our tax exempt status could be seen as a target.

To counter these attacks, we must be able to clearly communicate why we are unique as an industry, be able to quantitatively demonstrate the benefit that we bring to our communities, and communicate the message that we are in existence to serve our communities.

What differentiates not-for-profit hospitals from other industries in a community?

From a practical level, not-for-profit hospitals are constantly putting resources back into the community, for the good of the community, not the institution, unlike for-profit industries that must show stockholders value. We serve the community, and therefore, we must show that everything we do benefits the community.

On an emotional and even spiritual level, I genuinely believe that people are called to health care, just as people are called to the ministry. It is an intimate form of service. When we choose health care, or as some say, it chooses you, you are forgoing other occupations, and even making personal sacrifices, every day.

In not for-profit institutions, the Board of Directors, or the management, make decisions that are often not profitable, often simply because it is the right thing to do. That is very different than a primary objective of enriching the stakeholder, sometimes to the detriment of the community.

At the Community Benefits Task Force meeting today that you chair, a lot of discussion focused on what will be needed to make community benefit reporting successful in Wisconsin. What is the most important ingredient to a successful statewide voluntary reporting system for community benefits?

Participation is paramount. What we don’t need are more reporting mandates. As an association, we have the ability to encourage all hospitals to participate, and we have a good track record for voluntary participation. Look at CheckPoint. We have 98 percent of the hospitals reporting quality and safety data in their communities. I think Wisconsin hospitals will participate in a community benefit reporting system if the data collection can be simplified, and the results are easy to communicate.

We are national leaders in transparency. Adding community benefits reporting to our price, quality and safety agenda only makes sense as we work to expand the amount of information that we make available to our patients, our communities, and to employers.

We have to tell our communities what we do, even though what we do is sometimes mired in complexity. How do we manage that?

The key to successfully building a community benefit reporting system statewide is going to hinge on making it an intentional activity, rather than passive; being authentic not clever; and in keeping it simple. We need to keep our messages simple so we can be understandable and use real life stories so we can translate the complexity that is implicit in health care, into a personal experience that our audiences can connect to in their own lives.

Policy debates on health care are plentiful these days, but when the ink dries on the state budget and other important legislation, just how will it impact the delivery of rural health care—and rural health care providers? That is the subject that will be on the table during the 2005 Rural Health Conference.

Sen. Dale Schultz (R-Richland Center) will join WHA President Steve Brenton and Tim Size, executive director of the Rural Wisconsin Health Cooperative, in a panel discussion about how current public policy could change the way health care is delivered in rural Wisconsin.

Sen. Schultz is well known for his strong support of Wisconsin hospitals and is a proponent of increasing hospital Medicaid reimbursement rates. In 2004, Schultz introduced legislation that would have created a Wisconsin "Boren Amendment," essentially requiring the state Medicaid program to pay hospitals at a rate at least approaching their cost to deliver care.

The U.S. Department of Health and Human Services (HHS) today honored 184 of the nation’s largest hospitals for substantially raising the organ donation rates of eligible donors who died in their facilities in 2004.

A total of seven hospitals in Wisconsin received a Medal of Honor for organ donation, which included:

• St. Vincent Hospital, Green Bay
• Gundersen Lutheran Hospital, La Crosse
• UW Hospital & Clinics, Madison
• Saint Joseph’s Hospital, Marshfield
• Theda Clark Medical Center, Neenah
• Waukesha Memorial Hospital, Waukesha
• Aspirus Wausau Hospital, Wausau

Executives of the hospitals, together with their partners in 49 organ procurement organizations (OPOs), were given the Department’s first annual Medals of Honor for Organ Donation by Elizabeth M. Duke, Ph.D., administrator of HHS’ Health Resources and Services Administration (HRSA), during a recent ceremony in Pittsburgh. Hospitals and OPOs were cited for raising their donation rate to 75 percent of eligible donors. By contrast, the national average donation rate in all hospitals was 55 percent last year.

Fifty-eight U.S. OPOs coordinate organ procurement in designated service areas and work to preserve organs and arrange for their distribution according to national policies.

"The work of these hospitals and OPOs helped make possible 1,400 more life-saving transplants than occurred in 2003," Dr. Duke said. "Their achievements demonstrate that we can improve systems to boost donation rates and save many more lives in the future."

In recent weeks, a number of prominent pundits have been pursuing a common theme. It goes something like this: America’s "real" domestic crisis isn’t social security…it’s health care. They then proceed to paint a nasty picture of this nation’s health care woes (high costs, large number of uninsured, infant mortality rates, etc.). They also tend to have a common solution…universal coverage/access. These opinion leaders contend that universal health coverage and lower health care costs (combined with health care improvement) go hand-in-hand. Here, there is significant opportunity for debate.

While America’s health care price tag is high, "low cost" universal care isn’t necessarily a bargain. Consider the recent story from Great Britain where a nine-year-old child died after an operation to treat his severe epilepsy was canceled twice because that nation’s premier children’s hospital "ran out of money." The young boy, Peter Buckle, had a massive epileptic seizure and died on May 16. He had been waiting to undergo surgery at Great Ormond Street Hospital for Children in London. On March 15, the hospital canceled the operation after it discovered it had treated more children than its budget allowed for during the first quarter of its fiscal year. The rescheduled operation was also canceled when a hospital ward was closed after staff contracted a viral infection. The surgery was rescheduled for June 10, three weeks too late for Peter. That incident just wouldn’t happen in this country’s "high cost" delivery system.

Another recent story out of London involves a 45-year-old Englishman, Leslie Burke, with a progressive neurological ailment that one day will deprive him of the ability to speak or swallow. Burke is suing Britain’s National Health Service (NHS) to guarantee that he receive food and water through a tube once his illness advances to the point that he can no longer verbalize his care choices.

This suit may seem far-fetched until one looks at criteria established by NHS that has physicians, rather than patients or their families, empowered with final say about providing or withholding basic health care, including nutrition. Here’s a portion of the "clinical guidelines" used for physician decision making: "An assessment should be made of the cost of the treatment per additional year of life which it brings, and per quality adjusted life year (QALY)…which takes into consideration the quality of life of the patient during any additional time for which their life will be prolonged." This formula-driven treatment guideline is then used to determine whether the treatment should be provided in the NHS. Clinicians are instructed "to follow these guidelines without being obliged to accede to patient demands. If this principle were to be undermined, there would be considerable risk of inefficient use of NHS resources."

Many will argue that the British NHS would never be replicated in an American universal coverage system. But what would be better, Canada’s nine-month waiting lists for cataract surgery and 18-24 month waits for hip replacements? Check out the Fraser Institute’s "Waiting Your Turn" publication at www.fraserinstitute.ca/shared/readmore.asp?sNav=pb&id=705.

Rationing care and slowing the diffusion of medical technology are at the foundation of all universal (government financed) health care systems. Every universal coverage system has a sum certain global budget. When the money is gone…either taxes are increased…or care is rationed. And the former is seldom the politically chosen option. So, consider reality vs. fantasy the next time government-financed health care is passed off as a solution to America’s "real" domestic crisis.

Steve Brenton
President

"According to your editorial board," Nolan wrote, "health care costs are the No. 1 most critical issue facing the Fox Valley. I agree….we know first-hand the ‘hidden health care tax’ is one of the underlying issues driving up these costs."

Nolan went on to explain how the hidden health care tax, approximately $450 million in 2004, is a cost shift onto private payers due to dismal Medicaid reimbursements.

"It can’t continue on this way," he said. "Everyone loses – government loses, hospitals lose, businesses loses and our communities lose…Things have to change."

Making Medicaid a priority by supporting WHA’s Medicaid Downpayment Plan in the state budget bill is one way legislators can address the hidden health care tax. If you haven’t contacted your legislators urging their support for WHA’s Downpayment Plan, do so today!

Log onto WHA’s Email My Legislators Web page at www.wha.org/speakUp/emailLegislator.aspx.

Read more about WHA’s Downpayment Plan at www.wha.org/governmentRelations/pdf/pp2005-2006downpayment.pdf.

We want to hear your grassroots stories. Contact Jenny Boese at 608-268-1816 or jboese@wha.org to report your grassroots successes!

Grassroots advocacy is the heart and soul of an effective government relations program. The Hospitals Education & Advocacy Team (HEAT) gives you the information, the insight, the strategy and the assistance you need in order to be in touch with your legislators on issues of importance to Wisconsin hospitals. By joining HEAT, you partner with hundreds of hospital advocates across the state who want to make a difference on behalf of our hospitals and the communities we serve.

Join HEAT today and make a difference for Wisconsin hospitals!

Access registration information online at www.wha.org/speakUp/heat.aspx.

The Department of Health and Family Services has issued a bundle of variances for certified outpatient psychotherapy clinics. According to DHFS, the variances are being issued to provide immediate regulatory relief for certified outpatient psychotherapy clinics by reflecting recent changes in professional licensure and to emphasize evidence-based programs.

The Centers for Medicare and Medicaid Services released proposed changes to the Inpatient Rehabilitation Facility (IRF) Perspective Payment System (PPS) for federal fiscal year (FFY) 2006. The proposal calls for substantial revisions to the IRF PPS that would have a significant redistributional affect. These include:

• Reduce the standard payment rate by 1.9 percent. The reduction is based on an analysis of calendar year 2002 data that CMS interprets as indicating that the PPS payment rates are too high compared to actual costs of caring for Medicare patients in IRFs. CMS states that this is largely due to coding changes by providers subsequent to the implementation of the PPS.
  
• Revise the IRF patient classification system. The revisions include the elimination of a number of codes currently included as comorbidities.
  
• Implement a teaching adjustment to account for the higher costs associated with major teaching programs. The proposed formula for the adjustment is (1 + the number of residents divided by the average daily census, raised to the power of 1.083). For a facility with a resident to average daily census ratio of 0.10, this would result in a 10.9 percent increase in the payment.
  
• Increase the adjustment for rural IRFs from 1.1914 to 1.241.

• Increase the low-income patient (LIP) adjustment.
  
• Update the outlier threshold amount from the FFY 2005 threshold of $11,211 to $4,911 for FFY 2006. CMS intends to maintain outlier payments at 3 percent of total IRF payments and the threshold change is necessary due to the other proposed revisions to the IRF PPS.
  
• Update the data used to calculate the labor share of the rate. This would increase the portion of the rate that is adjusted by the wage index from 72.359 percent in FFY 2005 to 75.958 percent in FFY 2006.
  
• Adopt the new wage adjustment area definitions based on Core-Based Statistical Areas (CBSAs). These are the same wage areas implemented for the Inpatient PPS in FFY 2005.

The IRF PPS proposed rule provides a 3.1 percent increase to payments based on the projected market basket. However, based on other proposed rule changes, CMS projects total payment for rehabilitation services to increase by 2.9 percent.

Now a highlight of the annual Wisconsin Quality & Safety Forum, the Project Showcase will once again allow attendees to share information about their current quality and safety improvement initiatives, in a poster board format, as part of the 2005 Forum.

Projects that have not previously been submitted are eligible, as are new phases of a previously submitted project. A full project submission brochure, describing all submission criteria, is available on WHA’s web site at www.wha.org.

New for 2005 is the online submission process. Showcase project submissions will only be accepted via completion of the new online submission form at www.wha.org/QSFshowcase. The online form is currently available, and all submissions are due to WHA, via the online form, by July 1, 2005. For questions about project submission, contact Brian Competente at 608-274-1820 or bcompetente@wha.org.