Can America afford a new health care system that provides more choices, lower costs, better care and more coverage? I believe we can. To do so we must change the way we pay for health care from the current system that pays for procedures to one that pays for performance. The key is value over volume. Wisconsin providers understand this focus and are leading the nation in pushing for value-based care through your leadership in the Value Coalition cofounded by the Wisconsin Hospital Association.

Unfortunately, many other people believe that more tests, procedures, and technology mean better health care outcomes. But studies show that close to 30 percent of all health care spending each year, approximately $680 billion, goes to treatment and procedures that do not improve patient care. In many instances, the over-utilization of health care actually leads to worse results. We need a value-based reimbursement system that rewards quality and cost effectiveness. This is not a region by region or state by state fight; it’s a unique American challenge in need of a unique American solution.

Fortunately, work being done in Wisconsin has provided me with the examples of reform that I’ve used in debates in Washington to show a better health care model exists and can be replicated across the country. Our providers already focus on the value of care and provide high quality care at low costs. They do so by adopting integrated and fully coordinated care systems that focus on the patient rather than on procedures. They rely on primary care physicians and care coordinators with well trained nurses who spend more time with their patients and make shared decisions on care. They emphasize preventive and wellness programs while listening to the expectations of their patients in a shared decision-making model. For these providers, this approach - a greater emphasis on quality - leads to better health outcomes. The results indicate that a similar payment mechanism nationwide would save billions of dollars and better the overall outcomes of health care provided across the country. As President Obama suggests, we must look to these models if we are to truly reform our system.

The good news is that steps have recently been taken to incorporate value as a component of Medicare reimbursement in the House legislation. I led a group of members called the Quality Care Coalition and worked closely with House leadership to include two different Institute of Medicine commissions in the health care reform bill. The first IOM commission will look at the geographic adjustment factors in Medicare reimbursement formulas and update these with real input expenses. The second IOM commission will provide recommendations on changing the Medicare payment system to reward the quality of care given. These changes are designed to go into effect as early as 2012 and 2013.

Measures to reward high-quality, cost effective care will transform our current health care system and reward a focus on value over volume, resulting in better patient outcomes. I believe we can find increased savings in health care with a payment system that rewards the value of care given over the volume of care instead of the indiscriminate across-the-board payment cuts that are often recommended. These types of cuts hurt our high-quality, low-cost Wisconsin hospitals and seem to do little to appropriately incentivize poor providers elsewhere to offer quality care. If we supply the right incentives, we can provide high-quality care, improve patient outcomes, increase reimbursements for value-based Wisconsin providers, and make health care affordable to those who have it as well as those who don’t. That is the type of health care reform I can support.

The Worker’s Compensation Advisory Council ("WCAC"), which was scheduled to wrap up its biennial "agreed to" legislation negotiations by July 1, continues to consider significant changes to the Worker’s Compensation system including a possible fee schedule for health care services.

As previously outlined in the Valued Voice, the WCAC voting members include five representatives of labor and five representatives of management. Worker’s Compensation insurer representatives are nonvoting members but sit at the WCAC table. Three health care provider organizations are nonvoting "liaisons" to the WCAC: WHA, the Wisconsin Medical Society, and the Wisconsin Chiropractic Association. After the WCAC unanimously approves an "agreed to" bill, the Wisconsin Legislature traditionally passes the bill without amendment.

In late winter, both labor and management WCAC members exchanged proposals. The most significant remaining issues from those proposals include labor’s increase in permanent total disability payments and management’s proposal to "institute an effective medical cost containment system." The provider liaisons have worked to break an apparent deadlock on the WCAC and to recognize that while health care providers in the Wisconsin Worker’s Compensation system provide an excellent value (top ranked results for a lower overall cost than most states), health care costs are increasing. The provider liaisons suggested that the WCAC "freeze and grow" current reimbursement rates. In other words, the Worker’s Compensation statutes would require insurers to pay providers’ current Workers Compensation rates increased annually by no more than the rate of medical inflation.

The Wisconsin Insurance Alliance ("WIA") has released a memo criticizing the provider proposal. This week the provider liaison organizations responded to the WIA concerns. For example, concerning the data needed to implement the freeze and grow proposal, the WIA stated, "There is absolutely no existing mechanism for collecting this sort of detailed information." In response, the provider organizations pointed to existing databases - like the WHA Information Center’s database that collects every inpatient and outpatient claim made by every hospital in the state (for all payers) and the information collected by the Wisconsin Health Information Organization - as evidence that such databases can and do exist. A copy of the provider response is available at www.wha.org/legalAndRegulatory/WCresponse7-28-09.pdf.

The management representatives have not provided details concerning their proposed "effective cost containment system." Watch The Valued Voice for future updates.

Finally, debate and media coverage has come around to the fundamental issue in health care in the U.S.: runaway costs.

President Barack Obama and his Democratic reformers are belatedly being forced to deal with the all-important ways and means of covering everyone. It’s a laudable goal, but there are so many gaping holes in the proposals coming out of Congress that you have to wonder whether the social engineers inside the Beltway will ever come to grips with financial realities. Here are just some of the elemental flaws in the Democrat’s plan that amount to financial fantasy:

• The House-passed 8% payroll tax on companies that don’t provide coverage. My company, like many companies, is spending about 15% of payroll on health care. Why would Serigraph and other companies not opt for the 8% penalty, drop coverage and let our employees go to a public plan? We would save several million dollars a year at taxpayer expense. The Wisconsin Democrats and AFL-CIO were more realistic when they put a 15% to 20% payroll tax into their Healthy Wisconsin bill.
• The House’s 2.5% penalty on people who don’t buy mandatory health insurance. At $40,000 in pay, that would cost a person $1,000 a year in penalties, about one month’s premium for a family plan. With guaranty issue, also part of the House bill, why would a person not pay the penalty and then jump into insurance only when a medical need arises? That’s what’s happening in Massachusetts under a similar plan.
• The "public option" that would pay a little more than Medicare rates to providers. Medicare uses government price controls to reimburse at 40% to 50% of retail charges. Big private insurers pay 70% to 80%. How could the private insurers ever compete with the public insurance company and its price controls? Smart analysts predict a stampede out of private coverage to the cheaper public plan. The subsidies, direct and indirect, will rival the massive expense of Medicare and Medicaid.
• The absence of reasonable deductibles and co-insurance in any of the schemes and of offsetting personal health accounts. No system will keep costs in check without the full engagement of every individual in the system. Free lunches are always expensive.
• The failure to deal with the glaring need to change from fee-for-service to bundled payments by treatment episodes. If you pay for procedures, that’s what you get, lots of procedures, all piled into out-of-control, inscrutable bills.
• The requirement that all insurance be purchased through the government. That public "exchange" would effectively put out of business the private insurance agents, who operate on a 3% commission. Would a bureaucracy do the job for 3%? Doubtful.

The national reformers would do a lot better to look at Wisconsin models than at the looming failure in Massachusetts, where access is being cut back because of soaring costs.

Coverage in Wisconsin is now estimated by percentage to be in the high 90s, partly through successive additions to the Badger Care program. The great financial worry, though, is that it and Medicaid will break the state budget as private companies default to state coverage.

It would be far better to keep private employers, large and small, in the health care game. Early in his term, Gov. Jim Doyle’s administration looked into the creation of a state plan for catastrophic coverage. That would be a device for small businesses with one or more unhealthy employees to lay off the catastrophic risk and thereby become an insurable group at normal rates.

Big companies can buy coverage for catastrophic accidents or diseases, but small ones can’t. A state pool for high risks, funded by a broad, low tax on all health insurance, solves that issue.

Any necessary subsidies to get to universal coverage for low-income people could be put into health savings accounts that would be used to pay premiums, deductibles and co-insurance.

Wisconsin is also home to breakthrough innovations in cost control. They include QuadMed’s primary-care model, Aspirus’ quality transparency on heart procedures, ThedaCare’s lean disciplines, Dean’s HMO model, Gundersen Clinic’s track record on end-of-life directives, Marshfield’s pilot on bonus payments for quality and disease management and the numerous companies and few public entities with consumer-driven plans.

Instead of spending his time and energies on the politics of health care, Obama needs to do some real work. He needs to look to the grassroots, to the real world where people are innovating, improving quality and lowering costs. Wisconsin models could dissolve the cost obstacles that are endangering his health care ambitions and promises.

John Torinus is chairman of Serigraph Inc. of West Bend and a founder of BizStarts Milwaukee, a nonprofit organization dedicated to fostering entrepreneurship in southeastern Wisconsin. Contact him at torcolumn@serigraph.com.

First a note of appreciation to Congressman Ron Kind (D-La Crosse) for his hard work in getting Democrat Leaders to agree to a process that may "fix" the longstanding flawed Medicare physician payment formula and include a legislative "marker" that promises address of the notion that Medicare payment should reward value. Both of these issues were the subject of a letter (www.wha.org/2009KindLetter7-16.pdf) signed by WHA, WMS and more than a dozen well-respected provider organizations that have demonstrated a commitment to "low-cost high-performance" health care.

But the House Bill continues to be seriously flawed and will remain so as long as the open-ended, Medicare-like public "option" is included as a central component of the 1,000-page legislation. There are important details that make this proposal a non-starter for Wisconsin hospitals and physicians—and the communities and patients they serve. The "fine print" within the legislation virtually guarantees that tens of millions of currently commercially insured lives will move to a Medicare-like public plan within five years. Here’s why…

• The House Bill allows currently insured individuals, small businesses and eventually all employers to "opt out" of current commercial coverage and thus pave the way for self-insureds and employees to access a Medicare-like health plan at a onetime cost of between 0-8 percent of total payroll. That’s a small price to pay to access a government plan that can basically dictate provider rates. Such a plan will most certainly be priced at a 20-30 percent (perhaps much more) advantage to commercial products and hence undercut the private market.

• The House Bill also creates new premium subsidies for individuals and families. The subsidies are income based, up to four times the poverty level, which means that even middle class families will be eligible for significant subsidies. Under the proposal, a family of four making $44,000 per year would pay no more than $2,200 per year for coverage (accessed through the new insurance exchange) that could be worth as much as $12,000 if actuarial guidelines were used. The incentive would serve as a powerful vehicle to move people out of commercial coverage to what amounts to a new Medicare-like entitlement program.

The Lewin Group, a respected D.C. based health policy firm, has estimated that 100 million people would quickly migrate from private coverage to a new public program just like this one. Given the certainty that such a plan will underpay hospitals and physicians, the result could be a financial catastrophe for hospital bondholders, technology vendors, health facilities builders and their employees, and hospital and clinic employees. It also jeopardizes the nationally-recognized delivery system that Wisconsin patients depend on.

The Congressional summer recess is about to begin. That means there will be plenty of time to talk to federal lawmakers about the "fine print" that must be altered in order to advance necessary health reform later this year. The open-ended, Medicare-like public plan must go!

Steve Brenton
President

The health care discussion in Washington has focused on the fiscal feasibility of universal coverage. Legislation is being crafted to create delivery system reforms, including a variety of strategies to promote health and prevent disease.

But any reform is at risk of failure if the workforce crisis in primary care physicians isn’t resolved.

Increasing numbers of patients in shortage areas are served by community health centers. These centers contain costs by providing coordinated, comprehensive health care services, which reduces unnecessary emergency room visits, hospitalizations and referrals for specialty care. Savings have been estimated at $1,810 a person a year.

Unfortunately, the missing link in this strategy is primary care providers.

Massachusetts was the first to experience this shortage of primary care providers, but it’s a phenomenon that the rest of the country soon could see. In Massachusetts, from 2005-2007, the total number of patients cared for in community health centers increased by 50,000, indicating that expanding health insurance leads to a significant increase in demand for primary care, especially in underserved, low-income communities.

The extent of the primary care physician workforce crisis is documented in a recent issue of the New England Journal of Medicine, with two articles suggesting that the shortage may undermine important goals of health care reform. And a recent Institute of Medicine report indicated that more than 16,000 additional primary care physicians are needed to meet the present demand in underserved areas where community health centers attempt to provide access to care.

Recently, the Obama administration announced plans to cut Medicare specialist payments and use the savings to boost payments to primary care physicians by up to 8%. This step, along with proposed legislation intended to increase the number of primary care physicians, could ultimately revitalize primary care.

However, even if the unfavorable career trend in graduating medical students begins to reverse in 2010, at least three more years will be required before these students complete their residencies, enter practice and begin to expand the primary care workforce.

To immediately expand the capacity of community health centers, we propose a linkage between primary care physician graduate medical education and care for the underserved.

This would be achieved by establishing primary care graduate medical education clinics in community health centers that have established a Patient Center Medical Home practice environment. Primary care residents would receive their final year of training in these clinics, with the incentive of National Health Service Corps debt repayment for subsequent practice in an underserved area.

This model provides an optimal training environment, given its close faculty supervision and the emphasis on patient-centered care that reflects the future high-quality practice of medicine. The addition of family medicine, internal medicine and pediatrics residents trained in this setting would immediately increase clinical capacity. Additionally, many graduates would provide access to low-cost primary care services for the increasing number of underserved patients. These sites would also increase training of nurse clinicians and other health care personnel.

Creating such community clinics, which could be done as soon as July 2011, would help forge a link between achieving fiscal feasibility for universal coverage and delivery system reforms. And it would provide more access to primary care, which will be needed if health care reform is to succeed.

The skeptics will judge health care reform by how it works from day one. Without this missing link—without more primary care physicians—the promising initiatives now under discussion may not succeed.

The Federal Trade Commission announced that it is further delaying enforcement of the "Red Flags Rule" until November 1, 2009, to give creditors and financial institutions more time to review FTC guidance and to develop and implement written identity theft prevention programs. The FTC says that its staff will redouble its efforts to educate creditors and financial institutions about compliance with the Red Flags Rule and ease compliance by providing additional resources and guidance to clarify whether businesses are covered by the Rule and what they must do to comply.

The FTC’s Red Flags Web site, www.ftc.gov/redflagsrule, offers resources to help entities determine if they are covered and, if they are, how to comply with the Rule. It includes an online compliance template that enables companies to design their own Identity Theft Prevention Program through an easy-to-do form, as well as articles directed to specific businesses and industries, guidance manuals, and Frequently Asked Questions to help companies navigate the Rule. According to the FTC, the three-month extension, coupled with new guidance, should enable businesses to gain a better understanding of the Rule and any obligations that they may have under it.

Under the rule, financial institutions and creditors with covered accounts must have Identity Theft Prevention Programs to identify, detect, and respond to patterns, practices, and activities that could indicate identity theft. The rule applies to financial institutions and creditors, including non-profit and government entities, that defer payment for goods and services. Hospitals are likely to meet the rule’s broad definition of "creditor," requiring them to develop a written Identity Theft Prevention Program.

What will health care reform look like in late September? No one knows for sure, but make sure you’re part of the conversation on health reform and its effect on Wisconsin hospitals, in particular, at the WHA’s 2009 Annual Convention.

Make plans now to attend the 2009 Annual Convention September 23-25 at the Grand Geneva Resort in Lake Geneva. This year’s convention is the perfect opportunity for you, your hospital senior staff, and your Board of Trustee members to join the conversation with colleagues from around the state. This year’s convention agenda includes:

• A look forward at the dynamics in play affecting health care in 2015, as seen by AHA’s senior strategic policy planning executive, Jim Bentley;
• An up-to-the-minute look at national health reform and what it means to Wisconsin;
• A discussion of the primary care shortage and its effects on health reform; and,
• Many other current topics.

For ACHE members, attendance at this year’s annual convention will include 4.5 Category I (ACHE education) credit hours, thanks to a partnership with the Wisconsin Chapter of ACHE. In addition, the annual convention agenda has been submitted or approved for a variety of other applicable continuing education credits.

While initially presented about two years ago, Medicare is moving from a discussion mode to an implementation mode on reducing payment for three adverse events. On July 6, Medicare revised its instructions to providers in their MLN Matters newsletter focused on payment adjustments and claims reporting for "Wrong Surgical or Other Invasive Procedure Performed on a Patient; Surgery or Other Invasive Procedure Performed on the Wrong Body Part; and Surgical or Other Invasive Procedure Performed on the Wrong Patient." Effective October 5, 2009, Wisconsin hospitals will be required to follow the instructions in the MLN Matters when a wrong surgery or other invasive procedure occurs with a patient (see link below.) Fiscal Intermediaries and Medicare Administrative Contractors (MACs) have been notified of this change in CMS Transmittal 1764 issued on July 2, 2009 for Medicare Claims Processing.

Hospitals are urged to have this in place by October 5, 2009 and to alert their staff about this change as any time one of these events occurs, hospitals will need to submit two bills according to the Medicare instructions so that Medicare can properly reduce payment. One bill will be for services rendered during the stay that are not related to the adverse event as these services will be covered. The second bill will include the services provided that are related to the event and will not be paid. Please note there are different codes to utilize signifying a payment reduction based upon inpatient or outpatient surgical services.

As you work with your HIT and claim vendors to implement, keep in mind that as of October 1, 2009 there will be new E-codes that will also be utilized to designate whether it was wrong site, wrong surgery, or wrong patient. We fully expect that Medicare will soon issue an update to the MLN Matters Newsletter so that providers can make all the changes by the effective date of October 5.

For background material on what is considered to apply in one of these surgical situations, please refer to the Medicare National Coverage Determination on the CMS Web site at:

Wrong Body Part – CAG-00402N   www.cms.hhs.gov/mcd/viewdecisionmemo.asp?from2=viewdecisionmemo.asp&id=222&
Wrong Patient – CAG-00403N www.cms.hhs.gov/mcd/viewdecisionmemo.asp?id=221
Wrong Surgery – CAG-00401N www.cms.hhs.gov/mcd/viewdecisionmemo.asp?id=223

Judy Warmuth, WHA vice president of workforce, has been invited to participate as an expert panelist on a strategic team focused on the health care workforce that will provide input to the Wisconsin State Health Plan, "Healthiest Wisconsin 2020: Everyone Living Better Longer."

For the past year, the Wisconsin Department of Health Services, Wisconsin’s public health system partners, and the Healthiest Wisconsin 2020 Strategic Leadership Team appointed by Department of Health Services Secretary Karen Timberlake have worked together to propose the health improvement model for 2010-2020 known as Healthiest Wisconsin 2020. Healthiest Wisconsin 2020 is anchored in a legislative mandate to produce a public health agenda for the people of Wisconsin every 10 years. Through systematic community-driven approaches, the Leadership Team identified a shared vision, goals, 23 focus areas that influence the health of the public, and the long-term goals for the decade 2010-2020.

State Public Health Director Seth Foldy, MD asked Warmuth to serve on the focus area that will ensure a diverse, sufficient, and competent workforce that protects and supports health. Foldy said the key deliverable from the workforce Focus Area Strategic Team will be the identification of the two 10-year measurable objectives specific to workforce that have the greatest likelihood of achieving the goals of improving health across the lifespan and of achieving health equity by 2020.

The development of statewide goals specific to the health care workforce within the State Health Plan align with WHA’s priority to ensure there is an adequate supply of trained health care professionals to meet the growing demand for medical services.

The Wisconsin Healthcare Public Relations and Marketing Society (WHPRMS) will hold their annual fall conference October 7-9 at the Hyatt Regency in downtown Milwaukee. This year’s event will focus on turning today’s challenges into tomorrow’s opportunities, with a keynote session by Susan Dubuque, a nationally-recognized speaker on health care and service marketing. She is a past recipient of the Award for Individual Professional Excellence from the Society for Healthcare Strategy and Market Development (SHSMD).

Additional conference topics will include: consumer online search behavior for health information; communicating tough news, such as workforce reductions; the changes to HIPAA that will affect health care marketing; and the successes, challenges and lessons learned by using social media in a variety of health care settings.

For many people, stopping the usage of tobacco on your own can be challenging. Affinity Nurse Direct "Call It Quits Tobacco Cessation Program" offers support through telephone-based counseling or classroom counseling. The program is designed to help individuals assess their tobacco habit, identify triggers and develop a personalized plan. Phone counseling is free and open to anyone in the Fox Cities and Oshkosh.

When patients call, a counselor provides you with support, helps you develop a personalized plan to quit and sends you an educational packet to assist you in the process.

Kristy Hartman-Begun, RN BSN, director of the Call It Quits program, says, "These telephone-counseling sessions have successfully helped many people quit by providing people with privacy, confidentiality and convenience."

The program has surpassed national averages for tobacco quitting rates, reducing tobacco usage rates among adults by five percent and among teens by 16 percent. There are also in-person classes at St. Elizabeth Hospital in Appleton and Mercy Medical Center in Oshkosh.

The Subsidized Medical Transportation Program at Community Memorial Hospital provides transportation to and from the hospital service locations for eligible persons who have difficulty arranging their own transportation and lack the financial resources to purchase transportation.

The program, which began in 1997, is limited to hospital patients and their immediate families with income at or below 200% of Federal Poverty Guidelines. Patients who participate in the program must be coming to the hospital for treatment, diagnostic appointments, family visits, support meetings or educational programs.

One patient found herself in great need of the transportation service after she was diagnosed with colon cancer in March 2008. The elderly woman, who lives alone in a community located more than 25 miles from Community Memorial, was unable to arrange transportation to and from her daily chemotherapy appointments.

The woman recalled sitting in a waiting room discussing the situation with her daughter, who lives out of state. "They told me I had to have chemo every day and I didn’t know what I was going to do," the woman said. The patient’s social worker overheard their conversation and told them the hospital’s transportation service would meet all of the woman’s needs.

Throughout her treatment, the woman got to know all seven of the service drivers by name and found them to be a great comfort along her road to recovery. She is now in remission and enjoys visiting her three grandchildren.

"I honestly don’t know what I would have done," she said about the transportation program. "This was salvation for me."

In 2008 Grant Regional Health Center sponsored its 12th annual Harvest Festival Fun Run/Walk on Saturday, October 4. In honor of National Physical Therapy Month, Grant Regional annually sponsors a non-competitive fitness run/walk to promote healthy living in our community. The goal is to stress the importance of exercise and physical activity and its contribution to good health. Unlike many walks/runs in the area, the Fun Run/Walk is strictly for fun and fitness. Participants are not required to collect any pledges or donations.

The 5K non-competitive Run/Walk starts on the Square at approximately 8 a.m. and follows a scenic route and ends with refreshments back at the hospital. The entry fee is $12 in advance and $13 the day of the event, which includes a t-shirt. The event is offered free to students.

A Tot Trot for ages 3-10 was added this past year and was held just before the Fun Run/Walk. Cost for the Tot Trot was just $9 and included a kids t-shirt and refreshments following the event. Since this isn’t a competition, all Tot Trot participants received a completion certificate and gold medal. The first 20 kids registered also received a complimentary goodie bag!

Grant Regional’s certified massage therapist offered complimentary back massages and rehab staff also conducted shoe evaluations to ensure that participants are wearing the correct athletic shoe for their foot type.

Participants are also encouraged to join Grant Regional in supporting our local food pantry by bringing a non-perishable food item with them the morning of the Run/Walk. With the holidays just around the corner, it’s a perfect time to donate items to the food pantry.

Even though there is a cost to participate in the event, the hospital invests a great deal more in time and money, including advertisements, invitations, flyers, banners, and volunteer time to facilitate this event. And with 80-100 participants each year, Grant Regional remains committed to continuing this event for the benefit of our community’s health and wellbeing.

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