HHS Secretary Tommy Thompson calls "Saving Lives & Saving Money" a welcome and necessary addition to the health care debate. Co-author of the book, Anne Woodbury from the Center for Health Transformation, is part of a small transformation team, headed by Newt Gingrich, who conceptualized, created, launched and now manages the Center.

"Saving Lives & Saving Money" outlines the vision of a 21st century system that is centered on the individual, prevention focused, knowledge intense, innovation rich, and market mediated. It identifies the principles of transformation necessary to create the 21st century system of health care that will save lives and money.

As chief health advocate, Woodbury oversees the Center’s public positions and activities to achieve maximum impact in accelerating transformation. She is the lead spokesperson for the Center. As a highly sought-after speaker, she addresses audiences ranging from small business groups to large policy conferences. In addition, she serves as an advisor on all Center projects and is the principal on the Health information Technology Initiative, the Optimal Health Management Project and the Diabetes Transformation Project.

Prior to joining the Gingrich Group, Woodbury served as Speaker Gingrich’s Project Director at the American Enterprise Institute for Public Policy Research, a Washington, D.C. based think tank. The focus of this project was to develop a 21st Century model of health and health care that could accommodate the rapid technological and biological advances of a new age of medicine.

Woodbury will deliver the keynote address at the WHA Convention on September 16 in Lake Geneva. A convention "preview" flyer is available in this week’s packet. The full brochure and registration information will be included in the August 13 WHA Friday Packet; however, you may download it at www.wha.org. The final cut-off for hotel rooms is August 15. Make your reservations today by calling the Grand Geneva Resort at 800-558-3417.

On July 23, 2004, HHS Secretary Tommy Thompson announced 62 grants totaling $15.5 million to universities, colleges, nursing schools, medical centers and other health care organizations to expand the nation’s supply of qualified nurses and promote diversity in the nursing profession. "The national nursing shortage threatens the quality of America’s health care," said HHS Secretary Tommy Thompson. "These grants will help us meet future demand for the essential health care services that nurses provide."

Marquette University is the recipient of one of those grants for almost one million dollars over a three-year period. The grant will support the Wisconsin Nurse Residency Program for new nurse graduates with the purpose of fostering the transition from school to nursing practice. Research indicates that the first year of practice is particularly complex and that failure to successfully negotiate entry into practice may lead to dissatisfaction with nursing as a career. Helping new graduates make the transition to hospital employment and learning what works best will be the focus of the grant.

WHA had supported and endorsed the grant proposal, and Wisconsin hospitals will be invited to participate along with new nurse graduates. There are many strategies for ensuring an adequate supply of nurses for Wisconsin’s future. Assuring that nursing school graduates become successful in the workforce is one of those critical strategies.

On August 2 the Centers for Medicare & Medicaid Services (CMS) placed on display the Medicare inpatient prospective payment system (IPPS) final rule for fiscal year (FY) 2005. The rule implements a payment update of 3.3% – or full market basket – beginning October 1, 2004 for hospitals that submit quality data on 10 specific measures of care. After all the changes in the regulation – including the implementation of several provisions won as part of the Medicare Modernization Act – the average hospital payment increase will be 5.8%.

Based on our preliminary read, other key policy changes include:

New MSAs: CMS has chosen to mitigate losses that would have been faced by some hospitals. Specifically:

• As proposed, the rule adopts the Office of Management and Budget’s (OMB) new census definitions of metropolitan statistical areas (MSAs) and will not adopt OMB’s definition of micropolitan areas.
• For hospitals that experience a decrease in their wage index solely because of the new labor market areas (but not due to any other reasons – such as a decline in a hospital’s average hourly wage), CMS will implement for FY 2005 a blended wage index consisting of 50% of the wage index value using the new MSAs and 50% of the wage index using the old MSAs.
• CMS will allow current "urban" hospitals that would be redesignated as "rural" due to the new labor market areas to maintain the wage index of the MSA where they are currently assigned for three years.
• Critical Access Hospitals (CAHs) redesignated to "urban" areas will retain their current CAH status, as requested by WHA, through December 31, 2005, allowing time to obtain a state designation as "rural."
• Finally, as WHA requested, hospitals that applied for reclassification for 2005 will be permitted to withdraw their applications within 30 days of this final rule if the reclassification results in a lower wage index.

Occupational Mix: For 2005, as proposed, CMS will implement a blended wage index that incorporates a 10% adjustment to reflect the occupational mix of hospital employees.

Outliers: In a move strongly advocated by WHA, CMS will lower the outlier threshold to $25,800 – down from its current level of approximately $31,000 (and from a proposed $35,085). This decline will help ensure that additional payments are available for the treatment of very complex patients.

Transfers: We are pleased that CMS is not adopting its proposed set of "alternative criteria" for determining which diagnosis-related groups would be subject to the post-acute transfer policy – a provision WHA strongly opposed and one that would have added to the number of cases under the policy in FY 2005.

Long Term Care Hospitals (LTCH): Beginning October 1, 2005, the rule will revise payment under the LTCH PPS for certain hospital in hospital (HIH) patients. HIHs will be paid under the LTCH PPS without adjustment for host hospital referrals that fall below a specified threshold, patients who were previously outliers in the host hospital, and patients referred from non-host hospitals. HIH reimbursement will be the lesser of the LTCH PPS payment or the corresponding IPPS payment for HIH cases that exceed a specified threshold for referrals from the host hospital. The new payment adjustment will be phased in as follows.

• FY 2005: No change.
• FY 2006: The current separateness criteria expire. The host hospital referral threshold will be set at 75%.
• FY 2007: The host hospital referral threshold will be set at 50%.
• FY 2008 and beyond: The host hospital referral threshold will be set at 25%. Rural and certain urban HIHs will be given special treatment.

The rule makes no changes to the current HIH common ownership guidelines.

The regulation will be published August 11 in the Federal Register and is currently available on the CMS Web site at www.cms.hhs.gov/providers/hipps/frnotices.asp.

WHA will send more detailed analysis as we learn more about the final rule.

Last week’s column suggested that the issue of "transparency" (the public disclosure of information about the performance of the health care system) has emerged as a current health reform theme. The column also suggested that the private sector’s early embrace of the public reporting of quality, safety and service measures means that the "pricing" aspect of the transparency issue is the current and primary focus of attention.

At WHA’s recent Board Planning Session, participants agreed that "transparency" really means "reliable health care information for decision-making." And to effectively address the stakeholders who ask for this information, it will be important to look at the specific needs of the specific audiences requesting the information.

• The Public Policy Audience (lawmakers, the media and political pundits) – The public policy audience can best be served by providing timely access to "retail" charge information on the variety of inpatient and outpatient services and procedures. Much of this information is already in the public domain and can be further enhanced as the WHA Information Center matures. WHA Planning Session participants also agreed that providing discount information by payer type (commercial, Medicaid and Medicare) in aggregate will be helpful in addressing public policy questions regarding hospital "charges" and "real prices." The WHAIC can play a significant role in advancing this public policy need.
  
• Insured Consumers (especially those with potential out-of-pocket expense) – Insured consumers require timely access to negotiated rates to enable them to shop for elective services and procedures. That information can best be provided by the health plans that actually cover the insured consumers. Negotiated hospital, physician and pharmacy discounts should be made available to insured consumers directly by health plans in order to facilitate price comparisons.
  
• Uninsured Consumers (especially low-income patients) – Hospital personnel should be willing to counsel uninsured patients consistent with the billing and collection guidelines adopted by WHA’s Board in June 2004 (www.wha.org/newsCenter/pdf/2004uncompcare.pdf). These guidelines, enthusiastically endorsed by former Governor Tommy Thompson, represent a proactive effort to align the mission of community hospitals with the needs of uninsured patients.

Planning Session participants also agreed that current WHA billing and collection guidelines should be modified to include the notion of providing patients with an "estimate" of their potential hospital bill, upon request. Although this is something that is commonly done already, the issue has been the subject of recent legislative interest.

By structuring a WHA agenda around the needs of each specific audience, WHA can fashion meaningful and responsible "pricing" transparency solutions. It’s important to note that none of these ideas/initiatives require the passage of legislation. Much like the commitment to publicly report quality and safety measures, "pricing" issues can also be subject to private sector address.

Steve Brenton,
President

WHA’s 2004 Annual Convention brochure and registration form is available at www.wha.org. Also look for it in the August 13 WHA Friday Packet.

Make your room reservations now by calling the Grand Geneva at 800-558-3417. Final cut-off for rooms in the WHA block is August 15.

New this year! Get CLE credits by attending a legal education track at Convention. Watch for a special brochure in the August 13 WHA Friday Packet.

Learn what strategies your colleagues are using to avoid future shortages in their health care organizations with a one-day seminar, "Health Care Recruitment and Retention Best Practices."

This September 29 seminar will focus on new approaches to increase awareness of health care careers. You will learn innovative ways to implement, recruit and retain a strong health care workforce. It will be held from 9 am to 4 pm at the Embassy Suites Hotel, Brookfield. A brochure and a registration form are included in this week’s packet and on the Web site at www.wha.org. Easy, on-line registration is also available on WHA’s Web site.

Monica Gustafson began work on August 1 as CEO at Edgerton Memorial Community Hospital. Gustafson comes to Edgerton from Decatur County Hospital in Leon, Iowa, where she served as CEO.

Gustafson has direct experience in successfully operating a critical access hospital. She holds a degree in laboratory technology from St. Francis University in Joliet, Illinois as well as an MBA from Lewis University in Romeo, Illinois. She served as chief operating officer for Winneshiek County Memorial Hospital in Decorah, Iowa, before joining the Decatur County Hospital.

Gustafson will be an employee of Brim Healthcare.

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