Identifying Challenges, Achieving Solutions

Eric Borgerding’s message to ACHE members

September 25, 2018

On September 18, WHA President/CEO Eric Borgerding spoke at the American College of Healthcare Executives (ACHE)-Wisconsin Chapter annual meeting about the top issues facing Wisconsin hospital CEOs, and how WHA is helping our members with solutions to meet those challenges. Borgerding delivered an hour-long overview of the health care environment in Wisconsin,including the top challenges facing WHA members, and detailed how WHA uses public policy and advocacy to impact these issues.   

According to WHA member surveys, the top issues threatening the ability of hospitals and health systems to provide high quality care are:

1.  Workforce shortages
2.  Uncertainty in the insurance market
3.  Government health care program underpayment

Borgerding noted that while Wisconsin is not alone in facing these challenges, WHA’s primary role is to understand and stay ahead of these challenges while crafting and delivering a responsive, relevant and impactful agenda.  

“We are always looking ahead, always proactive and constantly seeking opportunities to improve health care and be credible, meaningful, and influential in the debate,” Borgerding said. “We continue to expand our reach and purview across the continuum of care to deliver unquestionable value for our members, while forming new partnerships and relationships to build and advance common agendas.” 
Workforce Shortages
In 1990, manufacturing was the leading employer for most of the nation, and Wisconsin was no exception. But in the past 25 years, there has been a shift in employment sectors with health care expected to become the dominant industry in more than half the states by 2024. As reported in The Atlantic in January 2018, the U.S. reached that projection seven years early—and health care is now the leading employment sector.  

“As Wisconsin faces health care workforce shortages, we are also seeing demand for health care increase; it’s the proverbial perfect storm,” Borgerding said. “Wisconsin’s 65 and older population will double by 2030, meaning increasing demand for health care now and in the future.”

“With record low unemployment in Wisconsin, the labor market is already extremely tight, so we won’t solve the health care workforce problem through numbers alone; we have to look inside our state and inside our hospital and health systems to ‘grow our own’ workforce,” Borgerding said. “WHA takes a two-pronged approach, working with lawmakers to enact bipartisan public policy that both increases the number of caregivers being educated and trained in Wisconsin, but also staying in Wisconsin to practice.  We also use regulatory policy to better leverage the skills and training of existing caregivers.  Our physicians and advanced practice clinicians have licenses to deliver care. We need to make sure they are able to do that, able to practice at the top of those licenses as caregivers, not paper pushers.”    

One example is the Wisconsin Graduate Medical Education (GME) matching grant program. WHA initiated the program in the 2013-15 state budget and has worked with Republicans and Democrats during the past five years to grow and strengthen this “grow our own” strategy.  WHA created and garnered bipartisan support for GME, which is one of the best public policy solutions in Wisconsin. 

“By 2020, Wisconsin is projected to have 133 more primary care residents, many of those being in much needed specialties like psychiatry, in the so-called pipeline, and it is highly likely most of them will practice right here in Wisconsin. The GME grant program is shaping up to be one of the better examples we’ve seen in many years of advocacy and public policy being successfully channeled to create and implement real solutions,” said Borgerding.

“We know from WHA’s own research that if a medical student is from Wisconsin, attends medical school in Wisconsin, and completes their residency in Wisconsin, it becomes very likely they will practice in Wisconsin,” Borgerding told the ACHE audience.  “Wisconsin’s GME program addresses a key ingredient in that equation—residencies. It’s a real success story, a blue print for physician workforce public policy that we can replicate for other in-demand health care professions.”

According to WHA’s 2017 Health Care Workforce Report, advanced practice nurses, certified nursing assistants, physician assistants, and surgical technicians continue to be some of the most in-demand positions, with vacancies for surgical technicians, respiratory therapists, and physical therapist vacancies doubling since 2014.

In the last state budget, WHA worked with lawmakers on both sides of the aisle to provide $1 million in matching grant funding to develop rural training programs for advanced practice nurses and allied health professionals.  It’s an approach that mimics Wisconsin’s successful GME program by pairing state resources with hospital matching funding to grow more of our own workforce.  

“It’s not just the State that is stepping up to the plate with funding for these programs. Its also our members—the hospitals and health systems of Wisconsin—that are putting their own financial resources on the table, dollar for dollar, to help educate and train the health care workforce all of Wisconsin needs for the coming generations,” said Borgerding.  “It’s a commitment to Wisconsin that exemplifies what makes health care one of our greatest strengths, and why our hospitals and health systems are truly some of Wisconsin’s greatest assets.” 

In addition to new grant funding, WHA spearheaded legislation that clarifies that advanced practice clinicians treating Medicaid patients do not need physician co-signatures for services provided within their scope of practice. “Regulations and statutes can hinder care delivery models and clinician capabilities,” Borgerding said.  “We need to regulatory reforms like this to allow Wisconsin to fully utilize the caregiver workforce we already have,” said Borgerding. “This legislation was an important step, but there’s much more to do and much more to come as we allow more caregivers to practice at the top of their licenses.” 

Unstable Insurance Markets Threaten Coverage Gains
Through a combination of expanding Medicaid to cover those in poverty (incomes <100% of the federal poverty level) and implementation of the ACA’s insurance exchange, Wisconsin has cut its uninsured rate nearly in half, Borgerding told the ACHE gathering.  Wisconsin’s  uninsured rate is tied for 7th lowest in the nation, with a lower uninsured rate than 24 of the 33 states that have accepted full Medicaid expansion.  At the same time, fewer insurers are participating in Wisconsin’s exchange marketplace and premiums rose an average of 36% in 2018, factors combining to threaten Wisconsin’s progress.

“It’s critical that we hold on to these coverage gains, not step backward,” Borgerding said.  “Though the ACA is largely a federal issue, watching it implode from Madison, with no replacement in hand, is not an option.  If or until there is something actually enacted to replace the ACA, states can and must play a role in sustaining coverage gains within the ACA.  And to the Governor’s and Legislature’s credit, Wisconsin is doing just that.”

In the latter half of 2017, WHA called on the Governor and Legislature to take action at the state level to stabilize insurance markets and sustain coverage gains.  “Rather than stand by and watch the piecemeal deconstruction of Obamacare unfold, WHA calls on the state to strike its own path,” WHA said in a January 2018 statement. “…We believe the time for the state to act is now and are very encouraged by the Governor’s proposal to create a reinsurance mechanism to stabilize insurance premiums.” 

The reinsurance program passed the state Legislature with strong bipartisan support in early 2018, was signed into law by Governor Walker at multiple WHA member hospitals, and received federal approval in July. The program will cover 50% of high-cost claims ($50k-$250) in the exchange market in 2019. The program is funded by both state and federal dollars, with the federal government picking up an estimated 83% of the cost (approximately $166 million) and the state paying 17% of the cost.

The program is expected to lower 2019 premium rates in Wisconsin’s individual health insurance market on a weighted average by 3.5% from 2018 rates, and an estimated 11% as compared to without the waiver. The program has also brought stability to the individual market, with additional health plans planning to participate in 2019.  

Government Underpayment 
The final challenge Borgerding shared with the group is one echoed across the state:  the lack of adequate reimbursement for providing services to Medicaid payments.  According to WHA, hospitals alone are reimbursed $1.1 billion less than what it costs to provide care to Medicaid patients.  That translates into more than $1 billion in higher health care costs for everyone else as those unpaid costs are shifted to others, Borgerding said.  It’s a dynamic dubbed “The Hidden Health Care Tax” and it is only getting worse.  

To help hospitals that serve higher numbers of Medicaid patients, in the last state budget, WHA championed reimbursement improvements to offset hospitals’ uncompensated care costs, improve access for Medicaid and uninsured patients, and help maintain the financial stability of safety-net hospitals. One example is the state’s Medicaid Disproportionate Share Hospital (DSH) program, which provides $130+ million over the biennium to hospitals serving higher numbers of Medicaid and incurring high levels of losses. WHA also succeeded in creating a $1.2 million Rural Critical Care supplement for Wisconsin’s 11 non-DSH hospitals that do not meet the obstetrical services requirement.  

Over the past decade, WHA has also preserved and protected the Wisconsin’s nearly $425 million annual hospital assessment. The program is well-crafted and has served its purpose as intended, Borgerding noted.  

“Like most other states, Wisconsin hospitals were willing to step up to the plate and pay this assessment, which also increases the federal investment in the program. It’s proven to be a well-crafted approach that is working, preserving access to crucial hospital and other health care services, which is beneficial to hospitals, patients and employers,” said Borgerding.  “However, its notable that the state ‘skims’ about $150 million from the hospital assessment each year, while at the same time, Wisconsin is projecting a $102 million surplus in its Medicaid program.  That doesn’t make sense and needs to change. I think hospitals are being ‘overskimmed’.” 

Will Wisconsin Adopt Full Medicaid Expansion?
One of the most hotly debated health care topics in the Governor and Legislature races is Medicaid expansion. Wisconsin rejected full expansion under the ACA, and in the process, has passed up hundreds of million in additional federal Medicaid funding.  At the same time, Wisconsin has no insurance “coverage gap,” is the only state with complete access to coverage, and has invested some $3 billion in additional State funding into its Medicaid program since 2011.  

As politicians debate whether Wisconsin should take ACA-style Medicaid expansion, the primary question seems to revolve around the hundreds of millions in new federal money.  Not just taking the money, according to Borgerding, but how to spend the money.

“It’s unclear what will happen next year with Medicaid expansion; that will most likely be determined by the outcome of the election,” Borgerding said.  “But what is becoming troublingly clear is the desire by many proponents of Medicaid expansion to use the additional federal health care money for everything other than health care.  This is counter to what those dollars are for, and if Wisconsin goes the expansion route, WHA will join with others in taking a firm stand on preserving health care dollars for health care.”

2019 Public Policy Agenda Development
Borgerding wrapped up the session by noting that WHA is in the process of developing next year’s legislative agenda based upon feedback from members and other key stakeholders.  WHA put together a variety of workgroups, including the following, to gather input over the past year:

  • Medicaid Policy/State Budget Workgroup
  • Telemedicine Workgroup
  • Post-acute Care Workgroup
  • Behavior Health Task Force
  • Dental Access Workgroup
“We go where our members are going – that’s what makes us relevant and impactful,” said Borgerding.

This story originally appeared in the September 25, 2018 edition of WHA Newsletter