Since 2004, the Department of Dental Medicine at Lehigh Valley Health Network has participated in the ADA's Give Kids A Smile Day. This nationwide outreach program was launched to encourage parents, health professionals and policymakers to address this important health care issue. Our health network's program is designed to improve access to care as well as to publicize the difficulties that many underprivileged people face in obtaining needed dental care in our community. 

For me this is the most rewarding day of the entire year. This year at our Allentown clinic alone (one of three that participated), four dental residents, three volunteer attending dentists and our support staff (hygienist, assistants and front desk personnel) provided free care to 26 children, performing 132 procedures at a value of over $7500. Over the last seven years we have cared for more than 200 children on this one day alone at a value of well over $50,000.  Services included x-rays, cleanings, preventive sealants, restorations, extractions, and even root canal therapy. Children received oral hygiene instructions and a gift bag containing a new toothbrush, toothpaste, and floss as well as small prizes.

As follow-up, parents are given a treatment plan for any care that was not completed and are asked to meet with the hospital's financial counselor so they can continue receiving care at a reduced fee or free of charge.

Although we are taking a very small step, we are committed to improving the oral health of our area's children and preventing those lost school hours. The children and their parents are extremely appreciative of the care we provide.

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Nevertheless, the underlying issues behind reform--expanded coverage for the uninsured, making coverage more affordable, insurance reform, and improving health care delivery--remain as important as ever to hospitals and patients. Hospitals across Pennsylvania continue to lead the way, making progress and advocating for improvements, even though the enactment of a comprehensive national plan now looks uncertain. Hospitals also must continue to advocate for important areas of reform in the absence of a comprehensive plan.

Health Information Technology

Health information technology, such as electronic health records, can change the way providers capture, access, and report clinical information. These new capabilities could support transformations in the way health care is delivered and financed. Pennsylvania hospitals carved out a leadership position in the adoption of health information technology several years ago. Hospitals have begun important initiatives to implement electronic health records, computerized physician order-entry, the review of test results, and e-prescribing.

Paying for Results

Instead of paying for separate, individual health care procedures by multiple providers, Medicare and other payors could "bundle" payments, encouraging providers to integrate their services and work together to provide care. In Pennsylvania, many hospitals are exploring the creation of new delivery models that integrate services across the continuum of care, especially for chronic illnesses. The hospital community continues to support a reform provision that would create voluntary hospital pilot programs to explore the use of bundled reimbursements.

Research on Comparative Effectiveness

Hospitals and physicians have embraced evidence-based medicine. The use of clinical standards--protocols that have been proven by research to work--is a familiar concept. In addition, a national center to study the relative effectiveness of medical treatments has been established.

Filling the Physician Pipeline

The U.S. is expected to face a shortage of more than 125,000 physicians by 2025. With physicians spending eight or more years in training, we must start educating more doctors now. The hospital community continues to urge Congress to create more Medicare-supported training positions for residents. Unused residency positions should be redistributed to hospitals that can fill these slots. New positions should be added to expand training in primary care and needed specialties.

Expanding Coverage Through Medicaid

The hospital community strongly advocates for the extension of the temporary increase in the Federal Medical Assistance Percentage (FMAP) included in the American Recovery and Reinvestment Act. The funds were intended to be used by states to cover the cost of the growing number of low-income residents applying for Medicaid, due in part to the prolonged economic recession. Pennsylvania should use its increased FMAP dollars accordingly. State government should continue to provide access to needed health care for Medicaid patients while maintaining eligibility, benefits, and hospital payments at current levels.

Expanding Coverage Through Insurance Reforms

Changes should be made to the health insurance marketplace to help more people get and keep commercial coverage. The hospital community continues to support these reforms:

• No one should be denied coverage, or have their coverage taken away, because of their health status or pre-existing health condition.
• Insurers should not be able to put caps on the amount of health care services beneficiaries need and use or the costs incurred.
• Insurers should not be able to impose excessive waiting periods before enrollees receive their health care benefits.
• Limits for "premium rating bands" should be established. Premium rating bands determine how much insurers can increase premiums for people who are in poor health and discount premiums for people who are in excellent health.
• Clinical trials are essential for advances in medicine. Insurers should not be allowed to cancel coverage for patients that participate in clinical trials. Insurers should also be required to cover the routine care costs associated with clinical trials.

Your Role in Health Care Reform

Health care reform is complex, controversial, and crucial to the long-term health of Pennsylvania, the nation, our economy. Americans have the finest health care in the world, yet too many people lack access to that care when they need it. Health care costs are rising faster than inflation, accounting for more of our gross domestic product, and making American companies less competitive in the global marketplace. As part of the hospital family, you are in a unique position to understand and communicate the issues behind health care reform and the important work your hospital is already doing to improve the situation. Subscribe now to this newsletter to stay updated--and join the conversation.

The nation's slow and jobless economic recovery continues to drive up enrollment in Pennsylvania's Medical Assistance insurance program. Pennsylvania's enrollment in Medical Assistance grew 5 percent from January 2009 through December 2009, from 1.99 million to 2.09 million Pennsylvanians. Yet the Governor proposed a state budget for 2010-11 with cuts totaling $51 million in state and federal funds.

"These are trying times for everyone. While mindful of the budget difficulties facing Pennsylvania, we must ensure that full-service hospitals can continue their role of providing needed care while acting as a key source for jobs and job-growth opportunities. This is especially true for hospitals and providers that serve a disproportionate share of people covered under Medical Assistance or without health insurance," said H. Ray Welch Jr., president and chief executive officer, Mercy Health System, in southeastern Pennsylvania.

Protecting Hospital Funding and Jobs

Hospitals support one out of every ten jobs in Pennsylvania. The health care sector is one of the few parts of the economy maintaining employment and even supporting job growth. With Pennsylvania's unemployment hovering near the highest level in 25 years, the state budget should support, not undermine, hospitals' financial viability, so they can continue to function as some of the state's largest, most reliable employers.

In next year's state budget, hospital Medical Assistance payments must at least hold steady. They should not be reduced by $51 million, as currently proposed.

"The global recession is just that. We are certainly experiencing its effect in north central Pennsylvania, an area which already has a higher than average unemployment rate. We certainly understand the impact that it has had on state budgets. Yet, any further cuts in Medical Assistance payments would negatively impact our hospital and the communities that we serve through further loss of hospital jobs and reductions in services," said Edward C. Pitchford, president and chief executive officer, Charles Cole Memorial Hospital.

Help From the Federal Government?

The proposed state budget relies on federal legislation to extend a temporary increase in the Federal Medical Assistance Percentage (FMAP) and bring an additional $850 million to Pennsylvania. These additional funds are needed to help assure that Medical Assistance patients have access to health care. It's crucial to hospitals across the nation that Congress pass federal legislation extending the FMAP increase. It's also crucial that Pennsylvania's state budget uses these funds for its intended purpose--to ensure continued patient access to hospital care--and not divert the funds elsewhere in the state budget.

How You Can Help

Over the coming weeks, hospitals will receive additional details about the state budget. There are several ways you can help protect health care in Pennsylvania by advocating for hospitals:

1. Sign up now to continue to receive updates.
2. Consider submitting a personal story about how cuts in Medical Assistance funding would impact you, your patients, your hospital, or your community. The CareForPA website has a quick and easy way for you to share your story.
3. Prepare now to speak out on behalf of your hospital. When asked to contact your lawmakers about this important issue, use the resources in the Legislative Action Center area of CareForPA website to send email messages.

Providing More Benefits Than Ever

As a matter of course, hospitals save lives, improve quality of life, and heal the injuries and illnesses of everyday life. Besides serving the immediate needs of their patients, hospitals go above and beyond to develop, staff, and fund additional services that improve the overall health and well-being of communities. In many cases, these programs would not be available if hospitals did not provide them. Community benefits include two major components; the unreimbursed costs of providing care to patients who have little or no means to pay for that care, and community services that include, but are not limited to:

• Free clinics and health services
• Child health promotion efforts
• School-based wellness programs
• Health screenings and education
• Health fairs
• Prenatal and maternity programs
• Health professions presentations
• Scholarship programs
• Adult activity programs
• Community outreach vans

With the current economic downturn, hospitals are providing more community benefits than ever. Hospitals are extending more charity care and financial assistance, coping with more unpaid patient bills, and serving more patients with Medical Assistance (and being paid less than what it costs to provide the care). Many hospitals are supporting food drives, support groups and clinic services, and working to provide social services for those in need. During the last year on record, the amount of uncompensated care (charity care plus bad debt) provided by Pennsylvania hospitals grew 11 percent to $753 million.

Learn and Share the Many Good Works

What special programs does your hospital have to serve the specific needs of its community? Does your emergency department have a patient education group for children with asthma? Does your hospital provide social, networking, or learning opportunities for older adults? Knowing about these "extras" should make you feel even prouder of the work you do every day. You may even end up telling family and friends about community benefits that could help with their particular health needs.

Tell Your Hospital's Story

Hospitals are amazing havens of healing, health, and hope. Share the good work that you and your hospital are doing. Highlight your hospital's most innovative or effective community benefit on the CareforPA website. Simply submit text, photos, or a link to videotape as described in this issue. Together let's spread the good news about how Pennsylvania hospitals are helping communities across the state.

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Because part of the state budget includes Medical Assistance payments to hospitals, and other state support for specific health care services, the hospital community must pay close attention to any proposals to cut hospital funding in the 2010-2011 budget. It's a critical time for you, as a member of the hospital family, to understand the issues and ways you can help send messages to elected officials when the next budget is proposed by the Governor.

Challenges

In 2009, in the midst of a severe economic downturn, state government was collecting less money than expected. This revenue shortfall made passing the 2009-2010 state budget especially difficult because lawmakers had to first find the money to fill that existing shortfall of $3.2 billion. The strong voice of Pennsylvania's hospital and health system community helped to restore most of the hospital payment cuts proposed in that budget, which, at one point, totaled $280 million. On October 9, Governor Rendell signed the General Appropriations Act of 2009 (House Bill 1416) into law. However, as of press time, one of the supporting bills has not been enacted because of ongoing debate over proposed "gaming legislation." It is the seventh year in a row that Pennsylvania lawmakers and the Governor did not meet the June 30 deadline for passing the state budget.

Since October 9, new gaps have emerged for 2010 as revenues have fallen short of the projections on which the 2010 budget was based. Current estimates show a year-end revenue shortfall of $450 million. If the proposed gaming legislation does not generate $250 million this year, the projected revenue shortfall will be even larger. The Governor is expected to release Pennsylvania's next budget in February, and if revenue declines persist as expected, additional spending and service cuts could be likely.

Your Role

Look for the next edition of Understanding the Issues, and follow the updates about the Governor's 2010-2011 budget proposal and its impact on the hospital community. You need to be ready to speak out against hospital funding cuts to ensure Pennsylvania's hospitals and health systems can continue to meet patient needs, implement health care reform changes, and make advancements in care.

Hospitals' doors are open around the clock, providing care for all who need them, regardless of their ability to pay. As a member of the hospital community, you see first hand the effects of being uninsured can have on a person's health.

That's why the hospital community has worked with federal lawmakers to support reform efforts by agreeing to accept less money for Medicare and Medicaid patients in order to help make expanded health insurance coverage a reality. Specifically, the hospital community made an agreement with congressional leaders early on to accept $155 billion in hospital payment reductions over ten years in order to ensure health care insurance coverage for 97 percent of the people legally residing in the U.S.

However, as federal lawmakers continue to work on health care reform legislation and agreements and compromises are made, there are a number of areas in the reform package that the hospital community is concerned about.

Fair Payment Rates

One of the main ideas put forth for a way to expand health care coverage is to increase competition in the insurance market and provide more choices to patients using non-governmental, non-profit entities to provide coverage.

The plan that is adopted by Congress should provide health care insurance for the un- and under-insured must allow hospitals to negotiate fair and adequate payment rates for health care provided to patients with this new kind of insurance. The hospital community opposes any plan that would base those hospital payments on Medicare rates, because in Pennsylvania hospitals only get paid 94 cents for every dollar of care provided for Medicare patients. 
 
Fair Incentives to Reduce Hospital Readmissions

Current health care reform legislation as it now stands also would penalize hospitals for patient readmissions that occur within 30 days of being discharged. Sometimes patients who have been hospitalized return to the hospital (a "readmission") soon after their discharge because they are having problems. If those problems are related to the care they received the first time, known as an avoidable readmission, hospitals understand that some type of financial penalty may be appropriate. But often, patients return because of complications that are not related to a mistake in the hospital. Perhaps the patient develops a secondary virus, or he or she does not follow all their discharge instructions. In these cases, hospitals should not be penalized. The two key pieces of health care reform legislation (House and Senate) do not recognize the difference. Lawmakers need to make changes so that financial penalties are only levied for avoidable readmissions--those where compromised care resulted in readmission.

Next Steps

When the House-Senate conference committee begins its work to reach a final compromise, hospitals may need to speak up even more about their key concerns: 

• Ensuring coverage is increased to 97 percent of the people legally residing in the U.S., or reducing hospital payment reductions if this target is not met. The hospital community had agreed to $155 billion in payment reductions over ten years to help pay for expanded coverage if 97 percent of the population legally residing in the U.S. is covered.
• Ensuring that under a new public option plan, hospitals are paid based on negotiated rates with providers, not based on Medicare rates. 
• Ensuring that a hospital readmission policy is changed to address only truly unavoidable hospital readmissions, so that hospitals are not penalized for readmissions that are truly unavoidable.
  

When Congress and the President started the process of developing proposals for a ten-year health care reform plan, they had very clear goals and objectives--certain things they wanted to be sure were included. Whenever a major law is being created, legislative leaders have to get the votes to pass it, and sometimes that means making agreements that can take away from the original goals and objectives. As this process has continued in Washington, especially in the Senate, parts of the plan were altered to get those votes. People need to understand that this means whatever compromise is reached between the House version and Senate version in January may have some unintended consequences, and Congress may have to go back later and pass new laws to make changes over the next ten years.
 
Look for new information on the progress being made on health care reform and hospital issues in the next edition of Know the Issues.

Many factors have led to a nationwide need for more doctors. These include:

1. America's growing and aging population. The U.S. population is expected to grow by more than 50 million between 2006 and 2025. At the same time, the number of older Americans who need more health care is expected to double between 2000 and 2030. Pennsylvania has the second oldest population in the nation.
2. Health care reform's goal of expanding coverage for the uninsured also will create the need for more doctors, especially primary care physicians needed to provide increased wellness and preventative care services.
3. Physicians' life style changes--today's young doctors want more balance between work and career.
4. Advances in medical technology have added to the need for physicians to make use of new diagnostic and treatment tools sought after by patients.
5. Managed care insurance, an innovation intended to reduce the need for physicians, has increased their administrative duties and created the need for more doctors.

According to the Association of American Medical Colleges (AAMC), the U.S. is expected to face a shortage of more than 125,000 physicians by 2025. Health care reform could increase the need for doctors by as much as 25 percent. Although more young people are becoming doctors, the AAMC in 2006 called for a 30 percent increase in medical school enrollment by 2015.

Fortunately, Pennsylvania has many medical schools and residency programs. Our state ranks fifth in the nation in terms of the concentration of medical school students, and fourth in terms of doctors in accredited residencies and fellowships.

Unfortunately, Pennsylvania's difficult medical liability environment is hurting our ability to attract doctors to the state and retain the young doctors who train here. While doctors' liability insurance costs have stabilized, premiums remain double what they were, on average, in 2000.

As a result, Pennsylvania's residency retention rate has dropped from 60 percent in 1992 to about 20 percent in 2006. The average age of Pennsylvania's physicians has risen to nearly 50 years. Almost one of every four doctors in active practice is over 60. Many doctors say they have plans to leave the state or retire early.

The Impact on Hospitals

Physician shortages could ultimately mean that hospitals could have difficulty in providing the services their patients need. The Pennsylvania hospital community has already taken some steps to address this issue. To help physicians with their medical liability costs, hospitals are hiring physicians and assuming the financial burden of their insurance premiums.

Next Steps (and how you can help)

The Hospital & Healthsystem Association of Pennsylvania (HAP) is working with the Pennsylvania Medical Society and others to develop incentives to encourage more young doctors to settle here and put down roots in our communities. Subscribe to this newsletter now so you continue to receive information about these new initiatives. In the coming year, HAP will be asking your help in advocating for legislative solutions to Pennsylvania's growing physician shortage.

Medicaid is funded by the federal and state government, and provides safety net health care to the elderly, the disabled, low-income children, and families who are eligible financially and have no insurance.

Medicaid has historically paid hospitals less than what it costs to deliver the care. This gap has been widening in more recent years as Medicaid hospital payments have not kept pace with the overall cost of care (larger and more diversified workforces, older and sicker patients, new technology, and pharmaceutical costs).

The state sets payments for hospital care for Medical Assistance patients. In Pennsylvania, general acute care hospitals are paid, on average, 82 cents for each dollar that care costs for Medicaid patients--compared to a national average payment of 88 cents for every dollar spent caring for Medicaid patients.

Since Medical Assistance does not pay adequate rates, there is pressure for other health insurers to make up the shortfall left by Medicaid's lower payment rates--thus, creating a hidden tax on citizens who then are asked to pay higher premiums, or on whose behalf employers pay higher premiums to make up the difference. In other words, not only do hospitals get hurt by this inadequate payment system, so do taxpayers and businesses.

In addition to the state underpaying hospitals for care to Medical Assistance patients, there are differences between hospitals in the patients they serve and the care they provide. In addition to having sufficient funds to pay hospitals for care, the system needs to recognize hospitals' burden of caring for the Medical Assistance population given their health needs.

Some hospitals serve large numbers and/or have a higher percentage of Medical Assistance patients. Some hospitals with teaching programs or special services (such as trauma, obstetrics, neonatal, burn) have substantial "standby costs" to provide such programs or services, and may have a larger volume or higher percentage of Medical Assistance and uninsured patients in these special services. A significant percentage of the Medical Assistance insured population in Pennsylvania resides in more rural communities as well as urban communities.

The hospital community has been and will continue to seek Medical Assistance payment modernization. Studies and reports have verified the need for change. Given the long-term impact of the recession on patients and hospitals, and the expectation of major changes due to federal health care reform, Medical Assistance modernization is a continuing priority for the hospital community. Pennsylvania needs a budget that assures fair payments, and the state needs to implement a balanced system for payments to hospitals to care for Medical Assistance patients.