A recent report by PricewaterhouseCoopers on medical cost trends for 2009 lists cost-shifting from Medicare and Medicaid recipients, as well as the uninsured, as one of the major factors behind rising health care costs for consumers.

According to the national report, in two years nearly one in every four dollars spent on hospital care by employers and others with commercial health insurance will be attributable to cost-shifting. The Wisconsin Hospital Association (WHA) says the report’s findings are consistent with the worsening situation in Wisconsin.

"Wisconsin reached this unfortunate level in 2006, with health care consumers having over 26 percent of their hospital bill attributable to cost-shifting," said WHA Executive Vice President Eric Borgerding. "If nothing changes, by 2009 we estimate nearly one-third of the price employers and others pay for hospital care will be the result of cost-shifting from Medicaid, other government programs and, to a lesser extent in Wisconsin, the uninsured."

Medicaid, the health care program for low-income children and adults, is jointly funded by the state and federal government. Wisconsin’s Medicaid program now pays hospitals less than 50 cents for every dollar they spend providing care—some of the worst payment rates in the country. As a result, the state’s hospitals are annually forced to recoup over $600 million in unpaid costs by increasing prices for employers and others.

"The Pricewaterhouse study confirms what we have known for some time – cost shifting from government health care programs and the uninsured is driving up the price of health care for everyone else," Borgerding said. "Wisconsin is making great progress covering the uninsured, but has missed key opportunities to address Medicaid cost-shifting."

Wisconsin’s uninsured population is one of the lowest in the country, and could become even lower when BadgerCare Plus is fully implemented next year. Approved by Governor Doyle and a bipartisan majority of legislators in 2007, BadgerCare Plus takes a targeted approach to health care reform by extending coverage to children and low-income, uninsured adults. WHA is a strong supporter of the measure, which preserves Wisconsin’s nationally-lauded health care delivery system while increasing access to coverage.

As progress is being made to cover the uninsured, the price-inflating effects of Medicaid cost shifting remain unaddressed. In fact, Medicaid payments to hospitals have not increased in over a decade, dropping from 81 percent of cost in 1997 to less than 47 percent in 2007.

A hospital assessment proposed by Governor Doyle last session, and revised by WHA, would have captured an additional $400 million of federal Medicaid payments to help reduce cost-shifting. The proposal failed despite support from WHA and two of the state’s largest business organizations, Wisconsin Manufacturers & Commerce and the Metropolitan Milwaukee Association of Commerce.

WHA is hopeful the next state budget, introduced in early 2009, will result in bipartisan action to address Medicaid cost-shifting.

"As the evidence continues to mount about cost-shifting, so does the realization that continued inaction means even higher health care costs," Borgerding said. "The bottom line is it will take a significant injection of new dollars and new thinking to begin addressing this problem."

Wisconsin Medicaid officials have announced that a large number of Medicare crossover claims are about to be denied because of problems associated with the implementation of the new National Provider Identifier (NPI).

Moreover, in some cases, providers will not receive notification of claim denial because of difficulties matching provider numbers between the Medicare and Medicaid NPI databases. In other cases, the provider can be identified and will receive a remittance advice providing information about the cause of the denial.

Medicaid officials are asking hospitals that are expecting payment on crossover claims but have not yet received a remittance advice to call EDS customer service to initiate an investigation.

While the vast majority of hospitals have registered their NPIs with Medicaid, at this point only four percent of institutional claims are being submitted electronically with the NPI as the only provider ID. Claims containing both the NPI and the legacy Medicaid ID number are being processed under the legacy ID and no validation is being performed on the submitted NPI. Medicaid officials are advising hospitals and other providers to begin submitting small numbers of claims with an NPI only to ensure that any problems are detected early and do not affect a large volume of claims. They are also asking hospitals to make sure that correct taxonomy codes and CN1 suffixes are submitted as part of the NPI on the claim.

Providers will be required to use the NPI exclusively once the new Wisconsin Medicaid Management Information System (MMIS) is implemented. That is expected to occur October 1.

As one of only 18 state teams selected to participate in a National Summit on Nursing Capacity held in Washington DC, nurse experts and leaders from Wisconsin worked together over two days in June developing a plan to increase capacity and ensure that the state’s future nurse workforce needs will be met. Vice President of Workforce Judy Warmuth represented the Wisconsin Hospital Association.

The purpose of the summit was to encourage the use of states as laboratories to develop innovative solutions to the capacity crisis in nursing education. States were required to bring a team of 10 key stakeholders and strategic partners to ensure that the result of the summit would be a collaborative plan.

Wisconsin’s team included Senator Judy Robson, who attended and participated in her key role as a legislator and policymaker. Others on the team were:

• Nursing Education System – Sally Lundeen, UW-Milwaukee; Kathy Loppnow, Wisconsin Technical College System
• Employers of Nurses – Judy Warmuth, Wisconsin Hospital Association
• Workforce Investment System – Dianne Reynolds, Department of Workforce Development
• Regulatory Bodies – Marilyn Kaufman, Wisconsin Board of Nursing
• Nursing Leadership – Sue Schuler, Pam Maxson-Cooper, Barb Pinekenstein and Lea Acord, Wisconsin Center for Nursing
• Philanthropic Organization – Mary Gulbrandsen, Fund for Wisconsin Scholars

Wisconsin’s team identified data-based workforce planning as its highest priority. Accurate workforce data is critically necessary to ensure that limited resources are focused on the right time, place and numbers necessary for workforce success. While individuals and groups have worked with limited success to improve workforce data collection, the team vowed to energize activities related to this goal. An adequate nurse faculty, sufficient clinical facilities, and redesign of both education and practice models were also identified as issues by the Wisconsin group.

Concern about an adequate future supply of nurses in this country led three major sponsors—Robert Wood Johnson, AARP and the U.S. Department of Labor—to host a national summit on nursing capacity. These groups will also offer ongoing support to state teams as they work within their states to create capacity and ensure an adequate nursing workforce. Wisconsin’s team will continue to meet to implement strategies that will lead to better workforce data collection and other strategies to achieve their long-term goal of ensuring a sufficient future nursing workforce in Wisconsin.

Judy Warmuth, WHA vice president of workforce development, has been selected to serve as a member of the Wisconsin Legislative Council’s Special Committee on Building Wisconsin’s Workforce. The Committee is comprised of 15 members: three senators, three representatives, and nine public members, and is lead by Rep. Pat Strachota (R - West Bend) as chair and Sen. Robert Wirch (D - Pleasant Prairie) as vice-chair.

The Special Committee is directed to study and make recommendations regarding the coordination of existing resources of K-12 educational institutions, technical colleges, universities, government agencies, and private organizations to:

1. Meet the future workforce needs of the health care, skilled trades, construction, advanced manufacturing, and technology fields;
2. Retain workers in the health care, skilled trades, construction, advanced manufacturing, and technology fields; and,
3. Retrain and update the skills and education of workers in the health care, skilled trades, construction, advanced manufacturing, and technology fields.

Legislative Council Study Committees are highly regarded, and provide a venue for knowledgeable members of the public to work side-by-side with state legislators and staff on issues of timely importance to Wisconsin. The Committees often produce consensus legislative proposals that become law.

Warmuth has advocated for the health care workforce in Wisconsin for over five years. Pleased to have been selected for this important committee, Warmuth says, "In many Wisconsin communities, health care is the largest employer. In the state, the health care workforce will soon be the largest occupational sector. Educating, retaining and retraining a health care workforce is necessary for employers to have an adequate workforce and is good for Wisconsin’s economy."

The first meeting of the group will be in July when Warmuth will provide the entire committee with an overview of issues related to the health care workforce.

• The just released PricewaterhouseCoopers report on medical cost drivers confirms the fact that public program underpayment is a major factor fueling rising health insurance premiums for businesses and individual consumers.

Not that we necessarily needed it, but the report represents another indication in the mounting pile of evidence that hospital cost-shifting losses from Medicaid and Medicare truly do represent a not-so "hidden tax" on beleaguered purchasers of commercial health insurance products. In fact, the study confirms WHA’s long-standing contention that nearly one in every four dollars spent by private health consumers for hospital care can be attributed to cost-shifting. And in Wisconsin, the problem is even greater given the fact that our Medicaid payments to providers rank at or near the bottom of all states. In fact, WHA number crunching suggests that by 2009, as much as 33 percent of the average hospital bill will be due primarily to Medicare and Medicaid program losses.

A handful of lawmakers shunned an opportunity to actually do something about addressing this growing crisis during state budget deliberations last year. Disappointingly, while rejecting the Doyle Administration’s initiative as "a gimmick," critics offered no viable alternative on the scale necessary to begin addressing the magnitude of this problem, which adds $600+ million annually to the price of health care for Wisconsin businesses. Instead, another budget came and went with ample finger pointing, but no increase in Medicaid payments. It doesn’t take a clairvoyant to come to the quick read that next year’s state budget will face a revenue shortfall that will remind us of 2003—not 2007. The prospects for meaningful Medicaid payment increases in that environment, absent the hospital assessment, are likely to be nil. In light of these realities, "What’s your plan?" will be a frequent question we ask of candidates this election season.

• Occasionally an "academic" study will be released in which the "findings" are so obvious that the expression DUHHH...is the natural (and deserved) response. Such was the case a few days ago when Health Affairs published an abstract from an investigation undertaken by two Washington D.C. based researchers that came to the startling conclusion that public programs, like Medicaid, spend less on covered lives than their private sector counterparts.

The fact that government programs dramatically underpay physicians and hospitals certainly creates an advantage for the public payer. But the notion that "spending less" represents "less expense" is wrong and misses the big picture necessary to effectively understand and address system-wide "costs"—a good lesson to keep in mind if single payer-style health care reform gains momentum after the fall elections.

Steve Brenton
President

The WHA Task Force on Access & Coverage modified a gap analysis prepared by WHA staff at its June meeting. The gap analysis identifies nine key principles related to improving coverage of and access to health care, and lists improvements or changes that can be made to close the gaps.

The Task Force identified key health care cost drivers, which include demographics, technology, inappropriate care, and third-party payment issues, and suggests that care management, a more rational approach to end-of-life care and collaborative development of value-based purchasing, along with consumer engagement, can have a positive effect on holding down health care cost increases.

WHA will use the analysis to evaluate strengths and weaknesses of health care reform proposals pending in the Legislature, according to Executive Vice President Eric Borgerding.

The Task Force, chaired by Leo Brideau, president/CEO, Columbia St. Mary’s, discussed the importance of a principle that distinguishes "access" from "coverage." For example, Medicaid "covers" dental and mental health care, but "access" for Medicaid patients to these two services is unavailable in much of Wisconsin. Workforce shortages contribute to the problem now, and are expected to worsen in the future, further limiting access to medical services.

Task Force members identified two options that can help close the primary care infrastructure gap: targeted payment increases and broadening the scope of practice for primary care physicians and advanced practice providers.

Task Force members further discussed the role of providers and payers. They recommended that providers continue to seek greater operational efficiency, embrace value-based purchasing and collaborate with their communities to promote wellness. The group said payers should provide incentives for transparency, pay for well-care and chronic disease management, and increase administrative efficiency.

Massachusetts Health Reform and Outlook for Wisconsin

Borgerding provided an overview of the emerging political landscape and what it may mean relative to the direction of health care reform in Wisconsin. He provided a brief summary of key health reform proposals that have the most traction in Madison in the context of WHA’s guiding principles on health reform, which were developed by the Task Force.

George Quinn, WHA senior vice president, said the number of uninsured in Massachusetts has dropped from 13 percent to 7 percent since that state enacted a personal insurance mandate. Providers have seen modest improvements in Medicaid reimbursement and some reductions in bad debt and charity care, but those improvements are being offset by budgeted reductions in uncompensated care payments that previously went to hospitals. Among the negative aspects, Quinn said that the cost of the program is twice what had been projected and increased coverage has resulted in a shortage of primary care physicians.

Next Steps

The Task Force identified the following priorities:

• Continue to revise the gap analysis based on member feedback and on discussions at the upcoming WHA Board Planning Session.
• Report back on findings and recommendations that result from the WHA Board discussions at the July Planning Session.
• Receive a briefing on the Doyle Administration’s Small Group Health Plan initiative.
• Request the Wisconsin Association of Health Plans to present an overview of their position on issues associated with expanding coverage and access.

WHA President Steve Brenton said even though Wisconsin is a national leader in providing employment-based health insurance to their employees and families, the goal is to get to nearly 100 percent coverage while addressing the issue of rising costs.

"A major issue going forward is insurance affordability—which can be addressed by several strategies, including value purchasing and rewarding consumer engagement in their own health care status and decision making—both are key elements identified by the Task Force as we move forward," said Brenton.

Physician payment cuts of 10.6 percent are slated to go into effect July 1. While the House of Representatives approved funding to offset these cuts, the Senate failed to do so before leaving for its Independence Day recess. To avoid disruption in health care services and payments, the Centers for Medicare & Medicaid Services (CMS) said it is instructing contractors to hold, for 10 business days, claims for dates of service in July.

After 10 business days, contractors will begin releasing claims into processing under the fee schedule that implements current law. This could then result in claims being processed with the negative 10.6 percent physician payment update unless Congress acts. If a new law is enacted changing the negative 10.6 percent update, retroactive to July 1, CMS indicates it is prepared to automatically reprocess most of those claims which have already been processed. The hope is that Congress will address the issue immediately when it returns the week of July 7.

In other news, President Bush signed an Iraq War spending bill into law this week. Contained within that bill were the delays of six Medicaid rules until April 2009. The American Hospital Association (AHA) and Wisconsin Hospital Association have been supportive of delaying various Medicaid rules. The moratorium delays rules covering certified public expenditures, intergovernmental transfers, graduate medical education, state provider tax laws, case management services, rehab services and school outreach.

Congress excluded a proposed Medicaid outpatient rule from the moratorium that would narrowly define hospital outpatient services. The AHA continues to oppose the Medicaid outpatient rule.

The 2008 Nominating, Awards and Bylaws Committee will meet in August to consider nominating a WHA Chair-Elect, one or two At-Large members for the WHA Board and candidates for the Trustee Award and Distinguished Service Award (information on these two awards can be found on the WHA Web site at www.wha.org/about/pdf/2008awardscall.pdf.)

WHA members interested in being considered for an At-Large WHA Board seat or the Chair-Elect position should contact either WHA President Steve Brenton at sbrenton@wha.org or WHA Nominating Committee Chair Bob Fale at fale@agnesian.com.

Nominating Committee members for 2008 are:

Bob Fale, President & CEO, Agnesian HealthCare, Fond du Lac - Chair
Sandy Anderson, President, St. Clare Hospital & Health Services, Baraboo
Tom Bayer, COO, St. Vincent Hospital, Green Bay
David Fish, Executive Vice President, St. Joseph’s Hospital, Chippewa Falls
Stan Gaynor, CEO, Black River Memorial Hospital, Black River Falls
Barb Peickert, CEO, Hayward Area Memorial Hospital, Hayward
Terri Richards, Executive Vice President, Saint Joseph’s Hospital, Marshfield
Ford Titus, CEO, ProHealth Care, Inc., Waukesha
Steve Brenton, President/CEO, WHA, Madison

On June 23, Anthem Blue Cross and Blue Shield Foundation, the charitable giving arm of Anthem Blue Cross and Blue Shield in Wisconsin, announced a $99,000 grant to the Milwaukee Health Care Partnership to provide health care services to low-income, uninsured, underinsured, and medically underserved populations in Milwaukee. The funds will be shared among three Community Health Centers (CHCs): the Sixteenth Street Community Health Center, Westside Healthcare Association, and Health Care for the Homeless.

The Milwaukee Health Care Partnership will use the grant to advance its "medical home" service delivery model, which helps patients establish an ongoing relationship with a primary care provider to improve continuity of care and enable patients to better manage their own health.

"The Anthem Blue Cross and Blue Shield Foundation is committed to improving the health of our communities," said Steve Martenet, president of Anthem Blue Cross and Blue Shield in Wisconsin. "These grant funds will help individuals receive the care they need so they can lead happier, healthier lives. We support the excellent work of the Milwaukee Health Care Partnership and its allies, who are creating positive outcomes for all those they serve."

Defined in federal statute, CHCs are neighborhood-based health centers that provide medical, dental, behavioral and preventive health services to underserved populations in their service area and the community. There are four CHCs in Milwaukee County, 17 across Wisconsin and 3,800 CHC service sites nationwide.

"Patients who receive care from a consistent location and provider time after time create a relationship and health history, and can more effectively manage their health care needs in contrast to those who seek episodic services from an emergency department," said Joy Tapper, director of the Milwaukee Health Care Partnership. "This continuity allows us to help patients manage their own health and establish treatment and care management plans for chronic diseases or other serious medical conditions such as diabetes, asthma, congestive heart failure, pregnancy, or mental illness.

As many cancer patients know, hope is a strong force that can carry you through a life-changing ordeal. For Sandra Beyer of Fond du Lac, that hope came through many avenues.

Beyer was diagnosed with breast cancer in November 2006. Her husband, family and friends were there throughout, from diagnosis, to chemotherapy, mastectomy and breast reconstruction. But Beyer also drew strength from people she had never met previously—through classes and support groups offered through Agnesian HealthCare’s Journeys: a health resource center.

From the American Cancer Society’s "I Can Cope" classes, the "Look Good, Feel Better" program and a breast cancer support group, Beyer has utilized many of Journey’s resources as she came to terms with her cancer.

"Through the support group I met all different types of people, in different stages of cancer, and everyone has a story to tell." She soon realized the value of such a group. "You could feel so alone, but this group helps you survive; gives you hope and the willingness to go on, just by being around others who have survived."

The educational programs offered through Journeys have been helpful too. "You don’t always know what is happening when you have cancer. Here is a place where expert resources are on hand and can answer your questions."

Now Beyer wants to "pay it forward." "I appreciate the people I have met through Journeys who were willing to talk and share their experiences. I hope to do the same for others."

According to the City of Milwaukee Health Department, Milwaukee’s infant mortality rate (IMR) is significantly higher than the national rate, 40th among the 50 largest cities in the U.S., and worse than countries such as Cuba, Chile, Poland, Costa Rica and Kuwait. The IMR disparity between African Americans and Whites ranked Milwaukee the 4th worst among 16 cities measured.

What accounts for these grim statistics? The largest contributing factor is prematurity driven by lack of prenatal care, teen pregnancy, short intervals between pregnancies, lack of education about Sudden Infant Death Syndrome and infections, and smoking during pregnancy.

Into the heart of this seemingly hopeless situation, the St. Joseph Women’s Outpatient Center injects daily doses of care, education, and compassion. Located inside Wheaton Franciscan Healthcare - St. Joseph—in the heart of one of Wisconsin’s highest infant mortality zip codes—the Women’s Outpatient Center (WOC) provides prenatal and gynecological services to underserved women. A resident run clinic, the WOC also provides a superior learning experience for Medical College of Wisconsin residents mentored by attending obstetricians.

Among the many challenges we face is our patient population, many of whom have been dismissed by other clinics for non-compliance with instructions. Our staff goes to extraordinary lengths to ensure mothers-to-be get the prenatal care they need, calling patients and emergency contacts as many as three times to reschedule appointments, even sending certified letters when necessary. Our nurses also provide extensive and comprehensive education for our patients, from their first appointment throughout their entire pregnancy.

Overcoming barriers of culture, language, economics, education, and perception of the health care industry, our staff works very hard to build trusting relationships in order to keep patients on a regular schedule of prenatal care. We learn the names of patients, families and significant others. We conduct care conferences to gain insight into the social, psychological or financial issues affecting them. And we ensure culturally competent care through staff education, bilingual caregivers, interpreters, and staff diversity.

To extend our reach and effectiveness in the community, St. Joseph’s established a network with other low cost providers of OB care, hired a perinatal resource nurse funded by the Black Health Coalition, partnered with the March of Dimes to provide free baby care products through our Stork’s Nest program, and provide additional prenatal care to uninsured families through Wheaton Franciscan Healthcare’s Community Care program.

With an ever increasing patient population, our multidisciplinary team of nurses, physicians, social workers, financial counselors, and interpreters has produced some highly impressive outcomes. In 2004, among the babies of the mothers we cared for:

• Only 15 percent went to the Neonatal Intensive Care Unit
• Only 10 percent were born before 37 weeks gestation
• Only 5 percent were born before 35 weeks
• Only 12 percent were considered low birth weight

Gordon Lewis has been appointed chief executive officer of Burnett Medical Center in Grantsburg. Lewis began his new position on June 9. He most recently was CEO of Community Hospital and Long-Term Care Center in Torrington, Wyoming. Recent professional experiences have included service as Wyoming Regent for the American College of Healthcare Executives, Regional Policy Board Delegate for the American Hospital Association, and Board of Directors of the Wyoming Hospital Association and the Wyoming Healthcare Resources Network. Lewis has recent successful experience in hospital building programs, strategic planning, health care finance, lobbying efforts, quality improvement, and customer/patient service and care.

On June 11, Premier healthcare alliance recognized the nation’s top hospitals for their commitment to outstanding patient care and operational efficiency with the 2008 Premier Award for Quality (AFQ). Two Wisconsin hospitals received the AFQ: University of Wisconsin Hospitals and Clinics and St. Joseph Hospital, Marshfield. Premier announced the 26 winners of the award, out of more than 3,800 eligible hospitals nationwide, at their annual conference.

The AFQ recognizes leading health care organizations that efficiently provide outstanding patient care and consistently set the standard in clinical excellence nationwide. Distinguished by its consideration of performance-based criteria, including clinical quality outcomes, resource utilization, and clinical process indicators, the AFQ measures top performers at the overall hospital level.

"The Award for Quality differentiates its winners as industry leaders by recognizing clinical excellence in both quality of care and operational efficiency," said Stephanie Alexander, senior vice president of Premier Healthcare Informatics. "Premier is pleased to honor this elite group of hospitals for the high quality of patient care they offer to improve the health of their communities."

All acute care inpatient facilities in the United States that submitted data to the Centers for Medicare & Medicaid Services (CMS) and the CMS Hospital Compare project were considered for the AFQ. Using MedPar 2006 data, Quality and Efficiency Indexes were calculated for 62 disease groups and at the overall hospital level. Quality was measured by the incidence of three adverse outcomes: mortality, morbidity and complications, which are combined into a single Quality Index using the preference weightings from the Corporate Hospital Rating Project. The efficiency index was generated using length of stay to proxy for resource utilization.

Acute care facilities attaining the top one percent designation are identified as having scores in the top two quintiles for process of care and in 10 out of 62 disease groups and at the overall hospital level for quality and efficiency.

Aurora Health Care is the top performing health system in the country in a national Centers for Medicare & Medicaid Services (CMS), Premier healthcare alliance pay-for-performance project. The initiative rewards hospitals for delivering higher quality care in five major clinical areas.

Aurora Health Care has been one of the top performing health care systems since the Hospital Quality Incentive Demonstration project’s inception four years ago. The initiative focuses on improving the quality of patient care in congestive heart failure, heart attack, pneumonia, heart bypass surgery, and hip and knee replacement.

In the year three results that were just released, Aurora hospitals have excelled in several of the quality areas.

• Aurora’s hospitals are top performers in 40 of the 47 quality areas that are measured. This is the most of any system.
• Aurora hospitals received incentive payments in 24 quality areas, the most of any system in the country.
• Ten of the Aurora hospitals that have been a part of the quality effort are in the top for care of people with pneumonia.

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Ray Myers, assistant administrator, St. Joseph’s Hospital, Chippewa Falls, will formally retire from St. Joseph’s Hospital and HSHS Western Wisconsin Region in mid-July.

David Fish, president/CEO at St. Joseph’s, said, "His love of people, kindness and patience has been a true gift shared with our community and all who have had the opportunity to work with him. Ray’s quiet manner has allowed him to accomplish great things—most recently, being instrumental in opening the new dental clinic that serves those who have significant needs and in some cases very limited resources."

WHA recognized Myers for his efforts to improve dental access at their Rural Health Conference in 2006.

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