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June
20, 2005
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Michigan Health & Hospital Association 6215 West St. Joseph Highway Lansing, MI 48917 (517) 323-3443 Fax: (517) 323-0946 |
IN THIS ISSUE Senate
and House Complete Initial Work on State Budget Bills
Senate and House Complete Initial Work on State Budget Bills
Last week, the Michigan Senate completed work on Senate Bill 267, legislation to provide funding for the Michigan Department of Community Health (MDCH) in fiscal year 2006. House and Senate leaders anticipate moving the budget bills into conference committees by the end of this week, but they have not laid out time frames for the required budget negotiations to be completed. Gov. Granholm’s 2006 budget proposes the smallest Medicaid cuts, totaling nearly $125 million, while the House version offers the deepest reductions, totaling about $200 million. Medicaid has been targeted for months as the state faces a budget deficit of roughly $800 million for fiscal year 2006, which begins Oct. 1. In addition to an agreement being forged between the House and Senate, negotiations must also occur between the executive office and legislative leaders for any final budget agreements to become law. The MHA will continue to meet with Gov. Granholm and key legislative leaders to discuss the impact that proposed Medicaid cuts will have on hospitals and the patients they serve who have no other resources or options. MHA members are urged to tell legislators to oppose further Medicaid cuts and argue that stable and adequate long-term revenues must be committed to Medicaid to protect Michigan’s children and elderly residents. For more information, contact Brian Peters at the MHA. Medicaid
Cuts Shift Costs, Eliminate Michigan Jobs,
Cause Real Human Suffering
On the same day last week that leaders of the state House of Representatives announced another round of massive cuts to health care for Michigan Medicaid patients, a Families USA report issued in Washington offered this conclusion: Health insurance premiums for the average Michigan family will increase $730 this year to cover the costs of providing medical care for the uninsured. In other words, Michigan residents who lack health care coverage are still getting sick, and someone else in Michigan is paying for their care. That “someone” is those of us who have health care insurance, Michigan employers, and providers who absorb the losses. Combined, we will pay more than $1.1 billion this year and $1.5 billion by 2010 to pay the health care bills of Michigan’s uninsured, the Families USA report concludes. It would be unwise then, for our elected leaders to purposely increase the number of Michigan residents without health care insurance or to pare the benefits of people who have coverage. But what have our elected leaders in Lansing done with the Medicaid budget in recent years?
In addition to shifting higher health care costs to Michigan employers and insured residents, the depth and breadth of the FY 2006 Medicaid cuts proposed by the House and Senate would cause suffering and harm to tens of thousands of Michigan’s most vulnerable and fragile residents. Understand that the face of Medicaid in Michigan today is, by and large, grandmothers and grandfathers. Elderly and disabled Michigan residents account for 70 percent of total Medicaid health care spending, mostly for long-term care and prescription drugs. In terms of total patients served, the face of Medicaid today is mostly children and their moms. Medicaid finances about 33 of every 100 births in Michigan. Many of these babies would not be alive today without Michigan’s Medicaid health care program. The face of Medicaid in Michigan is tens of thousands of former auto and manufacturing workers. Most lost good jobs with good benefits and today are unemployed or have new jobs without health care coverage. In addition, Medicaid is one reason why health care is Michigan’s top private sector employer, providing more than 472,300 direct jobs and 254,340 indirect jobs that pump $29.8 billion a year in wages and salaries into the state’s economy. Health care is projected to generate more than 100,000 new jobs in Michigan in the next decade, as the state’s population lives longer and needs more health care services. According to a recent study by Michigan State University researchers, a $100 million cut in Medicaid spending would result in more than 6,300 Michigan residents losing their jobs. So the cuts proposed by the House could cost 12,600 Michigan health care jobs. Now is precisely the wrong time to reduce Medicaid spending. Instead, the state must commit, over the long-term, to paying its fair share for health care to protect children and the elderly, to protect thousands of good jobs, and to stop shifting the costs of government underfunding to employers and the insured. Low-income Residents Stay in Hospitals Longer
As Michigan’s economy struggles to recover and the state government shrinks budgets for Medicaid and other social programs, data from the MHA Interactive Data System (IDS) show that Michigan’s low-income population has a higher hospital utilization rate than does the state as a whole. The data measured reflects information from October 2003 through September 2004, the most recent period available. Defining the low-income population as those who live in areas (defined by ZIP codes) with a median household income less than $30,000 a year, the IDS shows that the average length of stay for low-income residents was 5.3 days compared to the state average of 4.7 days. After the data is severity adjusted, the difference indicates the low-income patients were more severely ill than those who had higher incomes. In Michigan, 7.3 percent of the population lives in ZIP codes with a median household income under $30,000. Yet, this population accounted for 9.8 percent of hospital discharges and 10.9 percent of the days patients were hospitalized during fiscal year 2003-2004. After adjusting the data to account for age and sex differences in the populations, the low-income group had 38 percent more admissions and used 54 percent more hospital days than expected, with the greatest usage by those aged 45 to 64 years. More research is necessary to determine the causes of higher hospitalization among Michigan’s low-income population and to explore related factors. However, the data confirm the premise that failure to provide low-income individuals with affordable access to primary health care services leads to longer, more expensive treatment over the long term. For more information, contact Bob Zorn at the MHA. Sparrow Health System Selects New CEO
Sparrow Health System, Lansing, has selected Dennis Swan as its president and chief executive officer, effective June 10. He had been filling the position on an interim basis since October, following the resignation of former CEO Joseph F. Damore. A member of the Sparrow executive team for more than 20 years, Swan previously served as Sparrow’s senior vice president of operations and chief operating officer. He holds a bachelor’s of arts degree from Western Michigan University and a juris doctorate degree from the Thomas M. Cooley Law School.
The MHA HEALTH PAC has raised $128,925 toward its 2005 campaign goal of $300,000. Nearly 30 hospitals/health systems have already met or exceeded their organizational political action committee goals, including eight new goal achievers. They are Alpena Regional Medical Center; Chelsea Community Hospital; Hills & Dales General Hospital, Cass City; Memorial Medical Center of West Michigan, Ludington; Otsego Memorial Hospital, Gaylord; Port Huron Hospital; Portage Health System, Hancock; and Scheurer Hospital, Pigeon. Those who contribute to the campaign secure membership to one of the following clubs: Trustees’ Club ($1,500+), President’s Club ($1,000+), Chairman’s Circle ($500+), Capitol Club ($350+) and Century Club ($250+). The Volunteers’ Club recognizes members of the volunteer community who contribute to the campaign. More information on the campaign, goal achievers and club members is available on the HEALTH PAC Web site. Members with questions about the MHA HEALTH PAC or beginning a local fundraising campaign should contact Lori Latham or Courtney Lawson at the MHA. Governors Testify on Bipartisan Plan for Medicaid Reform Last week, the National Governors Association (NGA) released a report titled Medicaid Reform: A Preliminary Report. Gov. Jennifer Granholm was a member of the bipartisan work group of governors that developed the report. Following its release, Govs. Mark Warner (D-VA) and Mike Huckabee (R-AR) testified before the House Energy and Commerce Committee and the Senate Finance Committee on this issue. Both committees have jurisdiction over Medicaid and, under the recently passed budget resolution, are charged with finding $10 billion in savings in the Medicaid program. Despite the bipartisan nature of the report, Michigan Rep. John Dingell (D-Dearborn) and other House Democrats strongly disagreed with the NGA proposals, arguing that reforms targeting coverage and benefits for senior citizens, children and pregnant women are being sought to support tax cuts for the wealthy.
The report is organized around five objectives: reforming Medicaid, enhancing quality and reducing costs, strengthening employer-based and other private health insurance, slowing the growth of Medicaid long-term care, and state contributions to the Medicare prescription drug program. The plan does not call for increasing federal matching payments to assist states with the cost of Medicaid. Like recent proposals from the House and Senate, the NGA plan would require certain beneficiaries to participate in cost-sharing to support the program. Warner and Huckabee testified that they favor pursuing Medicaid reforms yet this year. For more information, contact Laura Appel at the MHA. National Provider Identifier (NPI) and HIPAA Security Compliance As was recently reported, the Health Insurance Portability and Accountability Act of 1996 (HIPAA) requires most entities covered under the act to use the National Provider Identifier (NPI) for electronic transactions. The Centers for Medicare & Medicaid Services (CMS) is now providing educational opportunities to learn more about this portion of the HIPAA law.
The agency will host a National HIPAA National Provider Identifier Roundtable conference call June 22 at 2 p.m. To participate in the free event, call (877) 203-0044 and use identification number 5580682. There is no need to pre-register for the conference call. In addition, the CMS has scheduled a free, one-day conference July 21 in Lansing to assist hospitals in understanding the new NPI and compliance with the HIPAA security regulations. The conference will address the many areas where the new identifier will have major effects and provide information on conforming to the administrative, physical and technical safeguards required to secure their electronic health information from threats and hazards. To learn more or register, contact the CMS at (952) 854-3401. The law firm of Hall, Render, Killian, Heath and Lyman, PLLC, has also prepared an executive brief with information on the NPI. Questions on the identifier may be directed to Kim Commins or Michael Philbrick at Hall Render at (248) 740-7505 or to Jim Lee at the MHA.
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