Will the care be there? What’s at Stake in this Election

[Hospital Logo]

Summer 2012

Serving our community…• # of patients treated• # of employees• Key services:

– Emergency department – Birthing center– Cardiac services– Cancer center

Our Hospital…

…and preparing for our future

1990 U.S. population

248.7 million2030 U.S. population

351.0 million

2010 U.S. population

308.7 million

2050 U.S. population: 403.7 million

Source: U.S. Census Bureau

More patients with chronic diseasesPrevalence of Common Chronic Diseases, 2001 and 2010

Diabetes Asthma

13

31

21

39

20012010

Pre

vale

nce

(mil

lion

s)

Source: Centers for Disease Control and Prevention, 2011

Hospitals are continually asked to do more with less

• Labor

• Life-saving technology

• Older, sicker patients

• Redundant regulation

• Liability insurance

• Information technology

• Emergency readiness

Forces Increasing Costs

Distribution of Iowa Hospitals Revenue by Payer

2002

44%

8%3%

16%

29% MedicareMedicaidSelf PayWellmarkOther

2011

42%

12%4%

22%

21%MedicareMedicaidSelf PayWellmarkOther

Distribution of Iowa Hospitals Revenue

2002

56%44% Inpatient

Outpatient

2011

46%54%

InpatientOutpatient

Trends in Percentage Increase in Iowa Hospitals Net Patient Revenues & Total Expenses

2002-2011

2002 2003 2004 2005 2006 2007 2008 2009 2010 20110.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

5.8

7.7

7.0

7.6

6.7

5.8 5.7

4.4

3.84.0

5.7

6.9

8.0

6.46.7

5.6

6.7

4.7

2.7

3.4

Net Patient RevenueTotal Expenses

Iowa Hospitals Uncompensated Care (in Millions)2001-2010

2002 2003 2004 2005 2006 2007 2008 2009 2010 20110

100

200

300

400

500

600

700

800

900

1000

$174.3$192.5 $226.7 $236.8 $234.0 $284.7 $309.2 $325.2 $344.3 $351.7

$135.7 $153.3$181.6

$227.9 $274.1

$328.1$400.1

$471.1$506.9

$603.9

Charity CareBad Debt

Trends in Iowa Hospitals Total Employment2002-2011

2002 2003 2004 2005 2006 2007 2008 2009 2010 201165,000

66,000

67,000

68,000

69,000

70,000

71,000

72,000

66531

65403

66948

67696

68791

69362

71111

67688

67239

67820

• Government underpayment

• Private payer pressure

• Rising number of uninsured individuals

Forces Decreasing Revenue

Despite challenges, hospitals remain ready to care 24/7

Investing in improved safety & quality

Investing in effective and efficient health care delivery

Investing in health information technology

Hospitals are improving care by:

***Hospital Examples***• Insert local examples of what your hospital is

doing to improve value and quality.

But can that level of care remain?

state budget cuts growing need for care

federal budget

? ?

Election 2012

• Both houses of Congress are unlikely to consider legislation to overhaul Medicare or Medicaid until a new Congress – and possibly a new president – are seated in 2013.

• But Congress is expected to return to Washington after the election to consider major deficit reduction legislation during a “lame-duck” session.

Federal Deficit

Percent of GDP

Source: CBO “Alternative Fiscal Scenario” constructed from the August 2010 Budget and Economic Outlook, additionally assuming that troops in Iraq and Afghanistan are reduced to 30,000 by 2013.

0%

50%

100%

150%

200%

250%

300%

August 2011: 98%

• Congress continues to dedicate significant time and energy focusing on long-term budgeting.

• U.S. Debt hitting record levels.• Members have very different approaches in how

to handle.• Increase Taxes?• Cut Spending?• Both?• None?

Deficit Reduction Options

As congressional leaders and the administration have debated deficit reduction, several “plans” and proposals have emerged. These include:• President Obama’s budget proposals• House Budget Chairman Paul Ryan’s budget proposal• The Congressional Budget Office’s report on options for reducing the

Federal deficit• The National Commission on Fiscal Responsibility and Reform

(Simpson-Bowles)• The Debt Reduction Task Force (Rivlin-Domenici)• The “Gang of 6” US senators that developed a bipartisan plan to

reduce the deficit• House Majority Leader Eric Cantor’s list of spending reductions

What’s At Stake for Hospitals• The Lame-Duck Congress will need to consider:

Issues (1 yr./10yr) Hospital Impact Timetable

Medicare physician payment reductions($10 billion/$270 billion)

Hospital payment reductions could be used as offset to finance extensions

Lame-duck session (and beyond)

Medicare extenders($750 million/$7.5 billion)

Hospital payment reductions could be used as offset to finance extensions

Lame duck session (and beyond)

Tax extenders($380 billion/$5.1 trillion)

Hospital payment reductions could be used as offset to finance extension

Lame duck session (and beyond)

Sequestration($120 billion/$1.2 trillion)

Hospital payment reductions could be used as offset to prevent defense sequester

Lame duck session (and beyond)

Debt ceiling extension(Unknown)

Hospital payment reductions could be used as offset of spending reduction package necessary to extend debt limit

Lame duck session (and beyond)

Debt reduction agreement(Unknown)

Hospital payment reductions could be part of a major long-term deficit reduction agreement

Lame duck session (and beyond)

Bottom Line: The Potential for Billions In Cuts to Hospital Funding

What’s At Stake

…threaten access to care.• Longer wait times for emergency room

care.

• Fewer doctors, nurses and other caregivers.

• Less patient access to the latest and most effective treatments and technologies.

• The potential for fewer specialty services particularly in rural areas compromising the delivery of community-based health care.

• Increased charity care and bad debt.

• Reduced financial capacity for continued investments in community-based programs and services provided by hospitals.

…threaten Iowa’s economy.• Hospitals are major employers and provide care

for millions of individuals across the state. Iowa hospitals provide nearly 70,000 jobs that pay more than $3.8 billion in salaries and benefits. Hospitals are the ninth largest non-agricultural employer in Iowa.

• There is an economic multiplier effect that is compromised when hospitals experience cuts that impact other sectors of the economy, including other non-health care businesses that interact with hospitals. In Iowa some 136,000 jobs are tied to Iowa hospitals, creating an overall impact valued at nearly $6.2 billion to Iowa's economy.

• Hospitals provide a variety of community benefits and services that total $1.5 billion. These services provide critical financial and health care benefits to communities all across Iowa.

Additional cuts to Medicare and Medicaid would:

“No-Cut” AlternativesThe following alternatives could be discussed and thoughtfully considered in any deficit reduction debate:• Modernizing cost sharing for Medicare and Medicaid• Increasing the eligibility age for Medicare• Increasing the FICA tax to support Medicare Part A

spending• Implementing enhanced comparative effectiveness

research and programs• Improving programs to improve care at the end of life

“No-Cut” Alternatives• Developing programs to coordinate care for

individuals eligible for both Medicare and Medicaid

• Applying Medicare reforms in the ACA (such as accountable care organizations, medical homes, bundling) to Medicaid

• Increasing use of generic drugs and biologicals• Modernizing the Medicaid long-term care benefit• Taxing ‘Cadillac’ health plans• Taxing junk foods and sugary drinks

“No-Cut” Alternatives

These types of reforms can be used to reduce spending, improve quality, better coordinate care, enhance personal responsibility, and modernize Medicare, Medicaid and the entire health care system.

What You Can Do:• Candidates need to know that we care…and we vote.• We care and we vote because we are concerned

about whether the care will be there for the patients we serve.

• The time is now to work together toward long-term solutions that will set these programs on a path toward future sustainability.

• Our patients, communities and Iowa’s economy and quality of life depend on us, and the care we provide, to be there…today and tomorrow.

What You Can Do:• Encourage hospital staff to get involved and register to vote.• Encourage hospital staff to register into IHA VoterVoice to prepare for

fall advocacy efforts• Attend candidate forums

– Share:• What are your challenges?• What is your hospital doing to increase value?• What public policy changes are needed…and what should be

avoided?• Attend Advocacy Days in D.C. (Sep. 11, Nov. 29, Dec. 11)• Vote November 6• Prepare for and Respond to IHA Action Alerts Post-Election

We Care We Vote: Iowa Action Center: www.ihaonline.org/election

Find your polling place, voting information and other advocacy resources

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