The Politics of Health Care:State and Federal Policy Priorities for Advocate Health Care

Meghan Clune Woltman, Vice President, Government and Community Relations

Discussion Topics

• State Initiatives

• Federal Outlook

• Supreme Court

• Global Health Care Issues

• Q & A

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State Initiatives2012 Spring Session – what happened?

• Budget Challenges

• Nonprofit Hospital Property Tax Exemption

• Medicaid Changes– SMART Act Implementation

• Rate adjustments

• Utilization controls

• Eligibility, coverage and care coordination

• HACs, therapy, readmissions

Medicaid 2012: OverviewGovernor’s Proposal Final Legislation

$2.7 billion total: $2.7 billion total:

$1.35 billion targeted savings/reductions $1.36 billion targeted savings/reductions

$675 million cigarette tax $700 million cigarette tax

$675 million provider rate cuts $240 million provider rate cuts

- $350M or 8% hospitals - $108 million or 3.5% hospitals

$100 million new assessment

- $190 million gain for hospitals

$300 million - GRF

Hospital Payment System Reform• HFS may implement new inpatient and

outpatient payment system by rule as set forth in statute

• Inpatient payment system – 10/1/12 – test & shadow

– 7/1/13 – Implement new system• Base payment only

• Supplemental payments and assessments separate

– 7/1/14 – Begin 2-4 year transition of static payments

Looking Forward• Continued SMART Act implementation

• CMS approval of Enhanced Assessment

• Medicaid Payment System Reform

• Care Coordination Expansion

Federal OutlookWhat can we expect from the Congress?

• November Elections

• Bush Tax Cuts Expire

• 10 month Physician Fix expires – 27% cut, costs $376B to fix

• Debt Ceiling Debate…again

• Sequestration Starts– 2% across the board reductions

Supreme Court• Upheld Individual Mandate through Taxing

Power of the Congress• Found Medicaid Coercion Unlawful• States can opt out of Medicaid Expansion• Congressional Budget Office Assumes $84B

savings through SCOTUS decision• No change for Advocate – already the largest

Accountable Care Organization in the nation.

2014 Coverage Continuum

It’s a New Day• Most Insurers Acknowledge Inability to

Manage Rising Costs

• Medicare Finances are Not Sustainable

• Payers Can No Longer Sustain Double-Digit Increases

• Population is Aging - 10,000 New Medicare Beneficiaries Per Day

• Uninsured Will Enter Care Delivery System

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Global Issues• Health Care’s Impact on Economy

• Providers Need to Reduce Costs

• Alignment of Incentives– Patients/Providers/Health Plans

• Medicare/Medicaid– Medicaid is largest expense in state budgets

– Alignment of the patient

• End of Life Cost of Care

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Questions?