Protecting 340B Drug Discount Program for Benefit of Patients and Hospitals

The American Hospital Association’s (AHA) release of its Good Stewardship Principles concerning the Medicare 340B Drug Discount Program is the latest step in a series of actions designed to protect and strengthen this program.  The 340B Drug Discount Program has been under attack in recent years from legislators, policy makers, and oversight agencies that believe some utilizers of the program are not using the savings from the program as Congress intended – that is to fund other vital services and programs that might otherwise not be available to patients in vulnerable communities.

The 340B Drug Pricing Program requires drug companies that participate in Medicaid to sell outpatient drugs to certain not-for-profit hospitals – mainly safety-net hospitals – health centers, and specialty clinics at discounted rates, which range from 20 to 50 percent.  The program was established in 1992 and providers in New York State use savings from this program to re-invest in a variety of community outreach activities, free and low-cost programs, and most importantly, low or no-cost medications to low-income, vulnerable patients.  It’s important to remember that the 340B Drug Discount Program operates at little cost to the federal government.

Despite its inherent value, the Centers for Medicare and Medicaid Services (CMS) reduced by nearly 30 percent the amount Medicare reimburses for some drugs purchased through the 340B Program.  That cut took effect January 1, 2018.  This will result in more than $100 million in cuts this year to eligible 340B hospitals – cuts that will ultimately hurt New York’s most vulnerable patients.  The Suburban Hospital Alliance of New York State (SHANYS) has voiced its opposition to these cuts and supports current bills (H.R. 4392 and H.R. 6071), which would halt these cuts and institute other reforms to strengthen the program.

On the legal front, the American Hospital Association recently refiled its lawsuit against the U.S. Department of Health and Human Services (HHS) agency challenging CMS’ rule that imposed the 30 percent cut.  The first suit was dismissed on procedural grounds.  A U.S. Court of Appeals agreed with a lower court stating that the plaintiffs had not yet exhausted their administrative remedies challenging CMS’ legal authority to implement the cuts.  The new lawsuit demonstrates that the administrative appeals process has been exhausted.  SHANYS is supporting this suit.

Since the 340B Drug Program involves pharmaceutical companies, the issue of pricing and transparency is tantamount to the program’s intent to enable eligible hospitals to reinvest savings.  Those in the program receive a minimum discount or “ceiling price” reduced by a rebate percentage. An additional discount is allowed, if the price of the drug has increased faster than the rate of inflation.  A final rule, awaiting implementation by the HHS regarding 340B drug ceiling prices and civil monetary penalties for manufacturers, has been delayed five times.  The rule is intended to provide transparency on drug manufacturer price increases and hold these manufacturers accountable.  This rule will have an immediate effect on the affordability of prescription drugs.  The AHA just filed a separate lawsuit pertaining to this delay.

The 340B Drug Program is one of the more complicated healthcare policy and financing issues.  But the bottom line is that the program historically has helped hospitals to invest in their community’s health, including funding for social determinant of health interventions, such as subsidized transportation, mobile primary care units, and expanding mental health and substance use services, to name a few benefits.

In light of increased scrutiny surrounding the 340B Program, the AHA’s 340B Good Stewardship Principles for hospitals remind everyone of this program’s necessity and value beyond drug affordability.  More importantly, the principles provide hospitals with a framework to tell the public about how the savings from this crucial program allow their hospitals to deliver a variety of benefits to patients and communities – programs and services that would not exist otherwise.

Federal Actions Further De-Stabilize Insurance Market and Foretell Premium Hikes

In late spring, insurers filed their proposed rate increases with the New York State Department of Financial Services (DFS).  The average rate increase is 24 percent in the individual market and 7.5 percent in the small group market for 2019.  These are the increases proposed before the latest news from the Centers for Medicare and Medicaid Services (CMS) revealed that the agency has put on hold $10.4 billion in risk adjustment payments for benefit year 2017.  This matters because the loss of these payments, along with the repeal of the individual mandate and the White House’s recent final rule expanding the role of association health plans, further de-stabilizes the insurance marketplace and increases premiums even more next year.

It has to do with covering the very sick and covering the not so sick.  Insurance companies need a “healthy” mix of the two in order to remain solvent and to ensure affordable premiums for all.  It’s simple economics.  Various elements of the Affordable Care Act (ACA) were intended to ensure that risk was shared and broadly distributed.

The Affordable Care Act’s (ACA) Risk Adjustment Program was one such element designed to do just that – to stabilize insurance markets by disincentivising health insurers from seeking out only the healthiest of individuals as customers.  The program guards against “cherry picking,” a tactic that ends up leaving a handful of insurers with the most costly covered members and by default the costliest premiums for all.   The Risk Adjustment Program transfers funds in the individual and small group health insurance markets from health plans with lower-risk members (the healthy) to plans with higher-risk enrollees (the sick, which includes those with pre-existing conditions).  No taxpayer money is involved.

In response to the federal government’s action, Governor Cuomo directed the DFS to implement an affordable health access action plan to expand the state’s Risk Adjustment Program, if necessary.  The idea is to ensure access to affordable health insurance, especially for those who need it the most.

CMS says it took this action due to conflicting court rulings in lawsuits filed by small insurers who claim they are being treated unfairly by the program.  The administration says its hands are tied due to the contradictory decisions stemming from federal courts in New Mexico and Massachusetts regarding the formula CMS uses to calculate the payments.  However, some legal experts say these payments are required by law and should continue.

While such uncertainty is not helpful to insurers, patients and providers bear the brunt of these actions.  Patients, especially those with pre-existing conditions such as diabetes, heart disease, cancer and any other number of chronic illnesses, could be priced out of the insurance market and unable to access care.  And hospitals, institutions that are required under federal law to treat anyone who presents at an emergency room, will receive little to no reimbursement for the care offered to those uninsured patients.

CMS’ final ruling in late June that expands the availability of association health plans also chips away at the stability of the insurance markets, patients’ access to care, and hospitals’ ability to care for the uninsured and underinsured.  The association health plan rule allows unrelated businesses or groups of individuals to form groups to purchase health insurance across state lines, without a requirement to offer products that adhere to the current ACA’s minimum standards of coverage.  In other words, plans could skimp on covered benefits and charge members differently, depending upon health status.  That raises premium costs for employers and employees.  Although New York State has robust consumer and provider protections in place, this new rule, effective September 1, 2018, will challenge the state’s ability to regulate these plans.

The repeal of the penalty for not complying with the individual mandate is almost universally cited by insurers operating in our state as the reason why the average rate increase (24 percent) requested for the individual market is so steep for 2019.   Repeal of the penalty and, in effect, the individual mandate to carry health insurance, was contained in tax reform legislation passed late last year.  The state will review requested rates this summer and has the authority to change the requested amounts.  The approved rates will be announced in the fall.

New York State notes that since the implementation of New York’s own health insurance exhange, the state’s uninsured rate has halved.  That is progress and good news for New Yorkers.  More insured patients is also good news for providers.  However, the elimination of the individual insurance mandate undermines the fundamental balance of interests and economics agreed to in the ACA. The hospital sector agreed to hundreds of billions of dollars in federal Medicare and Medicaid cuts, over the course of 10 years, to help fund the law.  Insurers agreed to underwriting restrictions in exchange for the promise of a diverse pool of new customers.  Consumers and employers would get access to affordable coverage in exchange for the mandates to purchase insurance.  The ranks of the insured would swell.

By chipping away at the individual mandate, risk adjustment programs and coverage requirements, the law is significantly weakened.  Soaring premiums for plans in the exchange are but one consequence of these actions.

The current administration’s actions do nothing to reduce health insurance costs for Americans or enhance access to care.  Instead, these actions move us backwards and hamper hospitals’ ability to provide affordable care to all.



Clinical Leaders, Not State Legislators, Should Determine Nurse Staff Levels

Multiple times every day, nursing leaders make decisions on the number of nurses per patient needed to staff each unit in their hospitals, based on factors such as the severity of their patients’ illnesses, the skill set of their workforce, clinical research and professional guidelines.  It is both a legal and an ethical obligation to do so – but it’s also a very practical obligation.  Illness and injury do not manifest themselves the same way in every patient, because every patient, every case, and every hospital is uniquely different.  Flexibility in nurse staff planning is, in reality, a requirement for quality patient care.

Instead of affording these highly-trained clinical professionals the flexibility to make decisions about the best way to care for their patients, there is an effort in Albany to instead put nursing staffing decisions into the hands of the state legislature.  A bill called the Safe Staffing for Quality Care Act would write into law explicit nurse-to-patient ratios that would apply to every unit of every hospital in the state, every hour of the day and every day of the year, regardless of those critical factors that go into the staffing decision-process now.  For some years, advocates of nurse staffing ratio laws have been pressing their case before the state legislature but the effort has gained particular momentum this year.  The Assembly has passed the bill in the past and is on the verge of doing so again, while the Senate has generally taken a more cautious approach.  However, the Safe Staffing for Quality Act has bipartisan support in the Assembly and Senate and the vigorous backing of the New York State Nurses Association.

Research shows that nurse staffing ratio mandates do not improve patient care and, in some cases, impede effective care.  California is the only other state in the nation to have a mandated nurse staffing ratio law on the books, and the results have not been what advocates expected.  California’s law became effective January 1, 2004 and several studies to prove its effectiveness followed.  One study found no significant change in falls, pressure ulcers, or use of restraints occurred after the mandated ratios were in place.  Another found that most quality measures analyzed after the implementation of the staffing law were not affected by the mandate.  In other words, there was no empirical evidence that linked the law to improved quality care.

What researchers have found, however, is that team-based care, which includes a mix of other direct care professionals, leads to improved patient outcomes.  Ironically, mandating nurse staffing ratios may cause the elimination of these important support positions such as nursing aides and therapy technicians because the labor cost to implement mandated ratios is exorbitant – in the area of about $3 billion annually to New York’s hospitals and nursing homes.  Such an expense would be justified, if the research backed up proponents’ claims of improved quality care.

Nurse staffing ratios would render individual hospitals helpless to adjust nurse staffing needs based on patient complexity, volume surge, and workflow fluctuations.  Hospitals need the flexibility to respond to patient complexities that constantly change, almost minute by minute depending upon the unit, as well as the ability to respond to surge capacity needs.  The flu is a good example.  In these cases, mandated staffing ratios actually hinder quality care.

So what’s the solution?  Staffing is a local issue and a one-size fits all approach will do more harm than good.  Research has shown that the combination of higher levels of nurse education, the use of evidence-based treatments, and an appropriate mix of staff levels are all critical to quality care.  The New York State legislature took a step in the right direction when it passed the BSN in 10 law last year. This law requires new nurses to earn a bachelor’s degree within 10 years of initial licensure.  Academic and leading governmental research bodies have looked at the issue of bachelor degree training and beyond for the nation’s nurses.  There is widespread agreement that as hospital patients present with more complex and multiple chronic conditions, higher-educated nurses are needed because they bring with them a more extensive skill set and enhanced decision-making ability.

Workforce complexity, staffing flexibility, local control, and evidence-based treatment lead to quality care and improved patient outcomes – not arbitrarily assigned nurse staffing ratios.

Consolidating an Industry to Improve Patient Health and Provider Performance

The traditional hospital, both in physical structure and scope of services, is not what it once was, as market pressures and reform measures are transforming these institutions into non-centralized points of care.  While the most severely ill will always need the high-tech services found in an acute care hospital setting, and indeed, these patients will comprise the bulk of hospital beds, the remainder of the population will increasingly find care in community-based outpatient settings, clinics, and practices.   But these places of care, although geographically dispersed, are organized more and more under one corporate umbrella.

About a decade ago, hospitals began to join forces and realized their bargaining power with commercial health plans and supply/product manufacturers improved when hospitals entered into affiliations, mergers, and other joint agreements with other hospitals and large health systems.  Early on, clinical expertise, best practices, and group purchasing perks were the benefits driving the “economies of scale” approach.   Today, a hospital’s survival depends upon its ability to provide integrated care, both vertically and horizontally, that addresses disease states from chronic to acute and every phase between and before, including prevention and wellness.  As a result, hospital consolidations and mergers are accelerating and yielding institutions that can successfully operate in a “value-based” market that rewards providers who can, ironically, keep the patients out of the acute beds, but not necessarily out of the system.

This approach has the broadest implications for chronic disease.  The Centers for Disease Control and Prevention (CDC) note that one in every two adult Americans has at least one chronic disease.  Also according to the CDC, chronic disease is the leading cause of death and disability in the United States. But most chronic diseases are preventable and with the right care in the community these illnesses can be managed well before costly complications take hold.  The CDC estimates that 86 percent of U.S. healthcare costs are attributed to chronic disease.

Overwhelmingly, age is a risk factor for chronic diseases, as are other disparities such as poverty and ethnicity.  Ten thousand baby boomers a day turn 65 and enroll in Medicare.  In fact, the Centers for Medicare and Medicaid Services (CMS) estimate that by 2029 18 percent of the U.S. population will be 65 plus, resulting in 81 million Medicare beneficiaries.    For those with low incomes, Medicaid is the predominant insurer.  Yet, both Medicare and Medicaid pay hospitals substantially less than the cost of care.  This is why government and commercial payers are embracing a value over volume reimbursement system and are rewarding providers for managing the disease state over time, including investing in prevention and wellness programs and new technologies to assist with care management.  These technologies include telemedicine, mobile applications for remote monitoring, and text messaging for medication reminders.

The emphasis is on keeping patients well and caring for all the patients’ needs, both medical and social, so that higher upstream costs related to disease complication are avoided.  There is a plethora of research that confirms a person’s health improves when they have a job, access to affordable housing and nutritious food, or a clean and safe environment, among other social determinants of health.  This is why hospitals are collaborating with local community-based organizations to ensure that those needs outside of the hospital’s walls, such a transportation and housing, are met.  These social factors heavily influence health outcomes and have bearing upon a patient’s recovery.  Under the Medicare program, readmission within 30 days of hospital discharge triggers non-payment to hospitals.

In terms of physical space, we are seeing the re-purposing of hospital-owned properties into space for more ambulatory care and outpatient-based primary care, and other continuum of care uses.    For example, Ellenville Regional Hospital is the first in New York State to partner with a for-profit developer to build affordable senior housing on its campus.

Westchester Medical Center Health Network in Kingston is re-working itself into a medical village, offering patients one-stop convenience for primary care and behavioral healthcare needs, as well as pharmacy services and wellness and support services.  In 2016, HealthAlliance became a member of the Westchester Medical Center Health Network.  The Westchester-based facility has established a presence in other regions throughout the Hudson Valley through its partnership with MidHudson Regional Hospital in Poughkeepsie and the Bon Secours Charity Health System, which has hospitals in Suffern, Warwick, and Port Jervis.  Similar consolidations have taken place throughout the Hudson Valley.  Two of these include Northwell Health, which now includes Northern Westchester Medical Center and Phelps Memorial Hospital, and Montefiore Health System, which now includes Burke Rehab, Montefiore Mount Vernon, Montefiore New Rochelle, St. Luke’s Cornwall, and White Plains.

Re-configuring space and acquiring locations requires capital investment.  Philanthropy helps fund a portion of major construction and expansion projects, but public investment is also needed.  New York State in recent state budget agreements has allotted funds, now nearing a total of $3.3 billion, for capital investment and transformation projects that will enable hospitals and health systems to successfully operate in a value-based market paradigm.  Most of the state funds are offered through a competitive grant process, such as the Statewide Health Care Facility Transformation Program II.

Consolidations among hospitals will continue, as competition for patients and dollars tightens under federal and state payment reforms and even as the commercial insurance industry undergoes its own consolidation process.  Added to the merger mix are more innovative alliances such as the CVS and Aetna deal and the joint venture between Amazon, Berkshire Hathaway, and JP Morgan Chase.  All these mega partnerships and hospital consolidations are aimed at controlling costs, improving care by better coordinating and streamlining its delivery, and enhancing access by offering convenient and comprehensive care to patients of all ages, income levels, and other demographics.




Adults’ Physical Activity Levels Show Uptick, but Still below National Average

Lack of physical activity is one risk factor for a variety of chronic diseases – diabetes, hypertension, asthma –  the more common ones.  A report recently produced by the Long Island Health Collaborative (LIHC) shows that, at least in the region of Long Island, adults are more active than they were in 2013, but activity levels are still below the national average.  The report – Physical Activity in Adults – A Look into the Long Island Region – examines  trends and patterns of physical activity.  It drew from national, state, and local data sets.

The physical activity level finding is a bit of good news for all health providers who have been collaborating with public health agencies and community-based organizations to get residents more active in an effort to reduce the burden of chronic diseases, especially those related to obesity.   This population health-based approach to prevention and wellness has become widespread in every region of the state.  Research confirms that interventions, such as those that promote physical activity, help patients and providers avoid more costly complications of chronic disease upstream – not to mention the improved quality of life that comes with better management of chronic disease.

The New York State Department of Health houses a county level data set that draws from the national Behavioral Risk Factor Surveillance System (BFRSS), which is maintained by the national Centers for Disease Control and Prevention. Analysts at the LIHC looked at this data set and the companion national data to compare the indicator – levels of physical activity self-reported in the past 30 days. BRFSS is the largest continually conducted survey system in the world. It is updated yearly.

The analysis also drew from results from the Collaborative’s primary data collection tools. The Long Island and Eastern Queens Community Health Assessment Survey is an ongoing survey, available online and paper-based, that collects primary data about adults’ health concerns for themselves and their communities through six questions, plus a series of demographic-related questions. Analyses are conducted bi-annually. Within the six questions, respondents have a variety of answer choices, including choices about physical activity. A map within the report indicates by zip code the percentage of respondents who believe health screenings, and education/information services about physical activity are needed in the community. The data is used by hospitals, county health departments, community-based organizations and other social and health services providers to offer programs that best meet the needs of local communities.

The Centers for Disease Control and Prevention note that at least 50 percent of all adults in the U.S. suffer from at least one chronic disease and 86 percent of U.S. healthcare costs are attributed to chronic disease. Population health is a way of addressing healthcare needs from a broader perspective that takes into account all the factors, such as housing, nutrition, transportation, that affect the outcome of disease among populations. These are commonly referred to as the social determinants of health and are now generally recognized by healthcare providers and researchers as contributing significantly to patients’ health. Patients, too, play a key role in ensuring their own good health by adopting healthy behaviors and adhering to treatment plans.

The Physical Activity Report and data dashboard maintained by the LIHC are excellent resources for researchers, grant writers, physicians and anyone involved in providing healthcare and social services, but a member of the general ‘population’ can get a sense of the burden of disease on their communities by looking at the report and related state, regional, and national data sets.

Such reports about lifestyle habits prove once again that a healthier community leads to a more robust local economic infrastructure and prosperity. Health is the undervalued connector no matter what region of the state is examined.

Approved State Budget Makes Investments, but Avoids Looming Issues

As far as state budgets go, the 2018-2019 one passed by the state March 31, 2018 was not really remarkable, but rather a mixture of some good stuff and not so good stuff for New York’s hospitals and patients.  The $168 billion 2018-2019 state budget enables hospitals to maintain their level of programming and servicing, at least for now.  This is good news for the millions of New Yorkers served by these hospitals.  Provisions in the budget include a variety of funding streams and policy decisions that allow hospitals to build upon quality prevention and treatment programs, to upgrade decades-old buildings, and to invest in new technologies.  However, the devil is always in the details.

The approved budget lays out more specific guidelines about safety net hospitals.  These hospitals often face financial distress because of the high-volume of uninsured, underinsured, and Medicaid patients they serve.  Budget language expands the definition of safety net hospitals to include not only hospitals with a high volume of Medicaid and uninsured patients, but public hospitals operated by a county, municipality, public benefit corporation, or the State University of New York.  It also includes Critical Access Hospitals (CAH) and Sole Community Hospitals (SCH). The budget offers $100 million in new funding for these enhanced safety net providers, ensuring access to care for all.   However, there are several other hospitals that serve high numbers of poor and indigent patients in the nine counties east and north of New York City that do not meet the new definition.

The budget also provides $525 million in new funding for the Statewide Healthcare Facility Transformation program, which awards grants for capital projects and debt retirement.  Hospitals will be eligible for $400 million of this amount.  This is significant because New York’s hospital buildings and physical plants are some of the oldest in the nation.  Money to assist in modernization projects allows hospitals to devote more of their financial resources toward designing innovative treatment programs/services, staffing needs, and building upon community-based programs that link patients to such services as housing, transportation, and food access.

On the downside, $425 million for the Transformation program comes from a reduction in the Medicaid Global Spending Cap allowance.  The global Medicaid cap was instituted in 2011 and is intended to limit all Medicaid spending growth to the Consumer Price Index.  Only a limited number of providers will be awarded capital grants through the $525 million in funds allotted in this budget, but all providers will be impacted by the ongoing limitation of Medicaid spending imposed by an even lower cap.  New York providers have come dangerously close to piercing the cap and, now that it is lowered, that possibility becomes more real.  If the cap is pierced, the state departments of health and budget are authorized to cut providers even more.  Medicaid spending continues to rise due to increased enrollment, not provider payments.

Finally, the budget missed an opportunity to buffer New York State against the loss of federal funds for the Essential Health Plan, Cost Sharing Reduction (CSR) payments, as well as sharp cuts in the  Medicaid Disproportionate Share hospital (DSH) payments that will kick in late in 2019.   The Essential Health Plan is low-cost insurance available on New York’s marketplace to those with modest incomes, but earn too much to qualify for Medicaid.  CSRs are payments made by the federal government to health insurers to help low-income Americans afford their co-payments and deductibles. DSH payments are supplementary payments to hospitals that care for high numbers of uninsured and indigent patients.  Given the uncertainly in federal politics, these may not be the only cuts our state will face.

Governor Cuomo had proposed a Healthcare Shortfall Fund to address federal losses.  Instead, the final budget agreement calls for $2 billion to be distributed over a multi-year period through a new Healthcare Transformation Fund that can be used for a variety of healthcare investments, but is no longer linked to federal cuts.  This fund will best serve all residents of the state as long as it is equitably distributed throughout different regions, taking into account the unique challenges that urban, suburban, and rural hospitals face.  This fund is under the control of the executive branch, with no input from the Legislature, and therefore, it limits transparency.   The Suburban Hospital Alliance will be advocating for regional parity, both for this fund and the capital grants, so that the Hudson Valley and Long Island get their fair share of funding

Capital funding and other investments in the transformation of the delivery system are welcome, but at some point we must address that provider’s costs are rising while Medicaid reimbursements are standing still.  It has been a decade since healthcare providers have received what is known as the trend factor increase, an annual adjustment tied to the rate of inflation that’s supposed to take effect automatically.  For 10 years, state budgets have blocked the annual increase. This equates to a 15 percent cut in reimbursement when adjusted for inflation.  According to economic analyses offered by the Healthcare Association of New York State, Medicaid pays about 74 cents on the dollar, resulting in a shortfall for hospitals.  Failing to increase reimbursements in line with inflation while at the same time expecting hospitals to take on more and more responsibility for patients’ non-healthcare needs is unsustainable.  These needs are known as the social determinants of health – transportation, housing, education- and these have been shown to greatly influence health outcomes.

We can be glad that the 2018-2019 budget arrived on-time, before the start of the next state fiscal year on April 1st.  We thank our state legislators for their hard work during this budget process: Senators Jamaal Bailey, Didi Barrett, John Bonacic, Philip Boyle, John Brooks, David Carlucci, Thomas Croci, John Flanagan, Kemp Hannon, Todd Kaminsky, Jeffrey Klein, William Larkin, Kenneth LaValle, Carl Marcellino, Terence Murphy, Elaine Phillips, Susan Serino, and Andrea Stewart-Cousins.  Assembly Members: Thomas Abinanti, Karl Brabenec, David Buchwald, Kevin Byrne, Kevin Cahill, Brian Curran, Anthony D’Urso, Steven Englebright, Michael Fitzpatrick, Sandra Galef, Andrew Garbarino, Aileen Gunther, Earlene Hooper, Ellen Jaffee, Kimberly Jean-Pierre, Kiernan Lalor, Charles Lavine, Shelley Mayer, David McDonough, Melissa Miller, Michael Montesano, Dean Murray, Steven Otis, Anthony Palumbo, Amy Paulin, Christine Pellegrino, Gary Pretlow, Edward Ra, Andrew Raia, Philip Ramos, Frank Skartados, James Skoufis, Michelle Solages, Fred Thiele, and Kenneth Ze

Congress Passes Spending Bill, But No Market Stabilization Achieved

With the passage of the $1.3 trillion Omnibus Spending Bill on Friday, March 23, 2018, a shutdown of the federal government that could have happened that day was averted.  However, the bill did not offer any assurance against excessive health insurance premium rate hikes in the future and that threat remains prevalent.

The spending bill contained no provisions to stabilize the health insurance markets.  Legislation to restore the Cost Sharing Reduction (CSR) payments to insurers, which were eliminated by the Trump administration last October, would have brought stability to the market and offered some assurance to consumers against high percentage premium hikes in the near future.  These payments help low-income Americans afford their co-payments and deductibles.  The Omnibus also left out language directing the establishment of re-insurance funds for states.  These funds would help cover the cost of people with complex and expensive healthcare needs.   Economists widely agree that these two mechanisms are needed to ensure stability in the health insurance exchange markets. Text of the legislation is available online.

The Omnibus bill funds the federal government through September 30, 2018 and adheres to the federal fiscal spending levels agreed to as part of the Bipartisan Budget Act of 2018, which became law in February.  (Refer to my Blog Post of March 12, 2018 for more information about that Act.)

Although the insurance stabilizer provisions did not make it into the final legislation, healthcare advocates from the Long Island and Hudson Valley regions are grateful to the members of New York’s delegation who supported the Omnibus Bill because it did include other favorable healthcare provisions such as nearly $4 billion to address the opioid epidemic and $37 billion for the National Institutes of Health.  Legislators supporting the Omnibus bill include Senator Charles Schumer and Representatives Peter King, Kathleen Rice, Gregory Meeks, Nita Lowey, and John Faso. 

Reinstatement of the CSRs and establishment of a re-insurance fund remain priorities.  Healthcare advocates will keep fighting for these so that excessive premium hikes are avoided and patients can continue to afford their health insurance.  In a little more than four weeks, May, insurers must submit their proposed 2019 rates to New York State for review.  The uncertainty insurers faced all last year about CSR funding prompted most to increase premiums as a way to guard against the loss of CSR funding.

What the DC Budget Deal Means for Hospitals

The Bipartisan Budget Act of 2018, approved on February 9, 2018, offers a two-year budget deal, and most importantly, added an additional four years, for a total of 10 years, of funding to the Children’s Health Insurance Program (CHIP), delayed the Medicaid Disproportionate Share (DSH) cuts to hospitals for two years, and continued funding for the nation’s community health centers.  The budget legislation also directs a reinstatement and five-year extension of both the Medicare Dependent Hospital (MDH) program and Medicare Low-Volume (MLV) payment adjustment.  It did not, however, address Cost Sharing Reduction (CSR) payments or a re-insurance program that would help cover the cost of people with complex and expensive healthcare needs.  There will be more about these efforts in the next Dahill Dose post.

Nonetheless, the healthcare and hospital industry achieved progress, but funding threats still linger.  We are thankful to members of New York’s delegation who represent constituents in the nine suburban counties east and north of New York City for supporting the health priorities contained in the Bipartisan Budget Act of 2018.  The members who committed to support patients and communities served by Suburban Hospital Alliance hospitals include Senators Charles Schumer and Kirsten Gillibrand and Representatives Peter King, Kathleen Rice, and John Faso.  A special shout out to Senator Charles Schumer for his efforts in negotiating this budget deal.

The delay of the DSH cuts is not all good news for hospitals, because adding more years to these scheduled cuts means deeper cuts for hospitals on the back end.  DSH cuts are supplementary payments to hospitals that care for high numbers of uninsured and indigent patients.  The DSH cuts were agreed upon by the hospital industry back in 2010 as one way to help fund provisions of the Affordable Care Act, specifically insurance expansion.  The cuts are based on the belief that as insurance coverage expands, the ranks of the uninsured contract.  However, with the continual threat of the ACA’s demise and instability of the insurance exchanges, insurance expansion remains at risk and unpredictable.

The Trump administration canceled CSR payments to insurers in October 2017.  This one move has shaken the viability of the exchanges.  These payments help low income Americans afford their co-payments and deductibles. For New York, loss of the CSR payments means a loss of about $900 million in funding for the state’s Essential Health Plan.  This is a plan available to low-income New Yorkers who earn too much to qualify for Medicaid, but not enough to afford commercial insurance sold on the exchange.

The elimination of the individual insurance mandate, which was part of the tax reform legislation passed earlier this year, may also increase the number of uninsured.  The Congressional Budget Office (CB) estimates that this provision will swell the ranks of the uninsured by 13 million by 2027.

But back to the Bipartisan Budget Act of 2018.  A total of 99,119 children located in the nine counties throughout the Suburban Hospital Alliance regions no longer have to worry that their insurance coverage would stop.  The CHIP program has been a popular bi-partisan program in place for 20 plus years, guaranteeing children from low and moderate-income families’ access to affordable health insurance.  The Medicare Dependent Hospital payment adjustment assists small hospitals for which Medicare patients comprise a significant percentage of patients, and therefore, the hospital’s revenue.  Medicare Low Volume hospitals are essential to their rural communities, have a modest volume of patients, and are located at least 15 miles from the next nearest hospitals.  Both these Medicare payment programs help such vital hospitals remain solvent and available to their communities.

The next step in the federal budget process is for legislators to write appropriations bills to spend the money allocated by the budget bill.  Appropriations bills are due March 23, 2018. Check the Dahill Dose then for the outcome of this legislative process.



Minding One’s Weight Benefits All; One Regional Collaborative Keeps Tabs on Obesity


by Kevin Dahill

Patients and their doctors alike have known for some time now that lifestyle choices affect health.  The research is definitive about this, and it concludes that lifestyle choices account for 70 percent of the incidence of chronic diseases – diabetes, high blood pressure, heart disease, asthma, even mental health conditions can link their origins back to what we do and don’t do as humans.

The Centers for Disease Control and Prevention note that at least 50 percent of all adults in the U.S. suffer from at least one chronic disease and 86 percent of U.S. healthcare costs are attributed to chronic disease. Population health is a way of addressing healthcare needs from a broader perspective that takes into account all the factors, such as housing, nutrition, transportation, that affect the outcome of disease among populations. These are commonly referred to as the social determinants of health and are now generally recognized by healthcare providers and researchers as contributing significantly to patients’ health.

The healthcare industry has embraced prevention and education as a preemptive strategy to halt some of the more deadly consequences of uncontrolled and poorly managed chronic diseases.  Through a variety of population health efforts, hospitals, health departments, community-based organizations, health plans, schools, and employers have joined forces to improve the health of their communities.  New York State has even funded 11 regional Population Health Improvement Programs (PHIP) throughout the state.  These entities are charged with helping communities better understand their pressing healthcare needs and then convening diverse partners from within the community to work together to meet those needs.

For many regions in the state, obesity remains high and it is a driver for all sorts of chronic conditions.  The PHIP on Long Island, through the Long Island Health Collaborative, has been keeping tabs on the region’s obesity rates and recently released some findings from its ongoing Community Health Assessment Survey  This tool collects primary data about Long Islanders’ health concerns for themselves and their communities. The data is used by hospitals, county health departments, community-based organizations and other social and health services providers to offer programs that best meet the needs of local communities.

In the group’s most recent analysis of year to year (2016 and 2017) community health data, it found that obesity and weight loss issues are of slightly less concern to the region’s residents.  The obesity finding is a bit of good news for the region’s health providers who have been collaborating with public health agencies and community-based organizations to chip away at the obesity crisis. The New York State Department of Health Prevention Agenda Dashboard of health indicators shows that there is improvement throughout the state in children receiving an assessment of weight status at a yearly outpatient visit. However, the percent of overweight and obese children and adults remains high.

But there is lots more work to be done, admit the collaborative partners.  Some of the partners’ current programs include tower gardens in schools, after-school recess programs, and programs to get people more active, such as the collaborative’s Are You Ready, Feet?™walking initiative.

Other results show that diabetes moved from the fifth most selected concern to the third most selected for individuals in Nassau County, with the need for diabetes screenings and education moving from the fourth most selected need in 2016 to the first most selected need in 2017. In Suffolk County, concern about heart disease and stroke moved from fourth position in 2016 to first position in 2017 among individuals. Similarly, blood pressure screenings and education appeared near the top of the list for services needed in the community.

These results and other reports are displayed on the collaborative’s user-friendly Population Health dashboard, which offers a window into the region’s healthcare landscape. The dashboard is an excellent resource for researchers, grant writers, physicians and anyone involved in providing healthcare and social services.  But even a member of the general population can get a sense of the burden of disease on their communities by looking at the dashboard. A healthier community leads to a more robust local economic infrastructure and prosperity. Health is the undervalued connector, and patients play a key role in ensuring their own good health by adopting healthy behaviors and adhering to treatment plans.