Read testimony presented today by Travis Heider to the Governor’s Medicaid Redesign Team II, at a Public Comment Forum held at Monroe Community College in Rochester. We are sharing the testimony with members of the Pandion state delegation and legislative leadership.
Statement of
PANDION HEALTHCARE: ADVOCACY AND EDUCATION
to the
NEW YORK STATE MEDICAID REDESIGN TEAM II
Public Comment Forum – February 18, 2020 | Monroe Community College, Rochester, NY
Good afternoon.
Thank you for the opportunity to comment on behalf of hospitals and health systems across Upstate New York. I am Travis Heider, President and CEO of Pandion Healthcare: Advocacy & Education, a membership organization representing 17 hospitals and health systems in the greater Rochester, Finger Lakes and Southern Tier regions. We also work closely with statewide partners including HANYS, and regional associations to advance our mission.
I am presenting today on behalf of both Pandion and the Upstate New York Healthcare Coalition, a larger partnership representing more than 60 hospitals in Upstate NY between Pandion and the Iroquois Healthcare Alliance, working together to ensure continued access to high-quality health care services for all people of Upstate New York.
We appreciate the challenge before the MRT II charged with reducing Medicaid spending by $2.5 billion in fiscal year 2021. Thank you for your willingness to participate on behalf of your communities. We ask you to keep in mind how critical hospitals and health systems are to every community across New York state when you consider options to achieve Medicaid savings.
For years, New York hospitals and health systems have been actively contributing to solutions to advance Medicaid transformation and ensure program sustainability. Specifically, hospitals and health systems are achieving what was asked of them by the first MRT:
- Reducing preventable admissions and re-admissions
- Reducing emergency room visits
- Improving efficiencies
- Investing in their communities to address social determinants of health
- and much more
Medicaid caps imposed by MRT I mean hospitals had flat reimbursement for eight years. They have stepped up to provide more high-quality care and more comprehensive services for more people while effectively being paid less. In fact, nearly 85% of hospitals in Upstate NY have negative operating margins. The time has come when hospitals can no longer sustain payment cuts and continue to provide access to all services to all citizens of New York. Therefore, on behalf of hospitals across Upstate New York and the patients and communities we serve, I urge you to include the following in your recommendations:
NO MORE HOSPITAL CUTS
On New Year’s Eve 2019, all New York hospitals and health systems received an across-the-board Medicaid cut of 1%. This totals $124 million cut for the remainder of this fiscal year and nearly $500 million EACH YEAR going forward. That New Year’s Eve Cut should be considered the hospital contribution IN FULL to achieving the $2.5 billion in Medicaid savings. No further reductions to hospitals and health systems should be made. Medicaid already pays Upstate New York hospitals only 69 cents on the dollar of the cost of providing care.
If the MRT finds no other alternative and further cuts to hospitals must be made, we implore you to ensure the following:
- Cuts are absolutely as minimal as possible
- That safety net hospitals are protected
- And that unique market conditions in Upstate NY and the Greater Rochester area are considered for regional impact
Since time is short, I will describe just a few of those unique challenges:
- There are currently over 2,000 registered nurse vacancies across Upstate New York in hospital inpatient settings alone and shortages of home care and other clinicians persist as well.
- Upstate hospitals struggle with physician shortages.
In order to recruit and/or retain physicians in most Upstate rural communities, hospitals must employ the physicians, paying 22% more for employed physicians than their downstate counterparts. In most cases, total cost to a hospital to employ a physician far exceeds the revenue generated by the physician. Frequently, there would be no primary care physician in a community if not for the hospital-employed doctor.
- Just last year, our largest academic medical center was cut by $4.1 million.
- As previously mentioned, but this bears repeating -- nearly 85% of Upstate hospitals are operating with negative margins.
Keep in mind, hospitals are the primary economic drivers in our Upstate New York communities. In the Greater Rochester area, health systems provide 62,000 jobs and generate $9 billion annually in economic activity.
The MRT II process and the decisions that result must not jeopardize hospitals, the cornerstones of our communities.
FOCUS ON THE TRUE DRIVERS OF UNANTICIPATED MEDICAID COST GROWTH
Hospital improvements in efficiency, quality, safety and their work to advance wellness have bent the Medicaid cost curve. Hospital care has remained under MRT I-imposed caps. To find savings, the MRT should focus on those segments in healthcare that you identified in previous presentations that are significantly driving unanticipated cost increases.
REVISIT THE GLOBAL CAP
MRT I implemented remarkable reforms that transformed New York’s Medicaid program. But that was almost a decade ago. It is time to reevaluate whether a 2% Global Cap is reasonable and realistic given TODAY’s New York Medicaid program considering:
- Increased enrollment under the Affordable Care Act
- An aging population, which is particularly true in Upstate New York
- Increased minimum wage.
The Global Cap must be adjusted to accommodate policy decisions the Governor and Legislature have made over the past decade. To continue to restrain growth in the program by an arbitrarily set cap would put beneficiaries at risk. We talk about hospitals closing, but there are other risks to beneficiary access that would occur if hospitals are cut again. Hospitals lose money providing certain types of care and services because reimbursement does not match the reality of providing that care. Yet hospitals provide the care because people need it.
Earlier I mentioned ensuring there are physicians in the community. Reimbursement for psychiatric, behavioral health and substance abuse treatment is another hospital-supported area along with dialysis, maternity services and others. Hospitals in several New York communities may be forced to stop providing those money-losing yet desperately needed services in order to keep the hospital doors open.
So further hospital cuts WILL impact beneficiaries ... something we all want to avoid. As appropriate, we will submit actionable policy proposals through the formal submission process.
Thank you for your consideration of our recommendations as well as your time and the opportunity to comment.
Travis Heider
President & CEO
Pandion Optimization Alliance
Pandion Healthcare: Advocacy & Education
office: 585.273.8183 | theider@pandionalliance.com