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Congressional Testimony
March 23, 2000, Thursday
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 4681 words
HEADLINE:
TESTIMONY March 23, 2000 LARRY S. GAGE PRESIDENT NATIONAL ASSOCIATION OF PUBLIC
SENATE HEALTH, EDUCATION, LABOR & PENSIONS SAFETY NET
PROVIDERS
BODY:
STATEMENT OF LARRY S. GAGE
PRESIDENT, NATIONAL ASSOCIATION OF PUBLIC HOSPITALS & HEALTH SYSTEMS March
23, 2000 Good morning. I am very pleased to have this opportunity to address the
Subcommittee on behalf of the National Association of Public Hospitals &
Health Systems (NAPH) to discuss the situation of America s safety net hospitals
and health systems. I am especially pleased to testify in support of an exciting
new initiative of tremendous importance to such providers and the uninsured
patients they serve. Although in its infancy, the Community Access Program has
already demonstrated the power of an idea. The overwhelming response that the
Health Resources and Services Administration (HRSA) has received from its
initial program announcement speaks volumes about the need for an initiative
that seeks to transform a fragmented system of safety net providers into a
coherent and integrated whole. It is with great enthusiasm that I am here to ask
for your support for this program. Before I do so, however, I would like very
briefly to describe for those Senators who may not be familiar with NAPH who we
are and the role our members play in the safety net health system in our country
today. I also want to share with you the encouraging results of a 1999
NAPH-sponsored poll indicating near-unanimous public support for protecting and
strengthening safety net providers. The core of my testimony will focus on the
importance of the Community Access Program. Finally, I will also take this
opportunity to discuss other current proposals to address the problem of the
uninsured. Safety Net Hospitals are an Essential Component of the Health Care
System for the Uninsured As hospitals, NAPH members receive federal support
primarily through the Medicaid and Medicare programs, although most of our
members also participate in many of the categorical programs over which this
committee has jurisdiction. Unlike other organizations represented on this
panel, however, public hospitals have no dedicated federal program authorizing
their existence so we do not come before you on a regular basis for
reauthorization. For that reason, we may not be as familiar to you as we are to
your colleagues on the Finance Committee. I would therefore like to take a few
minutes to describe our members to you. NAPH is comprised of about 100 of the
nation s largest urban and metropolitan area safety net hospitals and health
systems. These institutions are committed to providing health care services to
all individuals without regard to ability to pay. In other words, over 80
percent of NAPH member inpatient services are provided to Medicaid and Medicare
patients or the uninsured. 28 percent of inpatient services at NAPH hospitals
(as measured by the proportion of gross charges) are provided to individuals
without health insurance. Another 33 percent are provided to Medicaid patients,
and 21 percent to Medicare beneficiaries. (See Attachment A.) When many people
think of safety net hospitals, they think of large acute care centers. Our
members certainly do provide substantial secondary and tertiary care, including
highly costly specialized care that is relied on by the entire community: Level
I trauma care, neonatal intensive care, burn units, emergency psychiatric care,
and other specialized services. In 1997, the most recent year for which we have
data, our hospitals had on average 405 staffed beds and provided over 16,600
discharges and 105,000 inpatient days per hospital. Demand for inpatient care at
NAPH hospitals is very high by industry standards, with an average occupancy
rate of 71 percent as compared to 62 percent for all hospitals. But in addition
to inpatient care, NAPH members also provide a substantial volume of outpatient
care, including primary and preventive care through community-based neighborhood
clinics. In 1997 just 77 NAPH members provided 25 million outpatient visits, for
an average of almost 332,000 visits per hospital. Only 58 percent of these
visits were reimbursed; 42 percent were provided to the uninsured. Medicaid and
Medicare reimbursement for outpatient services is, however, typically less than
the cost of such care, so that 86 percent of outpatient care was either
unreimbursed or reimbursed below cost. Overall, NAPH members shoulder a hefty
burden of uncompensated care, and the weight of the burden is on the rise. In
1997, 29 percent of total costs at NAPH hospitals were uncompensated, up from 23
percent in 1993. This rising level can be attributed to a variety of factors:
the growing number of individuals without health insurance; increasing
competition for paying patients, including Medicaid patients; the drop in
Medicaid enrollment due to welfare reform; and restrictions in coverage for
legal immigrants, to name a few. So how do NAPH hospitals finance this level of
uncompensated care? The largest source of support -- 47 percent -- comes from
local government subsidies for indigent care. Medicaid Disproportionate Share
Hospital (DSH) funds are also extremely important, covering 22 percent of
uncompensated costs. Another 8 percent is paid for through Medicare DSH
payments, 7 percent through Medicare IME, and 4 percent through cost shifting
from third-party payers. The remaining 12 percent is from other miscellaneous
sources, for example, many NAPH members also receive grants under various Public
Health Service Act programs under the jurisdiction of this Subcommittee, such as
Ryan White CARE Act programs, block grants for maternal and
child health and the homeless, and substance abuse and mental health services.
Many also operate health centers and other programs that qualify as FQHCs. (See
Attachment B.) In sum, NAPH hospitals and health systems are a very significant
source of care for our nation s uninsured and low-income populations. Together
with the community health centers, rural health clinics, public health
departments and other essential providers, they constitute a de facto national
health care system for the uninsured. Public Support for Safety Net Providers is
Overwhelming Last May, NAPH conducted a poll of 1000 Americans in urban and
suburban households to gauge their support for safety net providers. Even we
were surprised by the clarity of the results. We found an overwhelming
endorsement for safety net providers and the work that they do, with the support
cutting across all lines of age, gender, income level and political affiliation.
A full 96 percent of respondents said that it is important that there be safety
net hospitals and clinics in their community to care for the uninsured, with 85
percent specifying that it is very important. 72 percent responded that more
money should be spent on safety net hospitals, with a majority of these
individuals indicating that they were personally willing to contribute more
money to care for the uninsured. Over half of the respondents said that they are
currently uninsured or have been so at some point in the past. One-third of the
currently insured thought that they or a family member may become uninsured in
the next five years. Clearly, personal experience and fear of being without
health insurance drives much of the support for the safety net. People realize
that anybody can become uninsured at any time, and that it is important that a
safety net system of care be firmly in place to assist those in need. This
public support is relevant as you consider the various safety net programs under
discussion here today. The Community Access Program Will Help Integrate Care for
the Uninsured NAPH has long believed that the solution to the problem of the
uninsured lies in extending health care coverage to all. That is a goal to which
we continue to be committed. We look forward to working with Congress, and with
members of this Committee in particular, in taking steps towards achieving that
goal. As a complement to expanding coverage, however, NAPH also believes that we
should address the needs of safety net providers that care for those individuals
who remain uninsured. (In fact, we believe that even under a system of A
universal coverage there would still need to be a safety net for those
individuals and services that would inevitably fall through the cracks.) The
federal government currently invests billions of dollars in support of the
safety net through a variety of programs -- Medicaid and Medicare
Disproportionate Share Hospitals payments, Section 330 health center funding,
Ryan White, family planning programs and others. Each of these federal programs,
however, is targeted on a particular type of provider. There is no federal
funding source that cuts across these program lines and encourages the different
types of providers to work together. As a result, from the perspective of an
uninsured individual, the care that he or she receives is often fragmented and
inefficient. The Community Access Program, which Congress launched last year as
a demonstration program, seeks to redress this gap. It provides competitive
grants to consortia of different types of safety net providers within a
community to encourage them to collaborate in providing care to the uninsured.
The idea is not to impose a federal A one-size-fits-all solution on the entire
country, but rather to let each community assess its own particularized needs
and develop its own particularized solutions with a minimum of federal mandates.
The primary federal requirements are that the grants be to consortia of
providers rather than individual providers, that the projects enhance care for
the uninsured, and that the recipients demonstrate an historical commitment to
serving the uninsured population. Locally tailored solutions will be developed
to address local needs. The program is modeled after much smaller grant programs
run by the Kellogg Foundation and the Robert Wood Johnson Foundation. Recipients
of those grants provide us with a glimpse of the types of innovative projects
that could be funded through the Community Access Program. For example, NAPH
member Denver Health is a recipient of a Kellogg Community Voices grant. It is
using the funding to strengthen the local safety net consisting of community and
school-based primary care sites, the county public health department, the region
s top trauma center, the city s 911 EMS system and a poison center. They have
identified three critical barriers to care: inadequate and fragmented outreach,
awkward enrollment and poor case management, and are using the grant money to
address each. For example, they have developed a concentrated case management
program targeted on patients whose main diagnosis is accompanied by a diagnosis
of substance abuse or chronic mental illness. These patients tend to be far more
likely than others to require multiple hospitalizations in a given year. Through
improved coordinated care and preventive services Denver Health expects to
significantly reduce the $10 million it spends annually on this population.
Already, a pilot group of 12 patients have reduced hospital days from 257 to 64
in just seven months. Other potential uses include: - Developing shared
information systems that will allow safety net providers to better coordinate
patient care; - Creating a formal integrated network of providers to coordinate
care for the uninsured; - Sharing clinical systems, including expensive
technology, to avoid duplicative expenditures and make more efficient use of
existing funding sources; and - Implementing computerized clinical
decision-making tools to be shared among a consortium of providers. The
potential variations are as numerous as the number of communities in need. We
also see the potential for the investment of federal dollars to leverage even
greater sums in additional public and private dollars, through public-private
partnerships. The Denver example I mentioned earlier is a good case in point.
Denver Health took the $2.5 million in Kellogg funding and used it to leverage
an additional $2.5 million from a local foundation and possibly another $1
million from the city for a total of $6 million in funding. Clearly participants
in any consortia would be dedicating significant financial and in-kind services
to their projects as well. In the end, the impact from a relatively small amount
of federal funding could potentially be much greater than a dollar-for-dollar
correlation would suggest. Last year, Congress launched the Community Access
Program through a $25 million appropriation for a demonstration project called
Access to Health Care for the Uninsured. The idea, originally included in the
Administration s FY 2000 budget request, was to have an initial year of seed
funding at the $25 million level, to be followed by a bigger investment of $1
billion over five years. Clearly, an investment at that level will require
authorizing legislation, which we are looking to this committee to help us get
enacted. The program would not be a permanent fixture in the Public Health
Service Act; it would sunset after five years. The higher funding level in years
two through five is not intended to change the qualitative nature of the
program. It would merely allow more communities to receive grants. This year,
the $25 million will cover grants to about 20 communities. If fully funded in
future years, 100 or more communities could receive funding. And clearly the
need is out there. HRSA is to be highly commended for the speed and efficiency
with which it has launched this program. It issued a Federal Register notice in
February announcing the availability of grants, and the response has been beyond
all expectations, even for those of us who are the biggest champions of the
program. We understand that HRSA has received 1800 requests for applications to
date -- and this for a mere 20 initial grants! Requests have poured in from
every state in the union, including the District of Columbia and Puerto Rico.
NAPH can supply any member of this committee with a list of interested
applicants from your own state if you would find it helpful. Over the last two
weeks, HRSA held a series of six regional pre- application workshops across the
country, all of which attracted standing room only crowds. NAPH participated in
all of the workshops, and I myself attended the workshop last week in Los
Angeles. I can only describe the atmosphere in that room to you as A electric.
There was an energy and enthusiasm that I have not seen for a federal program in
years. As I spoke with people from all over the Southwest about their ideas for
projects even I, who has long endorsed this idea, was impressed with the
creativity and the potential to make a real difference in the quality of care
for the uninsured. As I said, clearly the need and the demand for this kind of
program is out there. You all should have received a letter supporting the
Community Access Program from a coalition of groups that NAPH has organized
representing safety net providers, local governments and others - - about 15
groups in all. I have attached a copy to my testimony. (See Attachment C.) As we
have begun talking to members of this committee and others in Congress about
this idea the response has been overwhelmingly supportive, and we thank you for
that support. Now, we ask that you consider establishing the Community Access
Program as a fully authorized program, so that we can encourage even more
communities to begin down the path of providing truly quality care for our
nation s uninsured. Congress Can Also Take Other Steps to Address the Needs of
the Uninsured My main purpose in addressing you today is to ask for your support
for the Community Access Program. But I do not want to lose the opportunity to
mention, however briefly, other proposals that NAPH believes must be part and
parcel of any solution to the problem of the 44 million uninsured Americans.
These include: - Expansion of the children s health insurance program to cover
parents, pregnant women and/or other populations; - Expanded outreach and
enrollment initiatives to ensure that those eligible for existing programs are
actually covered; and
Stabilization of the Medicare program without
impacting current eligibility or guaranteed benefits, and an expansion to cover
prescription drugs and buy-in opportunities for certain populations (such as
early retirees). In addition, we believe that there is a need for a renewed
commitment from the federal government for direct support for services provided
by safety net providers (which the Community Access Program would offer in only
a very limited way). In particular, the Medicaid Disproportionate Share Hospital
program, which as I mentioned earlier covers nearly one-quarter of the
uncompensated care provided by NAPH members, is scheduled for dramatic cuts over
the next three years. By 2002, the program will be shrunk by 38 percent. Safety
net hospitals simply cannot absorb cuts of that magnitude, at a time when the
number of uninsured and the amount of uncompensated care is rising so quickly.
We therefore support measures in both the House and Senate that would eliminate
the final two years of the scheduled DSH cuts. Bipartisan legislation has
already been introduced in the House to accomplish this goal. Even though we
understand that Medicaid is outside of this committee s jurisdiction, we ask for
your help and support for this legislation in the months ahead. In the same
vein, we endorse efforts to expand funding for health centers through the 330
program so that services can be doubled over the next five years. Like safety
net hospitals, community health centers, migrant health centers and healthcare
for the homeless programs have been and always will be there to serve
populations whom other providers scorn. They are an essential and integral part
of the safety net healthcare system in this country, and the work that they do
should be supported and expanded so that they can reach even more individuals in
need. Once again, I thank you for granting me the opportunity to speak with you
this morning. I would be happy to answer any questions you may have.
LOAD-DATE: March 30, 2000, Thursday
