Americans are getting their first close look at a congressional proposal to replace the federal Affordable Care Act (ACA), also known as “Obamacare.” There’s a lot to pore over, but the first and most overriding concern from the hospital perspective is that access to health care through safety net providers does not equal coverage – and coverage is essential to good health, a strong health care delivery system and reduced health care costs. This proposal threatens to both reduce coverage and access for poor, elderly and disabled Iowans, making it a significant step backward from the current law.
President Trump assured the country that no one would lose coverage under his plan, but this proposal does not uphold that guarantee. Most significantly, the legislation would undermine Medicaid expansion. Iowa took a big step closer to becoming the nation’s healthiest state when Governor Branstad agreed to expand Medicaid. Because of expansion, 150,000 more Iowans have access to a primary care doctor and preventive care. They have a home in the health care system and they are receiving more of the right care, in the right place, at the right time.
It would be a very harmful step backward if those Iowans lose their coverage and the state returns to the days when Iowans were forced to rely on hospital emergency rooms for much if not all of their health care. That’s not good for those Iowans and it’s just not a smart way to deliver health care services. Stripping Iowans of coverage for routine and preventive care will raise health care costs for all. And all of this comes at a time when Iowans and communities are struggling with an epidemic of drug addiction.
The proposal to change Medicaid from a federal-state partnership to a program that simply provides per-capita lump-sum payments to the states raises serious worries about the future coverage of 630,000 Iowa residents who depend on the program. Most notably, this fundamental change in Medicaid could eventually force the state, facing another tight budget year, to reduce care or tighten eligibility requirements, creating more uninsured, unhealthy Iowans.
More Iowans without coverage raises real concerns about the future of Iowa hospitals. As more people gained health insurance coverage through ACA, Iowa hospitals have seen a significant decrease in the need for charity care. That was expected. In fact, when ACA became law in 2010, it required Iowa hospitals to give up millions of dollars in future Medicare and Medicaid payments because more insured people would drive down the need for charity care.
That is precisely what happened. However, while the proposal would bring an eventual end to expanded coverage through Medicaid, it does not fully restore what hospitals gave up for ACA. That paints a very unstable financial picture for hospitals in Iowa, which are already struggling with increased costs, payment delays and denials related to the state’s transition to privately managed Medicaid.
The Affordable Care Act is not perfect, but it has achieved important progress by insuring more Americans, providing greater access to high-quality health care and bringing greater stability to health care finances, among other improvements. As our federal legislators consider the future of the ACA, Iowa hospitals are asking Congress to abide by the adage: “Do no harm.”
Unfortunately, this first attempt fails to uphold that principle.
Iowa has one of the highest quality, lowest cost health care systems in the United States. And at the heart of that system are 118 community hospitals that stand ready, day and night, to serve everyone, regardless of their ability to pay. A significant reason for health care excellence in Iowa has been state oversight of institutional health care services through the Certificate of Need law.
Iowa’s Certificate of Need regulations were first enacted in 1977 for the express purpose of providing for the orderly and economical development of health care services, thereby avoiding unnecessary duplication of services, controlling the growth of overall health care costs and ensuring the stability of community hospitals. Since that time, these regulations have been re-examined multiple times and each time the same conclusion was reached: Iowa needs Certificate of Need.
As the name implies, Certificate of Need ensures that new medical services are truly needed at the community level. This is important because new facilities (including nursing homes, ambulatory surgical centers and hospitals, among others) must have sufficient patient volumes to support proficiency among medical staff and ensure high-quality care. The same applies to existing facilities, yet without Certificate of Need, new, for-profit facilities would spring up all over the state and deplete patient volumes across the board.
Not only would this compromise the quality of care for everyone, but these new facilities would target lucrative lines of medical service while not providing emergency care, charity care and other unprofitable services that are at the core of the community hospital mission. If Iowa’s community hospitals are left with only unprofitable services and only care for complicated patients who are on Medicaid or uninsured, their ability to survive and continue providing high-quality, community-focused care to everyone will be jeopardized.
In fact, repeal of the law in other states has led to hospitals closing. Furthermore, nearly all of these states have instituted a different review process that is highly politicized.
One of Iowa’s greatest strengths is its health care system. Not only do Iowa’s health care providers deliver excellent, accessible and efficient care, but health care employs more than 200,000 people, injecting some $11 billion into the state’s economy. More than 71,000 of these workers are employed by hospitals, which alone have an economic impact of $4.3 billion.
Certificate of Need, which exists in 36 states, not only ensures the stability of these major employers and economic engines, but it also supports the collaborative spirit that fosters communication and cooperation among Iowa health care providers, which, again, leads to better health care for everyone.
Today, with the uncertainties surrounding the future of the Affordable Care Act (Obamacare), Iowa’s Medicaid program and even Medicare, the constancy of Certificate of Need is more important than ever. During this time of significant change in the health care industry, the stability provided by this law allows hospitals to more confidently plan and respond to the needs of the communities they serve.
In all parts of the state, Iowans depend on their community hospitals being there all day, every day. That level of access and preparedness is jeopardized by those who would significantly change or repeal Certificate of Need.
When mental health issues become visible, it often happens explosively and tragically. The shootings at Newtown and Virginia Tech, along with countless other deadly crimes, were carried out by mentally unstable individuals. About a year ago, an Iowa veteran dealing with post-traumatic stress disorder was angered by two teens who were horsing around at an Ankeny McDonald’s. He shot and paralyzed one of them.
This is when, like a volcano erupting, mental health explodes across the headlines, only to eventually be replaced by some other disaster or scandal. But, as health care providers well know, the problem not only doesn’t go away, it’s getting worse. In fact, mental health is arguably Iowa’s top public health issue.
Unlike volcanoes, poor mental health and the dangers that can accompany it can be controlled. Where we are failing as both a nation and a state is in providing the right care in the right place at the right time.
Health care providers know this means many of the mentally ill end up in emergency rooms, but perhaps the most tragic evidence of failure are the number of mentally ill inmates in American jails. The National Alliance on Mental Illness estimates that nearly 15 percent of men and 30 percent of women booked into jails have a serious mental health condition. That’s about two million Americans each year.
Here in Iowa, 123,000 people live with serious mental health issues and 80,000 Iowa youths cope with severe emotional disorders. Yet Iowa has fewer psychiatric beds and mental health professionals than nearly every state in the nation.
The idea behind the “deinstitutionalization” of the 1950s and ’60s, and more recently the closing of two Iowa mental health institutes, is that the mentally ill could be helped more humanely while living and being treated in community settings. But the community-based infrastructure was never really put in place or properly supported, so a huge number of those released never got the local help they needed.
Now the price is literally being paid, as Iowans in need of mental health services are churning through emergency rooms and sometimes in jails, places that are costly not only terms of real dollars, but in their inability to properly address an individual’s long-term mental health. Good intentions in the form of deinstitutionalization are not enough, but there are solutions.
This is why during the upcoming legislative session, Iowa hospitals will be advocating for increased behavioral health care access across the continuum to help relieve the systemic bottleneck that has patients languishing in hospital beds or in jails.
Iowa needs a full care continuum in behavioral health that includes sub-acute services, crisis intervention, crisis homes, nursing facility care and community-based services. With that infrastructure in place, more hospital inpatient psychiatric beds will become available for patients who truly need them, while patients needing less intensive care will receive it close to home.
Properly investing in these more efficient and effective resources now will put our state on a path to reduce behavioral health care costs in the long run. Otherwise, reliance on stop-gap measures will continue to extract a high price from both Iowans and Iowa communities.
As Iowa’s 118 community hospitals and 71,000 hospital employees work daily to bring healing and wellness to all Iowans, the state’s reckless rush toward privatization of the Medicaid program has been a source of extreme concern. Most concerning are the myths about privatization perpetuated by our own governor as he tries to promote what is simply a bad idea for Iowa and, especially, for 560,000 vulnerable Iowans who depend on Medicaid.
On behalf of those Iowans and the health care professionals who care for them, it’s time that all of Iowa sees these myths for what they are: misleading half-truths that cannot hide the failures of this ill-conceived plan.
Myth: The federal government held Iowa to a higher standard when it forced the state to delay its plan.
Fact: The governor and his staff knew exactly what was needed to satisfy federal officials and, with any exercise of due diligence, they should have also realized it would be impossible to make this wholesale transition in only a year. No other state has ever privatized even part of its Medicaid program in such a tight timeframe, let alone the entire program, as the governor is seeking to do.
It was obvious to everyone, particularly among frustrated Medicaid beneficiaries, that the state was not ready, but Governor Branstad chose to ignore them, the people who provide their health care and other state leaders. Federal officials did what they were supposed to do: protect beneficiaries and ensure program integrity.
Myth: Medicaid privatization is the only option for coordinated, accountable care.
Fact: With the full knowledge and endorsement of Governor Branstad, the state already supports alternatives through the Medicaid State Innovation Model, Integrated Health Homes and Accountable Care Organizations – and as far as reducing cost and improving efficiency, they are working. The state and hospitals have put cooperative effort into these programs and they have shown more savings in the past five years than private managed care for Medicaid has demonstrated in 30 years of so-called “innovation”. Then again, there is nothing innovative about denying and delaying care.
The bottom line is Iowa already has one of the most efficient Medicaid systems in the nation and the state and health care providers have been working, hand-in-hand, to make it even better. Privatization will simply interject a very expensive middleman who will extract millions of dollars to meet corporate goals while adding no value to the system.
Myth: Iowans will support clean water, strong public education or a community-based, efficient and patient-oriented Medicaid program, but not all three.
Fact: Iowans can and do support all three and the path hospitals and other health providers desire to take will further sustain Medicaid and other widely-held priorities. The people of this state would rightfully reject wholesale privatization of the public school system or water resources, so it’s no surprise that nearly eight out of 10 Iowans oppose privatizing health care coverage for a half million highly vulnerable citizens. Knowing that, Governor Branstad’s administration fired its plan through the Capitol with no legislative debate and then, with the throttle firmly planted to the floor, pretended to take input from a predictably skeptical public.
As of today, nothing has been done to assuage that skepticism, which is why IHA, along with thousands of health care professionals and even more every-day Iowans, continues to oppose this untenable, unnecessary plan that puts the health of impoverished, disabled and elderly Iowans at risk.
Health care providers across the state know we can do better. In fact, we already are.
(The following was submitted to the Sioux City Journal in response to this editorial that appeared on December 20.)
The Iowa Hospital Association has been analyzing and evaluating the state’s plan for privatizing management of the Medicaid program since it was announced nearly a year ago. But long before that, IHA and Iowa’s hospitals accumulated years of experience with this arrangement through Magellan’s contract to manage Medicaid behavioral health services.
It is that analysis and experience that has led IHA to oppose the state’s privatization plan.
With Iowa’s low cost per beneficiary and minimal administrative overhead, the managed care companies will struggle to return any savings to the state. But make no mistake; these huge, for-profit, out-of-state companies that have fought tooth and nail to win a contract from the state will do everything they can to make money from this deal. To accomplish that preeminent goal, they will restrict access to care and they will reduce payments to providers.
This is not a guess or a threat; it is what managed care companies have consistently done across the nation to meet their business goals. In other states, these companies are known not as care managers, but money managers. They control costs by limiting access to care and reimbursement for care to meet their obligations to shareholders. With these restrictions in place, they may even save the state some money, but rest assured that savings will come at a price for Medicaid beneficiaries and the people who care for them.
And be aware that these companies are far more dedicated to shareholders than taxpayers, as evidenced by the research. A rigorous and recent Medicaid managed care study by the Robert Wood Johnson Foundation found that “any potential savings will not be significant” and that those savings “generally are due to reductions in provider reimbursement rates rather than managed care techniques.”
Meanwhile, Iowa hospitals and the state have already been working together to coordinate care and reduce costs. Through existing Accountable Care Organizations, Integrated Health Homes, the State Innovation Model and the Iowa Health and Wellness Plan, efforts are underway and creating positive results in Iowa – without the additional cost to taxpayers to cover an out-of-state company’s profit margin. In fact, the University of Iowa Public Policy Center released a report just this past March indicating that existing care coordination through Iowa’s Primary Care Health Home Program has generated 20 percent in savings ($11 million) in its first 18 months.
With results like these already occurring, why is the state looking to eliminate successful programs for an unsuccessful, unnecessary privatized model? And why is the Journal’s editorial board endorsing this plan, especially given the well-reported legal and ethical misdeeds of these companies as well as their botched rollout of the Iowa plan, which has been so poorly managed that the federal government was forced to step in and delay it?
There is no reliable evidence that Medicaid privatization reduces costs, improves quality or increases access to care. This is why Iowa’s hospitals encourage the Journal to reconsider its position and look beyond the claims and promises of companies that have no stake in Iowa, but simply seek to make money off of vulnerable Iowans.