The joy and generosity of the season is upon us and Iowa’s hospitals gladly join in the festivities. Yet, the grandest gifts of 70,000 hospital employees cannot be boxed and wrapped but are available at all hours of every day. The healing hands, sincere smiles and true compassion – these are the gifts you bestow each day to your friends, neighbors and communities. And for that, we are all deeply grateful. From everyone at the Iowa Hospital Association, season’s greetings!

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A recent Des Moines Register article expounded on publicly reported information to support the obvious conclusion that bringing tax-exempt organizations onto the tax rolls would lower other taxpayers’ proportional tax liability.  It’s important to know that two different standards on tax exemption are involved in an evaluation of this question.  

One is a standard in Iowa law that exempts from property taxation any religious, educational or charitable institution.  The other is a federal regulation that exempts organizations from taxes on revenue if that organization provides community benefits that the government otherwise would have to provide or, at the time of application for tax exemption, don’t exist in the community.   

Each standard involves evaluation by regulators – the Internal Revenue Service for community benefit and the Iowa Department of Revenue for charitable status – and both have had extensive and consistent scrutiny by the courts.  The Register noted that hospitals pay significant sums in property taxes and in addition to that, some make payments in lieu of taxes to support police and fire protection. 

Iowa hospitals supported mandatory reporting of community benefits in federal law because of their practice of doing so prior to this mandate.  Iowa hospitals continue to support the community benefit standard for the express reason that an assessment of community need is driven by its demographics and by the needs and priorities identified by community members.  The capacity, opportunity and definition of community benefit is different in a community of 1,500 than one modestly or significantly larger.  It’s certainly different when that institution exists in Des Moines or Chicago or Los Angeles. 

As the Register noted, opinions of policymakers and policy wonks differ on the question of what should be included in the definition of community benefit or whether a flat percentage mandate should be required.  Iowa Senator Charles Grassley supports inclusion of Medicaid payment shortfalls in an analysis of community benefit.  In 2010, Iowa hospitals’ net losses from Medicaid equaled nearly $200 million.  Uncompensated care, that care which was not classified as charity but which otherwise had no identifiable source for payment, equaled $340 million in 2010. 

So, what should be the appropriate ratio for calculating community benefit?  The Register took a very narrow view and used charity care divided by total expenses.  Hospital expenses consist of labor costs, infrastructure costs in delivering patient care as well as expenses unrelated to patient care.  Why not net patient revenues?  Perhaps because it supports a conclusion exactly opposite of the position promoted by the Register.   

Using the analysis of charity care plus Medicaid losses plus uncompensated care, Iowa hospitals provided 11.2 percent of net patient revenues for community benefit.  Using the same inputs and expenses for the denominator as the Register does shows Iowa hospitals allocated 10.2 percent of expenses for free care. 

In a country with a stagnating economy, it’s tempting to toss out simplistic solutions that rarely account for all the policy considerations at play let alone consider the implications for an industry that has a $6 billion impact on Iowa’s economy and provides nearly 70,000 jobs.  The important thing to know is that Iowa’s hospitals believe in and live up to being accountable to the communities they serve.

Iowa’s behavioral health system is in critical condition.  

Patients in need of services wait too long for appointments or for beds in treatment facilities.  Left on their own, these Iowans often enter the system through hospital emergency rooms or law enforcement.  Coupled with a fractured delivery structure that does not provide uniform access or services to citizens in different parts of the state, mental health care in Iowa is tenuous, at best. 

Certainly, adequate payment for services remains important to ensuring that behavioral health services remain viable in Iowa.  But other structural changes are equally important to consider as Iowa attempts to address this issue.

The Iowa Hospital Association is exploring pragmatic solutions for mental health delivery with the Department of Human Services and other stakeholders.  However, without prompt and thoughtful action from legislators, including a commitment to properly fund mental health care across the state, Iowa will find itself in a situation where there will be no appropriate caregivers for behavioral health services, resulting in significant societal costs that will impact everything from hospitals to schools to courts. 

In response, Iowa’s hospitals have identified several priority initiatives, including: 

• A need for sub-acute services:  Iowa needs more beds for patients who do not require intensive mental health care services provided by hospital inpatient units, but who are not ready to fully transition back into society.  The Iowa Mental Health Institute (MHI) Task Force convened in 2009 concluded that sub-acute care is a necessary portion of the continuum of care that is missing in Iowa and also noted that this is a role that could be filled via one or more of the state’s four MHIs.  IHA recommends that a pilot project expanding sub-acute care at one of the state’s MHIs be developed and funded to address this need, with the potential for expanding the pilot to other communities across the state. 
• Access to uniform mental health service delivery:  Iowa hospitals support the DHS goal of a more coordinated mental health delivery system.  However, local mental health providers have created innovative community delivery models.  Requiring access to uniform services could still allow for local innovation and eliminate inequitable services and administrative difficulties for regional and statewide providers.  This includes hospitals providing inpatient psychiatric care, which must cope with 99 different counties with different benefit plans.  IHA supports a uniform system that will increase efficiency, eliminate fragmentation and provide consistent services and outcomes for Iowans.  In addition, the Iowa General Assembly should increase county property tax caps for the provision of mental health services. 
• Expansion of telemedicine for behavioral health services:  Faced with a statewide shortage of psychiatrists, broader use of telemedicine services to oversee mid-level mental health practitioners holds great promise in Iowa.  The expansion of these services faces two significant hurdles: lack of payment from Medicaid and other third-party payers and issues with state rules governing supervisory authority for some services (such as inpatient mental health services) by out-of-state physicians.  Appropriate inpatient telemedicine services for behavioral health should be paid for by Medicaid and the use of telemedicine services should be viewed more liberally by the Board of Medicine and the Department of Inspections and Appeals. 
• Improved Coordination of Benefits:  Many behavioral health patients have multiple disorders or conditions that must be treated, including substance abuse and physical ailments.  Today, there is little benefit coordination between traditional Medicaid (which covers physical health), the Iowa Plan (which covers behavioral health), and substance abuse treatment (through the Iowa Department of Public Health) regarding payment for these services.  Hospitals often receive payment from only one funding source, covering only a portion of the overall care costs.  The state must better coordinate these services to more accurately reflect the total cost of treatment for Medicaid patients. 

Iowa’s hospitals are committed to ensuring that all Iowans have access to high-quality care – both physical and mental – and will continue to press state leaders to support an equitable and accessible behavioral health care system.

The year 2010 will not be soon forgotten and the Iowa Hospital Association hopes this holiday greeting will help you to reflect on what was great about the past year as well as put a smile on your face.

IHA is thankful for the opportunity to represent Iowa’s 118 hospitals that are caring for the sick and healing the injured in the communities they serve each and every day of the year. Wishing the best to all members of IHA in 2011.

YouTube link: http://www.youtube.com/watch?v=dwR0AtmHrDg

Click here to download the PDF of the video’s poem.

The Des Moines Register’s December 4 editorial basically calls for two things:  the end of the Iowa Hospital Licensing Board and requiring hospitals to report so-called “never events.”  Its reasoning for both is flawed and misleading. 

The hospital licensing board is not unlike numerous other boards the state has created to help it oversee certain industries and the professionals who work in them. Two examples are the Board of Nursing and the Board of Medicine. It should come as no surprise that those boards include nurses and physicians and that the hospital licensing board includes some people with an understanding of hospital operations. These boards are designed to offer some insight on the industry so that state agencies can understand the impact of their regulations.  

Let’s be clear: Only one of the members of the hospital licensing board is a hospital employee, and none of the members serve the Iowa Hospital Association in any capacity. The board members, who are all volunteers, are expected to work in the public’s interest, and there is nothing to indicate the licensing board members have not fulfilled that obligation. 

At the licensing board’s last meeting, there were several presentations on “never events” – extremely rare medical errors such as operating on the wrong body part or leaving a surgical instrument in the body. The Register would have readers believe the board was expected to vote on regulations, then and there, that would require hospitals to report these events, but that wasn’t the case. The presentations were just part of the information-gathering process – a process that is continuing, as it should be.  The absence of a Register reporter at this meeting is likely the cause of this lack of understanding. 

No one is arguing that “never events” aren’t important or that health care providers must continue to improve quality and safety.  The question is whether reporting has improved care in the states that require it.  

There is no evidence to demonstrate that public reporting of these events has improved patient safety or the care patients receive. The states that have reporting have taken years to implement their systems, some of which remain far from perfect.  And while these states provide a resource as Iowa considers implementation, it should not be assumed that another state’s system could – or should – simply be transplanted into Iowa, as the Register is apparently advocating. 

Also, state legislatures, not regulators, implemented those requirements. They did so only after it was clear how the information would be reported and used and how those providing the data would be legally protected. And they worked collaboratively with hospitals to make it happen. 

As an appointed public official directing the Iowa Department of Inspections and Appeals, Dean Lerner’s unilateral expectations have been whole-heartedly endorsed by the Register throughout his tenure.  Yet, contrary to the inference of the Register’s articles and editorials, board members have publicly registered their “disgust” with Lerner’s lack of collaboration and leave meetings frustrated.  Any CEO of any organization would be dismissed for having a similar relationship with a board. 

Iowa hospitals have a long history of working with government at all levels to provide and improve health care. The quality and safety of health care in this state is well documented.  Proof of our hospitals’ willingness to be transparent is found not only on the Iowa Hospital Association website (www.ihaonline.org) but also on the Iowa Healthcare Collaborative website (www.ihconline.org), where hospitals have voluntarily provided a massive amount of data about their safety and quality, including infection rate data, which is much more important to the safety and protection of more than 30,000     patients cared for on a daily basis by Iowa hospitals than is reporting of “never events.” 

Like health care itself, the work of the Iowa Hospital Licensing Board is complex, important and demanding. The board should be commended for taking its job seriously and being thorough.  It is that thoroughness, as opposed to the do-it-now and do-it-my way approach advocated by one appointed official, that ensures the state improves health care with thoughtful action.