Operating Budget Moves from House to Senate, where it will get quick action
Yesterday was the 60th day of the 90 day session, adjournment is just 30 days away. The House passed the FY 14 operating budget yesterday. The measure now moves to the Senate.
The Senate plans to make quick work of the operating budget. The Subcommittees will finish their work next week and the measure could be on the floor as early as March 26. The Senate HSS subcommittee will close out on Monday of next week.
The capital budget is being worked on in the Senate and will be passed to the House. Typically, the capital budget is the last financial measure to pass.
Unlike last year, the mood is one of fiscal constraint; Lawmakers warn more to come next year
The FY14 budget the Governor delivered this year was less than 1% in growth. After the House finished with the measure, that one percent increase was gone. The House delivered a $6.5 billion general fund budget- $9.8 billion in overall funds-slightly below ($4.4 million) last year’s levels. The budget currently does not include the negotiated salary increases for state employees which will likely bring back above a flat budget.
The budget includes some significant cuts across departments. Some of the most significant cuts include:
$8 million in Medicaid funds (making it $16million with federal match)
$8.3 million in Behavioral Health grants (see story below)
$2 million to the trauma fund for hospitals (which eliminates this fund, see story below)
$700,000 for currently operating therapeutic courts
In the deliberations on the budget this week, majority legislators forewarned about more cuts next year. Finance Co-chair Alan Austerman said, “If you don’t believe what the Department of Revenue is telling us on what the income that is coming to the state right now and where we are in a financial picture, that’s one thing, but I’m told and believe we are in deficit spending and we do need to maintain and grab control of our budget, and I think that is what this budget does."
Finance Co-chair Bill Stoltze said a cut of $4 million from last year is not a Draconian cut. He says the current $9.8 billion budget is not sustainable. "I can only say, Mr Co-chair, it is only going to get a lot tougher. I guess as we deal with this year and finish out this process ...we are going to have to scrape and scrap just to hold the line." However he said, “what we achieved this year is not even sustainable. It’s trying to turn the corner. I guess we better buckle in for even tougher times. If it’s tough this year, God help us in the future.”
Representative Mark Neuman who chaired the review of the DHSS and the DOT budgets, the two largest in state government, said that one of the reasons to cut the operating budget was to free up funds to put toward the capital budget. Co-chair Austerman complimented Neuman for his efforts but he clarified that the process of operating reductions was not to free up funds for capital projects.
The House passed the FY 14 operating budget yesterday by an overwhelming margin.
You can see the version of the legislation that passed out of the House here:
And the House version of the Mental Health Budget here:
What will the Senate do?
Next Monday at 8am we will see if the Senate repairs any of the cuts made by the House to the DHSS budget or cuts some programs of their own. It is widely expected that Senator John Coghill will move to restore the Trauma fund which has been eliminated in the House version. Another area to watch is funding for the dedicated Medicare-only Clinic in Anchorage.
The panel is chaired by Senator Donny Olson of Nome.
Early indications are that the Senate will see things somewhat differently. The Alaska Court System already has seen the Senate subcommittee, led by Senator Pete Kelly, restore six of their top priorities that were whacked in the House. That includes roughly $700,000 for therapeutic courts across the state.
Oil Tax Discussions Loom Over Fiscal Situation
In the halls of the State Capitol, an additional factor looming in future fiscal discussion is the impact of oil tax reductions on the State Treasury. Oil tax legislation is almost certainly going to pass the Legislature this year. As the oil tax reduction measure takes shape in the Senate, fiscal analysis shows that the State of Alaska will see a loss of oil revenue from $1.4 billion to $1.8 billion each year by 2019.
This could take a big bite out of the States' roughly $6.5 billion general fund budget and make the current budget reductions look like chump change.
Of course, Senate Majority members of both the House and Senate and the Governor believe these tax reductions are necessary to stimulate economic development in Alaska and that the focus should be on economic wealth creation outside of government—not measured by the size of State coffers.
Legislative leaders are well aware of the Hobsian choices they will need to make in the next several years with some passionate statements being made in committees.
Senator Pete Kelly was eloquent this week in Senate Finance on this issue. The co-chair said that the State took too much money from investors who wanted to produce an economy in the state and make a profit in the process and now the Legislature must consider giving some of that back so they will reinvest in Alaska. “As we give back, we can’t measure it against what government wants. We have to measure it against what the people want,” Kelly said. “They want jobs, they want to be able to start businesses.”
Adding to the challenge will be the certain reduction in federal spending that Alaska has come to rely on.
Trauma Funds Get Zeroed Out In House
The $2 million reduction in Trauma funding came with little notice. During the subcommittee process in the House there was little, if any, discussion about the Trauma Fund. The subcommittee included the funding in their recommendation to the full House Finance Committee. However, when the amended legislation was presented to the committee, the $2 million request by Governor Parnell had been eliminated.
The Trauma Fund was established in 2010 when legislation authored by then Rep. John Coghill (R-Fairbanks) passed the Legislature. In addition to the legislation, an appropriation of $2.5 million to establish the fund was contained in the 2010 capital budget. Since that time, hospitals around the state have used this fund to enhance their trauma capabilities.
Roughly 20 hospitals have signed up for the program and have gained or are seeking trauma designation. The Senate will determine the fate of the Trauma fund when it takes up the budget next Monday morning.
Alcohol Money Left on the Table Gets Snatched for Budget Switcheroo
The budget reduction that has attracted the most attention this year is the $8.4 million reduction to the grants that fund substance abuse, detox, drug abuse and mental health treatment programs across the State. This results in a 6.4% decrease in behavioral health grants.
The amount of the reduction is no accident because it matches the $8.4 million in capital funds that are left from last year’s appropriation of funds from the alcohol tax for innovative improvements in treatment approaches. The effort, championed by Senator Ellis and CHAAR, appropriated $9 million over three years to do something “out of the box” for this treatment area.
Last year the Department spent many months trying to come up with these innovations and only awarded around $700,000 of the funds. A partnership with many groups called Recover Alaska was formed to outline uses of the remaining millions.
The main problem with this solution is that it is a temporary, so it was not clear whether using the capital money is a stop gap measure on the way to real cuts or a temporary cut with the intent to further examine this area over the interim. House Finance members seemed confused and have differing opinions on this. Certainly this lack of clarity does not lend itself to solid agency funding.
The Senate will address this issue next week and we will report on the outcome.
Legislative Hearings for the week of March 18-23
Monday, March 18 @ 8:00am – HSS Senate Finance Subcommittee – Budget Closeout – Testimony by invitation only
Monday, March 18 @ 1:30pm – Senate HSS – Alaska Mental Health Trust Authority Board of Trustees Confirmation Hearing for Russell Webb and Paula Pence Easley
Wednesday, March 20 @ 1:30pm – House Finance – HB 64 – Capital Budget
Wednesday, March 20 @ 1:30pm – Senate HSS – Presentation on Obesity Prevention by DHSS
Thursday, March 21 @ 9:00am – Senate Finance Committee – HB 65 Operating Budget and HB 66 Mental Health Budget – Subcommittee reports to full committee
Thursday, March 21 @ 3:00pm – House HSS Committee – Presentation by Kenai Peninsula Borough – Medicaid Expansion
Friday, March 22 @ 9:00am – Continues at 1:30pm - Senate Finance – Statewide Public Testimony on HB 65 Operating Budget and HB 66 Mental Health Budget:
9:00am Bethel, Nome, Kotzebue
9:30am Barrow, Tok, Delta Junction
10:00am Ketchikan, Wrangell, Petersburg
11:00am Sitka, Cordova, Valdez
1:30pm Fairbanks, Mat-su
2:30pm Glennallen, Seward, Homer
Saturday, March 23 @ 10:00am – Senate Finance Committee HB 65 Operating Budget and HB 66 Mental Health Budget – Final Public Testimony
11:30am Kenai, Kodiak, Dillingham
12:30pm Statewide Teleconference – Offnet Site
Tanana Chiefs Opens New Super Clinic adjacent to Campus of Fairbanks Memorial Hospital
Tanana Chiefs Conference (TCC) dedicated its beautiful new $68 million, 95,000 sq. foot Chief Andrew Isaac Health Center this week in Fairbanks. The clinic is a dramatic expansion of space. TCC will be able to offer services to the 10,000 plus Interior Alaska Native residents from 42 villages and Fairbanks. Congrats to TCC President Jerry Isaac and Health Director Victor Joseph and Health Board Chair Andy Jimmie for shepherding this huge project through many hurdles.
The services are needed for a region that stretches from the Canadian border to near the Bering Sea covering 235,000 sq. miles or 37% of the state.
For over 40 years, TCC has had a strong partnership with Fairbanks Memorial Hospital with the co-location of the Chief Andrew Isaac Clinic at FMH in the 1970s. When it was clear the clinic needed more space, the Fairbanks Memorial board and administrative leadership worked with TCC to find suitable land adjacent to FMH so patients could continue to utilize all services as well as the patient hostel.
TCC will now own the 9.5 acre site and the building and the signature design gives the clinic its own identity.
With the new space, TCC will be able to add in-house services that were previously done at FMH including lab and some imaging. They will also expand dental, pharmacy, community health education, and specialty clinics.
The building was designed by Bettisworth North architects CB Bettisworth and Traci Vanairsdale (ASHNHA Associate members), NBBJ, and Johnpaul Jones—the Native American Architect responsible for the design and completion of the Smithsonian Museum of the American Indian on the Mall in Washington DC. (Coincidentally, Bettisworth and Jones were classmates at the University of Oregon).
The building is one of a dozen in Alaska to achieve the sustainable design certification of LEED Gold.
Second Joint Venture to Become a Reality
The new Chief Andrew Isaac Health Center was financed by TCC, but the staffing package and building costs will be amortized and covered by the federal government in an innovative federal Joint Venture program. The JV program was a way to leverage capital that tribes had access to outside the federal government and focus the federal investments on service enhancement in care. The four Alaska regions chosen for the joint venture program out of 31 nationwide have grabbed an opportunity that may not be available again given the fiscal climate. Southcentral Foundation developed and opened the Mat Su clinic last year and planning and construction are underway in Copper River and Kenaitze in Kenai.
There will be challenges ahead to ensure the federal funding is there for the staffing packages—but the latest Senate version of the Federal budget includes more than $50 million to cover those expenses in Alaska.
Bonding for the TCC project was financed through the Village of Koyukuk. We understand no state money was contributed to the project.
Clinic Newspaper Insert is a Best Practice
If you have a ribbon cutting or major event ahead you might want to take a look at the 24-page insert developed by Tanana Chiefs Conference and inserted in the Fairbanks paper last Sunday. Not only does the document highlight the new clinic, but it gives the general public an overview of the history of the organization and its mission. It’s a lovely item which can be used for months to come in waiting rooms. Click here
to view the entire publication.
Nice to See Mayors Talking About Health Care Jobs
The Tanana Chiefs Conference newspaper insert is packed with testimonials from contractors and others who supported the project. But the testimonial we like is the story “Big Building, Big Economic Impact.” Borough Mayor Luke Hopkins and City Mayor Jerry Cleworth focus is on the jobs created, not only by the 350 plus employees and $71 million payroll at the clinic, but by the patients who come from all over to use the center. Patients who once traveled to Anchorage are now able to receive services in the Interior which adds more dollars to the local economy.
It seems we need to build on this issue with our local leaders. With all the discussion about payers sending patients out of state for care, keeping patients close to home is an important message to emphasize. The message is especially critical to share with leaders who may be impacted even though they are not involved with the day-to-day of health care. In that vein we are very pleased to see Mayor Mike Navarre of the Kenai Peninsula Borough testifying in favor of the Medicaid expansion next week. Navarre is a former legislator and speaker of the house and is widely respected in the
Capitol and across the state.
Health Care Leaders Hit the Circuit on Medicaid Expansion
ASHNHA members are beginning to appear in front of business groups to explain the Medicaid expansion. This is a result of a request made by Governor Parnell to educate Alaskans regarding this issue.
Reception to the message has been positive, and while not all are convinced, it’s clear that individuals are interested in the topic and want to learn more. Central Peninsula CEO Rick Davis spoke to both his chambers and Karen Perdue, ASHNHA and Val Davidson, ANTHC spoke to the Anchorage Chamber. Karen focused on the cost shift that private employers bear due to uncompensated care—which would be somewhat relieved with the expansion. Click here
to read an article about their presentation to the Chamber.
Rick emphasized to the Chamber that Medicaid expansion would benefit the hospital’s finances and the community’s health in the long term. The expansion would help the hospital finances by covering some of the bad debt and charity care for people without any insurance. In addition, the expansion will allow those without any coverage to access preventative care and primary care. Rick further explained that because the new health care law requires small business to have health insurance for their employees, pressure on these businesses may be reduced by having the lower wage workers qualify for Medicaid.
to read the full article in the Peninsula Clarion.
Medicaid Expansion from Around the Country
Florida Legislature Rejects Governor’s Attempt to Expand Medicaid
Earlier this month Florida Governor Rick Scott agreed to expand Medicaid in Florida under the provisions of the Affordable Care Act. This week the Florida Senate proposed a compromise where the state could accept the federal money but use it to put low-income people into private plans. In essence the Senate believes they can appease the Governor and some residents in Florida while still moving people away from Medicaid.
In the Florida House, a committee voted to reject the expansion completely citing too high of a cost to put more people on Medicaid. Governor Scott has made it clear to legislators that he will not be lobbying them on expanding Medicaid but will stay focused on other issues of importance to his agenda.
to read the full article from the New York Times.
Sebelius Promoting Medicaid Expansion to City Leaders
HHS Secretary Kathleen Sebelius urged attendees at the National League of Cities’ annual legislative forum to join the Obama administration’s team to convince Republican Governors to expand Medicaid. Sebelius told the gathering that she hopes they will ask Republicans the question of whether the costs outweigh the benefits of expansion. Sebelius accused the Governors of playing politics with the expansion because they were opposed to the Affordable Care Act.
Regardless of what each does with the Affordable Care Act, Sebelius said she was going to need the help of local officials to make sure the public discovers the new insurance coverage expected to begin in 2014.
to read the entire article from ModernHealthcare.com.
Arkansas Medicaid Expansion Update
While the Obama administration has taken a hard line with regard to Medicaid Expansion—all or nothing-, there appears to be some wiggle room emerging. Recently HHS Secretary Kathleen Sebelius supposedly agreed to a proposal by Arkansas Governor Mike Beebe (D) to reject the expansion and instead use the expansion money to purchase health insurance for those who would have been covered under the Medicaid expansion. This should be good news to Alaska Health and Social Services Commissioner Bill Streur who has indicated he had pitched a similar proposal to HHS earlier this year.
While the Arkansas plan has yet to be finalized, both with the federal government and the Arkansas Legislature, there are concerns coming from the Congressional Budget Office (CBO). According to CBO estimates buying private insurance may be more expensive than adding a person to Medicaid.
to read the entire article from the Washington Post.
South Peninsula and PeaceHealth Ketchikan among Top 100 CAHs
South Peninsula Hospital in Homer and PeaceHealth Ketchikan Medical Center were recently named among the HealthStrong™ Top 100 Critical Access Hospitals (CAHs) in the United States.
ASHNHA would like to recognize the efforts of these hospitals and their physicians in achieving this designation.
The HealthStrong™ Top 100 Critical Access Hospitals scored best among critical access hospitals on the iVantage Health Analytics’ Hospital Strength Index™. The Hospital Strength Index is first-ever comprehensive rating of CAHs and the results recognize the Top 100 Critical Access Hospitals that provide a “safety-net” to communities across rural America – measuring them across 56 different performance metrics, including quality, outcomes, patient perspective, affordability and efficiency. More information can be found at www.iVantageHealth.com/HSI
“Rural hospitals play a critical role in providing needed care to communities across America. While, the challenges are completely different from urban hospitals they are as complex. The need for enhanced performance and a framework for success are equally important as hospitals prepare for the impact of health reform,” said John Morrow, EVP of iVantage Health Analytics.
Alaska Health Care Commission Focuses on Transparency
The Health Care Commission met last week to review preliminary findings and recommendations regarding transparency, the health information infrastructure, the Hospital Discharge Database and an All-Payer Claims Database (APCD).
for March 7-8 meeting documents
The feasibility study on the APCD has been released and was presented at the meeting. Not surprising the APCD emerges as the option to provide the widest range of data but also at the highest cost.
to read the feasibility study.
Benefits touted of an APCD, if done correctly, are to provide a method for desired transparency for consumers, and a tool for improving population health, clinical quality and utilization and cost of care (“If you can’t measure it, you can’t manage/improve it.”)
Potential challenges discussed include:
APCD would require state legislation to mandate participation by payers and providers and to overcome federal legal barriers to sharing data (HIPAA and anti-trust).
A higher proportion of Alaskans are on federal health programs than most other states. Other states with APCDs have not yet gotten participation in the APCD from Dept of Defense, Veteran’s Administration and Indian Health Service which are large payers here.
Questions arose about whether an APCD would cost more in Alaska than the report estimates due to the lack of data capacity now.
Since a majority of communities have a single hospital and limited number of providers, the question of small numbers and lack of comparision data needs to be considered.
The general recommendation seemed to be moving in the direction of proceeding with an APCD with caution. However, the Commission did not take any action and will do additional research on the outcomes of APCDs in other states and continue the discussion at the meeting in June. The Commission also reviewed examples of other States’ transparency initiatives (see pages 59-69 of APCD study). There is a strong interest in making health care pricing more transparent for consumers. ASHNHA plans to do its own research to help determine the potential benefits and challenges an APCD or other price transparency efforts could bring to members.
Jeannie Monk with ASHNHA presented an update on the Hospital Discharge Data System that primarily focused on the current tenuous nature of the system due to the lack of full participation by all the large hospitals in the Anchorage bowl. Commissioners were again reminded that hospitals have been voluntarily submitting data for 12 years and the State has a wealth of information but has not had the capacity to fully analyze and utilize this existing data source. The idea to mandate hospitals to submit discharge data was also discussed by the Commission.
Thanks to Bruce Richards from Central Peninsula Hospital for attending the whole meeting. He is a strong advocate for transparency.
ASHNHA Quality Summit 2013
Over 62 participants attended ASHNHA’s Quality Summit 2013 in Anchorage on March 5-6. The event began with an inspirational presentation by Brian Boyle, a dynamic young man who spent three years recovering from a near-fatal car accident. Brian provided an inspiring foundation for our dive into reducing adverse drug events and improving care transitions -- two of the ten quality measures in the HEN's aim to reduce hospital acquired conditions and prevent readmissions by January 1, 2014.
Steve Tremain, MD from Cynosure Health partnered with Amanda Hays, PharmD from the Alaska Native Medical Center to define, identify, and implement systemic change to reduce Adverse Drug Events in our hospitals. Adverse Drug Events are the most common Hospital Acquired Condition. Not only are ADEs the cause of 770,000 patient deaths each year across our nation, they also cost hospitals up to $5.6 billion annually.
On the second day of the Quality Summit, Jeffrey Greenwald, MD from Project B.O.O.S.T. and a practicing Hospitalist at Massachusetts General provided an overview of the CMS mandate to reduce readmissions. Hands immediately began to spring up throughout the audience as participants struggled to grasp the complex penalty associated with preventable readmissions.
Dr. Greenwald emphasized the importance of looking at Care Transitions as a “best practice” opportunity instead of allowing the CMS mandate to be the driver. He pointed out that in hospitals with open beds, the cost of the penalty is lower than the earnings from caring for patients who are readmitted. In addition, he recognized that in fact, for many patients in smaller communities the hospital is the only place for patients in need of additional care. Regardless of how we analyze the readmissions penalty, improving care transitions results in improved patient satisfaction and improved outcomes.
The second half of the day was presented in the style of a workshop on the use of root cause analysis as a key quality improvement tool in addition to a dynamic session on “teach back.” A team from Alaska Native Medical Center led by Dr. Alanna Small and Dr. Amanda Hays presented a preventable readmission case study. Demonstrating the true spirit of transparency, the patient story was shared with the audience for a group root cause analysis exercise and facilitated panel discussion. The panel generated interesting discussion and gave Summit attendees a chance to practice use of a tool vital to improvement.
The Quality Summit provided the attendees with inspiration, current best practices, and tools to implement positive change in their respective hospitals. Perhaps even more importantly it served as a platform for inter-hospital sharing, networking, and an opportunity to highlight the hard work and dedication to quality outcomes in hospitals throughout our state. Without exception, Alaska’s hospitals are committed to improving the way we deliver care.
Brian Boyle Inspires Us to Keep the Patient Front and Center
As the plenary speaker at the ASHNHA Quality Summit 2013 in Anchorage on March 5&6, Brian Boyle inspired the room with his amazing story of recovery. Boyle was 18 years old when the force of a horrific crash pushed his heart across his chest and damaged every major organ in his body. Doctors weren’t sure he would survive, let alone ever walk again.
Shara Sutherlin, CNO South Peninsula Hospital and Brian Boyle
After undergoing several life-saving surgeries, a medically induced a coma, intensive rehabilitation and receiving 36 blood transfusions over the course of his recovery, Brian now dedicates his life to competing in triathlons and giving back to the donors and caregivers who saved him. He is the National Spokesperson and volunteer for the American Red Cross.
Recalling his first impressions after awaking in the intensive care unit, Brian shared an excerpt from his book, Ironheart
My time in ICU Room 19 passed slowly, marked by the smallest signs of progress: first blinking, wiggling my toes and then speaking my first word (months later, I added taking my first step to the list). None of these huge personal milestones would have been possible without my family and the many nurses, doctors, therapists, techs and countless others who fought tirelessly for me. Completely reliant on others in my vulnerable state, my health care team met my many needs, big and small, around the clock.
Most of all, however, they gave me hope. Even though I couldn’t talk, they spoke to me — something I craved in my isolated state. Whether to explain that day’s tests, to talk about the Olympics in Athens, which they frequently let me watch, or to tell me about their lives, they treated me like a family member instead of a body in a bed. Actions as simple as playing my favorite CDs or asking my family to bring in fans to cool my feverish body meant so much to me. The impact of even a smile cannot be overstated.
For more information about Brian Boyle and to watch a captivating video about his story, please follow this link: http://www.redcrossblood.org/ironheart
USAC Rural Health Care Program Funding Year 2013 Window Opens April 8
Eligible health care providers (HCPs) may begin the Rural Health Care (RHC) Program application process for Funding Year (FY) 2013 by filing FCC Form 465, Description of Services Requested and Certification Form, beginning on Monday, April 8, 2013, at 9:00 AM EDT. FY2013 is from July 1, 2013, to June 30, 2014 Click here
for full details.
HRSA Offers Free Vouchers for Health IT Professional Examinations
The Health Resources and Services Administration (HRSA), in collaboration with The Office of the National Coordinator for Health IT is offering free vouchers to take the Health IT Professional Exams (HIT Pro Exams). These exams assess competency in one of six Health IT workforce roles:
Implementation Support Specialist
Practice Workflow & Information Management Redesign Specialist
Technical/Software Support Staff
Why Should You Take the Exam?
Validate Competencies: Competency examinations enable Health IT professionals, employers and other stakeholders to assess their own knowledge and experience.
Staff Development: The examinations can be used by employers to enhance the Health IT skills and capabilities of personnel. Staff who become certified can be instrumental in helping your organization qualify for incentive payments for the meaningful use of electronic health records.
Organizational Credibility: These exams help organizations demonstrate to customers that their staff possess the key skills needed to meet the challenges of effectively implementing and utilizing Health IT.
In Next Week’s Legislative Notes
We will profile what’s happening in Long Term Care across the State. We will track the progress of facilities in Kodiak, Anchorage, Bethel and Nome.