Health Reform Around the Nation: January 28, 2008
Massachusetts Gov. Deval Patrick (D) on Wednesday introduced a $28.2 billion fiscal year 2009 budget proposal that aims to close a $1.3 billion budget gap primarily created by increasing health care costs and declining state revenue, the Boston Globe reports (Viser, Boston Globe, 1/24).
Massachusetts officials expect the state's health care initiative to exceed the original budget for the program by about $245 million this year and another $400 million next year, largely because more people than expected are enrolling in state-subsidized coverage. Under the 2006 law, state residents must obtain health coverage or face a penalty on their state income tax.
The state expects federal funds to cover about half of the higher-than-expected costs for the program, but Massachusetts officials have just begun negotiations with the federal government on the matter. Separately, the state expects $5 million in revenue from businesses that do not offer health coverage for workers, down from the $24 million included in this year's budget (Dembner, Boston Globe, 1/24).
Patrick in the budget also proposed reducing Medicaid spending by $300 million, according to the AP/Boston Herald (AP/Boston Herald, 1/23). In addition, Patrick has proposed increasing the percentage state workers pay for health care to save $51 million (AP/Boston Herald, 1/23).
New Jersey State Senate President Richard Codey (D) on Thursday introduced a bill that would allow physician-owned surgical centers in the state to be exempt from a state law that prohibits self-referral, the Philadelphia Inquirer reports. Last year a judge ruled that about 200 ambulatory-surgery centers owned by doctors were violating the law.
Although the centers have remained open, enforcement of the ruling could force them to close, according to Mark Manigan, a partner at a law firm that represents the New Jersey Association of Ambulatory Surgical Centers. The bill would allow centers currently operating to continue but would prevent others from opening.
Earlier this month, the New Jersey Board of Medical Examiners proposed an emergency amendment to its regulations that would broaden the definition of a physician's medical office to include a separate site where surgery is performed, allowing the centers to operate without violating the self-referral law.
The amendment has not been officially adopted by the board and requires the governor's approval. However, a potential problem facing the state's emergency centers is that about 40 to 50 of them have outside investors, which would rule them out of the exemption proposed by the emergency amendment, Manigan said (Burling, Philadelphia Inquirer, 1/24).
In other New Jersey news, a state commission recommended that New Jersey financially help hospitals in the state that are considered "essential" and "financially viable" and allow other hospitals to face market forces, even if it leads to their closure, the Newark Star-Ledger reports.
The commission described an essential hospital as a facility that provides care for low-income patients, provides fundamental services such as trauma care and treats a significant portion of the local population. The report also identified factors that cause financial strain at hospitals, including an excess of hospital beds, an increase in outpatient centers and poor oversight by hospital boards.
In addition, the commission recommended that the state create a data-collection system to track order entries of physicians to determine the cost of treating similar patients, which would aim to identify excessive or unnecessary care, and require hospitals to post their charges online. The commission also recommended that the state hire an outside efficiency monitor to continuously report on hospitals (Stewart/Campbell, Newark Star-Ledger, 1/25).
The administration of New Mexico Gov. Bill Richardson (D) on Thursday indicated that it is willing to compromise with a coalition of advocacy groups on legislation that would overhaul the state's health care system, the AP/Contra Costa Times reports.
Richardson supports a bill that would require all New Mexico residents to obtain health coverage and would create a health care authority. The coalition, called the Health Care for All Campaign, supports the creation of a health care authority that would work with expert advisory councils to develop by 2009 "a comprehensive plan for accessible and affordable health care" for all state residents.
State Human Services Secretary Pam Hyde said that Richardson wants health care legislation to include insurance reforms and mechanisms to expand coverage. The coalition said that Richardson's plan does not do enough to reduce health care costs and guarantee access to care and that the proposed health care authority would give the governor too much power.
Under Richardson's plan, the governor would appoint all but one of the 11 members of the authority. Hyde said the Richardson administration is willing to discuss making the authority more independent, the AP/Times reports (Baker, AP/Contra Costa Times, 1/24).
New York Gov. Eliot Spitzer (D) on Tuesday proposed a $124.3 billion budget plan for the upcoming fiscal year that includes a $1 billion reduction in health care spending, the New York Times reports.
Spitzer proposed $980 million in cuts to Medicaid and other health programs, in part by changing the way the state reimburses hospitals and other providers to emphasize preventive care and by changing the way the state purchases medications in bulk.
The budget proposal also would reclassify HMOs as insurers for tax purposes, which would generate more than $200 million annually. In addition, Spitzer proposed increasing other fees charged to health insurance companies by $50 million. According to the Times, Spitzer "did not rule out" making further cuts later this year, if necessary (Hakim, New York Times, 1/23).
The Pennsylvania Department of Public Welfare last week launched a program to identify and stop Medicaid payments for care related to preventable hospital errors, the Inquirer reports. The state also will prohibit hospitals from charging patients for such errors.
Under the policy, which Gov. Ed Rendell (D) announced on Tuesday, the department will examine hospital bills for 27 so-called "never events," such as operating on the wrong patient, medication errors that result in death or disability, and bad blood transfusions. The department will assess each case to see if the event was preventable and resulted in significant harm to the beneficiary.
The initiative will apply to care given at acute care hospitals since Jan. 14 (Goldstein, Philadelphia Inquirer, 1/23). Officials did not provide an estimate of how much money the program would save the state's Medicaid program.
The policy does not apply to managed care organizations that enroll Medicaid beneficiaries. However, Stacey Witalec, a spokesperson for the department, said that the state expects those companies to adopt similar policies (Raffaele, AP/Contra Costa Times, 1/22).
The Pennsylvania program is part of a broader health care plan announced by Rendell in January 2007 that seeks to improve the quality of care, reduce errors, eliminate hospital-acquired infections and increase access to affordable health care for all state residents (Philadelphia Inquirer, 1/23).