Archive for June, 2011
June 30th, 2011 | 
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MIAMI |
MIAMI (Reuters) – As healthcare costs for the poor soar across the United States, perhaps no state will feel the loss of federal stimulus money more than Florida.
America’s fourth-most-populous state, Florida is second only to Texas in the percentage of residents without health insurance and its struggles are emblematic of problems afflicting many states.
Florida’s economy has been hit hard in recent years and was one of the states hurt the most by the housing bust. For 25 straight months, the state’s unemployment rate has been above 10 percent, creating an ever larger pool of people turning to Medicaid.
But now the $100 billion of stimulus money that boosted funding for the Medicaid health insurance program nationwide will run out at the end of June.
The Medicaid boost was one of several tax and spending measures in the $830 billion stimulus package passed in 2009 that helped state and local governments make it through the recent recession. The federal program partially reimburses states for healthcare provided for the poor and others who cannot pay their bills.
Even though state tax revenues have steadily improved in recent quarters, they are still not back to pre-recession levels and the end of stimulus programs like the Medicaid boost will leave many states without a key source of funds.
Florida’s drop in Medicaid funds will hit the same time the state cuts its own medical funding program.
“We could see an additional 20 to 25 percent uninsured right off the bat,” Andrew Behrman, chief executive of the Florida Association of Community Health Care Centers trade group, whose members have 1 million patients on their rolls, said about Florida’s reforms.
OBAMACARE TOO
Florida, like many other states, will also feel the Medicaid pinch under the healthcare law President Barack Obama championed.
The federal government will cover 100 percent of people who enroll in Medicaid under the law starting in 2014, but, according to a March report from Republican congressional leaders, Florida’s related costs for the program will spike by $12.9 billion through 2023. Texas and California’s costs will grow more.
“The end of this increase in federal matching funds means that an increase in the state share of Medicaid in all states comes at a time when states are still experiencing fiscal stress related to the economic downturn,” according to a June report by the Kaiser Family Foundation.
On top of all that, hospitals and clinics in Florida face a $1 billion rollback in state payments starting in July.
These developments add up to one massive bill for Florida. Since 2000, the state’s Medicaid costs have shot to $21 billion from $9 billion and now account for a third of state spending.
Florida’s governor, Republican and Tea Party-favorite Rick Scott, has moved to fight off Medicaid’s growing expense.
In May he signed laws meant to place the state’s three million Medicaid patients into private-sector for-profit health plans such as Health Maintenance Organizations and medical networks. Federal regulators must still approve the shift.
For related factbox see.
GROWING INTEREST IN OVERHAULING MEDICAID
Fifteen state governments have moved to overhaul their Medicaid programs and 43 have recently made Medicaid cuts.
One of America’s two big government-paid healthcare programs — with Medicare being the other, Medicaid accounted for 22 percent of state governments’ spending in fiscal 2010 ending a year ago.
In 2009, 3.69 million people in the U.S. joined Medicaid rolls in the sharpest annual rise in 40 years, according to the Kaiser Family Foundation, and Medicaid spending nearly doubled that year as well.
Managed care has been tried by other states with mixed results, according to healthcare economist Vivian Ho of Rice University in Houston.
“With too many competitors, you can lose economies of scale,” Ho said. “HMOs are not evil but they are economic engines like the rest of us. If you reduce resources, that may result in lower care for patients.”
HMOs may also “cherry pick,” choosing patients unlikely to require pricey treatments and leaving to government-run hospitals people requiring long hospitalizations, Ho said. HMOs may also skimp on preventive care, she said.
“For low-income populations, the current system works better,” she said. “It is a vulnerable population. There is too much cream skimming.”
FLORIDA ON THE BRINK OF MAJOR CHANGE
Florida’s 15 safety-net hospitals that treat large numbers of uninsured and poor Floridians will scramble for patients so overhead costs can be spread more effectively, according to Frank Nask, CEO of the North Broward Hospital District.
“We know there will be more uncompensated care,” said Laura Goodhue, executive director of Florida CHAIN, a patients advocacy group. “If hospitals do not get paid for care, there will be price shifts, and everyone’s rates will go up.”
Florida’s plan builds on a five-county Medicaid experiment with managed care and would create 11 administrative districts with an eye to creating competitors for the $21 billon the states spends each year on Medicaid services, such as maternity care for about half of Florida’s newborns.
Critics say using Florida’s Medicaid experiment in Broward and other counties as a template for state-wide reform is premature, since the effects on costs are not yet tabulated.
The North Broward Hospital District, among the five biggest U.S. public health systems, gets 20 percent of its revenue from Medicaid and expects to roughly break even from the pilot project that began in 2006, its CEO Nask said.
A study and survey by University of Florida researchers reported in January that patients using mental health services in the managed-care pilot were roughly as satisfied as those in a control group. But cost savings were not apparent.
A study for Florida’s Republican legislators, who predict the switch to managed-care for Medicaid patients will save $1.1 billion in the first year, concluded that a managed-care program in Texas had saved $123 million over two years.
NEW YORK OBSTACLES
Some of New York’s experiences demonstrate the kinds of obstacles states face as they look to the private sector for a hand. New York state, which has one of the nation’s most generous Medicaid programs, has for years battled high costs by switching patients to managed care and hunting for fraud.
There are economic risks in cutting Medicaid spending, state comptroller, Thomas DiNapoli said. Though Wall Street is the state’s main economic engine, hospitals throughout the state give its economy a nearly $108 billion boost every year, the Healthcare Association of New York State said in December.
New York Governor Andrew Cuomo used healthcare cuts to help close a $10 billion budget deficit. But the $2.2 billion the state cut from New York City means the city loses an equal amount of matching federal aid, the state comptroller said, which doubles the loss to $4.4 billion.
Mayor Michael Bloomberg, though bent on closing his city’s multibillion-dollar deficit, wants to boost Medicaid spending by 28 percent in the new budget to a total of just over $6 billion from the previous year, the state comptroller said.
(Additional reporting by Joan Gralla in New York, Barbara Liston in Orlando and Lisa Lambert in Washington; Editing by James Dalgleish)
Posted in 
BY DAVE GATHMAN
dgathman@stmedianetwork.com
June 28, 2011 8:54PM
Artist’s drawing of Centegra’s proposed hospital in Huntley.
Article Extras
Updated: June 29, 2011 2:21AM
JOLIET — The health care systems that each want to build a new hospital in southern McHenry County came to a meeting of state regulators Tuesday with lots of arguments about why each’s plan was better than its rival’s.
But maybe the health companies’ leaders should have concentrated more energy on convincing the Illinois Health Facilities and Services Review Board that any new hospital is needed at all.
After hours of testimony before a standing-room-only crowd of some 300 in a Joliet hotel, the board voted 8-1 to issue an “intent to deny” to both plans. The main reasons given by the board members were that neither the Huntley area nor the Crystal Lake area needs that many new hospital beds and that the competition from even one new hospital would seriously harm existing hospitals that serve Huntley, Crystal Lake, Algonquin, Lake in the Hills and Hampshire, including Sherman and Provena Saint Joseph in Elgin and Advocate Good Shepherd in Barrington.
Centegra Health System wants a “certificate of need” allowing it to build a $233 million, 128-bed hospital at Reed and Haligus roads in Huntley. It would open in 2016. Centegra already operates hospitals in Woodstock and McHenry.
Mercy Health System wants to build a $199 million, 128-bed hospital and physician clinic at Route 31 and Three Oaks Road in Crystal Lake. It would open as early as 2013. Mercy already operates hospitals in Janesville, Wis.; Lake Geneva, Wis.; and Harvard.
Because unneeded buildings and staffs create added costs that are passed on to taxpayers and insurance buyers, state law requires that no hospital can be built or expanded without the need for it being proven. Most of the 15 or so people who testified against each plan were employees or officials of Sherman or Advocate Good Shepherd or were representing the opposing McHenry County operator. However, some ordinary residents of Huntley and Lake in the Hills spoke in favor of having a new hospital close by.
“There is no need for additional beds in your service area. All the existing hospitals have unused capacity,” Sherman Health System President Rick Floyd said about the Mercy plan, and later also about the Centegra plan.
Floyd said a recent study concluded that a Crystal Lake hospital would take away 2,000 patients a year from Sherman, or about 15 percent of Sherman’s business.
Audrey Ramos Reed, a Sherman employee, said that impact “would very much harm our ability to be safety net provider to Carpentersville, Elgin and South Elgin residents” who are poor and uninsured.
Sherman and Good Shepherd officials said almost everyone who lives in the Crystal Lake-Huntley areas already is within a 30-minute drive from another hospital.
Dr. Matthew Stilson, director of emergency services at Sherman, said having a closer emergency room is less important to a critical patient than getting an ambulance and paramedics to him fast, since emergency-room doctors then work with the patient via radio link, using the paramedics as their hands.
But Javon Bea, president of Mercy Health, and Bob Lauer, a resident of Lake in the Hills, said distance does matter.
“I have driven my children to the emergency room bleeding or screaming in pain,” Bea said. “Thirty minutes of that would seem like an eternity.”
“Seconds and minutes make a difference in saving a person’s life,” Lauer said. He added that it took him 20 minutes to drive two miles along Randall Road on his way to Joliet that morning.
Mercy officials said they rescued failing little Harvard Hospital from having to close in 2003 after hospital leaders allegedly turned to Centegra for help and in effect were given a cold shoulder. The head of the nursing program at Advocate’s Trinity Hospital in a poor area of Chicago said that hospital is able to serve 60 percent underinsured or charity patients only because Good Shepherd in Barrington has only 10 percent underinsured patients. If Mercy or Centegra stole Good Shepherd’s more profitable patients, Trinity night be in trouble, she said.
Mercy Vice President Rich Gruber countered that the number of hospital patients on Medicaid in the county has zoomed from 2,696 in 2000 to 25,600 in 2009.
Targeting Centegra, Mercy officials said Crystal Lake and southeast McHenry County are the heart of an area with 160,000 people but no close hospital, and that also is the part of the county where the most poor people live.
Centegra officials countered that Huntley is one of the fastest-growing communities in Illinois and has a large population of seniors living at the village’s huge Sun City development.
Mercy officials argued that if Centegra adds a hospital in Huntley to its existing ones in Woodstock and McHenry, it would have 94 percent of the county’s hospital capacity and great potential power over pricing.
At the end, only board member Justice Alan Greiman voted to approve both plans. “A McDonald’s doesn’t have the right to say they don’t want a Taco Bell” built nearby, he said.
But the other eight said they were worried about the damage either new hospital would do to the existing ones. They said they remain unconvinced that the existing hospitals, which often have many empty beds, can’t handle any unmet needs.
Building a Centegra Huntley while Sherman remained not completely used would be “an unnecessary duplication of services,” board member Robert Hilgenbrink said.
Board member Richard Sewell said he would rather have postponed deciding on the Huntley proposal until some new projections of Huntley-area population could be examined, but he would rather vote “no” than “yes.”
Board staff members said both hospitals would have slightly more beds than the staff estimates the county will need to add. But even that figure may be too high, staffer David Carvalho said, because the population forecasts it’s based on were made before the home-development business collapsed.
The 2010 census showed McHenry County had 9 percent fewer people than state planners had expected when they made an estimate in 2006.
The board’s decisions are not yet final. After the two chains submit more information, the two plans could be back on the board agenda as early as Aug. 16, and the 8-1 majorities theoretically could be persuaded to change their minds.
A state regulatory panel is expected to decide today if one or neither of tawo competing hospital proposals will be allowed to move forward in McHenry County.
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The 128-bed hospitals would serve similar needs and be less than 10 miles apart, creating a rare situation for the Illinois Health Facilities and Services Review Board, which decides on hospital building and expansion plans. They would be the first new acute care hospitals approved in the state since 2004.
Critics have argues that the competing plans, a Mercy Health System hospital in Crystal Lake in the southeastern part of the county and a Centegra facility in the southern McHenry County in Huntley, would oversaturate the area.
The Mercy hospital on Route 31 and Three Oaks Road would focus on geriatrics and include an emergency department and a 45 physician multi-use specialty clinic. Centegra Hospital-Huntley calls for an emergency department, nursery, non-invasive cardiology services, and a dedicated women’s center.
A vote also is expected on a proposal to build Memorial Hospital-East in Shiloh, near St. Louis. The $118 million hospital would have 94 beds.
The board meets in Joliet at 9 a.m. Check back for details.
Centegra Health Care System has been doing a media and public relations blitz for months publicizing its plan to build a Huntley hospital, sending regular updates to the media and using its website to generate support.
Critics of Centegra’s plan have been just as busy launching a counter blitz; raising questions like does the area really need more hospital beds.
Sherman Hospital in Elgin has been vocal about its opposition arguing that there is a surplus of beds at area hospitals, which means the area doesn’t need additional beds.
The Elgin hospital also was among the first to make the argument that Centegra’s project would threaten its ability to offer what is termed as the “safety net,” the amount of charity hospitals provide to the poor and uninsured. Funding for that charitable work comes from revenues hospitals make from insured patients. A Huntley hospital would take away those patients from Sherman, officials said.
Recently, Sherman joined forces with Advocate Good Shepherd Hospital in Barrington and St. Alexius Hospital in Hoffman Estates in requesting the Illinois Health Facilities and Services Review Board postpone its decision. The hospitals argued a 2009 law passed after two incidents of corruption on the review board requires the Illinois Public Health Department to create a Center for Comprehensive Health Planning that would develop a master plan for building health care facilities, analyzing Certificate of Need applications and determining whether they fit into the master plan, according to Sherman’s attorneys.
The Center has not been created so the board should delay the decision on Centegra’s and Mercy Health System’s CON applications.
Such a delay would take a while since legislators have not funded the Center.
Since the state has not funded the initiative, “we are really not sure if that has any merit,” said Susan Milford, Centegra Health System’s Senior Vice President of Strategic Marketing Planning and Wellness Services.
Milford has been surprised by the number of hospitals opposing Centega’s plan “given we live in this community and have been providing health care for 100 years in this community,” she said.
Mercy’s Vice President, Rich Gruber, however, is not surprised. “It’s totally understandable,” he said. “The existing providers are interested in preserve their existing market share. The fact is Advocate (Good Shepherd) and Sherman are in the middle of merger conversations.”
“I believe their criticism is somewhat disingenuous,” he said.
By BRETT ROWLAND – browland@nwherald.comComments (…)
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(Photo illustration by Dave Lemery – dlemery@nwherald.com)
Local Video and Photos
CRYSTAL LAKE – A state board could make decisions Tuesday on two hospital proposals that would reshape health care services in McHenry County for years to come.
The Illinois Health Facilities and Services Review Board will hear presentations for Centegra Health System’s plan for a hospital in Huntley and Mercy Health System’s proposed hospital in Crystal Lake. The meeting is scheduled to begin at 9:30 a.m. Tuesday in Joliet.
Centegra Health System wants to put a $233 million, 128-bed hospital near Reed and Haligus roads, where it already has a medical campus. Mercy Health System wants to erect a $200 million, 128-bed hospital at Three Oaks Road and Route 31.
Health care workers, community members, town leaders and county officials are waiting on the outcome of Tuesday’s meeting.
“In my mind, there’s no question we’re going to need another hospital,” Huntley Village Board member Harry Leopold said.
Teams from Centegra and Mercy were busy last week getting ready for the meeting, which could be the culmination of years of planning and months of campaigning for public support.
Mercy administrators plan to focus their presentation to the board on the merits of their proposal and responding to concerns raised in recently released state agency reports, Mercy Health System Vice President Rich Gruber said.
“One distinction we’ll make is that we’re ready and able to go forward with the project and start construction by the end of the year,” Gruber said. “That will benefit Crystal Lake residents and the surrounding community.”
If granted approval, Mercy officials said they could open the Crystal Lake hospital in 2014. By contrast, Centegra’s Huntley hospital is scheduled to be completed in 2016.
Centegra executives intend to emphasize the rapid population growth in and around Huntley along with the company’s history of responsible development, said Susan Milford, senior vice president for Centegra.
“Centegra Hospital – Huntley is the right thing for the community,” she said. “If there wasn’t a need for more beds, we wouldn’t be proposing them.”
The review board members likely also will hear from opponents. Leaders from Sherman Hospital in Elgin, Advocate Good Shepherd Hospital in Barrington, and St. Alexius Medical Center in Hoffman Estates will be at the meeting.
All three are critical of designs offered by Mercy and Centegra. They have said that adding another hospital in McHenry County would unnecessarily duplicate medical services, raise health care costs, and make it more difficult for them to provide charity care to the poor.
Supporters are expected to speak out, as well. They have said another hospital is needed to cope with the community’s growing – and aging – population. They also tout the economic benefits of building a hospital, which would bring hundreds of jobs to the county. Supporters generally are divided into two camps: those in favor of Mercy and those in favor of Centegra.
Community members, municipal officials, and local organizations have sent scores of letters to the review board backing either the Mercy or Centegra hospital. And hundreds packed public hearings held in February and March to register their support or opposition to plans put forth by both health systems.
“In the future, if anyone in our community will need emergency ambulatory care, it will be wonderful and vital that Centegra would be so close for us,” Huntley Sun City resident Kenneth Kozy told representatives from the review board at a public hearing for Centegra’s hospital plan in February.
A month later, at a public hearing for Mercy’s hospital plan, Crystal Lake resident Judy Evertson took a different view.
“Crystal Lake should have had a hospital years ago,” she said.
Illinois is one of more than 30 states that require organizations to obtain permission through a certificate of need program before building or expanding a hospital. Created to stem duplication of services and surging health care costs, the review board is responsible for deciding when and where hospitals are built based on regional needs.
Reports from the Department of Public Health released earlier this month cast doubt on how many more hospital beds are needed in McHenry County. Compiled by Department of Public Health staff, the state agency reports noted that other hospitals less than 30 minutes away have open beds and are operating below “target occupancy.” They also found that neither Mercy’s nor Centegra’s application met all of the state requirements for new hospitals.
The reports anticipate that the McHenry County area will need 118 additional hospital beds by 2015. That’s 10 fewer than both Mercy and Centegra have proposed.
Review board members will consider the state agency reports along with feedback from public hearings and the applications submitted by Mercy and Centegra officials. The review board isn’t bound by the reports’ findings.
Board members, who are appointed by the governor, could not be reached for comment. Members are discouraged from talking to the news media and having any other ex-parte conversations about matters before the board, said Courtney Avery, the board’s administrator.
At Tuesday’s meeting, the proposals from Mercy and Centegra will be heard separately. The board could vote to approve, defer a decision, or take an interim step with an intent to deny motion.
An approval would be final, review board attorney Frank Urso said.
In the event of an intent to deny motion as an outcome Tuesday, health system officials would be given a chance to provide additional information and appear before the board again to try to augment their case, Urso said.
Board members also could choose to defer a decision and consider the matter at a later time, Urso said.
Since 1976, the review board has granted one certificate of need to build a new hospital in Illinois. That was Adventist Bolingbrook, which received approval in 2004 and opened in 2007. Sherman Hospital opened in 2009, but it replaced an older hospital on Center Street in Elgin.
SEE IT LIVE
The Northwest Herald plans to broadcast live from the Illinois Health Facilities and Services Review Board hearing Tuesday in Joliet. At issue are proposals by Centegra and Mercy health systems to build new hospitals in McHenry County. Centegra has proposed a 128-bed hospital in Huntley. Mercy wants to build a 128-bed hospital in Crystal Lake. To see the broadcast, visit NWHerald.com starting at 9:30 a.m. Tuesday.
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