Tag Archives: AHCCCS

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Price Corridor's Continuum Park Lands Advanced Business Services Company

 

Continuum Science & Technology Park in Chandler’s Price Corridor has landed its first major company — Nationstar Mortgage.

Nationstar is one of the nation’s leading mortgage servicers and lenders.

Nationstar will be placing 1,200 new jobs in 160,000 SF of space, with an option to expand. The company is currently occupying temporary space in the same building as tenant improvements are completed. RSG Builders is the general contractor and PHArchitecture is the architect.

“Nationstar is strong and growing, and we’re excited to be opening our newest site in Chandler,” said Nationstar Mortgage Executive Vice President Mike Rawls. “The Chandler area provides access to existing mortgage industry talent and a well-educated workforce. We look forward to building a great team here.”

The jobs will be in the advanced business services sector, including mortgage processing and origination as the company collects and processes loans.

“Chandler’s broad spectrum of industries serves us well as companies evaluate whether a community has the potential for industry partners,” said Chandler Mayor Jay Tibshraeny. “We have developed the workforce Nationstar needs through a strong financial services sector and the partnerships Chandler has in place with ASU and the University of Arizona.”

“I want to thank the Nationstar team for its confidence in, and commitment to Arizona,” said Sandra Watson, President and CEO of the Arizona Commerce Authority. “This project represents a significant investment in our state and will create hundreds of jobs for Arizonans. It continues to showcase Arizona as a state rich with talent and full of opportunity, with the government backing to support individual business success.”

Continuum is a 153-acre, master planned Science & Technology Park that advances the vision of the Price Corridor as a “super technology” region, making Chandler competitive on an international scale.

Continuum is expected to be home to 8,000 to 12,000 jobs and generate $250M to $300M in primary economic impacts at build-out.

“Nationstar’s desire for prominent identity, unparalleled infrastructure, and a quality labor pool made our project a perfect choice, and we couldn’t be more excited to have them as one of the first tenants at Continuum,” said Kevin Miller, Senior Vice President-Southwest Region, Capital Commercial Investments. “The addition of Nationstar continues to reinforce our position as one of the premier business parks in the valley.”

Nationstar joins notable employers in the Price Corridor in key industries of aerospace, life sciences, high technology R&D/manufacturing and advanced business services.

 

medicaid program - new patient eligibility

Arizona Chamber Foundation issues Medicaid reports

The issue of Medicaid expansion continues to loom large in state policymaking circles, and the Arizona Chamber of Commerce and Industry’s research arm, the Arizona Chamber Foundation, has produced new reports on this important topic.

The Foundation recently released a new Policy Brief titled The Business Case for AHCCCS Expansion. The brief outlines the impact of cost shifting and hidden health care taxes on Arizona businesses, along with the effect expansion of the Arizona Health Care Cost Containment System – AHCCCS – will have on the state economy and budget. It’s an excellent overview of the issue and the reasoning behind the growing support from governors throughout the United States, including Governor Brewer.

In addition, the Foundation has released a FAQ sheet to help individuals better understand what AHCCCS is and what voters passed into law when they adopted Proposition 204 in 2000. It’s an outstanding primer on the state’s best-in-class Medicaid program, the ballot measure that extended coverage to childless adults and the challenges facing the state posed by uncompensated health care.

I encourage you to dig into both of these publications and to share them with your network.

Glenn Hamer is the president and CEO of the Arizona Chamber of Commerce and Industry. The Arizona Chamber of Commerce and Industry is committed to advancing Arizona’s competitive position in the global economy by advocating free-market policies that stimulate economic growth and prosperity for all Arizonans.

Download Understanding AHCCCS and Proposition 204 and The Business Case for AHCCCS Expansion.

Lawsuit Dropped To Prevent AHCCCS Hospital Payment Cuts

Lawsuit Dropped To Prevent AHCCCS 5% Hospital Payment Cuts

The Arizona Hospital and Healthcare Association (AzHHA) Board of Directors voted Tuesday to drop the lawsuit against the Arizona Health Care Cost Containment System (AHCCCS) to prevent a five percent cut in hospital payment rates.

After thoughtful consideration, the AzHHA Board of Directors decided it would be in the best interest of all the parties involved to move forward and work together in partnership with policymakers to strengthen Arizona’s healthcare delivery system.

“This is a challenging time for hospitals and patients as a result of a prolonged recession and budget cuts to healthcare programs,” said AzHHA President and Chief Executive Officer Laurie Liles. “As we look ahead, we know the state and Arizona hospitals will continue to face economic challenges and we look forward to working with state leaders like Senate President Steve Pierce to prepare for the future and grow our state’s economy.”

“I’m glad to hear the Association is dropping this lawsuit. We need to stop looking back and instead look ahead to find solutions to the crisis in health care.  These are complex issues and we need to work together.  I’m tired of a shotgun approach to fixing things.  We must look at the big picture,” says Senate President Steve Pierce.

Arizona hospitals have struggled in recent months as they care for an increasing number of uninsured patients who turn to hospitals for emergency treatment.  In the last quarter of 2011, the amount of charity care hospitals provided increased by 75 percent over the same period in 2010.

For more information on AzHHA, visit their website at azhha.org. For more information on AHCCCS, visit their website at azahcccs.gov.

AHCCCS Alternative - AZ Business Magazine July/August 2011

AzHHA Proposes Alternative To Medicaid Reform Plan, AHCCCS

AzHHA and other health care organizations propose an alternative to Gov. Brewer’s Medicaid reform plan, the Arizona Health Care Cost Containment System ( AHCCCS )

The economic recession has had an impact on industries across the board and health care in Arizona is no exception. Arizona hospitals have lost more than $700 million in state and federal Medicaid funds since 2008 due to previous payment cuts and freezes and another $530.7 million in cuts is headed to hospitals in fiscal year 2012, bringing the total cuts to $1.3 billion.

To address the state’s fiscal woes, the Legislature passed a budget that authorizes several reforms to Arizona’s Medicaid program, the Arizona Health Care Cost Containment System (AHCCCS).

On March 15, 2011, Gov. Jan Brewer presented her plan, which includes reforms that will lower costs by an estimated $500 million in the State’s General Fund for the partial first year.

Included in these reforms is a phase-out plan for the Proposition 204 population — a voter-passed initiative that entitles anyone whose annual income is equal to or below the federal poverty level of $11,000 annually for an individual to AHCCCS coverage.

In a statement on the organization’s website, the Arizona Hospital and Healthcare Association (AZHHA) stated they are “deeply concerned that the budget will damage Arizona’s economy at a time when we are struggling mightily to recover from the recession. The budget authorizes the Arizona Health Care Containment System (AHCCCS) Administration to alter eligibility in a way that could result in 160,000 patients losing their healthcare coverage and financially harm the hospitals and healthcare professionals who will care for them when they become ill or injured.”

The most pertinent matters to AzHHA include: the 5 percent cut in all provider payments; the elimination of the Medical Expense Deduction program for patients with catastrophic illnesses and injuries; elimination of federal emergency services coverage for foreign national patients; and implementation of an inpatient bed day limit.

“Each of these proposals will increase the cost of uncompensated care hospitals provide, part of which will be passed on to patients with private health insurance,” says Laurie Liles, president and CEO of AzHHA.

“When AHCCCS and other government programs stop paying for care or pay hospitals significantly less than the cost of caring for their patients, hospitals must make up these losses elsewhere,” Liles adds. “Some hospitals — particularly those located in small, rural communities that operate on very slim margins and serve a high number of AHCCCS patients — have little ability to shift their costs to commercial plans. For those hospitals, the cumulative effect of the AHCCCS budget cuts will be devastating,”

As CEO of a hospital in a rural community, Tim Barnett of Yavapai Regional Medical Center understands this all too well: “Cutting expenses may seem like a good short-term solution but when those cuts are carefully and thoroughly analyzed, it’s clear that the long-term ramifications are potentially disastrous,” Barnett says. “It is far more prudent to think in terms of identifying additional sources of cash coming into our state for the benefit of all our residents.”

According to Barnett, Yavapai Regional Medical Center will lose at least $14 million annually from the cuts in AHCCCS funding.  This amount is more money than the center’s annual net revenue.  “We would have to look at very drastic changes in how we serve our community… The cuts would affect our ability to care for everyone, not just AHCCCS patients,” Barnett says.

Jim Dickson, CEO of Copper Queen Community Hospital in Bisbee agrees. “It will have a severe economic impact… They’re downsizing the healthcare system substantially, Arizona is already undeserved and we’re going even lower.”

On average, AHCCCS now pays hospitals less than 70 percent of the costs they sustain caring for Medicaid patients. Weathering the recession has been difficult enough and these additional cuts would force hospitals to cope with losses by delaying construction projects, some staff may experience salary freezes and furloughs, eliminating certain high-cost services, leaving vacant positions unfilled and more.

Though AzHHA supports Governor Brewer’s effort to preserve coverage for the existing Proposition 204 population, their goal is to maintain coverage for even more Arizona residents. AzHHA along with a coalition of Arizona hospitals, Medicaid health plans and skilled nursing facilities has proposed a viable alternative to the proposed reforms — a special health care assessment that would generate $465 million to protect coverage for low-income Arizonans.

“AzHHA believes the special healthcare assessment represents a fiscally responsible alternative to AHCCCS cuts included in the recently enacted state budget and the cuts included in the governor’s Medicaid Reform Plan,” Liles says.

AzHHA’s proposal, developed with the Arizona Association of Health Plans (AzAHP) and the Arizona Health Care Association (AHCA), would be tied to available funds and bring in $465 million annually, which would then generate two federal matching dollars for every one dollar from the assessments. The assessments would also stop reductions in health care provider rates, a component of Gov. Brewer’s proposal.

“Part of the federal match would be used to reimburse providers for the assessment, so there is no pressure to pass the assessment on to commercial insurers, business or patients,” Liles says. “The assessment is a ‘loan’ to the state to bring in additional federal dollars to help cover people enrolled in the Proposition 204 program.”

The federal matching funds would come from federal tax dollars that Arizonans are already paying and the assessment is considered to be a short-term solution through 2013 while the economy recovers. In the meantime, the organization plans to work with policy makers on a long-term plan to streamline Medicaid utilization and improve quality of care. Many of the hospitals that may otherwise be adversely affected by Gov. Brewer’s reforms have a positive outlook on the health care assessment.

“AzHHA’s proposal is definitely a good alternative… The best-case scenario would be for the legislature and the governor to work collaboratively along with AzHHA and its colleagues to implement the best solutions for patients,” Barnett says. Recognizing the economic difficulties Arizona is facing and a shared mission of helping heal the state’s economy is something Barnett hopes will bring both sides to a resolution.

“We’re blessed that we already have that solution developed…  AzHHA, nursing homes, Medicaid insurance plans and hospitals throughout Arizona are focused on how we can contribute to the solution and how we can help make Arizona an even better place to live and work,” he says.

AzHHA plans to work with policy makers to ensure that lawmakers reconsider their health care assessment and support this alternative to eliminating health care coverage and provider payment cuts.


AHCCCS Cuts Hurt Arizona’s Economy

  • The Arizona Health Care Cost Containment System (AHCCCS), the state’s Medicaid program, is a shared matching program between the state and federal government. For every $1 the state puts in, the federal government matches it with $2.
  • A rollback of the Prop. 204 population would result in a loss of nearly $1.5 billion in state and federal funding. The annualized impact is $2.27 billion.
  • If Arizona chooses to opt-out of the Medicaid program, the state will be removing $7.2 billion in federal money from the economy.
  • Money spent on healthcare is a long-term investment that pays off. The healthcare sector is vast, and there are many large and small companies in various industries. It is also one of the only areas of the economy that has continued to grow throughout the recession.

 


AHCCCS Cuts Result in Job Losses

  • As lawmakers struggle to recover the 300,000 jobs lost during the current recession, cuts to the AHCCCS program undermine these efforts by causing more jobs to be lost.
  • Arizona currently holds a 9.4% unemployment rate.
  • Scaling back Prop. 204 will eliminate 13,568 private-sector healthcare jobs and 30,000 jobs across all areas of the private sector, as well as a reduction of $2.5 billion to the gross state product in the first full year of the rollback.
  • A total elimination of Arizona’s Medicaid program would result in a loss of 159,000 jobs, nearly 82,000 in healthcare alone. The healthcare jobs that will be affected are high quality, high-paying positions such as physicians, physician assistants, nurses, dentists, physical therapists, and behavioral health professionals.
  • These cuts and resulting job losses then create an access-to-care issue (particularly in rural areas) for all patients when services and the professionals who provide them are no longer available.

 


AHCCCS Cuts Create a Cost Shift to Arizona’s Businesses

  • Healthcare providers often respond to reductions in AHCCCS payments by shifting a portion of the cost to private payers and insurance companies, which results in higher premiums for Arizona’s businesses and the privately insured.
  • This cost shift limits the ability for businesses to grow and prosper.

 

Sources: The Potential Economic Impact of Withdrawing from Medicaid in Arizona. January 2011. W.P. Carey School of Business, Arizona State University.
Arizona Chamber of Commerce


Arizona Business Magazine July/August 2011

CEO Linda Hunt - AZ Business Magazine Mar/Apr 2011

Linda Hunt, CEO, St. Joseph’s Hospital And Medical Center

CEO Series: Linda Hunt

Title: President
Company: CHW Arizona/St. Joseph’s Hospital & Medical Center


How is St. Joseph’s preparing itself to meet the changes being brought on by national health care reform and the state’s budget crisis?

We’ve been on the ground from the very beginning. Catholic Healthcare West, our parent company, has really been involved with the Obama Administration in looking at different ways to provide health care, and we know that health care has to change. The most important thing for us has been quality — providing the high quality access. We have a lot of people without care or without access to care. So when you look at how do we do that and how do we lower our cost of delivering care, those things have been driving forces for St. Joseph’s and CHW to be intimately involved in what needs to occur.
It’s a tremendous strain if we have the (state) budget cuts that are proposed. About 44 percent of our patients are AHCCCS (Arizona Health Care Cost Containment System ) patients, and this will be anywhere between $25 million to $31 million for just our organization alone that we will see decreased.
We also are part owners of Mercy Care Plan, so for us it’s a real concern. Mercy Care Plan has 386,000 lives, and about 60,000 of those lives (coverage) will be eliminated if the state budget crises and the state waiver go through.

The mass shooting that took place in Tucson really put attention on the work of Level I trauma centers, such as the one at St. Joseph’s. What message has that sent to Legislators and the community?

Tucson was a great example of why Level I trauma centers are needed. It truly is the life-saving component of life care. If we would not have had the hospital in Tucson, if we would not have had the trauma surgeons, the neurosurgeons right there ready, a number of those people would not have survived. I think Gabby Giffords can really say one day, “I owe my life to these people and to the quick response that they had.” We have very limited funding. As you know, it’s not about money coming in from the federal government or the state government for Level I. It’s really thanks to a number of our patients who have insurance and the variety of people who give to us to make sure we can continue to have the resources available to provide that kind of care.

How has St. Joseph’s evolution mirrored that of the state’s health care industry?

When the (Sisters of Mercy) got here in the 1890s, they found a very small community of people who were working here, but also many other people who had come here because they were ill. (The sisters) came here to teach, and all of a sudden they looked around and said, “My gosh, it’s not about teaching. We have to provide health care for these people. They’re dying in the streets.”

So, I feel we are the beginning of health care in this community and have continued for almost 116 years. When you look at the number of firsts that were done at St. Joseph’s, many times we brought health care and progressive health care to this community. When you look at the first residency, the first pharmacy in-house, the first NICU, the first MRI, the first CAT scan … it truly is a jewel to be treasured in this community.

Is health care a cooperative effort in the Valley?

I think we all compete. We are businesses. But I think it’s a camaraderie because we’re all about taking care of people in this community. When you look back, there are a lot of great friendships that you have with the other CEOs. And we do share. We share resources. When we get in trouble as a Level I trauma center, when we’re overwhelmed, everyone pitches in and we fan out patients. We do a number of things together. If we need equipment, we lend it to each other. So in a way we compete, but we are all here to serve this community and I think that is very important.

How does St. Joseph’s work with rural communities?

Look at Children’s Rehabilitative Services, which we have been a partner of the state with in caring for children. We have clinics all over the state. We work with the Indian communities; we work with Flagstaff, Prescott; Yuma and Tucson work together with us. So right there is a perfect example of that collaboration. We have outreach clinics throughout the state, especially in the rural areas. We train residents and new physicians, which we think is a very important part of training the next generation of caregivers. We are training a lot of the physicians that will be practicing in rural Arizona and other rural areas of this country.

The Roman Catholic Diocese of Phoenix has stripped St. Joseph’s of its Catholic standing. how does that affect the average patient?

If you came into our hospital in early December and you came in today, we would look no different. The one thing we cannot do is Mass in the chapel. We still have worship services, they’re just not Catholic worship services. But we do have rosaries, we have spiritual hours, we have people who are there to allow you to pray and to provide that spiritual comfort, just as we did in the past. … We acknowledge that (Bishop Thomas J. Olmstead) has the authority to no longer designate us a Catholic hospital. We’re all very sad about that. … But we will always take care of people who are here and do what we can do to make sure they are safe, and that they receive the care that they deserve. … it came down to we had to save the life we could and we did.


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Vital Stats: Linda Hunt

  • Service Area President, Catholic Healthcare West
  • President, St. Joseph’s Hospital and Medical Center
  • Bachelor of Science in Nursing from William Carey College in Mississippi
  • Master of Science in Nursing Administration from the University of Colorado Health Sciences Center
  • Graduated from the Johnson & Johnson Fellows Program in Management at the Wharton School at the University of Pennsylvania
  • Was on the faculty at the University of Colorado Health Sciences Center and Regis University in Denver
  • Active in Greater Phoenix Leadership and the Greater Phoenix Economic Council

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Arizona Business Magazine Mar/Apr 2011

Arizona Health Care Cuts, AHCCCS

Arizona’s Mental Health Braces for AHCCCS Heavy Cuts

Sit back, close your eyes — after you have read this of course — and imagine your daughter, friend, brother or spouse suffering with no help in sight. A year ago you saw them excelling in life, overcoming their illness, stable with only happiness for the future when suddenly their standard medication was changed, their health services discontinued and their housing no longer an option. Now you are seeing your loved one’s health deteriorate, and each day becomes harder to cope.Arizona State Capitol, Flickr, Willem van Bergen

This scenario was a reality for thousands of children and adults facing mental illness last July when the Arizona Health Care Cost Containment System (AHCCCS) saw serious cuts. Those who were not determined Title-19 eligible — those not under the poverty level — faced the loss of brand-name medications, supportive housing and services on which they previously relied.

With Arizona projecting a 1.15 billion-dollar deficit in FY 2012, Governor Janet Brewer released her proposed budget cuts for FY 2011. These cuts are estimated at $1.1 billion. AHCCCS was cut by $541.5 million, making it possible for 280,000 people to lose coverage. These cuts leave 5,200 seriously mentally ill people with medication-only coverage and other losses similar to the cuts in March 2010.

“…the growth in Arizona Medicaid spending is a key driver of our state’s current budget crisis,” Governor Jan Brewer said in a statement on the cuts.  “Medicaid’s explosive growth, nearing almost 65 percent over the past four years despite ongoing attempts to stem its increases, is simply unsustainable and threatens to consume the core functions of state government.”

To some these cuts are seen as more than just balancing a budget but also a safety issue for Arizona.

“Arizona has one of the lowest grades for mental health in the nation,” said Patricia Bonivel, an Arizona resident whose spouse is diagnosed with a mental illness.Arizona Health Care Cuts, Mentally Ill Suffer

“Mental illness is not going away; we have to address the system, effectively streamline the system and work within an adequate budget line,” Bonivel said.  “This is not the time or area to slash costs; it can only end up with additional overburdened areas and does nothing to promote wellness and recovery — the goal of which needs to be attained for the sake of us all.”

In her recent statement on the budget cuts, Governor Brewer said she is “mindful of the very real impacts these reductions will have” but holds to the belief that “this is Arizona’s only option to restore [its] fiscal stability.”

Bonivel asks the question whether or not these cuts are worth the “small margin” of economic gain and said, “Looking at recent events in Tucson, I think the answer is NO; think about it!”

Now go for it. Close your eyes and imagine what you would do faced with these difficult decisions. You may surprise yourself.

AzHHA’s New President And CEO Laurie Liles - AZ Business Magazine Sept/Oct 2010

AzHHA’s New President And CEO Is Ready To Tackle The Industry’s Challenges

A familiar face has been named the new president and chief executive officer of the Arizona Hospital and Healthcare Association (AzHHA). Laurie Liles assumed her new role on Sept. 7, succeeding John Rivers, who will be available as a consultant until his retirement becomes official in January.

Selected by the AzHHA board of directors on June 3 after an extensive national search, Liles is a natural for the position, having most recently served as senior vice president of public affairs for the organization. In that role, Liles was the association’s chief lobbyist, putting her in charge of legislative and regulatory advocacy, and making her a familiar face at the state Capitol.

In fact, when she joined the association in 1991, Liles already was well known and respected at the Legislature. She was an intern at the Arizona House of Representatives in 1985, and in 1986 joined the House research staff. It was her first real job coming out of college, where she had majored in political science at Northern Arizona University.

The years at AzHHA that Liles spent lobbying lawmakers have given her a solid foundation for the tasks ahead. She also worked closely with the chief executive officers of AzHHA-member hospitals throughout the state.

“My role as chief lobbyist has given me a great deal of exposure to the challenging issues our members face,” Liles says. “It also enabled me to advance their interests with the regulatory entities they interact with.”

While she savors the experience and knowledge she gained as a lobbyist, Liles doesn’t plan on visiting the Capitol on a regular basis anymore.

“As the head of an advocacy organization, I will be ultimately responsible for accomplishing our advocacy goals,” she says, adding she will work closely with her staff and her replacement, who will tend to the day-to-day duties of lobbying.

Myriad challenges lie ahead, but No. 1 on Liles’ list is not unique to hospitals or the health care industry: the economy.

“The recession has been hard on everyone, and hospitals are no exception to that,” Liles says. “Our members continue to provide high-quality care, and the challenge going forward is to maintain that quality as resources become more and more precious.”

Arizona’s fiscal crisis is expected to continue for the next few years, Liles says, and as the state slowly recovers hospitals will be particularly vulnerable to any government-imposed cuts to Medicare and the state’s Medicaid program, the Arizona Health Care Cost Containment System (AHCCCS). The question remains how the state will pay for ever-expanding AHCCCS rolls. Enhanced federal matching funds, which faced some opposition in Congress, would ease the burden.

A close second in priorities is implementation of the new federal health care reform law. Fortunately, Liles has maintained a close working relationship with Arizona’s congressional delegation, particularly staff members who deal with health care issues. In addition to e-mails and phone calls, Liles has made it a practice to meet in Washington, D.C., with congressional members a couple of times a year.

Norm Botsford, chairman of the AzHHA board of directors, cited the federal health care law when he announced Liles’ appointment.

“The state’s health care community and citizens will be well served by Ms. Liles’ leadership as we begin the process of implementing the historic health care reforms signed into law by President Obama.” he stated.

But one of the challenges facing Liles and hospital administrators throughout the state does have a silver lining. Asked what good news hospitals can expect in the year ahead, Liles took a long pause before saying: “The really positive news for health care is the increased coverage that the federal health reform legislation brings. Having 32 million more Americans who previously had no insurance be covered is a positive development, but with it comes challenges of providing care for them.”

http://azbigmedia.com/tag/september-october-2010-2

Good Samaritan Hospital at sunset

Massive Budget Cuts Have Arizona’s Hospitals And Health Care Industry Closing Ranks

As bad as 2009 was, the health care industry in Arizona is still bracing for the worst. So says John R. Rivers, president and chief executive officer of the Arizona Hospital and Healthcare Association (AzHHA), whose organization, along with others, lobbied unsuccessfully against massive legislative reductions totaling $2.7 billion to the Arizona Health Care Cost Containment System (AHCCCS) and Arizona Department of Health Services’ budgets for fiscal 2011.

The cuts were part of an effort by the Legislature to dig the state out of the deficit hole it finds itself in.

“I can’t predict who is going to do what in response to these cutbacks, but I can tell you that every person in Arizona will be affected by these cuts in some negative manner — either though higher insurance premiums, more overcrowding in hospital emergency rooms, reduced services provided by hospitals or even some hospital closures,” Rivers says. “The impact of these cuts will be far-reaching and long-lasting.”

Hospitals alone stand to lose $1.15 billion in the fiscal year that starts July 1.

“Our focus and energies must be on the daunting challenge of dealing with the negative impact on patient care as a result of the budget cuts recently enacted in Arizona,” says Peter Fine, president and CEO of Banner Health. “These cuts will result in reductions of $2.7 billion in health care spending, including scheduled cuts of more than $1 billion to Arizona hospitals in 2011. This will place tremendous pressure on the state’s hospitals.”

The AzHHA position is that the budget cuts not only will devastate Arizona’s health care community, but also cripple the state’s economy. Arizona’s hospital community employs approximately 73,000 people and contributes $11.5 billion to the state’s gross product. In a recent report, the Seidman Research Institute at the W.P. Carey School of Business at Arizona State University estimated the budget cuts would result in a loss of 42,000 jobs across virtually every segment of the Arizona economy.

Those job losses, Rivers says, “will worsen Arizona’s economic downturn and flies in the face of legislators’ efforts to create new jobs and revitalize the state’s business climate.”

The health care sector would suffer the greatest loss of jobs, totaling an estimated 19,600 in 2011. Employment losses also would hit such categories as arts and entertainment, construction, finance, manufacturing, mining, real estate, retail, transportation and warehousing, according to the ASU report.

Other startling numbers from the report indicate that real disposable income would be reduced by $1.74 billion — approximately $200 per capita — and the state’s population would shrink by 10,000.

Even before the Legislature took final action, St. Joseph’s Hospital & Medical Center already was dealing with the state’s budget implosion.

“Because we are the largest hospital in Arizona, and treat more AHCCCS patients than any other private hospital, these cuts have been devastating to us,” says Linda Hunt, service area president of Catholic Healthcare West (CHW) Arizona and president of St. Joseph’s. “The Legislature cut more than $14 million in funding to our hospital alone between mid-December and February. Part of these cuts wiped out funding for our graduate medical education program, which trains more than 200 medical residents in 10 different clinical specialties. We now have to make up the deficit. In addition, our charity care costs continue to increase, we are seeing more uninsured patients in our ER, and we are seeing more mentally ill patients in the ER because they have nowhere else to get help.”

Hunt’s concern for the most vulnerable members of society is echoed by Betsey Bayless, president and CEO of Maricopa Integrated Health System (MIHS), which operates the Maricopa Medical Center.

“About 65 percent of our patients are on AHCCCS, and we operate the Valley’s largest psychiatric inpatient hospital, Desert Vista, in Mesa,” Bayless says. “Furthermore, patients without coverage will seek care only when their conditions worsen, thus driving up emergency room demand — the most costly means of caring for illness and disease.”

Further putting a human face on the budget cuts, health care coverage is being eliminated for 310,500 low-income adults and 47,000 children, and mental health treatment ends for 36,500 adults and children.

Hospital officials fear their emergency rooms will be inundated by additional waves of the uninsured. Emergency rooms are federally mandated to screen and stabilize all patients, without regard to their ability to pay for care. In 2008, Arizona hospitals provided approximately $392 million in uncompensated care to uninsured patients. Hospitals make up the loss by absorbing or shifting costs to commercial health plans, which then charge businesses and individuals higher health insurance premiums, AzHHA maintains. The cost-shift, coupled with further cuts in AHCCCS hospital payment rates, amounts to a hidden tax on health care consumers, according to AzHHA.

The budget cuts also eliminate the KidsCare Program, which provides medical services and preventive health care for children of families who cannot afford insurance. Ending the program saves the state $22.9 million, but costs the state $95.5 million in federal matching funds, for a total loss of $119 million to the state’s health care system. Hospitals will lose $44 million in revenue, AzHHA says.

Of extreme concern to the medical community is a measure on the November ballot that targets Proposition 204, which was approved by voters in 2000. Prop. 204 expanded eligibility for AHCCCS, but the new ballot measure asks voters to deny eligibility to an estimated 315,000 individuals who benefited from the 2000 proposition. Under the ballot proposal this year, the state would save $765 million, but would lose $1.5 billion in federal matching funds, for a total reduction of $2.3 billion to the Arizona health care community. Hospitals alone would lose an estimated $851 million in revenue.

To cope with reduced funding, MIHS has limited new hires and is formulating plans to address these unprecedented budget cuts.

“Moreover,” Bayless says, “we recognize this is not our problem alone. Rather this is a community-wide issue, and I have been reaching out to other health care leaders about ways we can work together to best care for our Valley residents.”

Hunt says St. Joseph’s employees have provided dozens of ideas on how the hospital can operate more efficiently, while preserving patient safety and quality care.

“We are looking at a wide variety of community, academic and business partnerships, and are re-evaluating our strategic plan to add more focus on the service lines that are most needed in the region,” Hunt says. “We are a ‘destination hospital’ for many complex illnesses and will continue to bring patients in from around the country and around the world. We will also advocate strongly for the state to provide services for the most needy and encourage our leaders to see health care as a vital contributor to the state’s economic recovery.”

As for its next step, Rivers says AzHHA will work to guard the funds that escaped the budget axe.

“We will develop a proposal that protects these health care programs either through new revenue sources or requiring that existing revenue sources earmarked for these programs are used for their intended purposes — not just dropped into a black hole in the general fund,” he says.

Hidden Tax Revealed Chart

Hidden Health Care Tax Hits Workers

The Arizona Hospital and Healthcare Association (AzHHA) and the Arizona Chamber Foundation are joining forces to stop what we call a hidden health care tax on businesses and consumers. According to a study released by the Arizona Chamber Foundation, which is associated with the Arizona Chamber of Commerce and Industry, Arizona employers and the state’s 3.5 million privately insured consumers pay 40 percent above cost for hospital services, primarily because the state and federal governments significantly underpay hospitals for those same services.

“This study shines a light on what Arizona business and health care leaders refer to as the hidden health care tax,” says Suzanne Taylor, executive director of the Arizona Chamber Foundation. “The study demonstrates that when state or federal lawmakers reduce hospital payment levels to below their costs, Arizona businesses and consumers pick up the tab in the form of higher health insurance premiums.”

The study, An Analysis of Hospital Cost Shift in Arizona, was conducted by the nationally recognized Lewin Group. It found that in 2007, private insurance payments for Arizona hospital services exceeded costs by $1.3 billion in order to offset underpayment from:

  • State government — The Arizona Health Care Cost Containment System (AHCCCS), Arizona’s Medicaid program that paid 79 percent of hospitals’ costs for providing services, underpaid Arizona hospitals by $407 million.
  • Federal government — Medicare, which paid 89 percent of Arizona hospitals’ costs for delivering services, underpaid Arizona hospitals by $481 million.

Uncompensated care — Arizona’s hospitals absorbed $390 million in 2007 — 4.4 percent of their total costs — for services they delivered, but for which they received no compensation.

Public insurance programs such as AHCCCS and Medicare are the primary drivers behind the hidden health care tax, paying hospitals below what it costs to treat patients. To cover these costs, hospitals shift the burden to private health insurers by negotiating higher rates to provide coverage.

“In this downturn, the hidden health care tax is particularly harmful to the economic well-being of our state,” Taylor says. “Employers throughout Arizona are grappling with incredible challenges ranging from declining revenues to shrinking credit. The hidden health care tax is another weight on businesses that want to continue providing employer-based insurance to their employees.”

Arizona employers and their employees typically share the cost of health insurance coverage, with employers paying an average of 81 percent of a single policy and 75 percent of a family policy for workers enrolled in their respective health plans. According to the study, in 2007 inadequate payment by AHCCCS and Medicare, as well as uncompensated care, increased private health insurance premiums in Arizona by 8.8 percent or $361 for every privately insured person.

The study revealed that public program underpayment in 2007:

  • Added $1,017 — $324 of which is due to AHCCCS underpayment — to the annual price tag of a typical family health insurance policy, bringing the cost to $11,617.
  • Increased by $396 — $126 of which is due to AHCCCS underpayment — the annual cost of a single health insurance policy, bringing the price tag to $4,519.

Underpayment by public insurance programs for hospital services exacts a steep price on employers, their workers and private purchasers of health insurance. In 2007, the cost shift due to AHCCCS, Medicare and uncompensated care cost: employers an additional $941.7 million, $301.3 million resulting from AHCCCS underpayment; employees an additional $292.8 million, $93.7 million of it due to AHCCCS underpayment; and private purchasers of health insurance an additional $41.4 million, $13.2 million of it resulting from AHCCCS underpayment
AHCCCS payment rate freeze.

  • Five percent AHCCCS payment rate reduction.
  • Disproportionate share hospital payments.
  • Graduate medical education.
  • AHCCCS payments to rural hospitals.
  • State savings of  $95 million.
  • Lost federal funds of $250.4 million.

Total dollar increase in private insurance premiums due to the cost shift of $1.48 billion in 2009 and $1.63 billion in 2010.
Individual increase in premiums of 19 percent for privately insured Arizonans due to the cost shift.