Tag Archives: Arizona Hospital and Healthcare Association

Brewer

Brewer faces choice on Arizona health exchange

Gov. Jan Brewer is being pulled one way by major business groups and another by fellow conservatives as she faces a fast-approaching deadline to decide whether to implement a key part of the federal health care law.

The decision, due Friday, will determine if Arizona creates a state-run, online marketplace for consumers to use when choosing health plans, or lets the federal government create and run a so-called “exchange” for the state.

Brewer is among the Republican governors who oppose the law, but she has yet to indicate what course she’ll take.

Down the road, Brewer will face an equally hot-potato decision on whether to expand the state’s Medicaid program — another key aspect of the health care law.

Brewer’s administration has spent millions of dollars of federal grant money on planning and preliminary work for creating a health exchange.

Republican legislators and conservatives such as the Goldwater Institute say the requirement for an exchange is an infringement on the rights of states and individuals.

Meanwhile, a coalition of business groups wants Brewer to create a state exchange so Arizona has a say in in its design and funding.

“If we retain that control, we’re better able to customize and tweak and make adjustments,” said Pete Wertheim, a vice president of the Arizona Hospital and Healthcare Association.

Brewer already has selected a minimum benefits package for a state-run exchange based on current insurance coverage for state employees. She noted in a Sept. 28 letter to the Obama administration that the package excludes abortion coverage.

Brewer has said her administration has done a lot of planning to be prepared but also indicated she was still studying the issue and hadn’t made a decision.

“I’ve got to decide (whether) it’s the right thing for Arizona,” Brewer said while noting she will need legislative approval.

It’s clear that establishing a state-run exchange would put Brewer at odds with many Republicans in the Legislature, with no assurance that she would win the necessary approval.

“I don’t believe there are the votes in the House to pass something like this, so I don’t think this is going to go anywhere,” said House Appropriations Chairman John Kavanagh, a critic of the health care law and its penalties on some employers who don’t provide coverage to workers.

Senate Health Committee Chairman Nancy Barto offered a similar assessment of legislative leanings but said Brewer’s office “at least on the exchange seems committed to take a chance on Obamacare.”

“I would hope she wouldn’t do it without consideration of her party,” Barto said. “She has a record of standing up to the federal government and standing up for her party’s ideals, and this is a big part of that discussion.”

Proposing a state-run exchange wouldn’t be the first time Brewer has defied the wishes of most GOP lawmakers on a politically dicey issue.

After a year of trying, she was able to get lawmakers to put a temporary sales tax increase on a statewide ballot. Voters overwhelmingly approved it in 2010 to avoid deep cuts to schools and other services during the state’s budget crisis.

Brewer spokesman Matthew Benson declined to discuss what legislators’ “potential appetite” would be for having a state-run exchange.

On a related health care law issue with similar state-vs.-federal considerations, Brewer decided it was better to have the state run its own program to review health insurance rates than let the federal government handle it. The state has formally approved rules for a rate-review program.

Regarding the exchange, Brewer health policy adviser Don Hughes has said the governor wants to impose as few regulations and requirements on insurers as possible so it doesn’t turn into a duplicative regulator of the industry.

Conservative groups such as the Goldwater Institute and Americans for Prosperity are calling for Brewer to stiff-arm the federal law’s mandate for an exchange. Meanwhile, social-service advocacy groups are weighing in with calls for the state to create an exchange that is friendly to consumers on affordability, convenience and oversight.

“We’re optimistic that consumers will have influence in the design of it,” said Stephen Jennings, an AARP Arizona associate director.

AzHHA Conference - AZ Business Magazine July/August 2011

AzHHA Conference Addresses Challenges Facing Health Care Industry

The health care industry has undergone its fair share of challenges in the past, but 2011 has proven to be an exceptionally tough year. The difficult climate has set the stage for the Arizona Hospital and Healthcare Association’s (AzHHA) Annual Membership Conference, which will tackle the challenges head-on with the all-too appropriate theme, Between a Rock and a Hard Place.

“This year’s conference theme is applicable to many of the challenges facing the health care community today … including the implementation of health care reform, shrinking revenue streams, and the state and national budget woes,” says LeAnn Swanson, vice president of education services for AzHHA. The conference also will cover relevant topics such as advocacy, patient safety and quality, and governance.

The goal of the event, which will take place Oct. 20-21 at the Buttes Resort in Tempe, is to engage AzHHA’s members and keep them educated about pertinent issues affecting the industry. This year’s timely message is sure to make an impact on the audience of chief executive officers, hospital administrators, physician and nurse leaders, hospital trustees, operational leaders and all other members of the hospital family.

“Arizona hospitals and health systems find themselves in a time of both challenge and change,” Swanson says, “and the 2011 annual membership conference is designed to help your organization meet these challenges and changes head-on with instructive knowledge and a hopeful spirit.

“The conference is brimming with energizing and stimulating speakers providing the latest information and insights on the issues you care most about, to ensure your time away from the office is time well spent,” Swanson adds.

The event will begin with a keynote session titled, “From Success to Significance,” presented by Nido Qubein, president of High Point University and chairman of a national retail company. Qubein brings with him a rags-to-riches story of perseverance and business triumph, and will share a powerful message about the fundamentals that contribute to success.

“We are in difficult times and the future is challenging on many levels,” Qubein says. “Today’s health care professional is faced with a myriad of hard decisions that demand tenacity and experience.”

Following Qubein’s keynote will be the conference’s general session titled, “Healthcare Reform: Where are We Now, Where are we Going?” presented by Len Nichols, PhD., the director of the Center for Health Policy Research and Ethics and a professor of health policy at George Mason University.

Joe Tye, CEO and head coach of Values Coach, a consulting, training and leadership coaching company, will lead the informative session “The Florence Prescription (for hospitals and health care)” that will challenge audience members to reignite the spirit of the electrifying Florence Nightingale and her health care pioneers. Tye promises to bring his audience back to basics by reminding them of the importance of focusing on things such as employee engagement and patient satisfaction.

“They will learn specific strategies for building a culture of ownership, which is ultimately the only sustainable source of competitive advantage,” Tye says. He adds that attendees “will be challenged to think as deeply about the cultural blueprints of their hospitals as they do about blueprints for new buildings.”

John Foley, founder and president of CenterPoint Companies, which provides business performance training to Fortune 500 corporations, professional associations and educational organizations around the world, will close out the conference with a presentation on maximizing performance excellence.

There are also a few changes in store for the 2011 event. The conference no longer will feature an awards luncheon and instead will introduce the Honoring Our Professionals of Excellence (HOPE) Award. Deserving members of the health care community will receive recognition for their work, including a Caregiver Award, presented to an individual or care-giving team that has shown commitment to the delivery of quality care; and the Healthcare Leader Award, given to a deserving hospital executive or trustee who has demonstrated a history of noteworthy leadership at the state and/or national level.
The highly informative conference has been a benchmark event for AzHHA, helping to keep members educated and ready to face the challenges ahead.

“Times are difficult and budgets are tight, but your team still needs continuing education to stay current on the latest regulations and trends in the health care industry,” Swanson says.

Fortunately, AzHHA’s educational outreach efforts don’t end with the annual conference. The organization also hosts a multitude of webinars and other events throughout the year to keep their members informed and prepared in the dynamic health care industry.

“I have a depth of admiration for AzHHA and its members and I am most grateful for the continuing valuable work that they do to contribute to a better tomorrow for us all,” Qubein notes.

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AzHHA’s 2011 Annual Membership Conference

Oct. 20-21
The Buttes Resort
2000 Westcourt Way
Tempe, AZ 85282
azhha.org

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Arizona Business Magazine July/August 2011

 

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

AzHHA’s 2010 Annual Membership Conference - AZ Business Magazine Sept/Oct 2010

AzHHA’s 2010 Annual Membership Conference Is Aimed At Helping Members Prepare For Change

With the health care field on the brink of a major upheaval, the Arizona Hospital and Healthcare Association’s (AzHHA) 2010 Annual Membership Conference offers members information on what to expect in the future.

The theme, Bringing the Future into Focus, incorporates a mix of topics and speakers intended to appeal to a diverse hospital audience. Attendees will hear from leading economists, patient safety experts, health care visionaries and others.

LeAnn Swanson, vice president of education services for AzHHA, says the conference is the ideal venue to bring the new health care reality into full focus.
“Some of the best minds in the industry will be providing hard-hitting education and thought-provoking commentary,” she says. “This conference is intended for the entire hospital family, including the C-suite leadership team, hospital trustees, legal counsel, operations, quality, patient safety, human resources, and marketing officers.”

This year’s conference, Oct. 14-15 at The Buttes Resort in Tempe, kicks off with a keynote session featuring Lowell Catlett, Ph.D., regent’s professor, dean and chief administrative officer at New Mexico State University’s College of Agricultural, Consumer and Environmental Sciences. He will speak on the present and future of the economy.

Catlett notes that economic downturns are common — with 14 recessions during the past 80 years — and provide a means for society to re-balance what it deems to be important.

“Every recession leads to a spurt in new business starts, reformulation of business practices and new technological adaptations,” he says. “This current pause is no exception as we focus on what we value most. Get ready for phenomenal growth in health care, energy and lifestyle markets. For those willing to embrace the opportunities, the next decade will be successful beyond any in history.”

Immediately after Catlett’s presentation on Oct. 14, the general session will feature Ron Galloway, director of the documentary “Why Wal-Mart Works and Why That Makes Some People Crazy,” and the newly released “Rebooting Healthcare.” His topic, Wal-Mart and the Future of Healthcare, covers in-store health care clinics that offer everything from eyeglasses to flu shots to urgent care.

Galloway says the discount retailer aims to leverage its 4,000 stores into the largest force in American health care.

At the Oct. 15 breakfast meeting, sponsored by the American College of Healthcare Executives (ACHE), Chris Van Gorder, president and CEO of Scripps Health in San Diego and ACHE 2010-2011 chairman, will offer a look at Scripps’ medical response team. Van Gorder will describe the team’s efforts in the Hurricane Katrina-ravaged Gulf of Mexico, San Diego after its massive wildfires and quake-stricken Haiti.

Concurrent breakout sessions will look at the key drivers of physician behavior and the natural tension that exists in doctor-hospital relationships; trends and technologies that are “re-forming” health care in unexpected and beneficial ways; and the notion of being in a health care bubble with a high potential for a correction over the next five years.

The closing session will feature John Nance, author of “Why Hospitals Should Fly,” which was named the 2009 book of the year by the ACHE. Based on his book, Nance offers some solutions to the patient safety and quality-care crises that resonate deeply with all health care audiences.

The conference also will feature AzHHA’s annual awards luncheon, and a president’s reception that will give attendees an opportunity to say goodbye to the organization’s longtime president and CEO, John Rivers, as he nears retirement. The reception also will serve to introduce AzHHA’s new leader, Laurie Liles.

Along with the conference, during the upcoming year AzHHA also will offer a series of webinars and other events of interest to members of the hospital and health care industry, as well as representatives of the business community, Swanson says. The emphasis will be on compliance-related topics, including rules and regulations of the Centers for Medicare and Medicaid Services, the Health Insurance Portability and Accountability Act (HIPAA), and the Federal Emergency Medical Treatment and Labor Act, also known as EMTALA.

To learn more about upcoming education opportunities from AzHHA and to register for conference events, visit www.azhha.org/educational_services and click on education events.

    Arizona Hospital and Healthcare Association’s
    2010 Annual Membership Conference

    Oct. 14-15
    The Buttes Resort
    2000 Westcourt Way, Tempe
    www.azhha.org

Arizona Business Magazine Sept/Oct 2010

State Budget Cuts Will Hit Arizona Hospitals - AZ Business Magazine Sept/Oct 2010

Despite Restoring Some Funds, State Budget Cuts Will Hit Arizona Hospitals

It was looking pretty grim at 1700 W. Washington St., as Gov. Jan Brewer and a badly splintered Arizona Legislature struggled to cobble together a state budget that would have the appearance of being balanced.

Taking a follow-the-money tactic, policymakers targeted programs such as education and health care that annually receive large sums of taxpayer dollars. The budget Brewer and Republican lawmakers put together, addressing a $3.2 billion shortfall for fiscal year 2011, sent shock waves throughout the health care community.

The Arizona Hospital and Healthcare Association (AzHHA) estimated the cuts would reduce hospital revenue by $1.15 billion in state and federal funds in FY 2011, which began July 1, and cost the overall health care community $2.7 billion. For example, the budget package eliminated coverage under the state’s Medicaid program — Arizona Health Care Cost Containment System (AHCCCS) — to 310,500 adults and children, and eliminated KidsCare, ending health care coverage for 47,000 children. KidsCare provides low-cost insurance for the children of parents who earn too much to qualify for Medicaid, but are still considered the so-called working poor.

Before the ink was dry on the bills the governor had signed, officials learned that the landmark health care reform bill passed by Congress prohibited such budget cuts under the threat of losing federal funds. So lawmakers passed another bill to restore money stripped from AHCCCS and KidsCare. Failure to have taken the follow-up action, officials said, could have cost Arizona more than $7 billion in federal money for health care.

AzHHA strongly supported the governor’s push for a temporary 1-cent sales tax increase, which voters approved by a 64 percent to 36 percent margin. The tax increase remains in effect until May 31, 2013, and is expected to generate about $3 billion over three years to protect education, public safety and health and human services from further cuts.

Despite avoiding a funding disaster, hospitals still are forced to deal with a considerable loss of government dollars. Laurie Liles, president and CEO of AzHHA, says hospitals sustained $50.1 million in cuts to the Disproportionate Share Hospital (DSH) program, which provides special funding to hospitals that treat a significant number of AHCCCS and uninsured patients. The state cut $16.7 million, resulting in a loss of $33.4 million in federal funds. The federal stimulus act of 2009 matches state dollars three-to-one for DSH, so when the state trims $1 from the program, the total loss is $4.

Hospitals also lost some $37.3 million in funding for graduate medical education, which helps pay for physician instruction programs.

“There is no funding for 2011,” Liles says. “That is a huge loss for Arizona, considering the significance of our physician shortage.”

In addition to those losses, the Legislature authorized AHCCCS to reduce all provider payments, including those to hospitals, by up to 5 percent for fiscal 2011.

“We don’t know what percentage cut that hospitals will receive,” Liles says. “Hospitals are planning on the full 5 percent, but we’re hoping it will be somewhat less.”

Since 2008, Arizona hospitals have sustained several hundred million dollars in payment cuts and freezes, which impact hospital employees — medical and non-medical, Liles says. The association has been monitoring how its member hospitals are dealing with the recession.

“We have found that hospitals are managing through a variety of ways,” Liles says, “with some staffing reductions, delays in capital construction and services to the community. Hospitals have had to make some very hard choices about services. Strategies that hospitals have been forced to employ affect all Arizonans.”

For example, Liles says, when hospitals are underpaid, either by AHCCCS or Medicare, hospitals shift those costs onto commercial health plans to make up the difference.

“We call that cost shift a hidden health care tax,” she says. “That results in higher premiums for businesses and families. We all end up paying for the cost shift that hospitals are forced to make.”

Liles, who previously was the chief lobbyist for AzHHA, says she spent a lot of time over the past few years visiting with legislators regarding the impact of the hidden health care tax.

In 2009, the Arizona Chamber Foundation, an affiliate of the Arizona Chamber of Commerce and Industry, determined that all purchasers of health care coverage pay 40 percent more for hospital care through commercial insurance as a result of underpayments from AHCCCS and Medicare, Liles says.

“We look for more of the same,” she says.

Hospitals are counting on Congress to continue funding AHCCCS at an increased level.

“We have shared our concern with our congressional delegation,” Liles says. “The enhanced federal medical assistance percentage is absolutely vital to Arizona.”

The increased funding amounts to about $480 million — money needed to cover the expanded AHCCCS population — that the state is mandated to continue covering as a result of national health care reform. Without additional federal funding, Liles wonders: “How are our Legislature and governor going to pay for that? We are concerned about the care we provide. There are only so many places our state can cut.”

By The Numbers: Health Care Cuts

  • $50.1 million in cuts to the Disproportionate Share Hospital (DSH) program
  • $37.3 million in funding for graduate medical education
  • AHCCCS can reduce all provider payments by up to 5 percent

Arizona Business Magazine Sept/Oct 2010

Outgoing AzHHA Leader John Rivers Talks About The Past, Present And Future Of Health Care In Arizona

After more than 23 years as president and CEO of the Arizona Hospital and Healthcare Association (AzHHA), John Rivers announced he will be stepping down in January of next year. Arizona Business Magazine asked Rivers about his tenure at AzHHA and the challenges facing the health care system.

How has the Valley and state’s health care industry changed in the 23 years you’ve helmed AzHHA?
Health care in Arizona barely resembles what it looked like 25 years ago when I first arrived. In fact, I think it is better in every respect. Hospitals in particular are more sharply focused on cost-containment strategies, physician integration, patient safety and, of course, providing cutting-edge medical care to their patients. Hospitals have also made giant strides in better management of their human resources, particularly nurses, who are the heart and soul of good hospital care.

How has AzHHA’s mission changed over the years to adapt to the Valley and state’s evolving health care industry?
Our primary mission remains political advocacy, although the complexity and difficulty of doing that well has increased exponentially. The tremendous diversity among types of hospitals, and the even greater diversity of personalities among our CEOs, requires a great deal of adaptability on the part of the association CEO.

What are some of the biggest challenges you see facing the health care industry today?
All of us in health care are facing tremendous uncertainty about our future. Congress is on the verge of re-writing the book on government’s role in health care, and at the state level we face the greatest budget crisis in our history. With the federal and state government already purchasing about 70 percent of the hospital care in Arizona, our world will no doubt change dramatically. At a minimum, our future will require us to be more accountable, more transparent and more integrated. Also, we’ll see a seismic shift away from the revenue enhancement model to a cost-control model.

What would you say are some of AzHHA’s greatest successes over the past 20 years?
I think we have been very successful in our political advocacy and our record more than speaks for itself in that regard. More than that, I tend to define our success in terms of achieving our mission with competence and integrity — and keeping our focus on what is best for health care in Arizona and what is best for the patients served by our institutions.

Do you plan to stay involved in health care, and how?
I will definitely stay involved in a number of charitable and community service activities in which I currently participate, but I have no plans to remain involved in health care except as a citizen who cares profoundly about all that we do. I’ve spent the past 40 years of my life in health care, 25 of them in Arizona, and it’s time for me to move on and enjoy life in ways that I have not had time to do up until now. There’s more to life than driving to the office each morning and I intend to live my other dreams while I am still in good health and able to do so.

www.azhha.org

Arizona Business Magazine

January 2010

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.

Nursing Shortage Still Plagues Arizona’s Health Care Industry

Nursing Shortage Still Plagues Arizona’s Health Care Industry

Arizona’s nursing shortage is a very serious problem and it is not going away any time soon. The state is going to need approximately 49,000 new registered nurses by 2017 to keep pace with population growth, RNs retiring and nurses lost to attrition, according to the Arizona RN Shortage: 2007 Results, a report published by the Arizona Healthcare Data Center. The data center was started by the Arizona Hospital and Healthcare Association (AzHHA) in 2007 to study health professions in Arizona.

“I think people are tired of hearing about the nursing shortage,” says Bernadette Melnyk, dean of ASU College of Nursing and Healthcare Innovation. “They don’t understand the adverse effects until they or a family member is hospitalized and they see for themselves the effect it has on the health and safety of people they love.”

Of the approximately 49,000 RNs that will be needed by 2017:

  • 20,000 will be needed to keep pace with the state’s growing population, as well as to close the gap between Arizona’s current average of 681 RNs per 100,000 residents and the U.S. average of 825 RNs per 100,000 residents.
  • 10,000 nurses will be required to replace retiring RNs. More than one-third of Arizona’s current RNs are older than 55 and will retire over the next five to 10 years.
  • 19,000 RNs, or 3.5 percent annually, will be needed to account for the profession’s attrition rate.
  • Twelve of Arizona’s 15 counties also fall below the national average of RNs per 100,000 people, according to the Health Resources and Services Administration (HRSA). The national average is 3.3 RNs per 100,000 people, and Arizona has 1.9 RNs per 100,000 people. The three counties that exceed the national average — Coconino, Pima and Yavapai — still face shortages of RNs.

    Adda Alexander, RN, MBA, former executive vice president of AzHHA, says Arizona colleges have increased their capacity and are graduating more nurses, but it is not enough. Arizona’s nursing programs need to graduate an additional 2,235 students per year just to keep pace with the state’s population growth.

    To help address the nursing shortage, Arizona hospitals contributed $57 million between 2006 and 2007 to the state’s education programs in the form of tuition reimbursements, loan forgiveness programs and in-kind giving (providing space for nursing education programs, sponsoring faculty salaries and tuition reimbursement). In 2005, the Arizona Legislature passed the Arizona Partnership for Nursing Education (APNE) bill, which provided $20 million over five years to double the capacity of Arizona’s college and university nursing education programs by increasing the number of nurse education faculty. As a result of the APNE funding, the estimated number of additional nursing graduates in 2010 will be 1,242. Alexander said APNE was a crucial step in helping the nursing shortage, but it sunsets in 2010 and the funding stops.

    According to Annual Reports from Nursing Education Programs, 2007, Arizona Board of Nursing, there were 41 vacancies for full-time Arizona nursing faculty in 2006, which was a 13 percent increase from the previous year. In addition, there were 38 vacancies for part-time nursing faculty in 2006, which represented a 600 percent increase in vacancies from 2005.

    The report also indicated that due to the lack of capacity, more than one-third of nursing students are wait-listed each year by Arizona nursing programs even though they have met all course prerequisites.

    Joey Ridnour, executive director of the Arizona State Board of Nursing, contends that the lack of clinical space also contributes heavily to the nursing shortage. Thus, many states are looking at using simulations in combination with clinical experience to teach students.

    “This may be a good combination to consider in the future, but faculty needs to figure out how to maximize it so students get a good education,” Ridnour says. “When I was a student, I would have valued doing some of the procedures through simulation rather than on live patients. It would have given me a better understanding and more confidence.”

    Melnyk believes the state has to hit the nursing shortage from two angles: (1) produce more nurses and (2) help them feel satisfied and empowered in their role. She says between 35 and 60 percent of new graduates leave their positions in the first year due to stress from staffing shortages and patient acuity levels.

    “I think nurses get out in the real world and don’t expect their jobs to be so stressful,” she says. “People in hospitals are very sick and oftentimes what the nurses are expected to juggle is too much for them to handle.”

    Melnyk also thinks nurses and other health care providers should be educated in evidence-based practice (EBP), a problem-solving approach that integrates the best evidence from research studies and combines it with patient preferences and the clinician’s expertise.A number of medical studies show that when nurses, physicians and other health care providers deliver care in an evidence-based manner, the quality of care is substantially better and patient outcomes improved.

    “Studies also show that nurses practicing EBP are more satisfied with their role, feel more empowered and make less medical errors,” Melnyk says. “A lot of people don’t realize that 99,000 patients die annually in the U.S. due to medical errors. That’s a staggering number of patients.”