Washington State Hospital Association

Washington State Legislature 2011/2012 Sessions Randy Revelle, Senior Vice President Cassie Sauer, Vice President Len McComb, Lobbyist 79 th WSHA Annual Meeting October 12, 2011

Washington State Hospital Association 33 Outline of the Presentation Washington State Legislature – Randy Policy Priorities – Cassie Washington State Budget – Len Budget Priorities – Len Hospital Safety Net Assessment – Randy “Hospitals: Essential Community Partners” – Cassie WSHA Information and Resources – Cassie Washington Hospital PAC – Randy

Washington State Hospital Association 44 Washington State Legislature

Washington State Hospital Association 55 Democratic Leadership Frank Chopp Speaker of the House Frank Chopp Speaker of the House Ross Hunter House Ways and Means Chair Ross Hunter House Ways and Means Chair Eileen Cody House Health Care Chair Eileen Cody House Health Care Chair Lisa Brown Senate Majority Leader Lisa Brown Senate Majority Leader Ed Murray Senate Ways and Means Chair Ed Murray Senate Ways and Means Chair Karen Keiser Senate Health Care Chair Karen Keiser Senate Health Care Chair

Washington State Hospital Association 66 Republican Leadership Gary Alexander House Ranking Ways and Means Gary Alexander House Ranking Ways and Means Randi Becker Senate Ranking Health Care Randi Becker Senate Ranking Health Care Joe Zarelli Senate Ranking Ways and Means Joe Zarelli Senate Ranking Ways and Means Mike Hewitt Senate Minority Leader Mike Hewitt Senate Minority Leader Richard DeBoldt House Minority Leader Richard DeBoldt House Minority Leader Joe Schmick House Ranking Health Care Joe Schmick House Ranking Health Care

Washington State Hospital Association Session Overview Hard work by the Policy/Advocacy Team Extensive grassroots campaign Great success on numerous policy bills Frustrating results on the Washington State budget State legislature raided the Hospital Safety Net Assessment.

Washington State Hospital Association 88 Policy Priorities

Washington State Hospital Association 9 Policy Priorities: 2011 Session Nurse staffing agreement Health insurance exchange Adverse events reporting Public Hospital District fundraising

Washington State Hospital Association Policy Priorities: 2011/2012 Sessions Health care reform Meal and rest breaks (?) Executive compensation Freestanding emergency departments Physician peer review 10

Washington State Hospital Association 11 Washington State Budget

Washington State Hospital Association 12 *Data Sources: Washington State Department of Health Year-End Reports, Fiscal Years DataBank; January to March, 2011 **First Quarter 2011 (estimate) Hospital Margins Are Declining 5.22%5.27%6.10%5.62%4.69%

Washington State Hospital Association 13 Data Source: Washington State Department of Health Year End Reports, Fiscal Year 2010 Wide Range of Operating Margins (65 of 97 Hospitals Reporting)

Washington State Hospital Association 14 Government Cost Shift (1995 to 2009) Health Information Program Data Source: Washington State Department of Health – Hospital Fiscal Year-End Reports Other Payers Medicare Medicaid

Washington State Hospital Association 15 Impact of Initiative 1053 or Very difficult to increase revenues and close tax loopholes

Washington State Hospital Association 16 Impacts of the Recession Increased case loads for education and health care Reduced revenue as sales tax receipts decline Since more than two-thirds of the state budget is protected, $5.1 billion had to be cut from a budget base of about $13 billion. The June 2011 forecast predicted $570 million less revenue for , reducing the state’s ending fund balance to $160 million. The September 15, 2011 revenue forecast predicts an additional $1.4 billion shortfall in revenues for the biennium.

Washington State Hospital Association 17 Three Budget “Whacks” to Hospitals  About $310 million in hospital cuts in 2009; partially restored by the assessment in  More than $800 million in additional direct and indirect cuts to hospitals for the biennium  More than $400 million in additional direct and indirect cuts to hospitals for the biennium

Washington State Hospital Association 18 Budget Priorities

Washington State Hospital Association 19 Budget Priorities: 2011 Session (1)Protect the Hospital Safety Net Assessment (2)Maintain access to health care (3)Protect mental health funding (4)Protect health clinic funding (5)Maintain maternity support services

Washington State Hospital Association Budget Priorities: 2011/2012 Sessions Supplemental budget shortfall Access to health care Mental health funding Critical Access Hospitals Certified Public Expenditure hospitals Other budget priorities State revenues/referendum Hospital Safety Net Assessment 20

Washington State Hospital Association 21 Hospital Safety Net Assessment

Washington State Hospital Association 22 Preserve the Hospital Safety Net Assessment Hospitals volunteered to pay an assessment to augment state funds. The assessment is matched by the federal government. Hospitals receive enhanced Medicaid payment rates and Disproportionate Share Hospital payments. The assessment stabilizes quality care for Medicaid and Apple Health enrollees.

Washington State Hospital Association 23 Assessment: Benefits to the State biennium About $60 million in new state general funds Saved the state millions of dollars by providing payment increases without state funds biennium About $50 million in new state general funds Saved the state millions of dollars by providing payment increases without state funds

Washington State Hospital Association 24 Assessment: Benefits to Hospitals More than $70 million net for the biennium More than $100 million net for the biennium Restores a significant portion of the hospital payment cuts enacted by the 2009 legislature Requires no additional state funds

Washington State Hospital Association 25 Impact of House Bill 2069 ( )  Reduces payments to Prospective Payment System (PPS) hospitals by about 10 percent  Takes $110 million from the assessment for state general funds  Forgoes $110 million in Medicaid match funds for hospital payments  Keeps $40 million in surplus assessment funds No direct cuts to Critical Access Hospitals, Certified Public Expenditure hospitals, and psychiatric hospitals   Total impact is $260 million 

Washington State Hospital Association Impact on PPS Hospitals ( ) April 2010 Law $1 from the hospital 80 cents to the hospital $1.50 to the hospital HB

Washington State Hospital Association 27 WSHA Board of Trustees’ Goals Pursue a lawsuit against Washington State to: Preserve the Hospital Safety Net Assessment; or Negotiate a mutually agreeable settlement with the state

Washington State Hospital Association Status of the Assessment Lawsuit Lawsuit filed in King County, July Claims: The state legislature violated the Washington State Constitution and several provisions of the assessment law. Hearing is scheduled for November WSHA is requesting a summary judgment and a writ of mandamus. 28

Washington State Hospital Association 29 “Hospitals: Essential Community Partners”

Washington State Hospital Association Legislators’ Perceptions of Hospitals Statewide grassroots campaign to improve legislators’ perceptions of hospitals and health systems “Hospitals: Essential Community Partners” Address a variety of controversial issues Highlight hospital and health system accomplishments and benefits Educate and lobby all state legislators 30

Washington State Hospital Association Hot Buttons Margins above eight percent Executive compensation more than $500,000 Rural hospitals with low census Integration of physician practices Affiliation with a system New construction Public Hospital Districts Free-standing emergency rooms 31

Washington State Hospital Association 32 WSHA Information and Resources

Washington State Hospital Association 33 WSHA Information Inside Olympia and Inside D.C Legislative Summary Health care reform resources on WSHA’s web site Hospital-specific reports Presentations to management staff, boards, and organizations

Washington State Hospital Association 34 WSHA Resources Policy: Research, analysis, and writing Media: Editorials, op-eds, and news articles Lobbyists: WSHA lobbyists, as well as mobilizing other hospital lobbyists Grassroots: Unleashing the persuasive power of our membership Political Action Committee (PAC): Using campaign donations to promote access to elected officials

Washington State Hospital Association 35 Washington Hospital PAC

Washington State Hospital Association 36 Washington Hospital PAC In 2001, WSHA membership urged PAC expansion. In 2010, 531 donors from 92 hospitals/health systems and several organizations donated $154,713. Success in the 2010 elections: 88 of the 94 (94%) candidates we supported won their elections! PAC donations give WSHA access to elected officials. From 2001 to now, the PAC has raised a total of: $1,056,897!

Washington State Hospital Association 37 $82,751 $109,345 $135,446 $154,713 $126,501 $111,000 $137,076 PAC Donations: 2005 to 2011

Washington State Hospital Association Legislative Composition 38

Washington State Hospital Association PAC Contributions (State Legislative Candidates) Individual Candidates Senate:10 Democrats, 7 Republicans House:43 Democrats, 25 Republicans Democratic Funds Senate:Roosevelt Fund – Tied for first House:Truman Fund – Fourth Republican Funds Senate:Leadership Council – Second House:Reagan Fund – Tied for third

Washington State Hospital Association 40 We Need Your Help! Stay in contact with your legislators and arrange a hospital visit this year Answer calls to action in Inside Olympia and Inside D.C. Talk to community leaders about hospitals, health systems, and health care Educate reporters and editorial boards Contribute generously to the Washington Hospital PAC!

Washington State Hospital Association 41 Thank you! Contact Information: Randy Revelle Senior Vice President Questions and Comments