Sunday, May 30, 2010

The Three Pinnochioes of Louisiana Healthcare


The ability to sell a lie — particularly when it affects public policy — depends in large measure on the ability of those pushing the lie to dominate the conversation, to keep selling their particular narrative until it verges on becoming the accepted truth.

The Kaiser Family Foundation, a non-partisan organization that has focused on healthcare policy, issued a report on Wednesday that looks at the impact of the expansion of Medicaid eligibility contained in the recently enacted healthcare reform legislation. In so doing, the numbers demolished the core lie of the Jindal administration's plan to close the public hospitals operated by LSU — that the loss of disproportionate share dollars will make the hospitals fiscally unsustainable. Here's the Kaiser press release. Here's the executive summary (PDF). Here's the full report (PDF).

The lie being pushed by Jindal, DHH Secretary Alan Levine and Speaker Jim Tucker — The Three Pinnochioes — is that the loss of a few hundred million dollars of disproportionate share dollars will doom the hospitals. What they don't want people to know — and what the Kaiser report makes clear — is that this expansion of Medicaid contained in the Patient Protection and Affordable Care Act (ACA) will bring Billions of new healthcare dollars into the state that will more than offset the loss of that much smaller figure.

The report points out that this infusion of federal dollars will begin in 2014 with the federal government picking up the tab for the entire expansion in year one, falling to 95.6% of the cost of the expansion over the ensuring five years (Table 1, on page 12 in the full report).

In all, expansion of Medicaid eligibility could bring a minimum of $7.2 billion in new healthcare dollars into Louisiana, reducing the percentage of uninsured Louisiana residents living just above the poverty level by half. And, that's if the state does a poor job of reaching out to those currently uninsured to make them aware of the opportunity to gain coverage. If the state does a more aggressive outreach program, 74.8% of those now uninsured would have coverage.

In a hastily drawn up response to the Kaiser report, Levine actually agreed with the numbers. He and his boss Jindal just don't want to see it happen.

As the Kaiser report points out, "Medicaid is voluntary, states may choose to not to participate and thereby forego the federal Medicaid funding to which participating states are entitled. States that elect not to implement these new requirements in effect would be making the choice not to participate." (Page 7, Executive Summary)

Opting out is the route that The Three Pinnochioes plan to take, turning their back on billions of dollars in federal healthcare dollars, and opening the path for them to close the LSU hospitals. The only problem is that those dollars are dollars are bound for providers — doctors, hospitals, and clinics — who take Medicaid patients. Relations between the Jindal administration and the provider community are already strained after three years of budget cuts that resulted in reduced reimbursements rates.

Denying providers billions of dollars to cover what is otherwise uncompensated care would be signing a death warrant for many community hospitals who deliver much of the Medicaid. If The Three Pinnochioes succeed in their effort to kill the LSU hospitals, those community hospitals would be expected to pick up the patient load now handled by the LSU system, particularly those without any ability to pay.

The result will be a fiscal calamity for community hospitals and a public health  emergency for the state.

It's the Ideology, Stupid!

In the world of The Three Pinnochioes, this has never been a healthcare issue. This is an ideological issue. They don't believe that the state should operate any hospitals and are committed to closing them. The notion of what happens to the patients is not something that they are particularly concerned about. Never has been.

Ideological rigidity leads to the same answer over and over, regardless of the facts.  The Three Pinnochioes demonstrate this with their unbridled desire to kill the LSU hospitals. Any excuse will do.

The state's budget problems (which they largely created with the repeal of the income tax portions of the Stelly Plan) were the first excuse. Now with the potential for a surge of federal healthcare dollars into the state, they say that's their excuse for needing to kill those hospitals because the money is just not flowing into the the right pots.

In their ideologically driven quest to kill the LSU hospitals, The Three Pinnochioes threaten wrecking the entire healthcare system in this state. The initial impact might be on care for the poor, but it will ultimately accelerate the crisis that is putting health insurance beyond the reach of working families.

In a state where the percentage of working age adults without health insurance is high and climbing, opting out of the Medicaid portion of the ACA would leave Louisiana healthcare costs locked into the death spiral driven by the shifting of the cost of providing care for the uninsured onto the backs of those with coverage. This is the core of the national healthcare crisis. It is driving the cost of health insurance through the roof. A decision to opt out of the Medicaid portion would be the equivalent of smashing the pedal to the metal and heading over the cliff.

But, the cliff is precisely where Jindal wants to see this go for his own political reasons. He's directed Attorney General Buddy Caldwell to file suit challenging the legality of the ACA. He yanked the Department of Insurance back from participating in the new high risk pool for adults denied coverage over pre-existing conditions (a temporary program that will last until 2014 when the pre-existing condition exclusion for adults is outlawed). Refusing to participate in the Medicaid portion of the program would be the next step.

Levine's statement on Wednesday was the tip that this is what's coming.

Jindal's Obsession

Bobby Jindal has wanted to close the state's public hospitals (formerly known as the Charity System) since the days when he was Mike Foster's DHH Secretary. Now Jindal and his DHH Secretary Alan Levine are trying to privatize the operation of the state's three mental health hospitals that has stirred up a hornet's nest of opposition from Democrats and Republicans in those communities, but particularly in the Felicianas around East Louisiana Mental Health hospital in Jackson.

Jindal and Levine made striking a deal to close Earl K. Long Medical Center in Baton Rouge and transfer some of those patient services to Our Lady of the Lake Medical Center one condition of their support for building a new teaching hospital in New Orleans. LSU also had to give up control of that new hospital as part of the deal.

Two down, eight to go. (Note: LSU Health Sciences Center in Shreveport runs the LSU hospitals in that city, Pineville and Monroe.)

The push to close what are now the LSU hospitals will come in the 2011 session in the fight over the 2012 budget. It will be an election year and this will be one of the defining issues coming out of that session and in the election that follows.

That fight might be put off that fight until next year, if the House and Senate can reach a deal on this year's budget. The version of HB-1 approved by the House Appropriations Committee last week will cut $68 million from LSU's hospitals and that will force the closure of some facilities.

House Speaker Jim Tucker, who led the charge to pry LSU's control away from the New Orleans teaching hospital, laid bare the outlines of the game plan during to kill the rest of the system during a May 10 appearance at the Baton Rouge Press Club:
Tucker said national health care changes are going to cost Louisiana more money in the long run. It is being financed partially by diversion of funds from uninsured care which are used to operate the state’s public hospitals, he said. That’s going to prompt a major decision affecting the future of the hospitals, he said.

“What’s interesting about it, it’s taken a Democratic president to in all likelihood get Louisiana out of the hospital business,” said Tucker.
The care for the uninsured that Tucker mentioned will not be needed because ACA is going to provide coverage to most of those who are now uninsured. The issue becomes where will those people go for treatment and care?

Louisiana residents living just above the poverty line are those most likely to be affected by untreated chronic disease. They don't have insurance and so they avoid going to doctors unless and until symptoms get too bad to ignore. Many of those people go to emergency rooms at LSU hospitals for care when things reach that stage.

In 2008, the most recent year available, the LSU hospitals in the southern part of the state (operated by LSU Health Care Services Division) treated a patient population of just over 400,000. There were just under 30,000 hospital admissions, resulting in 144,000 inpatient days. Just over 3,000 psychiatric admissions, resulting in 38,000 psychiatric inpatient days. There were 7,226 full time employees or equivalents at those seven hospitals.

LSU Health Sciences in Shreveport, which operates hospitals in three cities, handled 31,000 admissions; 110,000 emergency room encounters; nearly 600,000 outpatient clinic visits. 41% of their patients are Medicaid patients; 26% are 'free care.' There are 6,200 employees in the hospitals run by this system.

And these patients will go where for care? Community hospitals can't handle this load and, because of Medicaid reimbursement cuts made by The Three Pinnochioes, they would probably resist state efforts to force these patients on them.

In Baton Rouge, it is instructive that DHH will pay Our Lady of the Lake a higher Medicaid reimbursement rate than it will other hospitals in that region in return for agreeing to take on some of the Earl K. Long patient load. Administrators at other hospitals closer to the local patient base of Earl K. Long are worried that they will get stuck with a larger percentage of the patient load but not get paid as much to care for those patients as OLOL will. At least two hospitals (Baton Rouge General and Lane Memorial Hospital in Zachary) believe the deal with OLOL threatens their financial viability if large numbers of former Earl K. Long patients take the shortest routes to healthcare.

So, the cost of delivering Medicaid in the Baton Rouge area will actually go up as a result of the closure of Earl K. Long. But, isn't Medicaid causing the state's budget crisis? Isn't that rising cost going to be the reason The Three Pinnochioes cite when they move to abstain from participation in the expansion of the Medicaid program?

Yes, but with ideologically driven decision-making, any excuse will do.

The Growing Bi-Partisan Backlash

There has been a bi-partisan uprising in the normally conservative House of Representatives against The Three Pinnochioes plan to privatize the state's three mental health hospitals. It has dawned on the people in the Felicianas that those facilities have jobs attached to them as well as providing care for those with mental disabilities, including criminals.

The facts got loose out there and the locals are no longer buying the Jindal spin.

The push to have legislative review of all state professional service contracts is further evidence that the days of the Legislature's rolling over at Jindal's command might be ending ("might be" because these bills have not yet passed both houses and face a probable Jindal veto).

LSU is not in a position to fight the hospital closures directly. They've got too much riding on the teaching hospital in New Orleans and other state funding needs. However, the private sector provider community can — and, really, must — push both for participation in the Medicaid expansion and to fight the closure of the LSU hospitals. The reason is simple: their existence depends on it.

The Kaiser report shows just how much ACA's expansion of Medicaid could mean to them AND how little it would cost the state to take part in that program — $300 to $500 million in state match over a five year period! (Pages 10 and 11 of the Kaiser Executive Summary PDF.)

The Governor has been spending most of his time on the coast, away from the Capitol. The Speaker has been his time in the Capitol and his presence has had about as strong a negative effect as Jindal's absence.

Levine, a former political candidate in Florida who still speaks at Republican candidate workshops here, has proven tone deaf in dealing with the Legislature. He and his aides say legislators are "injecting politics" into the budget process by calling for a review of privatization contracts, yet can only focus on the cost benefits when discussing the proposed moves — as if healthcare is only about money and not about care for people in need. Like the governor he serves, Levine can't see beyond the numbers at the people behind them, nor can he see beyond his ideological blinders.

The public, like legislators, is catching on, along with legislators. With bigger budget holes yet to fill and and opportunity to get federal relief for the most pressing human needs in the state, The Three Pinnochioes appear trapped by their ideology, unable to respond to changing circumstances.

A collision is coming and The Three Pinnochioes seem particularly ill-prepared to handle it.

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