Local Commentary

Guest Commentary: Virginia’s Sensible Health Care Reform Plan

By Sean Connaughton

Health care is everywhere these days. It’s a hot topic in national, state and local politics.

With all that talk, it can be tough to cut through rhetoric that unfortunately has become polarizing since the Affordable Care Act passed in 2010.
What I’d like you to do is take a few steps back and see health care for what it truly is.

Health care is vital to our economy and our well-being. Virginia’s hospitals and health systems are major contributors on both accounts.

Hospitals and health systems provide good-paying Virginia jobs (115,000 overall), generate $36 billion in positive annual economic activity, and spend $17 billion on goods and services with local businesses.

Hospitals are among the largest employers in the communities they serve, even in regions such as Northern Virginia.

Beyond direct jobs, many local businesses that support the livelihoods of our friends, family, and neighbors are linked to the health care economy.
Hospitals’ economic footprints are especially prominent in rural communities, where they provide 17,500 jobs. Each hospital job in rural Virginia supports two additional local economy jobs.

Overall, health care accounts for 1 in 9 Virginia jobs (11 percent of the workforce).

Health care was one of Virginia’s few employment growth sectors in 2014. U.S. Bureau of Labor Statistics forecast a similar story ahead when health care jobs are expected to help propel national job market prosperity.

While those numbers are impressive, the real import of hospitals is often only evident when all we want is reassurance that the facility where a loved is receiving medical care has highly-trained staff, and state-of-the-art equipment and facilities necessary to treat them.

At some point, each of us will need a hospital, whether for a scheduled procedure or an unexpected crisis, a birth in the family or end of life care. Hospitals are there for those moments. There when Ebola strikes. There to treat people after natural disasters, man-made incidents, and acts of God.
They are there for the insured and uninsured alike. You see, years of government decisions have put unfunded mandates on hospitals that cost them billions.

Medicaid and Medicare, the 50-year-old subsidized insurance programs, reimburse hospitals at rates less than the cost to provide care. A 30-year-old federal law requires hospitals to treat emergency room patients even if they can’t pay.

Those unfunded mandates obligate hospitals to provide substantial amounts of free and discounted care at great expense. That level of government involvement means health care is not a free market system.

Virginia hospitals also face rising federal funding cuts from sequestration and ACA escalating to roughly $1 billion annually by 2021.

All those burdens jeopardize the jobs, economic and public health benefits hospitals provide. Also threatened is access to health care services and facilities which could become scarce depending on policy outcomes.

Protecting our hospitals as the assets they are requires common sense health care policy measures.

Two prominent health care issues before the Virginia General Assembly involve extending health care coverage to more Virginians – sound fiscal analysis shows that is economically prudent – and protecting a health care law that helps control costs and offset charity care mandates on Virginia’s health care delivery system.

Virginia’s Certificate of Public Need (COPN) law is a review process for proposed new health care facilities, services, and equipment.

Eliminating it would weaken health care, allowing some providers to cherry pick the most profitable types of care, in the most profitable regions, leaving less wealthy areas with fewer health care options and forcing hospitals to subsidize money-losing types of care.

A work group the General Assembly ordered to study the issue recommended updating COPN, but concluded the law should remain intact. That is a sensible health care reform plan.

Another big issue is health care access. Under ACA, states have the option to expand Medicaid so more people are insured. Thirty-one states have done so. Virginia has not, though nearly 400,000 primarily working poor Virginians could benefit. Money for that is available from Washington, funded with health care taxes from Virginia.

Some worry Washington won’t fulfill its promise to fund most costs from the new population, even though Virginia’s budget is built on billions in federal funds that support our roads, schools, police, prisons, you name it.

Virginia hospitals have put forth a proposal to allay fears about state costs from insuring more people by conditionally offering to contribute funds to support health care.

That approach is flexible enough to backfill existing Medicaid funding, or to expand health care coverage to many more Virginians.

Hospitals, not taxpayers, would cover the state’s cost. Drawing down additional federal funds that way would improve the state budget, and enhance the fiscal stability of Virginia’s health care system without costing taxpayers.

That is a fair bargain when so much is at stake.

 

Sean Connaughton is president and CEO of the Virginia Hospital & Healthcare Association.