30 October 2012

Midwest Edition
Calendar
November 15-16
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Sequester May Hit Health Research

Budgets for Minnesota, Wisconsin Universities on Line
Unless Congress amends The Budget Control Act of 2011 during the lame duck session this winter, the legislation will cut a total of $1.2 trillion from the federal budget over the next decade. The budget sequester will trim $55 billion in defense and another $55 billion in nondefense spending. Cuts from the bill that Congress passed are set to go into effect January 2013. One area that will be hit is federal funding that goes toward university research. There will be an estimated 8.7% ($12.5 billion) cut in 2013. The Information Technology & Innovation Foundation estimates the sequestration will cause a loss of 200,000 jobs and reduce the nations gross domestic product between $203 billion and $860 billion. Justin Hicks, senior economic analyst at the organization, said federal funding accounts for more than 60% of funding for basic research done in universities today. This is a broad and deep problem we are facing, Hicks said. When you are looking at sequestration of R and D, the impact on universities is not insignicant. And a handful of public universities in the Midwest are highly dependent on federal funding to perform their mission. The University of Wisconsin is near the top of the list of federally funded research programs. In 2009, the total research budget for the university was around $269 million, of which $160 million was federally funded, said Jon Sender, vice president of Venn Strategies, LLC and manager of federal relations for the School of Medicine. Sender said the universitys health system is a three-legged stool comprised of education, research and healthcare, all of which would be impacted by the cuts. The balance is tricky and when you start taking things away, other things fall away as well; its all interrelated, he said. Another top ve research institution in the nation is the University of Minnesota. The universitys president, Richard Pfutzenreuter III, said it received $605 million in federal funding in 2012, a large portion of which (some $262 million) goes toward personnel compensation. The universitys reductions would fall in the ballpark of $50 million. We are going to have to nd other funds to support those staff or we will have to shrink the program, he said. Our appropriations from the state legislature for scal year 2013 are equivalent to what they gave us in 1998. There is obvious pressure on student tuition and debt, so we arent going to solve the
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December 13
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NEWS
Research (Continued from Page One)
problem there. Our only solution at some point is to cut. Even if UM doesnt have to cut staff, it may have to cut salaries, Sender said. The universitys cancer center in Madison is the only one in the state that is designated by the National Institutes of Health for its level of research and care expertise. Many of its staff are researchers, educators and provide patient care and their salary package is reliant on funds from all three areas. Research would obviously suffer if cuts are made. Hicks said the United States would lose its access to cutting-edge, basic research that most companies dont perform. Universities are performing R&D on fundamental questions with broad impact, he said. No single business out there could endeavor to map the human genome and through federal funding, universities are able to do that. Hicks said his organization recently looked at the impact of a dollar of funding owing through a university. It found that $1 million provided to a school can produce up to 10 different studies or publications a huge impact with a huge return, he said. Reducing funding may also cut new research. It is likely that established studies will be funded through to completion and have a higher priority for refunding, Sender

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In Brief
Ohio Expects To Be Flooded With Medicaid Applicants After 2014
The State of Ohio has predicted that as many as 400,000 residents will join the Medicaid rolls after 2014, a number whose proportion is significantly at odds with neighboring states. The data was released last week by Gov. John Kasichs office. Although Ohio has more population than neighboring Indiana and Michigan, those states are predicting Medicaid bumps of 92,000 and 15,000 through 2015. Pending next weeks Presidential election results, Medicaid rolls are expected to expand in 2014 as the result of the Affordable Care Act. The actuarial data provided by Kasichs office predicts as much as a 50% uptake rate by those eligible to enroll in the Medicaid program, compared to actuarial reports elsewhere suggesting an uptake rate of around 15% in other states. In addition to the increase, Kasichs staff is predicting the increase will cost Ohio about $940 million per year. However, the figures offered by Kasich have been questioned by organizations such as the Universal Health Care Action Network of Ohio and the Health Policy Center at the Urban Institute.

said. What will suffer is new research. This means they might not enter the eld, or go to other countries. For a public facility, resources are somewhat limited, whereas private schools, with huge endowments, can make plays for leading researchers, he said. There is also a strong overseas market for leading research. A lot outside of the US are investing heavily in research while we cut. According to an ITIF report, the United States already ranks low in federal research funding 22nd out of 30 developed nations including China, Korea and the United Kingdom. Hicks said he understands that cuts may have to be made. However, he Congress can come together before the end of the year to put together a sensible budget solution. Research is a clear driver of economic growth, he added. Instead, Hicks believes the federal government should be investing in innovation, the workforce and education. They (Congress) are missing the important fact that we are in a global race and other countries are ramping up R&D dramatically, he said. China and Korea arent cutting; they are expanding at a quick rate we are losing ground and they are making it up faster. TAMMY WORTH

Mo. Patient Safety Center Expanding

Preliminary Plans Include Taking Programs National
The Missouri Center for Patient Safety wants to show folks outside of the Show Me State what it is capable of doing. The Jefferson City-based organization announced last week that it intends to take its programs national. It will begin offering its programs to other portions of the country immediately. We've reached a point where we see our expertise contributing to the larger
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Buckeye State Hospitals Make Big Quality Gains

Ohios hospitals dramatically improved their ratings in the most

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Longer ALOS!*

NEWS
Patient Safety (Continued from Page One)
conversation and changes underway in healthcare settings around the country," said MCPS Executive Director Becky Miller. The MCPS was formed in 2005, after state ofcials followed up on a national report released in 1999 concluding that as many as 99,000 hospital patients die every year due to preventable medical errors. The organization is a collaboration between the Missouri Hospital Association, the Missouri State Medical Association, and Primaris, the states federally designated quality improvement organization. The Centers primary program is the comprehensive unit-based safety program,

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In Brief
recent Healthgrades survey, making it among the highest-ranking states for surviving heart attacks, strokes, pneumonia and heart failure. According to the 2010 data from Healthgrades, hospitals in the Buckeye State ranked rst in the nation for heart attacks, up from 16th in 2009. It nished second for stroke survival, up from 24th in 2010. It nished third for heart failure, up from sixth from 2009 and 14th in 2008. And it placed fourth in the nation for pneumonia survival, compared to 14th in 2010. Ofcials said the states hospitals collaborated with one another, introducing various initiatives designed to improve patient outcomes, and working closely with the Quality Institute of the Ohio Hospital Association. Through collaboration and engagement, hospitals are learning from each other and other healthcare organizations to achieve their best delivery of patient care, said David Engler, vice president of the OHA Quality Institute.

which is conducted in conjunction with the Missouri Hospital Association. It focuses on empowering staff to improve safety in hospitals and learn from previous problems and medical errors. More than 40 hospitals are participating the vast majority of Missouris acute care facilities. In past efforts, the organization has focused on reducing hospital infection rates and promoting the use of colored wristbands for patients to decrease any confusion about who is being treated for what. The Center has not yet released any information about signing up clients in any states.

Harvard Doc To Head UM Center

Will Lead Research, Formation of Health Policy
A well-known Harvard University physician fellowship in general medicine and primary and researcher has been appointed as the rst care. director for the University of The institute includes a staff Michigans Institute for of more than 400 researchers Healthcare Policy and from the University of Michigan Innovation. and other organizations. It is John Z. Ayanian, M.D., expected to become a nationwide 52, will begin assuming the leader in terms of health research directorship next month. He and the development of health is expected to be appointed policy. as a professor at Michigans With experience in the medical school in 2013. He clinical realm, and in the world of currently holds faculty public policy, he's uniquely positions at both the Harvard poised to ensure that the work of Medical School and the IHPI members translates into Harvard School of Public action to improve the way Health, and practices at the healthcare is provided, paid for John Z. Ayanian, M.D. Brigham & Womens Hospital and regulated," said Michigan in Boston. Medical School Dean James O. Ayanian has directed Woolliscroft, M.D. Harvard programs overseeing health Ayanian will hold part-time appointments disparities research, clinical and translational at both Harvard and Michigan until his sciences, outcomes research for the Danatransition to the latter is completed by late Farber Harvard Cancer Center, and a summer.

Lead Poisoning In Illinois Plummets

Lead poisoning rates in Illinois have dropped by 93 percent since 1997, according to the state Department of Public Health. According to state data, 3,164 children younger than 6 years old in Illinois had elevated levels of lead in their blood in 2011. That compares to 45,809 in 1997. State officials say continued bans on materials containing lead, such as paint, contributed to the decline. "Although childhood lead poisoning rates in Illinois remain high, we are extremely pleased that the coordinated, strategic efforts of our Illinois Lead Program have worked toward such a dramatic decline in the number of lead poisoned children statewide," said Illinois Department of Public Health Director LaMar Hasbrouck, M.D.

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OPINION

Page 4

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Scenes From The Post-ACA World

Health Coverage Offerings Are Expected to Change
It continues to be business as usual for consumer directed health plans (CDHP), such as employers planning their health benet health savings accounts and health programs. Thats the highlight according to a reimbursement accounts, as a plan option and new employer survey completed by the nonthey indicated that this would increase to 62% prot Midwest Business Group on Health in 2013 and 71% through 2018. All large (MBGH) in collaboration with The Beneld employers indicated they will offer CDHPs to Group. their covered populations by 2018. More than a According to the study, the majority of quarter (29%) of all employers will make their employers responded that they will be CDHP offering their only plan available to adjusting to the new normal, making employees by 2018. changes to their benet design strategy in The fact that employers are already moving response to the post-Affordable Care Act (ACA) toward offering CDHPs is yet another signal that environment, but the bottom line is they are changing their viewpoint on that they do plan to continue who should pay for healthcare. In offering health benets. the past, employers took on a At the same time however, majority of this cost, but employers employers are taking a vital step are shifting this perspective and back and reassessing the principles instead are having employees take theyve used in the past in offering on more responsibility for the cost company health benets. They are of their care. This can have its now exploring new approaches, disadvantages for those who are such as an increased focus on either of lower income or at a consumer responsibility, to create higher level of health risk and really more effective strategies to improve depend on company-sponsored health and manage costs now and in benets. Nevertheless, it is a reality for By the near future. many employers who are moving to Margaret CDHPs because it will help them better The impacts of the ACA and the Rehayem manage healthcare costs and maintain economic recession have only fueled employers in their reassessment the last their bottom line. few years. Many employers still believe that Despite this shift in perspective, employers health benets are essential to attracting the will continue to offer healthcare benets. most talented employees and maintaining a Though a little more than half of employers plan productive workforce. Many employers also to make vision and/or dental coverage voluntary believe there is a positive connection between benets in 2013 and this percentage will health and productivity. continue to rise in the future. In fact, more than half of employers As employers continue to navigate the ACA who offer health benets also offer some type and the rebounding economy, they will continue of wellness and health management programs to focus on the health and well-being of their to their covered populations because it is the employees, albeit with additional right thing to do. However, employers also responsibilities added to consumers. The next realize that to be successful in creating a steps ahead for employers include making sure healthy and productive workforce requires that they are offering the ACA-required essential employees put their own skin in the game. benets. For both employers and consumers, a To accomplish this, many savvy key to the future will include a shared employers are implementing a variety of value- responsibility in creating a partnership to based benet design strategies (i.e. receiving a navigate the sea of changes healthcare reform premium differential for completing an HRA or will provide. biometric screening) and are not only seeing a positive effect of employees taking more Margaret Rehayem directs member initiatives accountability to be healthy, but are also for the Midwest Business Group on Health. beginning to achieve a positive return on their investment. The employer survey also found that Op-ed submissions of up to 600 words are 57% of responding employers currently offer welcomed. Please e-mail proposals to
editor@payersandproviders.com

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