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October 7, 2011

State & Federal Deficits, Health Reform: Cuts & Change…The Only Two Certainties Heidi L. Gartland, VP Government Relations November 17, 2011. October 7, 2011. February 4, 2011. January 24, 2011. University Hospitals. Federal Deficit Reduction Health Reform State Update 2012 Elections.

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October 7, 2011

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  1. State & Federal Deficits, Health Reform: Cuts & Change…The Only Two Certainties Heidi L. Gartland, VP Government Relations November 17, 2011 October 7, 2011 February 4, 2011 January 24, 2011 University Hospitals University Hospitals

  2. Federal Deficit Reduction • Health Reform • State Update • 2012 Elections October 7, 2011 February 4, 2011 University Hospitals University Hospitals

  3. Federal: Deficit Reduction Nov. 16 2011 University Hospitals Rainbow Babies and Children’s Hospital 4

  4. Federal Deficit: Budget Control Act- Stage I Immediate budget reduction of $917 billion No cuts in Medicare, Medicaid, Social Security No new revenues University Hospitals University Hospitals

  5. Federal Deficit: Budget Control Act- Stage II • Creation of special bipartisan congressional committee • $1.5 trillion in deficit reductions by 11.23.11 • Guaranteed up or down vote by 12.23.11 • Enforcement process…debt limit extended another $1.5 trillion thru 2012 if: • Resolution of committee adopted, or • Balance budget amendment adopted, or • Automatic across the board cuts/sequester of $1.2 trillion University Hospitals University Hospitals

  6. Federal Deficit: The Super Committee House Senate Dave Camp (R-MI) Jeb Hensarling (R-TX) Fred Upton (R-MI Xavier Becerra (D-CA) James Clyburn (D-SC) Chris Van Hollen (D-MD) University Hospitals Max Bacus (D-MT) Patti Murray (D-WA) John Kerry (D-MA) Jon Kyl (R-AZ) Rob Portman (R-OH) Pat Toomey (R-PA) University Hospitals 9

  7. Federal Deficit: Super Committee--Observations All appointees loyal to their leadership No members in Gang of Six No senators up for re-election Every House member has safe seat Focus on entitlements vs. appropriations Every GOP member took the “pledge” University Hospitals University Hospitals 10

  8. Federal Deficit: Super Committee—Success or Failure • Impact on the markets of the Super Committee making a deal? • Is failure (sequestration) preferable? • AARP • Anti-tax lobby • Health sectors-hospitals, physicians, Pharma • Social service advocates • Defense University Hospitals University Hospitals 11

  9. Federal Deficit: Super Committee Options Medicaid Medicare Blending FMAP rates ($14.9 billion) Provider tax reduction ($26.3 billion) University Hospitals Graduate medical education cuts ($15 billion) Bad debt cuts ($15-30 billion) Coding offset ($5 billion) Rural cuts ($14 billion) Post acute ($15 billion) Expand Independent advisory board University Hospitals 12

  10. Federal Deficit: Super Committee Medicare options: • Increase retirement age ($125 billion) • Means testing ($38 billion) • Reform and increase co-payments part A & B ($110 billion) • Medigap restrictions ($53 billion) • Home health co-payments ($40 billion) • SNF co-payments ($50 billion) University Hospitals University Hospitals 13

  11. Federal Deficit: Budget Control Act- Sequester Impact of $1.2 trillion Sources of Cuts Impact of Cuts • New revenues • Defense • Total non defense • Medicare* • Medicaid exempt • Net interest savings *Medicare 2% across the board, no cuts to benefits $0 $492 billion $492 billion $123 billion ($43B hosp.) $0 $216 billion University Hospitalsl 14

  12. Opening Bids: Last Week University Hospitals 15

  13. New GOP Offer Total package $1.2 trillion “Revenues: ($300)-$600 billion Spending cuts: $700 billion Medicaid $50 billion vs $185 billion (previously) University Hospitals 16

  14. Current Status: ??? Medicaid: $50 billion cut Provider tax 6% to 4.5% beginning 2015-3 year phase in Medicare: Rep. vs Dem. $75 B vs $225 B provider cut $200B vs $100 B beneficiary cut University Hospitals 17

  15. Federal Deficit Reduction • Health Reform • State Update • 2012 Elections October 7, 2011 February 4, 2011 University Hospitals University Hospitals

  16. Health Reform: Affordable Care Act U.S. Supreme Court accepts to hear the case US Supreme Court decision by June 2012 Challenged in several federal courts and courts of appeal Court’s ruling one of the most important issues 2012 campaign? University Hospitals

  17. Health Reform: Implementation vs. Dismantling 20 University Hospitals University Hospitals

  18. Health Reform: Regs • Movement away from fee- for-service…toward ‘integration” • Emphasis on value vs. volume • Emphasis on quality vs. quantity • Accountable care organizations • Bundling • Medical homes • Health benefits exchange • Value-based purchasing • Comparative effectiveness • Medical loss ratio • CMS Center for Innovation University Hospitals University Hospitals

  19. Health Reform: Ohio Impact University Hospitals University Hospitals

  20. Positioning for reform • Achieve solid hospital-physician (clinical) alignment • Measure, report and deliversuperior outcomes • Attain a favorable cost position • Strategic alliances University Hospitals University Hospitals

  21. Federal Deficit Reduction • Health Reform • State Update • 2012 Elections October 7, 2011 February 4, 2011 University Hospitals University Hospitals

  22. State Update: Legislation/Regulations General Assembly & Governor • Various health related bills • Medicaid policy changes • JobsOhio • Workers Comp reform • Tax reform • Capital Bill University Hospitals

  23. Ohio Medicaid: High Cost Cases University Hospitals University Hospitals

  24. University Hospitals University Hospitals

  25. Hospital Franchise Fee University Hospitals University Hospitals

  26. Federal Deficit Reduction • Health Reform • State Update • 2012 Elections October 7, 2011 February 4, 2011 University Hospitals University Hospitals

  27. Congressional Redistricting Federal law requires each census Ohio will lose 2 seats in the U.S. House of Representatives. Ohio’s congressional delegation from 18 to 16 seats. University Hospitals

  28. Current Congressional Map University Hospitals

  29. University Hospitals

  30. Congressional Redistricting Overview: NE Ohio Impact • Cleveland-Akron substantially altered. • 11th District (Fudge) will now include Akron • New 3rd District in Columbus. • New district will likely elect a Democrat • Reps. Stivers’ & Tiberi’s districts strengthened • Loss of one district in Central – SE • Reps. Austria & Turner will likely compete for new 10th District • Republican districts strengthened University Hospitals

  31. Congressional Redistricting: NE Ohio Impact Democratic #’s likely decrease from 5 seats to 3 seats. Republican # likely increase from 1 seat to 4 or 5 seats. Rep. Sutton’s & Renacci’s district. Rep. Kucinich & Rep. Kaptur for the new 9th District. University Hospitals

  32. Federal Update: 2012 Calendar • Electoral and presidential politics • Mar. 6, 2012 – Ohio Primary • Nov. 6, 2012 – Election Day • Presidential Politics: • Tough economyand high unemployment • Pres. Obama is upside down on his approval -disapproval numbers • Republican primaries University Hospitals

  33. Federal Update: Elections 2012 • U.S. Senate: • Nationally, 33 seats in play in 2012 • 23 D / 8 R • Only 8 of the 33 seats are open races • U.S. House of Representatives: • 242 R / 192 D (1 Vacant) • All 435 seats up for reelection • 218 Seats needed to gain majority in House • Growing anti-incumbent sentiment • Very unpredictable election season University Hospitals

  34. View from Washington Contact: Heidi L. Gartland Vice President, Government Relations University Hospitals (216)844-3985 (work) (216)403-4050 (cell) heidi.gartland@uhhospitals.org University Hospitals University Hospitals

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