Statement of The Hospital & Healthsystem Association of Pennsylvania

Before the

House Democratic Policy Committee

Presented by

Paula A. Bussard

Senior Vice President, Policy and Regulatory Services

The Hospital & Healthsystem Association of Pennsylvania (HAP)

Pittsburgh, Pennsylvania

February 16, 2007

Chair Eachus and members of the House Democratic Policy Committee, I am Paula A. Bussard, Senior Vice President, Policy and Regulatory Services, for The Hospital & Healthsystem Association of Pennsylvania (HAP). HAP represents and advocates for the nearly 250 acute and specialty care hospitals and health systems across the state and the patients they serve. I appreciate the opportunity to present the views of hospitals and health systems from across the commonwealth on health care reform.

Pennsylvanians count on health care being there when they or their family members need help. Hospitals and health systems play an important role in providing coordinated, high quality, compassionate health care to patients in communities across the commonwealth. Pennsylvania hospitals and health systems provide care to patients 24 hours a day, seven days a week and make every effort to treat all patients with dignity, respect and compassion.

Pennsylvania is the only large state in this nation to have no public hospitals, and therefore, day in and day out, our hospitals and health systems are on the front lines of caring for the poor and uninsured. Pennsylvania hospitals and health systems know first-hand what it means for individuals to be uninsured—the problems these individuals have in getting preventive care, the difficulties they may have in managing complex medical conditions, and the delays they may endure before seeking medical treatment.

Therefore, Pennsylvania hospitals and health systems support health care reform that assures that all citizens in the commonwealth have access to high-quality health care—now and into the future.

Assuring such access requires both the public and private sectors to be vested in finding solutions. Pennsylvania’s hospitals welcome a serious, thoughtful discussion with you, as lawmakers, Governor Rendell, and others about health care reform proposals that incorporate the following four tenets:

The success of any health care reform plan will require a partnership of all involved, united by a common commitment to serving patients. To support a commitment to health care in Pennsylvania communities, a fair and appropriate competitive system of delivery and financing of health care must exist. Achieving an appropriate balance between competitive market forces and regulatory requirements is important to enable innovation and progress both in the delivery and financing of health care.

In addition to the overarching tenets outlined above, Pennsylvania’s hospitals are committed to lasting solutions that incorporate the following principles. Health care reform must:

These principles serve as the foundation for Pennsylvania’s hospitals seeking change to make sure that patients get the right care at the right time in the right setting.

Pennsylvania hospitals and health systems have long responded to their communities’ health care needs and are committed to providing quality and safe care. I would like to speak to several examples that demonstrate that hospitals and health systems do respond to patient and community needs.

Access: A number of years ago, hospitals began experiencing increased use of emergency departments, which coupled with staff shortages created situations where patients needing care were being diverted to other facilities and non-emergent care was being provided in a costly setting. As a result, many hospitals developed primary care services, or a fast-track system, in conjunction with their emergency department. This enables patients needing critical care to have timely access, as well as affording non-emergency patients with timely, cost-effective, and appropriate care.

Attached to my testimony is a PowerPoint highlighting survey findings that show that 55 percent of Pennsylvania’s general acute care hospitals have already implemented such a system and that another 10 percent are implementing a fast track system this year. However, this approach does not work in every community, as the findings also clearly show that hospitals not implementing fast-track systems either have insufficient patient volume to make such an approach cost effective, or lack the physical plant to do so. Also, the mix of practitioners used in these models varies as well and is reflective of health professional supply and competencies, as well as patient needs.

These findings show the responsiveness of hospitals to patient needs and also reflect that one approach—one model—will not meet patient or community needs, nor be cost effective for all care settings.

Quality: In 2004, hospitals and health systems from across the commonwealth joined with the Institute for Healthcare Improvement (IHI) and other organizations in the 100,000 Lives Campaign, a national effort to reduce preventable deaths in U.S. hospitals. Last year, IHI stated that the 3,100 hospitals that participated in the initiative saved an estimated 122,000 in 18 months. In Pennsylvania, HAP worked with public and private sector organizations to support hospitals as they implemented new standards of care to prevent infections, reduce medication errors, and improve care. We worked with the Pennsylvania Patient Safety Authority, Quality Insights of Pennsylvania (the federal quality improvement organization), VHA East, VHA Pennsylvania, the Hospital Council of Western Pennsylvania, and the Healthcare Improvement Foundation of the Delaware Valley Healthcare Council (the southeastern Pennsylvania office of HAP).

More recently, IHI announced a new campaign, the 5 Million Lives Campaign, designed to accelerate efforts to reduce non-fatal harm, while continuing to fight needless deaths. HAP and the other Pennsylvania partners are working with member hospitals and health systems on this next phase. This is just one of the many collaborative initiatives underway in the commonwealth, which bring together innovative clinical leaders and knowledge to advance health care quality and safety.

The success of the IHI campaigns, or the efforts of the Pittsburgh Regional Healthcare Initiative, or the work of the Partnership for Patient Safety in southeastern Pennsylvania are because they both initiate and support innovative efforts. As IHI states these efforts are, "to discover, cultivate, and demonstrate the feasibility of new, more capable, designs." Regulatory structures need to foster, not limit this ability, and legislation that solely codifies current clinical science will limit innovation and improvement, not advance it.

Information Technology: Greater use of information technology in health care offers much potential. I would encourage you to hold a hearing to learn more about what hospitals and health systems, insurers, and other providers are doing, as well as what government (both state and federal) needs to do to support the opportunity to advance quality, safety, and cost effectiveness of care.

Hospitals and health systems across the state have expanded their use of health information technology based on their patients’ needs and the availability of funding. These include implementation of computer physician order entry; incorporating electronic surveillance in infection prevention and control; use of electronic medical records; and other technology that improves care delivery and continuity of care.

Attached to my testimony is a PowerPoint depicting survey results on the use by Pennsylvania hospitals and health systems of electronic surveillance in identifying and preventing infections. Electronic surveillance is a developing area where technology is being used to support internal efforts to identify and control health care-acquired infections. As can be seen from the findings, greater than one-third of hospitals are using electronic surveillance, because it enables integration of infection surveillance with other hospital information systems, as well as enabling the hospital to improve the identification of potential infections for purposes of more timely treatment and to enhance prevention efforts. Of those hospitals using such systems, one third developed an electronic surveillance system in-house, while others use a variety of vendors to meet their patient and facility needs. Mandating a single system, solely for reporting purposes, will not enable the innovation and improvement in care that is already occurring.

In addition, while the Governor’s plan calls for hospitals developing plans by 2008, to implement electronic medical records and e-prescribing, it does little to address the financial investment needed for hospitals or other providers to accomplish such plans. Nationally, a health information technology research firm estimated that annual spending for health information technology for hospitals and doctors would reach $34.7 billion per year by 2011. For hospitals struggling financially any mandate would be a daunting challenge, forcing such hospitals to make difficult choices around continuing needed patient care services.

Finally, it is also important to note that nationally there are no standards as of yet regarding interoperability. Therefore, hospitals investing in information technology systems are going at risk as they invest in improving patient care. The lack of uniform standards across information technology systems makes it far more difficult for smaller, or financially strapped facilities to make investments in these technologies at this time.

Improving Value: Pennsylvania hospitals and health systems are participating in pay-for-performance initiatives through contracts with Blue Cross and other commercial health plans, a pilot project through the Department of Public Welfare’s Medical Assistance program, the Centers for Medicare & Medicaid Services (CMS) Premier demonstration project, and the CMS Hospital Quality data reporting.

All of these efforts developed collaboratively to structure incentives that put patient care and outcome improvement at the center of the initiative. None are punitive in nature and all recognize that defining and measuring value are still evolving. These initiatives have focused on improvement and the results of many of these efforts are encouraging. Again, I would encourage this committee to sit with insurers and providers who have participated in these programs to learn more about how they work, the successes, data that these initiatives use, and other lessons learned.

Pennsylvania hospitals have consistently supported expanded health care coverage for our most vulnerable citizens, and a more efficient health care delivery system. But, we have to be careful that promises to these citizens do not put the health care system in greater peril.

The Administration's Prescription for Pennsylvania and the proposed fiscal year 2008 budget include a significant number of new government mandates for hospitals and increased government bureaucracy in health care, while at the same time reducing payments to hospitals that serve the state’s most vulnerable citizens.

The proposed Medical Assistance payment cuts, coupled with the President’s proposed Medicare and Medicaid cuts in the federal budget, and the increased costs associated with new hospital mandates, will jeopardize access to health care in Pennsylvania. The result would be that hospitals would be required to make more investments in technology, workforce, and physical plant, but to do so with fewer dollars.

Hospitals and health systems support:

We also believe that there needs to be additional medical liability reform, particularly for joint and several liability, and greater government support for information technology investment in health care.

Fixing only pieces of the system will not solve overall health care coverage and cost problems but will rather simply shift the strain from one part of the system to another. It is important to keep in mind that the hospital portion of the health care dollar has been declining, and now stands at 36 percent of the health care dollar. Attached to my testimony are several charts that show the changes in health care spending between 1994 and the present, and how hospital spending in Pennsylvania as a percentage of health care spending has declined over the past 10 years.

Emphasizing prevention, wellness, and clinical integration are important, but they cannot be effectively accomplished solely through mandates on one sector of the health care delivery system. We need to advance integration of care and enhance the opportunities for continued innovation. Focusing primarily on only one component of the system, or attempting to force solutions through just the hospital sector will only exacerbate the fragmentation of the system and will do little to reduce costs, either of health care or of health care insurance.

Pennsylvania’s hospitals appreciate the opportunity to engage in a crucial health care conversation with policymakers, patients, business, insurers, labor, and health care providers.

We will support elements that further the hospitals' health care mission to their communities, that improve care integration, and that foster innovation that leads to better

outcomes, and we will guard against proposed changes that will harm the very system that must meet the growing health care needs of our citizens.

Again, I thank you for the opportunity today to present the hospital community’s views on Pennsylvania’s health care system, our commitment to improve care, and the need for public and private sectors involvement in efforts to improve access, quality and affordability. I would be more than happy to answer any questions you might have.

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