Healthcare was among the four targeted areas of President-elect Barack Obamas economic stimulus package announced last week, but interest groups were left wondering how muchand wherefederal funding will be allocated to help the nations health system.
Industry leaders said health information technology and an increase in the Federal Medical Assistance Percentages, or FMAP, match would likely be the two major healthcare components in Obamas plan that Congress is now considering and could approve by mid-February. An original deadline of Jan. 20the same day Obama will be sworn in as the nations 44th presidentnow seems unrealistic.
But whether healthcare reform is a part of this recovery package or another legislative vehicle, it is definitely a priority for this administration, according to Richard Pollack, executive vice president of advocacy and public policy for the American Hospital Association .
In a speech at George Mason University on Jan. 8, Obama said that his proposal, the American Recovery and Reinvestment Plan, will certainly add to the budget deficit in the short term, but is also expected to create 3 million jobs in the next few years as it invests in alternative energy, education, infrastructure and healthcare. Obama was sparing on details, but promised to make the immediate investment necessary to ensure that all of Americas medical records are computerized within five years.
That was welcome news to Sharon Canner, senior director of advocacy programs, at the College of Healthcare Information Management Executives, who said that she was encouraged by what she has heard so far about the inclusion of health information technology. The real positive is the understanding by President-elect Obama on the use of IT, Canner said. Hes looking at it as a part of health reform for the delivery of care. Hes also looking at this as a stimulusas a job creator, she added. But obviously purchases will have to be made by hospitals and health systems.
In a letter last week, the Premier health alliance asked top congressional leaders to include health IT provisions in any stimulus package they approve. Among other things, Premier called for the mandatory adoption of interoperability standards to store and transmit data within an electronic health record. Whether its in the stimulus package or not is still an open question, said Blair Childs, spokesman for Premier. Childs added that an investment in health IT was one of Obamas primary campaign promises.
A report issued late last week from the National Research Council underscored the need for a greater commitment to health IT. Based partially on site visits to eight U.S. medical centers that are considered leaders in this field, the report said current approaches are insufficient and not meeting the goals that the Institute of Medicine outlined in 2001. Efforts should be made, the report said, to provide healthcare workers and patients with cognitive support, such as help in decisionmaking and problem-solving.
Meanwhile, states hope to see a significant increase in the FMAP match. Edwin Park, senior fellow at the Center on Budget and Policy Priorities in El Cerrito, Calif., said this is similar to when Congress increased the federal match by $10 billion during a 15-month period in April 2003, as the nation emerged from a recession. Only this time, Park said, the nation is in a deeper recession, which requires more funding for a longer period.
Any fiscal relief needs to be longer than the last time around, Park said, suggesting a timeframe of between two and 2½ years. As for the increase in funding, Park suggested $100 billion or more to help the states, whose collective budget deficits for 2009 and 2010 could total as much as $350 billion.
Alan Levine, secretary of Louisianas Health and Hospitals Department, said hed also like to see a longer period for the federal matching funds, especially for coastal states such as Florida and Louisiana. Louisiana and Florida are in a unique situation because weve been hit with hurricanes, so you see some temporary growth, Levine said. So your economy does better, your per capita income goes up and that decreases your federal match. Theres got to be some dialogue about coastal states.
In Louisianas case, the states current federal match of 72% will drop to 68% in October 2009, which will end up costing the state $200 million, Levine said.
At the National Conference of State Legislatures, health policy director Joy Wilson said she expects the FMAP boost to be bigger and perhaps for a longer period, and added that congressional leaders should also account for unemployment in whatever package they pass. Anytime there is an economic downturn, the Medicaid rolls go up, Wilson said. There should be something in the statute that has some relationship to unemployment because its predictable that when unemployment spikes more people go on Medicaid, she said.
Medicaid affects not just the beneficiaries, but the system as well: hospitals, nursing homes, doctors, the whole infrastructure, Wilson said. You cant not support Medicaid and expect that everything else is going to work.