General Assembly 2014

Do we have a responsibility to help Virginia’s hospitals as engines of economic opportunity and providers of critical services?

Last week, we heard several floor speeches exploring whether, how, when, and under what conditions we can expand health care coverage to up to 400,000 uninsured Virginians. I am optimistic that we can find a way — a Virginia way — to enact the reforms and provide the assistance that so many of our citizens need, and am heartened by the deliberate and thoughtful approach we are taking in this complex debate as it unfolds.

The gentleman from Augusta said last week that we should be mindful of the future. I agree. But I hope that our concern for the future will not prevent us from confronting what is before us and developing the best possible solution.

Today, I would like to focus on one piece of our challenge — our hospitals.

Last Thursday, the gentleman from Suffolk discussed the impact of federal cuts on our hospitals. He was right when he said that the federal Medicaid cuts do not hit until 2015. But there is much, much more to this story. And this chart shows it. I have copies for anyone who wants it.

This chart shows — loudly and clearly — that the biggest challenge to our hospitals is not being created by Medicaid cuts – the green lines you can hardly see on this chart. The problem is the Medicare cuts from the ACA, in blue, and the sequester, in red — a total of $207M in Medicare cuts in 2014, rising to $393 M by 2016 and $540 M by 2018. This is what is affecting our hospitals. It is happening now and will continue to happen in the years ahead.

These cuts are placing our hospitals — and the communities they serve — at considerable financial risk. Accessing additional federal Medicaid dollars is, pure and simple, an economic imperative for the hospitals and the communities they serve. Just ask your hospitals.

We can see the future — and unless we act, it isn’t very pretty.

A couple of examples:

• According to the Virginia Hospital Association, the Augusta health system located in the Shenandoah Valley has already seen its federal monies decline by $4.5M and 2015 will bring another $3.2M in losses. There is a story in the News Virginian this morning.
• Riverside Health System, with 9,000 employees serving the Peninsula, will lose another $9M in 2015 on top of $11.2M already lost.
• Valley Health, a system with facilities in Page, Warren, and Winchester, recently laid off 33 persons, and is projected to lose another $6M in 2015.
• The Fredericksburg Free Lance Star reported Saturday that Mary Washington and Stafford Hospitals project a loss of $12M in 2015.
• And we have heard about the recent closure of the Lee Medical Center in Pennington Gap in Southwest Virginia, and the loss of 140 jobs.

These are costs not just because of ACA, but also because of the sequester. There are many more stories like this from all over the Commonwealth, especially in rural communities where the economic impact of a hospital is often most dramatic.

If we do not find a way to bring our tax dollars back to Virginia, hospitals will be forced into making ‘very tough business decisions’ that will hurt employees and the economy of local communities. Bringing our tax dollars back to Virginia is a business and economic imperative. Just ask your own hospitals.

There is little doubt that the loss of federal dollars will cause an impact. The question for us, then, is: do we have a responsibility to do something about it? I submit that we do. When faced with crisis affecting the economic life of our communities, we step up. We certainly step up when there are natural disasters over which we have no control.

And we step up when our communities are affected by economic challenge caused by decisions in Washington. Remember BRAC and its initial recommendation to close down the Naval Station at Oceania. The closure would have decimated this community and rippled throughout the commonwealth.

We could have decided we had no responsibility to act because the decision was not ours. But we didn’t. We could have decided not to act because the future of the base was uncertain. But we didn’t.

Why? Because the closure of Oceania would have meant the loss of thousands of jobs and millions of dollars in economic activity.

We stepped up and invested Virginia tax dollars to make sure the federal dollars would continue to flow. Our investment is over $70 million to date – $7.5m per year. There is another $7.5 M in the general fund this year. We are doing it to keep dollars flowing through the economy, to keep our communities economically strong.

I submit that the situation today with our hospitals is not much different. We do not know the future but we know what is happening now. Right now, when our hospitals are facing huge cuts in federal support and are paying increasing costs of indigent and charity care, we are refusing $5m every single day – our money — that could be brought back to Virginia to help our citizens, our hospitals and our economy.

If we want to keep our hospitals as strong economic engines and the backbone of many of our communities, we need to find a way — a Virginia Way — to bring these Medicaid dollars back to the Commonwealth.

Mr. Speaker, ladies and gentlemen of the House, I rise today in support of the new Governor’s efforts to assist some 400,000 Virginians who do not presently have health insurance.

In the Governor’s recent address to this joint assembly, he made a strong business case for why it is in our economic interest to find a way to insure more Virginians. He also stressed the importance of reform while complimenting the efforts of the MIRC, Governor McDonnell, and Secretary Hazel for all of their efforts to bend the cost curve on Medicaid and to provide services that work better and cost less.

Sometimes in this Chamber, we can be so focused on political differences that we lose track of some the things we can do together. We know that many of our citizens have great need. Over one million Virginians remain uninsured. Of those who receive some kind of Medicaid benefit… half are children, and another 260,000 are blind, elderly, or disabled.

Medicaid is hardly a treasure trove of riches for those who receive its benefits. We rank 48th among the states in spending per capita and our reimbursement rates for medical providers and hospitals are low. Nonetheless, it provides some level of assistance for those most in need. As you know, the state presently pays one-half the cost and the federal government pays the other half.

Most of us agree that reforms in Medicaid are necessary, and if you go to the MIRC website, you will be impressed with what has already occurred in Virginia. And we will need to do more because true reform is a continuous process; if we want an efficient government that works better and costs less, we need to continually push for reform. We will talk on future days about these reforms. But for today let us focus on what is before us.

As we discuss our options for this session, perhaps we can ask ourselves some critical questions.

• Why wouldn’t we, for example, want to cover another 400,000 Virginians, many of whom work and all of whom are our friends and neighbors, who do not have insurance at present?
• Why wouldn’t we want to lessen financial impacts on our hospitals and their ERs so that they may retain their viability, both as economic engines in their communities, and as job providers and creators for our citizens? These hospitals already provide substantial assistance in the form of indigent care – and they need our help.
• Why wouldn’t we want to create as many new jobs as possible by investments in health care that can help our citizens? It is estimated that we can create 30,000 new jobs if we find a way.
• And why wouldn’t we want to keep Virginia taxpayer dollars working for us in our state rather than having them sending them to other parts of the country?

Many of us would like to find a way – A Virginia Way – to make these things happen. And I would submit that this Virginia Way will involve building on the reforms of the MIRC in order that we can bend the cost curve and not subject Medicaid to an unsustainable future.

I wish to use several illustrations to point out some of the key issues that we face in this session.

First, few will dispute that Virginia taxpayer dollars are being sent to Washington and reprogramed into some 25 states who have decided to expand insurance coverage to their citizens in need. This map shows where these monies are going –to New York, California, Arizona, Iowa, & Connecticut. These are our taxpayers’ dollars — our money; why wouldn’t we want to bring it back so that they can work for our citizens?

This graphic shows what we are losing each day by choosing not to extend these insurance benefits to our friends and neighbors. It is commonly understood that five million dollars per day is being lost. Already in 2014, we have rejected some $75 million dollars and it will increase every day. We are essentially creating a sea of red ink of our own device.

There is much more to be said about this issue – and it will be said in the days and weeks ahead. There are reforms to discuss, implications to be considered, and common ground to be plowed. If we remain open to all options, we will find that way – that Virginia Way – to help our citizens and our communities address these needs, to stimulate our economies, and protect our citizens.

Thank you.