MHA Update Newsletter
January 30, 2015
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 June 1 and 2, 2015

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February 3

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In December, a few weeks after his election upset, then Gov.-elect Larry Hogan informed Marylanders that they would need a dose of "strong medicine" to cure the state's structural budget problems created by what he called years of spending beyond our means.


"The tough decisions have not been made, and the wrong decisions have been made for far too long," Hogan said at the time.


Fast forward six weeks, and Gov. Hogan's proposed fiscal year 2016 budget, released last week, carries through on his promise by holding statewide spending growth to just 2.4 percent, despite a 3.5 percent increase in revenues.


The bottom line: all of Maryland will be tightening its collective belt.


While we're still digesting the proposal and modeling its implications for Maryland's hospitals, our initial analysis reveals the most disappointing impact on our field to be $14.5 million in waiver-related savings that the legislature last year agreed would be used to reduce the Medicaid hospital tax. Under the new administration's budget, that money will instead be diverted back to the state's general fund.


This is among the many reasons that reducing and eliminating the tax remains hospitals' top priority. As long as it exists - and remember, it began in 2009 as a temporary fix to Medicaid's then-hemorrhaging budget - it will be a target for budget balancers looking to siphon money to other parts of the state's coffers. While we understand and appreciate the new administration's effort to be equitable in balancing the budget, our commitment to obtaining a concrete schedule for the Medicaid tax's phase-out is as strong as ever. We've made the case, and the administration has heard us, that the Medicaid hospital tax can go a long way toward their goal of cutting taxes. But for now, fiscal reality dictates otherwise.


The new budget also looks to hospitals for more than $24 million in Medicaid savings (resulting from what the administration believes is the continued reduction in uncompensated care due to Medicaid expansion) for fiscal years 2015 and 2016. We're working closely with the Health Services Cost Review Commission and MHA's Executive Committee to determine the best way to achieve those reductions while causing the least harm to hospitals.


Perhaps the most telling thing about Gov. Hogan's budget is not how individual interests are affected, but rather that it recognizes - and media pundits and reasonable people on both sides of the aisle seem to agree - the need for an honest reckoning of Maryland's finances.


As we work through the details of Gov. Hogan's proposal, we will continue to reinforce the idea that Maryland's hospitals are part of the state's budget solution. As the state reins in spending, so too are hospitals - the state's largest private employers. As the state seeks efficiencies in its operations, so too are Maryland's hospitals, which employ more than 100,000 people. As the state innovates to provide better, less costly services, hospitals, guided by global budgets and population health principles, are doing so as well.


In many ways, the governor's fiscal vision mirrors that of the modernized waiver's - better quality, delivered more efficiently and at a lower cost. That's something we can all get behind.

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In This Issue
Executive Committee Hears from DHMH Secretary, Discusses Legislative Agenda

This week's MHA Executive Committee meeting began with a visit from Department of Health and Mental Hygiene Secretary Van Mitchell, who shared his thoughts about the direction of the department and heard from committee members about hospitals' health care priorities. After the secretary's departure, the committee moved on to discuss the field's legislative priorities: reduce and eliminate Maryland's tax on hospital care; restrain out-of-control liability costs; and improve care for people suffering from mental health and substance abuse problems. Members were updated on MHA's activities in Annapolis and discussed strategies around the three priority areas.


The committee approved a recommendation from the MHA Council on Clinical and Quality Issues addressing data collection guidelines and the framework that will be used to evaluate the continuation of data collection from statewide quality and patient safety activities. The committee then approved the Executive Committee Composition and Leadership Plan for 2015-2018, which will guide the work of MHA's Nominating Committee this year; and revised investment policy statements for MHA's cash reserves and MHA's frozen defined benefit trust.


Meeting minutes will be available on the MHA website next week.
MHEI's Emergency Medicine Summit Agenda Finalized
MHEI new logoThe agenda for the Maryland Healthcare Education Institute's first Value Based Emergency Medicine Summit is now available on the MHEI website. This summit brings together hospital administrators and emergency medicine physicians to discuss best practices and innovative strategies for optimizing emergency departments. As health care moves into the era of population health, all organizations will rely on coordinated efforts to deliver better, faster and less-expensive services, and the emergency department is a key component. The summit is being held at the Baltimore Marriott Waterfront on
March 13.

Contact: Kelly Heacock
Prime Offers Lighting Retrofit Solutions
PRIME New logoLighting accounts for 30 to 60 percent of annual electric costs for many facilities and there are many new advances in lighting technology to help your facility conserve energy and save money. Prime, a subsidiary of the Maryland Hospital Association, would like to suggest Shepherd Electric Supply as a resource to help reduce maintenance and operating costs. A lighting retrofit can cut lighting energy costs up to 50 percent. Energy-efficient lamps, ballasts and lighting controls produce immediate and long-term savings over their 10- to 20-year life cycles. Recognizing the value of reducing energy demand, many electric utilities, as well as state and municipal governments, offer rebates and tax incentives for energy-efficient lighting. Hospitals can retrofit with little or no up-front capital through financing that pays for the project over time through a portion of the savings achieved.

Contact: Jim Johnston
The Week Ahead

Friday, February 6

MHA Council on Legislative & Regulatory Policy meeting

Top News from This Week


Modern Healthcare, By Melanie Evans and Bob Herman, January 28, 2015


The Baltimore Sun, By Andrea K. McDaniels, January 28, 2015


Baltimore Business Journal, By Rick Seltzer, January 28, 2015  


Drugs Expensive Under Plans Sold on Health Exchange, Survey Finds
The Baltimore Sun
, By Andrea K. McDaniels, January 27, 2015


The Baltimore Sun, By Erin Cox, January 26, 2015


The Baltimore Sun, By Andrea K. McDaniels, January 26, 2015


The Baltimore Sun, By Scott Dance, January 25, 2015