Healthcare Financial Management Association

1. Healthcare Financial Management Association New York Hospitals and the 2010 State and Federal Landscape March 18, 2010 LaGuardia Marriott

2. Agenda

3. New York Hospitals

4. New York Hospital and Insurer Margins *Does not reflect $500 million in 2009 Medicaid cuts or proposed 2010 cuts Over the last 8 years, NY hospitals have incurred losses of $466 million while NY insurer profits exceeded $10.3 Billion

5. New York Hospitals Disproportionately Reliant on Medicaid and Medicare New York State New York City 64% Medicaid/Medicare 69% Medicaid/Medicare (National number is 56%) Greater New York Hospital Association

6. Medicaid cuts are huge but pressure is coming from all over Relatively flat Medicare payments Increasing bad debt due to recession, increased patient cost sharing Increased audit recoveries Payment reductions for Never events Readmissions Observation level

7. Hospitals turn to private payers to subsidize government program losses

8. Ability to cost shift is not unlimited

9. Tight Medicare and Medicaid Budgets Will Continue

10. New York State

11. Proposed 2010 Medicaid Cuts($ in Millions) Almost $1 Billion Note: Providers losses account for the typical cash-flow lag in State savings, the loss of Medicaid Federal matching funds, and, for hospitals, the impact on Medicaid managed care, Workers’ Compensation, and No Fault rates.

12. Enrollment Growth Accounts for Almost All of New York’s Medicaid Spending Growth Greater New York Hospital Association

13. New York Medicaid Enrollment Has Grown Sharply Medicaid enrollment has grown 60% And Government Has Paid for Part of this Growth Through Provider cuts! Greater New York Hospital Association

14. GNYHA Budget Advocacy

15. NY Managed Care Advocacy

16. 2010 State Action

17. National Health Reform

18. Road to Reform

19. Senate Bill -Achieving Coverage Expansion

20. Medicaid Expansion

21. Insurance Reforms

22. Insurance Mandates

23. Insurance Subsidies

24. Results of Coverage Expansion Uninsured in Millions Insured % of U.S. Residents (including unauthorized immigrants) Source: Congressional Budget Office.

25. GNYHA Concerns

26. Hospital Cuts 2010-2019, $ in Billions Source: Congressional Budget Office.

27. GNYHA Conclusion: Support Reform