The Politics of Health Care:

1. The Politics of Health Care: State and Federal Policy Priorities for Advocate Health Care Meghan Clune Woltman, Vice President, Government and Community Relations

2. Discussion Topics • State Initiatives • Federal Outlook • Supreme Court • Global Health Care Issues • Q & A 2

3. State Initiatives 2012 Spring Session – what happened? • Budget Challenges • Nonprofit Hospital Property Tax Exemption • Medicaid Changes • SMART Act Implementation • Rate adjustments • Utilization controls • Eligibility, coverage and care coordination • HACs, therapy, readmissions

4. Medicaid 2012: Overview

5. Hospital Payment System Reform • HFS may implement new inpatient and outpatient payment system by rule as set forth in statute • Inpatient payment system • 10/1/12 – test & shadow • 7/1/13 – Implement new system • Base payment only • Supplemental payments and assessments separate • 7/1/14 – Begin 2-4 year transition of static payments

6. Looking Forward • Continued SMART Act implementation • CMS approval of Enhanced Assessment • Medicaid Payment System Reform • Care Coordination Expansion

7. Federal Outlook What can we expect from the Congress? • November Elections • Bush Tax Cuts Expire • 10 month Physician Fix expires • 27% cut, costs $376B to fix • Debt Ceiling Debate…again • Sequestration Starts • 2% across the board reductions

8. Supreme Court • Upheld Individual Mandate through Taxing Power of the Congress • Found Medicaid Coercion Unlawful • States can opt out of Medicaid Expansion • Congressional Budget Office Assumes $84B savings through SCOTUS decision • No change for Advocate – already the largest Accountable Care Organization in the nation.

9. 2014 Coverage Continuum

10. It’s a New Day • Most Insurers Acknowledge Inability to Manage Rising Costs • Medicare Finances are Not Sustainable • Payers Can No Longer Sustain Double-Digit Increases • Population is Aging - 10,000 New Medicare Beneficiaries Per Day • Uninsured Will Enter Care Delivery System 10

11. Global Issues • Health Care’s Impact on Economy • Providers Need to Reduce Costs • Alignment of Incentives • Patients/Providers/Health Plans • Medicare/Medicaid • Medicaid is largest expense in state budgets • Alignment of the patient • End of Life Cost of Care 11

12. Questions?