Roadmap for Today’s Discussion

• Setting the Stage • VHHA’s Role in Public Policy • Health Care Reform In • VHHA State Legislative Priorities • Impact of Federal Legislation on Virginia • Changing Political Dynamics • VHHA Advocacy • VHHA Grassroots Engagement

2

Virginia Hospitals at a Glance

• 107 community, psychiatric, rehabilitation and specialty hospitals • 18,881 hospital beds • 17 designated trauma centers • 49 percent are rural hospitals • 51 percent are urban hospitals • 77 percent of Virginia hospitals are not-for-profit

4 Hospitals and Healthcare are Economic Drivers

• 126,000 direct jobs • $8.5 billion in payroll • 262,000 direct and indirect jobs or 6.8% of State’s workforce • $37.9 billion in economic activity for the Commonwealth • $18.7 billion spent on goods and services • $2.92 billion in total community support • In 44% of Virginia cities and counties, hospitals and health systems are one of the top five employers • 1 out of every 9 jobs in Virginia is tied to healthcare

5 What it means for you:

• Hospitals and health systems are a large part of Virginia’s economy

• Hospitals and health systems provide significant community benefits to fill gaps in access to care

• Government, employers, and patients all depend upon you to meet their health care needs

• But they also all have a say in the public policy decisions affecting health care today

6

Remember Schoolhouse Rock? Principled Approach to Policy and Advocacy

• Proactive, principled policy leadership – Pursue the policy outcome that is best for patient health and high-value health care

• Innovative and collaborative approach to policy development – Seek partners and allies wherever possible – Strive for a common, powerful voice for health care

• Pragmatic, rather than partisan, approach to policy – Open to the best ideas from all sources – Rely on evidence and facts to drive positions

9 VHHA’s Role in Public Policy

• Research and analyze health-related public policy issues of importance to hospitals and health systems

• Through member and stakeholder engagement, develop position statements on public policy issues

• Translate public policy position statements into legislation, regulation, guidelines and best practices

• Monitor regulatory and agency activity and submit public comment and testimony to advance the interests of the field

• Engage legislators, regulators and agency representatives on public policy and regulatory issues in an effort to create a favorable operating environment for hospitals and health systems and improve health care in Virginia

10 Engaging Regulators and Agencies Engaging Stakeholders Recent Examples of VHHA’s Role

• Budget proposals to address Medicaid reimbursement, healthcare workforce, and rural health challenges • COPN legislation and process reforms • Development of Medicaid supplemental payment program proposals • Behavioral health legislation proposals • Opioid legislation, regulations, and guidance • Emergency care coordination IT solution • Nursing and physician licensure issues • Workers’ Compensation fee schedule • Nurse practitioner practice authority • All Payer Claims Database

13

Status of Reform in Virginia

• Virginia has declined to pursue opportunities to fully implement the Affordable Care Act

• Virginia has yet to engage in a concerted effort to pursue transformational reform for the Commonwealth

15 High Rate of Uninsured in Virginia

Approximately 12.5% of Virginia’s Population is Uninsured

Equates to over 800,000 individuals

16 Where Are Virginia’s Uninsured?

17 Rising Costs to Care for the Uninsured

• Since 2001, the cost of caring for the uninsured and low-income Virginia’s has increased

• Since 2008 alone, charity care costs have grown by 57 percent

18 Majority Insured by Medicare or Medicaid

19 Growing Bad Debt and Medicare Shortfalls

20 Aging of the Population in Virginia

• As more Virginians become eligible and enroll in Medicare, the portion of hospital costs attributed to treating this population increases • Medicare payments are below the hospital’s cost of providing care and will continue to fall over time

Cumulative Population Change Projected Medicare Payments Relative 2011-2022 to Costs

40% 84% 30% 83% 82% 20% 80% 80% 80% 79% 10% 79% 79%

0%

Medicare Medicaid All Other 2014 2015 2016 2017 2018 2019 2020 2021 2022

Medicare – projected growth in VA population over age 65 Medicare payments include scheduled reductions under the ACA, value based purchasing, Medicaid – based on historical enrollment growth 2010-2013 Hospital Readmission Reduction Program, Hospital Acquired Condition Reduction, All Other – projected population growth for VA population ATRA coding adjustment, bad debt reimbursement reduction, LTCH budget neutrality - Population projections from the Demographics Research Group, Adjustment, IPPS prospective and retrospective coding adjustment, HHA prospective Weldon Cooper Center, UVA. coding adjustment, 2-midnight rule offset, and MACRA

Source: Dobson Davanzo financial forecast model Sept. 2015 Growing Medicaid Shortfall

Medicaid Cost to Payment Ratio

1.1

Cost of Care 1

0.9

0.79 0.8 0.78 0.78 0.76 0.75

Percent of Inpatient Costs Reimbursed Costs Inpatient of Percent 0.72 0.72 0.72 0.72 0.7092 0.7 0.68 0.6842 0.6592 0.64 0.64

0.6

0.5 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 State Fiscal Year

22 Virginia Has a Lean Medicaid Program

• Ranks 47th in the nation on per capita Medicaid spending

• Characterized by strict eligibility requirements and tight utilization controls compared to other states

• One of only 14 states that has a 50% FMAP (lowest possible) rate

• Increasing portion of beneficiaries enrolled in Medicaid managed care plans

• Program has been a focus of reforms in the legislature, but no fundamental changes have been undertaken

23

Significant Public Health Concerns

• Chronic diseases cause over 50% of avoidable deaths in Virginia

• High rates of obesity and tobacco use

• Opioid and heroin overdoses resulted in over 1,000 deaths in 2015 - exceeding the number of deaths by automobile accidents and homicide

• Behavioral health system is fragmented resulting in an inability of individuals to access the right care at the right time

24 What it means for you:

• Current trends for government programs present an unsustainable trajectory for Virginia’s hospitals and health systems

• To bend the cost curve and improve the health of populations, significant transformational reforms are needed

• Federal action on the Affordable Care Act and statewide elections present possible opportunities to revisit meaningful reforms in Virginia

• There is an opportunity for hospitals and health systems to play a leadership role in identifying and prioritizing health reform initiatives in Virginia

25

2018 VHHA Legislative Agenda

• Access to Care/Reducing the Number of Uninsured • Medicaid Reimbursement • Certificate of Public Need • Behavioral Health • Opioids and Substance Abuse • Nurse Practitioner Practice Authority • Price Transparency • Cybersecurity

27 Outlook for 2018

• Outcome of statewide elections could create new political challenges and opportunities

• While budget picture showing some signs of improvement, additional funding to support health care reform and health priorities is not readily available

• Federal issues and impact on state will continue to dominate the discussion

28

2016 Federal Elections

Backlash over the ACA and other Obama Administration policies, combined with a strong anti-establishment sentiment among voters, resulted in a Republican sweep of the 2016 Federal Elections

Republicans retained control of both the U.S. House and Senate

30 Partisan Divide Over Healthcare

Medicaid Expansion by Party -82% -53% -13% +82% +90% 94% 89% 89%

74%

52%

39%

21%

7% 7% 4%

Base GOP Soft/Lean GOP Independent Soft/Lean Democrat Base Democrat (19%) (18%) (20%) (18%) (22%)

Total Support Total Oppose

31 ACA Alters Healthcare Debate

• In 2010, Congress passed the Affordable Care Act (ACA) along party lines

• Prior to ACA, the healthcare debate centered on the extent to which government provided coverage to certain groups, how it was paid for and its fiscal impact on federal and state governments.

• The ACA fundamentally altered the debate with a perceived philosophical change in the government’s role in health care and sharply divided the nation.

• Healthcare issues, even those unrelated to the ACA, must be viewed and addressed in a hyper-partisan environment.

• Republican efforts to unwind the ACA following the 2016 elections will only continue to worsen the partisanship surrounding our issues.

32 VHHA Federal Advocacy and Engagement

• VHHA serves as a conduit to and resource for our congressional delegation and members • We work closely with the AHA, FAH, and other national groups to advance our agenda • Federal Advocacy Agenda – Protect against reimbursement cuts – Secure funding for CHIP, extenders, GME, etc. – AWI reform – 340B program – Telehealth • Regulatory review and comments letters – IPPS/OPPS – LTCH/IRF/SNF – MACRA • Capitol Hill meetings and lobby days • Current Federal Issues blog and other resources can be found at www.vhha.com/advocacy

33 American Health Care Act (AHCA)

• In January, Republicans kicked off a process known as reconciliation – Budget maneuver requiring only 51 votes in the Senate

• In March, Republicans introduced the AHCA – Energy and Commerce and Ways and Means committees passed the legislation – Budget Committee passed it with recommended amendments – Manager’s Amendment added optional block grants, work requirements, etc.

• In late March, the legislation was pulled from the floor due to a lack of 216 “yea” votes

• Subsequent amendments to provide more funding for high-risk pools and state waivers from certain insurance requirements secured the votes for passage on May 4, 2017

• VHHA message/position: the status quo under the ACA is unsustainable for many Virginia hospitals, but as the debate continues, the AHCA must be amended to enhance and protect access to coverage and address disparities between expansion and non-expansion states

34 AHCA Key Provisions

• Phases out penalties for the individual and employer mandate and replaces the individual mandate with a new 30% continuous coverage penalty

• Repeals the ACA’s premium assistance tax credits and subsidies and replaces them with age-adjusted, advanceable tax credits

• Phases out Medicaid expansion beginning in 2020 and caps eligibility for enhanced funding as of March 1, 2017

• Provides non-expansion states with $2 billion in safety net funding per year over five years

• Converts Medicaid to a per capita cap or optional state block grant and enables states to impose work requirements on able bodied adults

• Creates the Patient and State Stability Fund and the Federal Invisible Risk Sharing Pool funded with $138 billion over 10 years

• Creates new state waivers from the AHCA’s proposed 5:1 age rating, the ten essential health benefits, and the ACA’s community rating requirement

• Eliminates the ACA’s Medicaid DSH cuts, but leaves in place all Medicare cuts

35 Medicaid Block Grants

Estimates show that Virginia will be on the losing end of current Medicaid block grant proposals

36 What it means for you:

• Virginia is not particularly well situated under current proposals to repeal and replace the Affordable Care Act

• Current proposals favor those states that implemented Medicaid expansion and have historically higher Medicaid spending

• Delivery side status quo - proposals do not address transformational reforms needed to bend the cost curve and improve the health of populations

37

2016-2017 General Assembly Demographics

• 62% Republican, 38% Democratic

• 81% Male, 19% Female

• 85% Caucasian, 13% African-American, 1.5% Hispanic, 1.5% Asian

• 23% are veterans

• 34% are attorneys

• 3.6% are medical doctors

• 30% have served less than 4 years, 15% for more than 20 years

• Senate: 21 Republicans, 19 Democrats (Lt Gov casts tie-breaking vote as needed)

• House of Delegates: 66 Republicans, 34 Democrats, all up for election in 2017 * 17% of House R’s represent districts won by Hillary Clinton in 2016

39 2017 Virginia Statewide Elections

Overview: • Virginia is one of only two states that will elect a new Governor in 2017, making Virginia a nationally targeted state for both Republicans and Democrats.

• Historically, Virginians have voted for the opposite party as the President in the preceeding election. This however only holds true for the top spot, Governor.

• Republicans and Democrats will hold primaries to be their party’s nominee on Tuesday, June 13, 2017.

• General Election: Tuesday, November 7, 2017

 Governor Democrats: Lt. Gov. Ralph Northam and Former Congressman Tom Perriello Republicans: Ed Gillespie, PWC Chairman , and Senator Frank Wagner

 Lt. Governor Democrats: Justin Fairfax, Susan Platt, Gene Rossi Republicans: Senator Jill Holtzman Vogel, Senator Bryce Reeves, and Delegate Glenn Davis

 Attorney General Democrats: AG Mark Herring is seeking re-election, unopposed for the Democratic nomination Republicans: John Adams is unopposed for the Republican nomination

40 2017 Virginia House of Delegates Elections

• All 100 HOD seats are up for election • Republicans hold a 16 seat majority = DEFENSE for Republicans • Retirements: • 6-7 Republicans: Speaker Bill Howell, Peter Farrell, Jimmie Massie, Mark Dudenhefer, Rick Morris, (possibly Glenn Davis) • 1 Democrat: • 67/100 Seats Contested as of June 5, 2017 • 12 R and 21 D unopposed • 23 Democratic primaries • 9 Republican primaries

41

You are a Lobbyist?

43

Meet Your Advocacy Team

Julie Dime Matt Strader Jennifer Wicker Vice President of Government Director of Federal Government Director of Intergovernmental Advocacy Affairs & Policy Affairs [email protected] [email protected] [email protected] (804) 297-3550 (804) 965-1221 (804) 965-1213

Kelly Cannon Dave Nutter Mary Margaret Whipple Director of Community & Member Regional Director for Regional Director for

Engagement Community & Member Community & Member [email protected] Outreach Outreach (804) 297-3547 [email protected] [email protected]

To help protect your privacy, PowerPoint has blocked automatic download of this picture.

Allison Lawrence Jones Victoria Quigley HosPAC Director Advocacy Assistant [email protected] [email protected] (804) 297-3548 (804) 965-1224

45 2017 Advocacy Team Agenda

Positive, Productive, Political Engagement = Proven Results

General Assembly Engagement Grassroots Engagement Stakeholder Engagement Member Engagement Federal Engagement Political Engagement

46 2017 General Assembly Highlights

Session Stats Leadership Changes in the House of Delegates

1086 House Bills Introduced Speaker Howell announces retirement.

813 Senate Bills Introduced Majority Leader is elected Speaker Designee.

880 Bills Approved by the House & Deputy Majority Leader is elected Majority Senate Leader Designee.

168 Bills VHHA Actively Delegate Tim Hugo is re-elected as House Republican Caucus Monitored/Worked on Chairman Designee.

Session Adjourned Sine Die on Delegate Jackson Miller is re-elected as Majority Whip February 25th Designee.

Reconvene Session: April 5

49 Vetoes by Governor McAuliffe = 836 Total Bills Passed in 2017

47

Virginia Hospital & Healthcare Advocacy Council

• The Virginia Hospital & Healthcare Advocacy Council (VHHAC) is comprised of health system in-house government relations staff and contract lobbyists.

• VHHAC meets weekly during the General Assembly session and monthly when the legislature is not in session.

• VHHAC members act as liaisons between their hospital(s)/health system and Virginia legislators, and advocate on behalf of their hospital(s)/health system.

• Chair: Jennifer Siciliano, Vice President, Government Relations, Inova Health System

• Vice Chair: Mark Lawrence, Vice President, Governmental and External Affairs, Carilion Clinic

48 Three “C”s of Advocacy

Constituents = Votes 200,000 people per Senate District 83,000 people per Delegate District 710,000 people per Congressional District

Contributors = Campaign Resources 2015 HOD Campaigns = $30,640,175 2015 VA Senate campaigns = $52,566,122

Colleagues = Expertise & Support Industry Experience Geographical diversity

49 HosPAC: “C”ontributor

• HosPAC is the Virginia Hospital & Healthcare Association’s political action committee

• Political action committees solicit funds from members and other interested parties to pool resources for contributions to candidates and officials that support an organization’s legislative and policy goals.

• HosPAC’s mission is: – To provide members with a means for organized and effective political action – To support candidates who will work to improve quality health care supported by the Virginia hospital and health system community – To promote efficient and responsible government

• In 2016-17, HosPAC contributed $369,907 to Virginia candidates, and was the 10th largest donor in the state

50 HosPAC Governance

• HosPAC is governed by a Board of Directors comprised of government relations and other personnel from VHHA members • Chairman, Vice Chairman, Secretary, Treasurer and up to 36 at-large directors • Nominated by the VHHA Board of Directors

• Paul Speidell, Vice President Government Relations and Health Policy for Sentara, serves as HosPAC Chairman

• E.W. Tibbs, CEO of Centra Health, is the 2017 HosPAC Campaign Chairman

• The HosPAC Budget Committee, designated by the HosPAC Chairman, makes recommendations to the full board for approval on contributions to candidates and fundraising goals

• HosPAC is governed by a constitution – approved by the VHHA Board of Directors – and bylaws adopted by the HosPAC Board

51

Advocacy Engagement

• Back to the Basics with Legislator and Policy Maker Outreach – One-on-one meetings with all members of the General Assembly, Congress and the Executive Branch – Direct, coordinated contact by VHHA staff and system govt relations staff

• Growing and Activating our Grassroots – Approximately 18,000+ registrants in our Muster legislative action network. This represents 25 percent growth in the Hospital Grassroots Network (HGN) and exceeds our five-year target in the first two years.

• Engaging the Business Community, Civic Groups, and Local Governments – Active alliances with Chambers of Commerce, local governments, and other health care stakeholders from across the state.

• Better Communications and Use of the New Media

• Mobilizing Voter Support and Goodwill

54

Optimizing Hospital and Health System Influence

Advocates General Assembly Ratio Members VHHA Advocacy Team 10 140 1:14

VHHAC members 50 140 1:2.8

Hospital CEOs 107 140 1:1.3

Hospital Employees 126,000 140 900:1

Healthcare Employment 450,000 140 3,214:1

Direct/Indirect Jobs 900,000 140 6,428:1

Registered Voters 5,529,742 140 379,498:1

55 Allied Health Care Stakeholders

VHHA hosts a semi-annual Allied Health Summit in May and November each year, bringing together health care stakeholders to discuss their legislative priorities and seek opportunities for collaboration. A few of those partners are:

And many more!!

56

Your Involvement is Critical!

• Hospitals and health care workers are highly regarded in their communities

• What happens “back home” matters to elected officials

• Helping legislators understand challenges and possible solutions requires the expertise of those “on the front lines”

• Confronting the challenges requires innovation and greater collaboration among health care providers, government, and the private sector

57

Take Action!

• Sign up and encourage others to participate in the Hospital Grassroots Network, powered by Muster grassroots mobilization software.

• Visit iSupportVirginiaHospitals.com to register. Receive regular updates on policy m

• atters and Action Alerts to seek your representatives’ support!

58 Coming Full Circle…

• Coordination across the field

• Actively advocating to improve health care in Virginia

• Be a credible source of information on health policy issues

• Ongoing contact and education with legislators

• Strong working relationships with state agencies

• Greater collaboration with stakeholders

• Greater involvement of hospitals and health systems at all levels of the organization and in all areas within the Commonwealth

59

60