Try­ing to weave the way to a ‘ra­tio­nal’ decision on Med­i­caid

Modern Healthcare - - Q & A -

“The strat­egy is to help Mis­souri pol­i­cy­mak­ers craft a so­lu­tion that they be­lieve and the vot­ers be­lieve is Mis­souri-spe­cific.”

Since July, Charlie Shields has served as CEO of the two-hos­pi­tal Tru­man Med­i­cal Cen­ters in Kansas City, Mo., the area’s safety net hos­pi­tal sys­tem, suc­ceed­ing long­time CEO John Blu­ford III. Tru­man suf­fered op­er­at­ing losses in 2013, with a -3.4% op­er­at­ing mar­gin on op­er­at­ing rev­enue of $459.5 mil­lion, com­pared with a -1.5% mar­gin the year be­fore, ac­cord­ing to Mod­ern Health­care’s fi­nan­cial data­base. Shields pre­vi­ously served as chief op­er­at­ing of­fi­cer of the sys­tem’s TMC Lake­wood hos­pi­tal. Be­fore that, he served as Repub­li­can leader of the Mis­souri state Se­nate. Mod­ern Health­care re­porter Steven Ross John­son re­cently spoke with Shields about his ef­forts to per­suade his for­mer GOP leg­isla­tive col­leagues to ex­pand Med­i­caid and what would hap­pen at Tru­man if they don’t. This is an edited tran­script.

Mod­ern Health­care: How will your ex­pe­ri­ence as a law­maker af­fect how you carry out your du­ties as a CEO of Tru­man?

Charlie Shields: In an or­ga­ni­za­tion like Tru­man, which is a true safety net hos­pi­tal, the re­al­ity is that the vast majority of our payer sources are con­nected to gov­ern­ment or pub­lic pol­icy in one form or another. So there’s a lot of in­ter­ac­tion be­tween us and the lo­cal gov­ern­ment, state gov­ern­ment and fed­eral gov­ern­ment. Un­der­stand­ing both worlds of how gov­ern­ment bud­gets are made, how laws are made, and un­der­stand­ing the health­care business puts me in a lit­tle bit of a unique po­si­tion for an or­ga­ni­za­tion like Tru­man.

MH: Why do you fa­vor Med­i­caid ex­pan­sion un­der the Pa­tient Pro­tec­tion and Af­ford­able Care Act?

Shields: The Af­ford­able Care Act takes a dis­or­ga­nized sys­tem of giv­ing care through dis­pro­por­tion­ate-share pay­ments to safety net hos­pi­tals and other char­i­ty­care providers and moves that into a more or­ga­nized, ra­tio­nal sys­tem of ex­pand­ing in­surance cov­er­age through the ex­changes and Med­i­caid. Then the Supreme Court rul­ing came along that kept the DSH cuts but made Med­i­caid ex­pan­sion op­tional for the states. That cre­ated the per­fect storm. If you move the char­ity-care pop­u­la­tion into Med­i­caid, you would even­tu­ally see a low­er­ing of your cost struc­ture as peo­ple move from chaotic episodes of care into more or­ga­nized care. Even­tu­ally, you would be­gin to bend the cost curve. That’s one of the ar­gu­ments you try to make to pol­i­cy­mak­ers.

MH: How have your con­ver­sa­tions gone with your for­mer Repub­li­can leg­isla­tive col­leagues who have op­posed Med­i­caid ex­pan­sion?


I’ve been in their shoes and I know the dilemma they’re in. The pub­lic per­cep­tion of the ACA is still very neg­a­tive. I think in their heart of hearts they know it’s a ra­tio­nal decision to ex­pand Med­i­caid, but they also know it’s po­lit­i­cally very risky be­cause it’s per­ceived that if you vote for Med­i­caid ex­pan­sion you’re en­dors­ing the ACA. I try to help them work through that and cre­ate some­thing that looks like a Mis­souri so­lu­tion that works best for the peo­ple of the state.

MH: Does your role in the health­care in­dus­try give you a

dif­fer­ent per­spec­tive on the ACA from your fel­low GOP law­mak­ers? Shields: Ab­so­lutely. If you work in this business, you see that un­com­pen­sated care tends to be very chaotic. Peo­ple who lack pri­mary care wait un­til they get to an acute-ill­ness stage be­fore they come to us. You see that ev­ery day in a safety net hos­pi­tal and you re­al­ize that if peo­ple had ac­cess to cov­er­age and pri­mary care and all the things that come with Med­i­caid ex­pan­sion, you wouldn’t see so much ex­pense on the back end with our pa­tients and see them in very bad con­di­tions. You’d ac­tu­ally be­gin to im­prove health out­comes. Serv­ing in a hos­pi­tal CEO role and vis­it­ing with pa­tients and mak­ing rounds in the emer­gency depart­ment, that is a per­spec­tive you don’t get as a law­maker.

MH: What’s your strat­egy for sell­ing the idea of Med­i­caid ex­pan­sion?

Shields: The strat­egy is to help Mis­souri pol­i­cy­mak­ers craft a so­lu­tion that they be­lieve and the vot­ers be­lieve is Mis­souri-spe­cific, tai­lored to the needs of this state. The tremen­dous ad­van­tage they have right now is that as you

go into the last two years of the Obama ad­min­is­tra­tion, HHS will be ex­tremely flex­i­ble on waivers as they try to get more states into the Med­i­caid ex­pan­sion. So I tell pol­i­cy­mak­ers they have a unique op­por­tu­nity in a rel­a­tively short time frame to take ad­van­tage of this and craft some­thing that works for our state, but also takes ad­van­tage of the fi­nan­cial re­sources avail­able through the ACA.

MH: Do you see Mis­souri adopt­ing a pri­vate plan model for Med­i­caid ex­pan­sion like Arkansas’?

Shields: I think that’s ex­actly right. If you look at Arkansas, do you go into a voucher sys­tem where you give peo­ple the op­por­tu­nity to buy into the Med­i­caid sys­tem? I think those are op­tions that would ac­tu­ally sell well to Mis­souri vot­ers, and I think that’s ex­actly what the Leg­is­la­ture needs to be look­ing at. You’ve seen states that are very con­ser­va­tive take ad­van­tage of that op­por­tu­nity and that flex­i­bil­ity with HHS.

MH: If Med­i­caid ex­pan­sion doesn’t take place in Mis­souri, what will be the im­pact on Tru­man?

Shields: Can you sus­tain your­self over time? Look­ing out in the fu­ture with­out ex­pan­sion and with the re­form law’s DSH cuts, that’s a dif­fi­cult po­si­tion. We know we’re in a tough bind. In Mis­souri, we’ve seen two hos­pi­tals close al­ready. So it be­comes a crit­i­cal dis­cus­sion. I tend to be an op­ti­mist. I think about how do we make it hap­pen.

MH: What would be your plan if Med­i­caid ex­pan­sion doesn’t take place?

Shields: Un­for­tu­nately, look­ing at the size of the DSH cuts, we couldn’t sus­tain the ser­vices we pro­vide now, and that would have a dra­matic ef­fect on Kansas City. Tru­man pro­vides the vast majority of be­hav­ioral­health ser­vices, ser­vices re­lated to chronic dis­ease man­age­ment, a lot of the pri­mary-care ser­vices, and 300,000 out­pa­tient vis­its a year. It’s hard to imag­ine how we would be able to con­tinue that given the mag­ni­tude of the DSH cuts that are loom­ing.

MH: If you had to cut be­hav­ioral-health ser­vices, what im­pact would that have on ac­cess to care?

Shields: We op­er­ate two com­mu­nity men­tal-health cen­ters, 66 in­pa­tient be­hav­ioral-health beds, and a be­hav­ioral-health emer­gency depart­ment. That’s a sys­tem that serves this com­mu­nity very well. Peo­ple in cri­sis come to that be­hav­ioral-health emer­gency depart­ment by them­selves or they’re brought in by law en­force­ment. I don’t think any­body in Kansas City would want to be­gin to imag­ine what would hap­pen if that ser­vice goes away. When you get rid of in­pa­tient beds, we all know the re­sult of pa­tients who no longer have ac­cess to those ser­vices. That’s one of the mes­sages we talk about with pol­i­cy­mak­ers. This is a ra­tio­nal low-cost sys­tem that is very much at risk with­out Med­i­caid ex­pan­sion.

MH: What is the like­li­hood of ex­pand­ing Med­i­caid?

Shields: It’s a chal­lenge. Some­how you have to weave your way to a ra­tio­nal decision, and to do it in a way that low­ers the po­lit­i­cal con­se­quences.

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