State Sen. Joe Vitale’s Testimony Today Before House Committee on Energy and Commerce

BY JOE VITALE Good morning, Chairman Pitts and members of the Subcommittee on Health.  My name is Joe Vitale.  I was elected to the New Jersey State Senate in 1998 and had the distinct pleasure of serving many of those years with your colleague Congressman Leonard Lance.  I am also a small business owner who understands first hand the crippling impact that double digit health insurance premium increases have on a business with limited cash flow flexibility. 

Chairman Pitts, Congressman Pallone, Congressman Waxman, thank you for the invitation to testify today regarding proposals before this Committee that would defund critical pieces of the Patient Protection and Affordable Care Act (P-PACA).  As members of this Committee, you all have found yourselves at a critical crossroads.  I urge you to stay the course.  P-PACA, while imperfect, has created a framework for States to follow to provide universal, portable, affordable and sustainable health care access to the 47 Million uninsured people in the United States. 

NEW JERSEY’S EXPERIENCE LEADING UP TO PASSAGE OF P-PACA

Finding real ways to cover the uninsured has been largely a bipartisan effort in New Jersey.  In fact, some might argue that my Republican colleagues in the Legislature have been the leading force behind such efforts.  Our SCHIP program — which was first called KidCare — was implemented by legislation sponsored by former Governor Donald DiFrancesco, a Republican.  Republican Governor Christie Whitman expanded that program to some of the highest eligibility levels in our country and to populations that the Clinton Administration refused to provide matching funds for: childless adults. 

As a result of Governor Whitman’s leadership, New Jersey SCHIP first enrolled parents and childless adults in October 2000.  In 2001, the cost of hospital charity care provided to the uninsured decreased by $75 million.  The large number of applicants, along with a multi-billion dollar budget deficit, forced the state to stop taking applications in 2002.  As a result, documented charity care increased more than $100 million.  The shift was socially unfair and economically wasteful: charity care is a much more expensive model of care per capita and less reliably provided.  In contrast, health insurance through the New Jersey SCHIP program provides preventive care and saves government money – more than $900 per person per year – while achieving better patient outcomes (see Appendix A).

Prior to passage of P-PACA, New Jersey worked incrementally toward health reform.  In 2006, I asked David Knowlton of the New Jersey Health Care Quality Institute and the President of LeapFrog to chair a working group of twenty-two health policy experts representing a wide variety of professional experience to examine how New Jersey could build a framework for providing universal, portable, affordable and sustainable health care access to New Jersey’s remaining 1.3 million uninsured.

I believed then, as I do today, that New Jersey could not have enacted our most recent reforms without taking the time to painstakingly understand the complexity of those reforms’ impact on the diverse group of stakeholders that health care encompasses.  It was through those efforts that we were able to offer a thorough and well planned legislative proposal that enjoyed overwhelming bi-partisan approval moving from announcement to passage into law in four months.

New Jersey has learned many lessons as we grappled with the complexity of providing access to health care for the uninsured over the past several years.  Our state’s efforts have only been enhanced by passage of P-PACA.  The proposals you are considering today would drive our efforts in New Jersey to a screeching halt. 

DEFUNDING STATE-BASED HEALTH INSURANCE EXCHANGE GRANTS

Defunding State-based health insurance exchanges will only serve to eliminate State flexibility, paving the way for a single Federally-based health insurance exchange.  The irony that I find in such a proposal is that it is coming from those who are typically ideologically-opposed to the expansion of federal government in favor of greater state autonomy. 

As many of you may remember, Congressman Weiner has advocated for the incremental expansion of a Federally-based health insurance exchange from the very beginning of this debate, but was opposed by Republicans in Congress at every turn.  That expanded federal exchange that Congressman Weiner advocated for is called Medicare.   

New Jersey was awarded a $1,000,000 Health Insurance Exchange Planning Grant. The State Department of Banking and Insurance awarded nearly $250,000 to the Rutgers University Center for State Health Policy, a nonpartisan, evidence-based think tank, to hold stakeholder sensing meetings.  Meetings have already begun with various stakeholder groups, including consumers, providers, and insurers.  The Center will compile input it gathers through these meetings and provide it to the State. 

With the remaining funding, the Department plans to hire consultants to inform policymakers about such aspects of the Health Insurance Exchange such as benefit design, interface development and oversight.  The value in this exercise is in the consensus it achieves and while it may seem unnecessary to duplicate such a process in each State, you will find that each State’s exchange will be different.  This controlled flexibility provides the opportunity for best practices to emerge across the nation, and for state policymakers to learn from the experience of their colleagues in other states. 

DEFUNDING PREVENTION AND PUBLIC HEALTH FUND

Public health initiatives are the single most proven method for controlling health care costs.  Vaccination, motor-vehicle safety, workplace safety, infectious disease control, safe food handling, nearly-universal access to prenatal care, family planning, and fluoridated water are all examples of how population-based, prevention and public health programs are the most cost effective investment Congress can make to control future health care costs.

New Jersey has received nearly $3,000,000 in Prevention and Public Health Fund grants.  In one of the funded initiatives, we are bringing primary health care services to people in their behavioral/mental health care setting.  This population is one of the most expensive to manage and we have learned that it pays to take the care to the client. 

New Jersey is also working with CMS on an exciting demonstration project that seeks to better manage the care of our most expensive hospital charity care cases.  This effort expands on the innovative work of Jeff Brenner, a family doctor in Camden, NJ.  Dr. Brenner analyzed charity care data for the three hospitals that serve the Camden area.  He found that most people accessing hospital charity care lived in one particular housing complex.  Last month he met with the residents of the building and offered to open a primary health care office in the basement of their building.  Physicians, advanced practice nurses and social workers will provide for the primary health care needs of the tenants at a fraction of the cost of care in the emergency room.

Another important function of P-PACA Prevention Public Health funding has been to add stability to discretionary programs such as AIDS Services Programs throughout the country.  To give you a sense of the real life impact of Congress’s failure to pass a budget, CMS is left only able to provide State programs with partial grants.  As a result, programs are left with the difficult decision to accept clients without knowing whether the funding to care for those clients will be eliminated in three months and even worse now, in just two weeks. 

Through P-PACA, New Jersey has received a $350,000 HIV Prevention Grant.  With these funds we have tested an alternate means of confirming HIV that replaces the expensive Western Blot Test with a second rapid test at a fraction of the cost.  In doing so we have become more effective in getting an individual found to be HIV-positive into treatment right away.  By decreasing the turn-around time for confirmation of an HIV-positive diagnosis, we can help infected individuals control their disease, and we can effectively reduce the transmission rate of HIV/AIDS in New Jersey.  The CDC is now considering modifying its surveillance requirements by adopting the rapid-response protocol tested in New Jersey.

Innovative, cost saving programs such as those I have just described would abruptly end if you were to defund the P-PACA Prevention and Public Health Fund.  I urge you to view this funding as a critical investment in your own States’ economies.  When I hear people voice criticism about how much of our nation’s gross domestic product is spent on health care, I scratch my head.  Health care is made in the USA, and consumed in the USA.  It can not be outsourced.  It requires an educated workforce and, for the most part, pays self-sustaining wages.  The end result of health care program cut-backs are health care provider lay-offs, and increased difficulty for health care consumers to access care.  Passing the P-PACA defunding proposals before you today will have a dire consequences for the constituents you serve. 

DEFUNDING SCHOOL-BASED HEALTH CENTERS

Of all the different components of P-PACA that are being considered for defunding today, rolling back the expansion of our country’s School-based Health Centers may be the most short-sighted.  Five years ago, I worked with the Visiting Nurses Association of Central Jersey to create non-traditional school-based health services in the suburban, middle-class town where I live, Woodbridge Township. 

Parents enrolled in the program are able to see a visiting Advanced Practice Nurse within the school nurses office when they are sick.  When a student enrolled in the program reports to his school nurse, an APN is dispatched to that school to evaluate the child, provide a diagnosis and recommend treatment.  Prescriptions are called into the student’s pharmacy so that they are ready for parents to pick up on their way home.  Children are treated faster, return to class sooner and parents miss less work, adding to employee productivity.  At the request of parents, the visiting advanced practice nurse now provides annual sports evaluations for students.

This is what’s called low-hanging fruit – a small investment with a huge return.  If only all of our investments assured us similar returns.

DEFUNDING PRIMARY HEALTH CARE WORKFORCE DEVELOPMENT

Through P-PACA, New Jersey has received several grants to address projected primary health care workforce shortages.  Defunding programs aimed at addressing the critical shortage of primary care providers may very well be the most irresponsible of the proposals before you today.  The primary care workforce shortage is not solely a New Jersey problem; it is a problem in every single state that will reach a critical level as access to health care coverage is expanded to currently uninsured populations.  It takes ten years to produce a physician.  It takes six to eight years to produce an advanced practice nurse. 

The New Jersey Nursing Initiative, funded by the New Jersey State Chamber of Commerce and the Robert Wood Johnson Foundation, was formed in 2007 and has been a comprehensive effort to expand the capacity of nursing education throughout the State.  I have been closely involved in this specific project and while implementation has taken time, we are just now starting to see the fruits of our coordinated efforts.  Community colleges have begun to establish relationships with four-year schools to create nursing bachelor degree completion programs throughout New Jersey.  A loan redemption program has been created to encourage nurses to pursue nursing faculty careers.  P-PACA dedicates $800,000 to this program and will help to ensure New Jersey’s health care system can handle the increased demand in health care services that will be created when persons currently uninsured are able to access affordable health care coverage.

The New Jersey Department of Labor was awarded a $150,000 workforce development primary care grant to study the full scope of the primary care needs that will result from implementation of P-PACA.  We have also received $10,560,000 to increase the number of resident physicians trained in family medicine, general internal medicine and general pediatrics.   

Defunding primary care workforce development will cripple health care delivery in states that do not already have existing health care workforce development programs in place.  While states like New Jersey will be set back by the decision to defund health care workforce development, states that have not already implemented programs will be left in crisis, unable to produce the doctors and nurses needed to care for their residents.

CONCLUSION

There is only so much that any individual state can afford to do on its own in this difficult economic climate. Our hard work in New Jersey, to date — in partnership with the Federal Government — has assisted countless New Jersey families and children who would otherwise have had their health jeopardized because they were uninsured. 

In the course of the national health care reform debate, there are those who have said that they believe that a government-backed plan will be too expensive, that it will leave millions of Americans behind, that it will dictate the amount of health care apportioned to the newly insured, and that it will destroy the competitive advantages that privately funded insurers offer. Respectfully, I disagree.

I believe that the P-PACA does what government is meant to do.  It fills the void that has been left by the private sector.  It does so by leveling the playing field and ensuring that health coverage remains a partnership between individuals and their employers.  It does not expand government’s role in the health care arena, and it’s certainly not a government take over of the health care industry. It is an assurance that the dollars on the table today, remain on the table tomorrow and are spent effectively on the most efficient model of care possible.  

Government already pays more into the health care system than any private entity.  Taxpayers already finance subsidies to companies who provide health coverage for their employees through generous tax breaks.  We also fund a considerable amount of health care research and development.  The Government invests in building the infrastructure through which health care is delivered, and in the education of those that deliver it.  Taxpayers pay for services to the elderly, the disabled and the poor, while also providing billions of dollars to hospitals to care for the uninsured.  P-PACA balances these resources so all Americans benefit from their investment in our nations’ health care system.

At the end of the day, the interest of American consumers must remain at the nexus of your debate.

I have read comments from some who worry that a government plan will cause prices to be controlled.  The irony in their commentary is that they completely ignore the fact that the single largest problem facing our health care system today is COST.  We spend more in the United State on health care than any other industrialized nation and have worse health outcomes for our investment. 

For as long as I can remember, high cost, waste, inefficiency, medical errors,  antiquated medical records, and a lack of comprehensive, reliable preventive care have driven costs in the existing marketplace to ever-growing, unsustainable levels. So many Americans who struggle every day, work hard for their families and do the right thing, will by and large never afford the cost of health insurance and the care that all of us with an insurance card enjoy.  They can’t even afford to fill the prescription a doctor writes.

Trust your states – the “laboratories of democracy” – to build working models and study solutions where there is not yet national consensus.  It may take time, but we cannot afford to fail.  Toward that end, I pledge New Jersey’s continued cooperation.  We will gladly share with you our years of research and experience, our failures and successes.  I pledge my personal commitment to work as tirelessly as you all have to see this through.

It costs so much more to do nothing.  The status quo is simply not sustainable.

Thank you for the opportunity to be with you today.

APPENDIX A

 

NOTES:

(~Y 02) and (~Y 05): The methodology used to calculate documented charity care was changed beginning in SFY 08.  Graduate Medical Education had been factored in the former formula in such a way that it would begin to inflate documented charity care over time.  This provoked the use of CY 02 data for SFYs 04-07 

Impact Adult Coverage in NJ FamilyCare has on

Documented Charity Care Claims

NJ FamilyCare began enrolling parents and childless adults in October 2000.  In 2001, documented charity care fell $75 million.  The large number of applicants coupled with State and Federal budget deficits, caused the State to stop accepting applications for childless adults beginning September 1, 2001, and from parents beginning June 15, 2002.  In the year after, documented charity care grew more than $200 million and continued to rise each year.

The incremental expansion of eligibility for parents in NJ FamilyCare, which began in January 2006, has had a direct impact on documented charity care. Since, more than 130,000 new parents enrolled in NJ FamilyCare. In just the first year of the NJ FamilyCare expansion, documented charity care decreased $71 million and the rate of documented charity care growth stabilized.

Maintaining enrollment of parents up to 200% of the federal poverty level in NJ FamilyCare is essential to the long term funding of major health care reform. The reason is twofold. First, 96.3% of all charity care is used to pay for the care of persons with income below 200% of the federal poverty level.  Documented charity care will only be reduced by making affordable health insurance coverage available to this population of the uninsured. 

Charity care is a more expensive model of care per capita and is only provided episodically whereas health insurance provides preventive care and is less costly.  It costs more than $900 per client per year to serve an adult on charity care than it does to serve them on NJ FamilyCare.

Secondly, the amount of disproportionate share dollars that New Jersey can leverage from the federal government to help fund charity care is capped and any additional dollar that is committed to charity care will not leverage as much federal funding.  By investing in NJ FamilyCare, New Jersey is sure to maximize federal funding opportunities.

Charity care is not a comprehensive solution for the uninsured.  While charity care covers all or most of the hospital costs incurred by an uninsured, eligible person; it leaves them completely exposed to the additional costs charged by the providers that deliver their care within the walls of the hospital.  These are the bills that bankrupt New Jersey residents.  NJ FamilyCare provides a comprehensive benefit to the uninsured.  In addition to the hospital bill, it covers physician charges, lab costs, radiology, infusions, prescription drugs, and more. 

New Jersey tax dollars go farther and help more people when used to fund NJ FamilyCare than to fund Charity Care.    

State Sen. Joe Vitale’s Testimony Today Before House Committee on Energy and Commerce