What is "sequestration" and why should we care? Congress passed a law that said if we can't agree on how to raise revenue while making budgets cuts, then a set of "automatic," across-the-board cutbacks would be put in place. The idea was to make the cutbacks so harsh that everyone in Congress and the President would work hard to come to agreement. Unfortunately, no agreement has been reached, so on April 1, the cuts will go into effect.
What does this mean to our state and local agencies? There are many organizations and programs that will feel these cuts deeply: K-12 education, education for children with disabilities, college work study jobs, Head Start, protection for clean air and clean water, military readiness, law enforcement and public safety, job search assistance, child care, vaccines for children, Violence Against Women grants, nutrition for seniors and public health cuts that will reduce admissions to substance abuse programs and result in fewer HIV tests. The impact is going to be significant, and as you can imagine when you think about each of these, long lasting. We feel a connection with the community organizations impacted, and compassion for the individuals who will struggle.
What is the impact to PeaceHealth as the largest employer and provider of health care services for Medicare patients locally? It means we will receive a cut in Medicare reimbursements in the range of $1.5 million dollars a year. While this is not good news, what concerns me more is the impact of these reductions on other organizations and services throughout our community.
PeaceHealth, along with every other health care provider locally and across the country, is preparing for health care reform. In anticipation of reimbursement rates going down, hospitals are taking steps to reduce costs. Over the last three years, PeaceHealth St. Joseph Medical Center has worked hard to increase efficiencies, reduce waste and improve processes - all with a commitment to improving quality. We accomplished this mostly through staff attrition and reassignment. In essence, we have experienced a fraction of the job loss at PeaceHealth St. Joseph as that of other hospitals in neighboring communities.
As hard as we have worked to improve, and with as much as we have accomplished, there is more work ahead. Health care reform calls on us to collaborate and be accountable in new ways. We are shifting from a health care system that rewards providers for treating more and more sick people, ("volumes") to incentivizing providers to help people maintain their health (quality outcomes). In the new system, doctors and hospitals will need the help of other providers, such as mental health and substance abuse counselors, to ensure positive outcomes and contain the cost of care for particularly vulnerable patients whose care costs more.
As a community we are learning that cuts in one part of the system may hurt care provided in another part of the system. This does not mean that full funding for all organizations is warranted - in fact, taking a more holistic view of the social service and medical care delivery systems will probably lead us to integrate care delivery and possibly consolidate organizations, reducing the overall cost of care.
Health care reform is spawning a renewed appreciation for the importance of health promotion and disease prevention. Dental care, mental health counseling, substance abuse services - these are not frills, they are vitally important ways to reduce the cost of health care, and maintain the health of the community.
So, what can we do about the sequestration cuts? At PeaceHealth we are going to make a strong, simple and specific request to our congressional delegation to refrain from further Medicare cuts. And we will inform them that a wide cross section of health care and social service providers are working together locally to enact health care reform, and we will need their support as we move forward. Regardless of sequestration, PeaceHealth remains committed to our mission of promoting individual and community health.
Nancy Steiger is CEO/Chief Mission Officer of PeaceHealth St. Joseph Medical Center in Bellingham.