Testimony to the Joint Senate Finance, Assembly Ways and Means Public Hearing

Introductions and About the Primary Care Development Corporation (PCDC)
Thank you for the opportunity to submit this testimony.  The Primary Care Development Corporation (PCDC) is a nonprofit dedicated to expanding access to high quality primary care in underserved communities throughout New York State.  PCDC provides low-cost capital financing and expert technical assistance to primary care providers in underserved communities, and works with lawmakers to develop policies that grow and sustain the primary care sector.

Since 1993, PCDC has created investments of $415 million in more than 100 primary care health center projects, leveraging more than $5 of private investment for each $1 of public investment.  These projects have created primary care access for more than 900,000 New York residents, created more than 4,600 jobs in low-income communities, and transformed more than 840,000 square feet of space.   PCDC has also trained and coached more than 900 primary care organizations to deliver high-quality patient-centered care, increase productivity, effectively implement electronic medical records, and prepare for emergencies. 

Summary of Comments
Two years ago, Governor Cuomo set out a bold agenda to redesign our health care system to make it more affordable, accessible and accountable.  The Medicaid Redesign Team, made up of stakeholders from across the health care spectrum, developed recommendations for cost reductions, regulatory changes, and investments that would put New York’s Medicaid program on a more sustainable path.  The Medicaid spending cap is now in place, and we are seeing important regulatory changes.  But what we still need is the investment, particularly in New York’s primary care system.  This investment is critical to achieving the cost savings and quality improvement goals set out by Governor Cuomo and the MRT.

We also understand that New York may have to address repayment of $1.1 billion in Medicaid funds in the coming fiscal year.  If this occurs, any changes that are made need to reflect the tenets of the MRT plan, which emphasize a strong, effective primary care system that keeps people healthy while reducing overall healthcare costs.

The Primary Care Crisis
Today, 2.3 million New York State residents lack access to primary care.  It will take more than 1,100 primary care providers and more than $1 billion in capital to build the primary care capacity to meet this need.

Our primary care shortage is the chief reason that New York ranks highest in the nation in avoidable hospital use and cost, fourth highest in emergency room wait times, and sixth highest in total health care spending, yet we are in the middle of the pack in health outcomes.  More than 40% of emergency room visits and 24% of hospital admissions or readmissions statewide are for primary care preventable conditions.  If we reduced hospital admissions in New York to the national average (an 11.6% reduction) we could save $10 billion per year (Medicaid, Medicare, uninsured and private insurance combined). Not only would this lead to healthier families and communities, it would reduce government health care spending and health insurance premiums for all of us. 

Recent Administration and Legislature Support for Primary Care
The Cuomo Administration and the Legislature have made significant efforts to try to reverse this trend and build a more robust primary care sector.  The Cuomo administration has created an Office of Primary Care in the Health Department to focus on the needs of the sector.  The Patient-Centered Medical Home Medicaid Incentive Program has helped thousands of primary care doctors improve the way they practice.  Now more than one million Medicaid enrollees have a medical home and New York State leads the nation in “recognized” medical homes.  Indigent Care Pool funding for Diagnostic and Treatment Centers (D&TCs) was increased to better approximate the true cost of caring for the uninsured.  This funding is critical to ensuring the uninsured population receives primary care that will prevent more costly hospitalizations and emergency room visits.  Doctors Across New York and the Primary Care Service Corps are working to put new doctors, nurses and other health professionals in communities that need them most. We are pleased that funding for these programs is maintained in the Executive Budget.

Primary Care Advances in the Executive Budget
There are some important new initiatives in Governor Cuomo’s budget that, if developed and implemented effectively, could significantly expand access to primary care.  Among them:

Increased scope of practices for nurse practitioners, physician assistants, dental hygienists and home health workers:  There is no short term fix to the doctor shortage. We simply will not have enough primary care physicians in the next 20 years to meet growing demand. The scope of practice changes proposed are important to expanding the provider base so more patients have access to primary care.  

Elimination of Certificate of Need (CON) for primary care facilities:  The certificate of need requirement for primary care has been problematic from the beginning. CON has primarily been used as tool to guard against oversupply of medical services, but there is so much unmet primary care need that the CON process becomes a barrier to increasing supply.  Also, CON applies to D&TCs and hospitals, but not private practices, the rationale being that these facilities received higher Medicaid reimbursements than private practices. 

But the Affordable Care Act substantially increases Medicaid payments for primary care doctors, and new models of care are beginning to pay more for high quality primary care.  This is attracting new provider types into low income communities who see value in providing high quality primary care services, but who would not be covered by CON.  It is only fair that the playing field be leveled, and providers be judged on the quality and value of care they provide. 

Temporary operator for health care facilities with significant management failures:  A hospital or diagnostic and treatment center with serious financial or management problems is at risk of failing its healthcare mission to the community.  Hospital-run primary care is at risk when the hospital is in financial distress and is not focused on their outpatient departments.   Allowing the Health Commissioner to appoint a temporary operator in certain cases could help to restructure and rightsize healthcare facilities and preserve vital services for the benefit of their communities.  Indeed, the authority itself is a powerful incentive that may prompt healthcare facility executives to serve their communities more effectively. 

“Limited Service Clinics” inside retail establishments:  The budget authorizes the establishment of limited service diagnostic and treatment centers inside commercial establishments like pharmacies and malls, with the rules and regulations to be determined by the Commissioner of Health.  These types of clinics have the potential to be important access points for thousands of people who are not adequately connected to the healthcare system.  The legislation establishes a regulatory framework to integrate such services into the “medical neighborhood” and to assure a baseline of quality.

Concerns in the Executive Budget 
No “MRT” waiver investment in Executive Budget:  Last year, The Cuomo administration brought together stakeholders to develop major initiatives to transform New York’s healthcare system.  The final plan became a $10 billion, five-year “MRT Waiver” which is now being negotiated with the U.S. Center for Medicare and Medicaid Services. In the waiver, more than $2 billion over five years was allocated to primary care expansion and transformation, including more than $500 million in capital investment and $125 million to help providers deliver more effective and coordinated primary care. 

Likewise, the MRT Waiver allocated funds to develop a regional health planning infrastructure, which has been discussed and planned over the last year and adopted by the Public Health and Health Planning Council.   “Regional Health Improvement Collaboratives,” (RHICs) would aid the NYS Department of Health in implementation of State health policy related to public health and facilities planning; build capacity through knowledge and data sharing; and form significant partnerships with community stakeholders. This could be particularly important to helping us understand the regional impact of new payment and delivery models like health homes and accountable care organizations.

These investments are not optional based on available funds.  They are essential to building the primary care infrastructure necessary to help New York achieve the “Triple Aim” of better health outcomes, healthier communities, and lower per capita health care costs. 

Block granting and funding cuts for important health programs:  Programs that received specific funds in the budget in past years are now “block granted” into several categories, and there is an overall 10% cut to the programs.   The Health Department should have strong oversight over these programs, and should evaluate what works and what does not.  However, what is set out in the budget creates too much uncertainty for organizations that are providing these important services like workforce development, chronic disease and HIV/AIDS prevention, and maternal and child health.  We recommend restoring funding for these organizations at 2012-13 levels.

Conclusion
We are just at the beginning of developing a primary care infrastructure that will truly reduce costs, improve health outcomes and create healthier communities.   We still have a long way to go.  The Executive Budget maintains support for existing programs and proposes several new initiatives that should have a positive impact on patient access to primary care.  But just as we invest in roads and bridges to prevent more expensive repairs down the line, we have to invest in a primary care system that will also save money from more expensive health care.  Significant investment in primary care should be a priority in the Executive Budget.