April 24, 2013
Caption: Mayor Greg Stanton
Mayor Greg Stanton, City Council members, hospital and business leaders announced today approval by the federal Centers for Medicare and Medicaid Services of the Phoenix Access to Care Ordinance, a plan to stabilize the economic vitality of the health-care industry by creating a new funding source to help cover the costs of the uninsured. As part of the ordinance, AHCCCS also will be able to enroll up to an additional 33,000 children throughout Arizona.
The ordinance, a measure that assesses Phoenix hospitals, draws down matching federal funds of almost $200 million. This funding is used by AHCCCS to pay in part for uncompensated care for low income and uninsured patients. The plan does not cost taxpayers and is widely supported by hospital leaders and the business community.
“Approval of our city’s Access to Care Ordinance is a milestone in public policy and health care for Arizona,” Stanton said. “We were the first city in Arizona to take action on this viable solution that brings jobs to our city instead of putting hospitals, jobs and our health-care system at risk. This is a plan the hospitals want, a solution patients want and action we can take to ensure that our economy moves forward as we make Phoenix a national destination for innovative and sustainable health-care solutions.”
Due to the impact of the recession on the state’s budget and unemployment, hospitals across the city have endured a sharp spike of more than $540 million in uncompensated costs due to an increased number of uninsured individuals flooding hospital emergency departments.
Banner Good Samaritan Medical Center and Banner Estrella Medical Center have seen the total costs of uncompensated care they provide more than double in the last few years, from $25 million in 2010 to $60.7 million in 2012. St. Joseph’s Hospital and Medical Center has seen its actual costs for charity and bad debt more than double in the past fiscal year, and it has had to eliminate more than 400 positions as a result of these tremendous financials strains.
“The growth in uncompensated care is on an unsustainable trajectory, which puts hospitals at risk throughout Phoenix,” said Reginald M. Ballantyne III, senior corporate officer of Vanguard Health Systems. “The Access to Care Ordinance provides a bridge to allow hospitals to continue to focus on our top priority – providing the highest quality health care to all Arizona residents.”
Arizona hospitals are a major economic engine, generating nearly $28 billion worth of economic activity. During the recent economic downturn, health care was one of the only sectors in our economy to grow jobs. The jobs created by hospitals in Phoenix and throughout Arizona are high-quality jobs that pay well and provide benefits.
"Keeping our citizens and our hospitals healthy is just good business, and that is what this ordinance is all about,” said Glenn Hamer, CEO of the Arizona Chamber of Commerce. “The new funding means more citizens will have access to the outstanding medical care available here and, at the same time, our hospitals will be made stronger financially.”
Key benefits of the one-year Phoenix Access to Care Ordinance include:
- No additional costs or taxes for Phoenix residents
- No increased spending by the city, and costs cannot be passed onto patients, business or insurance carriers
- $200 million will be generated to cover uncompensated care at Phoenix hospitals
- A 2:1 match by the federal government, ultimately funding 66 percent of the payments
- Phoenix acute-care hospitals would be paid based on their share of uncompensated care to uninsured and low-income patients
- Certain hospitals are exempt from the assessment due to their special nature, including government hospitals (Maricopa Integrated Health system), specialty hospitals, small children’s hospitals (Los Niños Hospital) and hospitals that provide a significant percentage of care to out-of-state and Medicare patients (The Mayo Clinic)
In 2011, the legislature and governor enacted an opportunity to create economic funding pools from political subdivisions to draw down federal matching dollars. The program gives local governments the ability to directly support hospitals in their communities.