By John D. Stobo

When President Obama signed health reform into law last month, it was the most significant moment in health care since Medicare and Medicaid were established in 1965. The law will add health insurance coverage for 32 million more Americans by 2019. We’re proud to say that University of California Health played an important role in shaping the final health reform bill. Here are three examples.

Geographic variations
UC’s five academic medical centers are a major part of California’s safety net. We provide complex care to a diverse population that includes many low-income patients. But a proposal from some members of Congress to equalize “geographic variations” would have potentially reduced Medicare reimbursements to California hospitals by approximately $3 billion over 10 years and redistributed those funds to purportedly “high-value” providers located in more rural areas of the country such as Minnesota. Had the proponents of the provision succeeded, UC’s medical centers would have lost $175 million over 10 years.

Throughout the health care debate, UC helped educate legislators on the importance of socioeconomic population differences. Health care costs are significantly higher in areas of poverty, where patients have less access to care and tend to be sicker when they arrive at hospitals, requiring more extensive, and thus more expensive, care. Thanks to the work of people such as UCLA Chief Medical Officer Tom Rosenthal, the health reform bill did not revise Medicare payments based on geographic variations. However, the issue has not gone away. The bill calls for two studies and a national summit on geographic variations, which we will follow closely.

Medical education training
UC Health runs the nation’s largest health sciences training program, with more than 14,000 students and 16 health professional schools. We train 60 percent of medical students in California, a role that will become more important as health insurance coverage expands, increasing the need for medical professionals. We fought strongly to maintain Medicare’s graduate medical education payments to teaching hospitals for physician training. There will be no reduction in GME payments. This is quite remarkable considering all the cuts to providers in the health reform bill.

We were not able to expand the number of residency slots subsidized by Medicare – the residency cap – but we did help insert critical provisions related to physician training. One is adding reimbursement for resident time spent in non-hospital settings, which will help train doctors to treat patients with chronic diseases such as diabetes. Another adds rules for counting resident time for didactic/scholarly activities such as seminars.

DSH payments
UC medical centers provide care to a large number of low-income individuals. Disproportionate share hospital (DSH) payments serve to compensate hospitals for this type of care, which is more costly, and to help provide low-income individuals access to treatment. In order to expand health insurance coverage to another 32 million people, the health reform law reduces DSH payments to California hospitals by $4.8 billion over 10 years. Nationally, DSH payments will be cut by $36.1 billion over 10 years. There were proposals to reduce DSH payments even further; however, UC Health was instrumental in preventing these reductions from occurring. Due to the efforts of UC Health, our medical centers saved $110 million over 10 years, therefore allowing UC Health to continue providing quality care to low-income individuals.

The health reform law is historic. While not perfect, it contains key provisions that expand access to care, preserve the safety net and support training of health professionals. UC Health took an active role in fine-tuning the bill to meet those needs. As the law is being implemented, we will continue to be very involved in efforts to strengthen our health care delivery system and our nation’s health.

John D. Stobo, M.D.
Senior Vice President
UC Health Sciences and Services