There is no doubt that residents of Baltimore's most impoverished neighborhoods — or, for that matter, people in similar circumstances in rural parts of the state — could use 1,000 jobs that pay fairly well, require few skills to start and include the chance for training and advancement. The question about a proposal to create such an opportunity, spearheaded by the Johns Hopkins Hospital and Health System and joined by several other area hospitals, is whether it's appropriate to use an increase in hospital billing rates, which are passed on to all of the state's health care consumers, to fund it.
The state's insurance companies are skeptical, arguing that while the proposed program's goal is laudable, any new jobs should be funded through existing resources. We disagree. The beauty of the proposal is that it not only serves the general good by creating opportunities in areas that desperately need them but that in doing so, the hospitals can provide or expand services that improve the health care system and potentially reduce long-term costs.
For starters, it's important to put the proposal in perspective of the state's overall health spending. The hospitals have long been governed by a unique rate-setting mechanism that has guaranteed them higher Medicare reimbursement rates so long as the growth in certain hospital costs stayed below the national average. That waiver from the usual federal rules was recently modernized in a way that requires the state to meet aggressive goals to control overall health spending. The results so far have been promising, and the hospitals have a cushion of about $400 million in their efforts to meet the new federal requirements.
The proposed jobs plan would cost $40 million and so would entail raising rates by the equivalent of 10 percent of the cushion — not a serious threat to the state's ability to maintain its Medicare waiver. Moreover, raising $40 million would require increasing hospital rates by about a quarter of one percent. That is to say, a hospital bill that previously would have been $1,000 would now be $1,002.50.
On the whole, though, there is reason to believe that this program, if implemented well, could actually reduce overall health care spending. In their proposal, the hospitals note the correlation between poverty and poor health outcomes and suggest that improving employment prospects in poor neighborhoods could help. True enough. But their stronger argument lies in their suggestions of what kinds of jobs the money could be used to create.
Specifically, they point to community health workers, certified application counselors and peer recovery support specialists. The first serve as connectors between health consumers and hospitals to provide education and follow-up to care in ways that reduce the chances of hospital admission or re-admission. Application counselors help consumers determine their eligibility for Medicaid or to navigate the process of obtaining private insurance under the Affordable Care Act. By steering people into appropriate health insurance, these workers can reduce the likelihood that patients will show up in emergency rooms for routine care, thus lowering costs, and they can reduce the amount of uncompensated care hospitals provide, the costs of which are spread among all consumers. Peer recovery workers are people who have experienced substance abuse or mental health conditions who can help others through the treatment process. Because of their personal histories, they can be particularly effective in helping others toward recovery.
All three of those categories of workers have the potential to improve health outcomes and lower costs, all three can be performed by people with relatively minimal training, and none of them are funded under the current hospital rate setting system. There would be a strong case to make to increase hospital rates to support those functions on their own merits; the idea of targeting hiring to impoverished ZIP codes is a bonus.
The program wouldn't be a blank check for the hospitals. They are suggesting that the HSCRC consider individual hiring proposals and evaluate them on a variety of measures, including the proposed wages and benefits; recruitment strategies to target impoverished communities; training and career advancement opportunities; and, perhaps most importantly, the role the jobs would play in helping the hospitals meet the terms of the waiver. If the commission determines that a proposal doesn't meet the highest standards in terms of benefiting the community, it can say no.
Creating 1,000 jobs may not begin to solve the problems in inner city Baltimore, but it's a start, and it can improve health outcomes at the same time. We urge the HSCRC to move forward with this plan as quickly as possible.