Sen. Jerry Ortiz Y Pino Addresses Voices Of Los Alamos On Global Budgeting For Hospitals

IMG_7823Sen. Jerry Ortiz y Pino addresses a large audience on global budgeting at the Feb. 24 Voices of Los Alamos meeting. Photo by Maire O’Neill/

IMG_7828Los Alamos County Council Vice Chair Pete Sheehey, right, chats with Sen. Jerry Ortiz y Pino during the Feb. 24 meeting of Voices of Los Alamos. Photo by Maire O’Neill/

IMG_7826Dr. Tyler Taylor, right, introduces Sen. Jerry Ortiz y Pino Feb. 24 at the Voices of Los Alamos meeting. Photo by Maire O’Neill/


Sen. Sen. Jerry Ortiz y Pino was the guest speaker Feb. 24 at Voices of Los Alamos. He has represented the 12th District in Bernalillo County since 2005, having been run unopposed in 2008, 2012 and 2016.

Introducing the senator, Dr. Tyler Taylor said Ortiz y Pino will be the lead sponsor in the Senate a year from now for the Health Security Act. Ortiz y Pino spoke to the group on “global budgeting” of hospitals as called for in the New Mexico Health Security Plan.

“He’s going to take everything he already knows and dig in deep for the next year so he will know every detail about it and be prepared to fight, that I’m sure,” Taylor said. “The key thing I think has been on his mind and mine of late is how to change the way we pay for our hospital care in the U.S. and particularly right now in New Mexico.”

Taylor said right now, the concept for that is global budgeting of hospitals which is a key feature of the Health Security Plan. He said Sen. Ortiz y Pino was the sponsor of a related memorial in the legislature this year, hoping that it could be passed as groundwork for the Health Security Act 12 months from now.

Ortiz y Pino said the global budgeting memorial stalled in committee as so many issues do in the 30-day session.

“It’s very hard to get anything with any complexity at all through the 30-day session because at least one committee along the way will raise doubts, or try to amend it or try to hijack it. It was disappointing that it didn’t get through but it wasn’t surprising. At least the seed was planted,” he said.

He said that’s one thing he’s come to learn watching the Health Security Act for at least 16 years – that the legislative process never stops.

“Whatever fails this year will be recycled or perhaps composted. It will somehow come back in a new form, bigger and better than ever, and it will be tried again. So, we don’t get discouraged, we get more motivated and keep trying these things,” Ortiz y Pino said.

He said the whole idea behind global budgeting is one that the state of Maryland has been doing for several years now.

“It’s very exciting and now Pennsylvania has been doing something very similar. In Maryland there’s a commission that sets the amount that each hospital’s budget will be for the coming year and they give them a global budget. They have to live within that budget. It frees them from having to do things that they would prefer not to do to earn more money – like holding onto patients for extra days that the insurance will pay for but the person doesn’t really need to stay in the hospital for but you do need to keep your budget going and you’re running low and the board is on your case to do something about the financial shortfall that you’re facing. So you hold onto the patient for a day or two longer,” Ortiz y Pino said.

He said the other thing that happens is that hospitals churn patients.

“You have them come back for a follow-up stay or you do extra testing or you do extra procedures or you charge $5 for Kleenex or you do all the things that hospitals feel pressured to do to balance the budget and to live in the system that reimburses them not for being available to do whatever we need in case something happens, but on a per activity or fee per service basis. So that each day is reimbursed, each procedure is reimbursed, each test is reimbursed and so if you want to have your budget balance at the end of the year, you have to do more patient days, more procedures, more testing, more anything to balance it out.” Ortiz y Pino said.

He said in Albuquerque it’s not such a big deal because there are plenty of patients coming in all the time.

“But if you go to Santa Rosa, for example, where they have an 8 or 12 bed hospital it is a big deal. We have tried over the years to help out with that with something called the Hospital Safety Fund, which is a way of using state money and county money – county money that used to go for helping indigent care is funneled to the state. We’ve compromised. They pay 12.5 percent from the county and the state kicks in some more and we make a direct lump sum payment to the hospitals to try and keep them alive,” Ortiz y Pino said.

But that’s different from a global budget, he said.

“In a global budget, we would sit down with each hospital and negotiate with them how many doctors so you need to have on staff, and hospitalists, and emergency room physicians, physicians, how many nurses do you need, how many nurse’ s assistants and how many janitors do you need, how many social workers or psychologists do you need to have on staff and what are your operating costs going to be, your insurance and your utilities and all of that,” he said. “We’ll figure out the budget and then we’ll reach an agreement on what it’s going to cost you to operate, to keep the doors open and be available for accidents or any kind of emergency and then we will provide you with one-twelfth of that money.”

Ortiz y Pino said that would free hospitals from having to try to earn their revenue over the year. It would take in New Mexico what’s called a waiver from the Medicaid reimbursement system so that Medicaid money could be bundled into it and then the hospitals would be able to, with some degree of certainty, operate during the whole year.

“In Pennsylvania they’re doing it on a voluntary basis. Hospitals don’t have to but if they want to they can enter into an agreement with the state and their Medicaid authority and they can participate voluntarily. In Maryland they said all hospitals will do this. And so they have a very powerfully commission and they can actually set the global budgets for each hospital, not the reimbursement rates, but the global budget and so they then don’t have to do a lot of billing. They don’t have to do any of the other things that they found it necessary to do to survive in this world. I’m not clear on how they do it in Maryland with private insurance because some insurance policies – all the private insurance companies may pay into a big state fund, but it seems to be working well there,” he said.

In terms of the Health Security Act, Ortiz y Pino said, “What we’re trying to do is get ahead of the cost curve and that’s what global budgeting is an attempt at doing”.

It’s an attempt at freeing hospital administrations from having to multiply the number of tests that they require so that they can survive financially. If they don’t have to do that, theoretically they will only order tests when the tests are needed. They’ll order an extra day in the hospital if the person really isn’t ready to go home,” he said. “But if they’re ready to go home, send them home, or send them home with home healthcare.”

Ortiz y Pino said global budgeting t really puts the healthcare system on a rational basis rather than on a maximized profit basis which is the underlying cause for why trillions and trillions dollars will be spent on healthcare over the next few years “until we can get a handle on this underlying facet that says healthcare is a business”.

“As long as it’s a business, corporations have an obligation to maximize profit for their shareholders. They don’t have any choice or they would not be taking care of their fiduciary responsibility,” he said. “The see-saw, the balancing act between healthcare as taking care of people’s need and healthcare as a way to make money, is tilted way out of line with healthcare to make money by far weighing the most. So we have a business model driven healthcare system and no way to control it.”