Policy Points
The newsletter of the New Hampshire Center for Public Policy Studies
March 2011
In this issue:
- An Uneven Playing Field: The Disparate Impacts of Local Aid Cuts
- Health System Cost-Shifting in NH
- Join Us on Our Blog and Social Media.
- Accepting Online Donations
An Uneven Playing Field: The Disparate Impacts of Local Aid Cuts
This is our first in a planned series of papers that will be published through the 2012-2013 budget-writing cycle in which the Center will analyze the potential impact of “downshifting” in various forms.
The report, “The Disparate Impacts of Local Aid Cuts, March 2011”, examines ways that cuts to local aid programs would be felt in communities across the state, which could involve public employees, retirement costs, school construction, special education expenses and more.
According to the report, cuts to local aid are often described as “downshifting,” or the pushing of costs to local taxpayers in an attempt to save money in the state budget. Since the only major revenue source available to cities and towns is the property tax, the shifting of state costs to municipalities often results in higher local property taxes, a trend that has been occurring for the past decade.
The Center makes it clear that the report is not intended as a critique of the Governor’s specific proposals; instead, those proposals are used to prompt a broader discussion of the financial relationship between the state and local communities.
Health System Cost-Shifting in NH
Our new study examines the health industry practice known as "cost-shifting"–charging certain patient populations more than the actual cost of their care so as to cover the cost of providing treatment to uninsured patients or Medicare and Medicaid patients whose expenses are not completely covered by the government.
According to the report , “Health System Cost-Shifting in NH, February 2011 ” ,expanding the analysis of cost-shifting to the entire health system did not fundamentally change the Center’s previous findings. Health systems continue to shift losses to private sector payers and the health care system continues to generate operating margins–although not all individual providers do.
“Our previous studies have studied the practice of cost-shifting among hospitals,” said Steve Norton the Center’s executive director. “Today however, vertical and horizontal integration have created health systems providing a broad group of services not traditionally associated with a stand-alone hospital.”
More generally, for policy makers interested in limiting cost-shifting, the report presents three possible policy responses:
- Encouraging the health care system to lower the cost of services so that existing reimbursement levels are adequate.
- Expanding health insurance coverage so that charitable care is financed by a source other than cost-shifting.
- Encouraging both the state Medicaid program and the federal Medicare program to increase reimbursements.
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