Lame Duck Look Back: Bill aims to reshape health care delivery

‘Hospital transformation’ plan targets service gaps, disparities

Illinois State Capitol

Editor’s note: This story is part of an ongoing “Lame Duck Look Back” series in which Capitol News Illinois is following up on the major bills that passed both chambers of the General Assembly in the Jan. 8-13 lame duck session.

SPRINGFIELD – During the early hours of the morning on one of the last days of the lame duck session, Illinois lawmakers passed a sweeping piece of legislation that seeks to revamp the way hospital services and health care generally are delivered in communities throughout the state.

The so-called “Hospital Transformation” bill, Senate Bill 1510, House Floor Amendment 3, was not part of the Legislative Black Caucus’ agenda, which was the focus of much of the activity during that session. But it did pass unanimously out of both chambers and will soon head to Gov. JB Pritzker for his signature.

In short, the bill makes about $150 million a year available to local communities to form partnerships that will develop and implement plans that improve medical access, with a focus on the uninsured and Medicaid users. The funds are meant for “integrated” health care, such as community-based services, preventive care, obstetric care, chronic disease management and specialists.

The program specifically targets what are known as “safety net hospitals,” which serve large numbers of Medicaid and uninsured patients, as well as “critical access” hospitals,” which are small hospitals in sparsely-populated rural areas that offer acute care and emergency medical services.

Funding for the grants will come from a statewide hospital assessment to earn federal dollars, which lawmakers renewed during the abbreviated regular session in May, combined with federal matching funds for Medicaid.

The bill was the result of a yearslong effort by a group called the Medicaid Working Group, made up of lawmakers from both parties and both chambers as well as officials from the governor’s office and the Department of Healthcare and Family Services. The group consults with hospitals, clinics and other stakeholders to design Medicaid policy.

House Majority Leader Greg Harris, D-Chicago, who is part of that working group, said during an interview that for the last several years, it has been focused on trying to design a modern Medicaid system that reflects a very different health care environment than the one that existed decades ago.

“When our system was designed, most healthcare was delivered in hospital settings, in medical surgery settings,” he said. “Now, you know, huge amounts of that kind of work is being done in outpatient settings, whether it’s diagnostic imaging or specialty care, or same day surgery. Hospitals are not the central hub for a lot of services like they used to be.”

The problem being faced in many parts of the state, he said, is that not all communities have access to the full array of medical services, resulting in health care disparities that cut across racial and ethnic lines, income categories, and the divide between urban, suburban and rural communities.

“So, whether you’re living in a densely populated urban area with very low automobile ownership, some areas with high concentrations of poverty and environmental factors, how do you plan for the future of good health care deliveries in those communities, in suburban communities where, you know, the environmental factors are totally different,” Harris said. “And then in rural communities in central and southern Illinois, where you may be a couple of counties away from a hospital, how do you make sure that quality health care is accessible in all those areas?”

The bill calls on local communities to conduct a “community needs assessment” to identify the particular needs of that community and then form collaborations between hospitals, primary care, preventive care and specialty care providers, mental health and substance abuse providers and other local organizations to address those needs.

It also calls on them to submit proposals specifically designed to improve health care outcomes and reduce health care disparities, including specific metrics that can be used to track whether or not the project is meeting its goals.

Beyond that, the bill puts few limitations on the types of proposals that will be considered. Evan Fazio, a spokesman for the Department of Healthcare and Family Services, which will administer the grant program, said that was intentional.

“We want to cast a really wide net and we want this to be about what the community needs and what the community wants,” he said. “And since it is a community-first initiative, we want people to kind of come up with the partnerships and collaborations that they think could come together to meet the needs of their community.”

Rep. Tom Demmer, R-Dixon, who also serves on the Medicaid Working Group, said one of the biggest challenges in crafting the bill was getting all the various players to come to a shared understanding of what a health care “transformation” should look like and what kinds of local programs the state was looking for.

“It’s been years in the making. These discussions have literally been going on for years, trying to craft some definitions and parameters for just what do we mean by this transformation idea,” he said.

The bill is what’s known in legislative jargon as an “agreed bill,” meaning lawmakers from both parties and both chambers, as well as all of the various interest groups affected by it, came to a general agreement on its provisions.

That’s a relatively rare occurrence in the Illinois General Assembly, but both Harris and Demmer said it has become common with Medicaid legislation, primarily because of the bipartisan nature of the Medicaid Working Group.

“Over the years, people have really learned to work together, and people put aside political differences and partisan differences in order to get really good policy outcomes,” Harris said. “And I think that has really helped us do good work, and it’s really nice to see.”

“I think this hospital transformation fund is a unique and innovative way to put additional money in communities that are struggling with health care today,” Demmer said. “The need has always been there, but it’s been highlighted by the impact we’ve seen with COVID in a lot of communities.”

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government and distributed to more than 400 newspapers statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.