a policy for healthcare access

8/2/2019 A Policy for Healthcare Access

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PROMOTING HEALTHCARE RELATED INVESTMENT IN HIGH NEEDS AREA

OVERVIEW OF THE PROBLEM

Based on a comparison of discharges for avoidable hospital conditions (AHCs),

we find that Paris provides greater access to primary care than Manhattan.Age-adjusted AHC rates are more than 2.5 times as high in Manhattan as inParis (Gusmano, Rodwin, & Weisz, 2011).

For uninsured Americans, access to health care depends largely on where theylive, this study suggests. It found that people in some cities were twice aslikely to report trouble getting care as those in other cities. Overall, about 31percent of uninsured Americans said they did not get needed care or theypostponed getting care, the Center for Studying Health System Changereported in a study published by the Journal of the American MedicalAssociation (Access to health care varies, 1998).

Recognizing the importance of health coverage for assuring children access topreventive and other health care for a healthy start in life, there currently issignificant focus at the national and state level on reducing the number ofuninsured children. Largely because of their high uninsured rate, low-incomenon-citizen children have particularly poor access to care, with many lacking aregular provider and going without preventive care (Artiga & Schwartz, 2007).

Controlling for age, gender, ethnicity, and area of residence, children whoreceived care from a private practice pediatric group were 73% less likely toutilize the Emergency Department if insured and 93% less likely if uninsured to

use the ED than children who had not visited a pediatrician. Uninsured childrenwere nearly 4 times more likely to use the ED than insured children. Amonginsured children, those covered by Medicaid were 54% less likely to use the EDthan children with private insurance. Compared with white, non-Hispanicchildren, Asian or Hispanic children were no more likely to use the ED. InsuredNative American children were more than twice as likely as white, non-Hispanic children to utilize the ED (Johnson & Rimsza, 2004).

EFFECTS OF THE PROBLEM

The effect of poor access to healthcare, ie. the lack of a primary care

physician, local clinic, and a general lack of quality healthcare alternativesrelated to socioeconomic status and geographic location means a lack ofquality healthcare treatment for those people who need it. This means anincrease in adult and child mortality rates for those individuals, an increase inthe severity of disease in those individuals and an increase in avoidablehospital conditions or (AHCs).

CURRENT MODEL INVESTMENT POLICYS


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ACCELERATED DEDUCTIONS

The American Recovery and Reinvestment Act was enacted in 2009. Thelegislation allowed an extension for businesses to continue to deduct bonusdepreciation along with an expanding of IRS section 179. Section 179 outlines

what is subject to bonus depreciation. The goal of the ARRA was to stimulatethe economy and to incentivize businesses to invest in new property andequipment. The legislation allowed business to recover more of theirdepreciated asset during the first year than would otherwise be possible.Section 179 of the IRS code allowed businesses to deduct up to 250 thousanddollars of a durable goods purchase in 2009. In order for a business to qualityfor the 100% bonus depreciation rule, the purchased property or good wouldhave had to occur before September 8, 2010 and under section 168 acquiredor constructed after 2008. If the business acquired the property or durablegood after September 8, 2010 the business (or taxpayer) would still be eligiblefor a 50% depreciation bonus the first year, as opposed to the 100%

depreciation bonus if bought before September 2010. In December of 2010the ARRA was amended by The Tax Relief, Unemployment Insurance Re-authorization, and Job Creation Act of 2010. This act extended the 100% bonusdepreciation from September 8, 2010 to January 1, 2012 and then reverts backto the 50% bonus for 2012. With the new extension, the property or good musthave been placed in service before 2012, but after 2008 and have a recoveryperiod of less than 20 years.

ACCELERATED DEDUCTIONS BASED ON GEOGRAPHIC LOCATION

These accelerated methods of depreciation are not equal to traditional straight

line method, but instead provide a higher level of depreciation for a purchasein the earlier years of a property or good. Most types of tangible goods such asbuildings, machinery, vehicles, equipment; computer software and evencopyrights and patents are despreciable, the one exception being land.Current incentives to invest in distressed areas include the FederalEmpowerment Zones (EZs) program and a second example being the New York State Excelsior Jobs program which superseded the New York StateEmpire Zone program. If a business qualifies for the EZs program among otherincentives, they will qualify for increased 179 deductions which include: takingan increase in deduction up to $35,000 of the cost of eligible equipmentpurchases, subject to certain limitations, in the placed-in-service year of the

equipment in an EZ location. Those deductions were available for equipmentplaced in service after December 31, 2001, but before January 1, 2010. Thedeductions were $35,000 per business, with the full benefit received if a totalof 160 thousand dollars to 1 million dollars of eligible equipment waspurchased and placed in service in 2007. You can also see IRS Publication 946for what equipment is (was) eligible. Also see IRS Publication 954 for what therequirements are for qualifying as an EZ business. The second example isthe NYS Excelsior Jobs Program. Under the Excelsior Investment Tax Credit a


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company which qualified could deduct two percent of qualified investments ontheir taxes. They could also qualify for the Excelsior Research andDevelopment Tax Credit which is a credit of 50 % of the Federal Research andDevelopment credit up to three percent of research expenditures in New YorkState, if investments was in research.

NEXT STEPS

Knowing this I propose a similar deduction schedule as the ARRA and Section179 of the IRS code based on geographic consideration and specific tomedical/healthcare related investment in urban high needs areas, such asthose designated as Federal Empowerment Zones or similar to NYS olderEmpire Zone locations. Section 179 outlines what is subject to bonusdepreciation and this policy would follow those accelerated deductionschedules, though for medical investments. Again like the ARRA in order for abusiness to quality for the 100% bonus depreciation rule the purchased

property or good would have have to be before a date in time to bedetermined. However, unlike the ARRA, investments would be geographicallybased, similar to Federal Empowerment Zones or previous New York StateEmpire Zones and would have to be medical or healthcare related in nature.The geographic regions would be delineated by AHC rates (avoidable hospitalconditions), uninsured rates, level of emergency department use or other suchfactors. The types of property or equipment investments which would qualifyfor the accelerated deduction schedule would be construction built forhealthcare related purposes, rehabilitation of buildings used for clinical orhealthcare related purposes, major investments in healthcare relatedequipment or in healthcare information technology. The goal of this proposed

legislation would be to facilitate an increase in preventive healthcare servicesas well as an increase in the quality of healthcare services provided in highneed geographic regions, or with populations which are undeserved at thistime.

WORKS CITED

Access to health care varies. (1998).Journal of Commerce, p. 5.A-5A. New York,

United States, New York.

Artiga, S., & Schwartz, K. (2007, May). Health Insurance Coverage and Access

to Care for Low-Income Non-Citizen Children. The Henry J. Kaiser Family

Foundation. Washington, DC.

Bonus Depreciation and Increased Section 179 Deduction under the American

Recovery and Reinvestment Act. (n.d.). Internal Revenue Service.


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Retrieved March 24, 2012, from

http://www.irs.gov/businesses/small/article/0,,id=213666,00.html

Excelsior Jobs Program . (n.d.). Welcome to Empire State Development.

Retrieved March 24, 2012, from

http://www.esd.ny.gov/BusinessPrograms/Excelsior.html

Gusmano, M. K., Rodwin, V. G., & Weisz, D. (2011). A new way to compare

health systems: avoidable hospital conditions in Manhattan and Paris.

Health affairs (Project Hope), 25(2), 510-20. doi:10.1377/hlthaff.25.2.510

Johnson, W., & Rimsza, M. (2004). The Effects of Access to Pediatric Care and

Insurance Coverage on. Pediatrics, 113(3), 483-488.

Welcome to the Community Renewal Initiative - Economic Development - CPD

- HUD. (n.d.). Community Planning & Development. Retrieved March 24,

2012, from

http://www.hud.gov/offices/cpd/economicdevelopment/programs/rc/inde

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