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Working Group 18 - Transition to the New System [ 1 ]
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�GROUP 18 - TRANSITION TO THE NEW SYSTEM
TABLE OF CONTENTS
BOOK TWO
I. State Issues
II. Initial Federal Action
III. Technical Assistance
IV. State/Federal Relations
V. Other Transition Issues
�1. STATE ISSUES
�Group 18 - State Issues
Group 18 considered the impact of health reform on states during a transition from
a variety of perspectives. The primary issues included: readiness of states to implement
reform; resources needed to implement reform; definition of specific requirements on
states to implement reform; and the incentives for states to move quickly.
1)
Readiness of States to Implement Reform
o
March 1993, Lawrence Brown. -- This background report summarizes the obstacles
and opportunities for states in implementing managed competition. Brown concludes
that no state has yet adopted a full blown managed competition system, although a
number have adopted innovations that are consistent with a managed competition
style reform. He observes that a political consensus had emerged in states by 1990
to move ahead, however, that fiscal capacity remains a critical impediment. His
paper examines reasons for state initiative (including extended periods of study,
progressive leadership, and building broad coalitions) and some of the reforms to
date. He argues for flexibility for states to finetune their systems within the context
of a detailed federal blueprint. He also recommends tools to diagnose state progress
and rewards and incentives tailored to stages of state development.
o
Group 18 met with David Helms of the Alpha Center to further identify the
readiness of various states to implement reform on a fast track and the criteria for
judging states. David Helms identified criteria for judging state readiness that
supported and expanded on the information in the Lawrence Brown background
paper. He concluded that up to 40 states could be ready to move with appropriate
support.
o
Trish Reilly of the National Academy for State Health Policy provided an analysis
of the factors important in assessing state capacity and estimated state readiness in
three categories. Approximately 34 states were considered to be likely or could be
ready for early reform.
o
At an April 20 meeting, staff of the NGA felt that 9 states could be ready in 18
months.
2)
Resources Needed to Implement Reform
Group 18 tried to assess the resource needs of states and HIPCs to implement
reform.
o
February 15, 1993 memo identifies several working assumptions for reform at the
�state and HIPC level.
o
March 12, 1992 , Mary Jo O'Brien identifies possible state government activities and
HIPC responsibilities necessary to implement health care reform.
o
Memo identifies 20 minimum federal requirements that a state program must meet.
o
April 5, 1993 memo from Health Benefits America suggests the per capita costs of
HIPC-type functions might be approximately $2.83 per person for consumer
information type services.
Members of group 18 also met with specific states and staff from the Robert Wood
Johnson Foundation to discuss state health reform experience.
o
"Introduction to Integrate Systems of Care", Vermont Health Authority
o
"Federal State Health Care Issues, Florida's Flexibility Proposal", April 1993
o
Robert Wood Johnson, State Initiatives in Health Care Financing Reform
In general, the consensus was that states will need some planning money early on
(i.e. before state legislation) and that states will need help with administrative costs to set
the program up as well as with subsidies for certain populations. Florida argued that
administrative costs were less important than early help with subsidies.
3)
Requirements on states to implement reform
Staff of the NGA recommend that federal financial support could be tied to specific
measures of state progress in implementing reform. A four phase approach was developed - planning grants without strings attached; 1/3 of start up grants after the passage of state
legislation; 2/3 of start up grants after submission of a state plan; and subsidies just prior
to open enrollment. (See notes from April 20 meeting)
Group 18 worked with NGA staff and working group leaders to define the specific
criteria for state legislation, start up grants and subsidies. A series of documents were
developed and revised. The process resulted in a number of significant recommendations
to make health care reform more flexible to permit alternative state models (e.g. single
payer, managed competition and mixed models) as well as greater state flexibility in
organizing the structure and operation of the Health Alliance(s). States also expressed their
need to participate in setting the performance accountability standards.
o
Various versions of "State-Federal Relations During the Transition"
o
Suggestions from Working group Leaders
�4)
Incentives for States to Act
o
Joe Hight, USDOL, "Selected Features of the Unemployment Insurance
Program". This document describes the provisions and experience of the
Federal Unemployment Tax Act (FUTA). The FUTA program has been an
effective model for inducing states to implement unemployment compensation
programs. Such a model is being considered for inducing states to implement
health reform. That is, if a state's health care program does not meet certain
Federal standards and requirements, then the employers will not receive
credits against their federal tax.
�DRAFT: Please Do Not Quote o r
C i r c u l a t e Without Permission
Lawrence D. Brown
March 1993
MANAGED COMPETITION IN THE STATES:
OBSTACLES AND OPPORTUNITIES
The s t a t e s have been a c t i v e p a r t i c i p a n t s , sometimes prime
movers, i n t h e i n c r e a s i n g l y i n s i s t e n t h e a l t h r e f o r m
politics
emerging i n t h e U n i t e d S t a t e s s i n c e 1990 o r so. Many s t a t e s have
adopted i n n o v a t i o n s c o n s i s t e n t w i t h , and s u p p o r t i v e o f , managed
c o m p e t i t i o n , b u t none has y e t adopted i t as a f u l l - b l o w n system.
Most s t a t e s f i n d t h e n o t i o n o f managed c o m p e t i t i o n
and
tantalizing,
some a r e i n s t a l l i n g and f i n e t u n i n g components o f i t , b u t few
have t h o u g h t c a r e f u l l y about what i t might r e q u i r e as a system.
And beyond t h e c o n c e p t u a l h o r i z o n l i e s a v a s t s e t o f implementat i o n issues.
The l i k e l i h o o d t h a t s t a t e s may s u c c e s s f u l l y formu-
l a t e and a d m i n i s t e r
increases
systems o f managed c o m p e t i t i o n
presumably
w i t h t h e number o f " p r e r e q u i s i t e s " f o r i t t h a t they
have p u t i n p l a c e , so t h e key c h a l l e n g e s
t o those who would move
them i n t h a t d i r e c t i o n i s t o i d e n t i f y these p r e r e q u i s i t e s and
f a s h i o n rewards f o r meeting them.
T h i s b r i e f paper e x p l o r e s how
t h i s m i g h t be done.
Where t h e S t a t e s Are Coming From
I f managed c o m p e t i t i o n
i s t o f i n d a happy home i n t h e s t a t e s
i t must speak t o t h e p o l i t i c a l and f i s c a l r e a l i t i e s t h a t both
d r i v e and i n h i b i t h e a l t h care r e f o r m i n t h e f e d e r a l system.
Even
a t t h e end o f t h e 1980s one might have d i s m i s s e d t h e s t a t e s as
u n l i k e l y sources o f i n n o v a t i v e energy because they seemed t o l a c k
both t h e p o l i t i c a l w i l l t o engineer change and t h e f i s c a l
�capacity t o sustain i t .
F i s c a l c a p a c i t y was
p r o b l e m a t i c because
c o m p e t i t i o n f o r business
and t a x base i n t h e f e d e r a l system
p e n a l i z e s s t a t e s t h a t would s t e p out from t h e crowd by
imposing
employer mandates or i n c r e a s i n g taxes t o expand h e a l t h coverage.
Political will
( t h e t r u e d e t e r m i n a n t of f i s c a l c a p a c i t y ) was
in
doubt because p o l i t i c a l l e a d e r s assumed, p r o b a b l y c o r r e c t l y ,
e f f o r t s t o change t h e system r e q u i r e d heavy investments
that
of
p o l i t i c a l c a p i t a l i n schemes t h a t would evoke s t r o n g o p p o s i t i o n
from i n t e r e s t e d groups w i t h o u t e l i c i t i n g compensating g r a t i t u d e
w i t h i n the befuddled e l e c t o r a t e .
Since 1990
t h i s p i c t u r e has changed i n one v e r y
salient
w a y — t h e s t a t e s have d r a m a t i c a l l y d i s c o v e r e d t h e p o l i t i c a l w i l l
to innovate.
Some of t h e new
p o l i t i c s d e r i v e from
intensifica-
t i o n o f p r e s s u r e by t h r e e more or l e s s c o n s t a n t sources:
uninsured
( o r more a c c u r a t e l y , those i n s t i t u t i o n s t h a t bear t h e
r i s i n g c o s t s o f t r e a t i n g them), business purchasers
r e s i s t a n t t o c o s t s h i f t i n g i n t h e i r d i r e c t i o n though
u n w i l l i n g t o y i e l d t h e i r ERISA exemptions),
suspects
the
(increasingly
still
and t h e u s u a l l i b e r a l
i n p u b l i c h e a l t h and k i n d r e d w o r l d s .
Most o f t h e change
i n p o l i t i c a l c l i m a t e , however, seems t o come from two newer
variables:
who
t h e r i s i n g anger of m i l l i o n s of middle c l a s s v o t e r s
c o n s t i t u t e t h e " u n e a s i l y i n s u r e d " because t h e p r i c e and
of coverage render i t l e s s dependable, and t h e
d e s p e r a t i o n of s t a t e policymakers
who
terms
growing
watch Medicaid
spending
consume ever more of t h e revenues t h e y r e q u i r e f o r p o l i c y
l e a d e r s h i p i n o t h e r arenas ( i n c l u d i n g such w e l l - d e f e n d e d
as e d u c a t i o n and c o r r e c t i o n s ) .
bastions
I n aggregate these f i v e v a r i a b l e s
have c r e a t e d a p o w e r f u l p o l i t i c a l economy o f change.
2
The
heart
�o f t h e economic component i s t h a t (as Lawton C h i l e s r e c e n t l y
remarked) a t p r e s e n t growth r a t e s workers' s a l a r i e s by t h e end o f
t h e decade w i l l resemble
premiums.
f r i n g e benefits attached t o health
The essence of t h e p o l i t i c a l element
i s that public
p o l i c y m a k e r s l o s e t h e p l e a s u r e s o f l e a d e r s h i p when Medicaid eats
up a l l t h e i r r e s o u r c e s .
By 1990 a p o l i t i c a l consensus was emerging
among s t a t e
l e a d e r s t h a t h e a l t h care r e f o r m c o u l d no l o n g e r be dodged.
(Wofford's s u r p r i s e e l e c t i o n i n 1991 p o w e r f u l l y r e i n f o r c e d
view, o f course.)
this
But f i s c a l c a p a c i t y remains as p r o b l e m a t i c
today as ever, and t h e s t a t e s ' t a s t e f o r hand-to-hand combat w i t h
p r o v i d e r and payer groups
i s s t i l l muted.
mixed p i c t u r e .
i s u s i n g p r o v i d e r t a x e s t o extend
Minnesota
Thus 1993
coverage t o an unknown number o f u n i n s u r e d c i t i z e n s .
finds a
F l o r i d a and
Vermont have adopted a m b i t i o u s p l a n s t o p l a n r e f o r m s o f u n c e r t a i n
magnitude.
Oregon has f i n a l l y won
f e d e r a l approval f o r a waiver
t o expand M e d i c a i d ; t h i s , coupled t o an employer mandate, i s
expected t o move t h e s t a t e toward u n i v e r s a l coverage, b u t t h e
c o s t s and t h e sources of s t a t e money remain u n c l e a r .
(1988) e f f o r t i n Massachusetts
The
t o i n s t a l l a play-or-pay
earlier
system
has been s t a l l e d by p o l i t i c a l r e s i s t a n c e and f i n a n c i a l d i s t r e s s .
The one t r u e s t a t e "model" remains Hawaii, which covers (by i t s
own e s t i m a t e ) 98 p e r c e n t o f i t s p o p u l a t i o n m a i n l y w i t h t h r e e
programs (an employer mandate, Medicaid, and a g a p - f i l l i n g S t a t e
H e a l t h Insurance Program),
emphasizes p r e v e n t i o n and p r i m a r y
care, and h o l d s down h e a l t h c o s t s i n an o t h e r w i s e expensive
state.
The mounting pressures of p o l i t i c a l economy s t r o n g l y
�encourage s t a t e - l e v e l reform (unless the f e d e r a l government
preempts the issue), but most states are f e e l i n g t h e i r way
cautiously.
This i s the broad short-term context i n t o which
managed competition would be inserted.
Explaining Patterns of Leadership
Why some s t a t e s — n o t a b l y , Hawaii, Massachusetts, Oregon,
Minnesota, F l o r i d a , and Vermont—have moved t o the head of the
class would seem t o be the c e n t r a l question f o r those gauging the
prospects f o r short term innovation but, strange t o say, the
c o r r e l a t e s of s t a t e health reform leadership remain l i t t l e
explored and poorly understood.
To some degree the i d e n t i t i e s of
the leaders surely derive from happenstance—the r i g h t people
occupied the r i g h t places a t the r i g h t times.
Giving s e r e n d i p i t y
i t s due, however, the six-member leadership set seems t o share
three general p r o p e r t i e s t h a t , taken together, may i n d i c a t e some
s t r a t e g i c lessons.
F i r s t , these innovators tend t o preface t h e i r p o l i c y
departures w i t h extended periods of study and d e l i b e r a t i o n i n the
forum of commissions and task forces.
C r i t i c s sometimes deride
these doings as another case of t a l k s u b s t i t u t i n g f o r a c t i o n
(which i s no doubt sometimes so), but i n r e t r o s p e c t the c r i t i q u e
misses the mark.
At t h e i r best these forums l e t p a r t i c i p a n t s
from d i s t i n c t i d e o l o g i c a l , p a r t i s a n , and r e g i o n a l viewpoints
learn about each others' values and i n t e r e s t s and begin t o search
out common ground.
They amass, present, and package data t h a t
give policymakers growing confidence t h a t they know whereof they
speak.
And they acquaint leaders w i t h group p o s i t i o n s before
�t h e y a l l inarch onto t h e f o r m a l b a t t l e f i e l d s of
legislation.
Second, l e a d i n g s t a t e s t e n d t o be s u f f i c i e n t l y
"progressive"
(or endowed w i t h a s o l i d enough b l o c k o f l i b e r a l s e n t i m e n t ) t o
a r t i c u l a t e c r e d i b l e t h r e a t s of d r a m a t i c d e p a r t u r e s s h o u l d
r e c a l c u l a t e i n t e r e s t s t h w a r t more moderate ones.
I n Hawaii,
l a b o r h e l p e d t o t r a n s l a t e p l a n t a t i o n - e r a coverage t r a d i t i o n s
f i r s t i n t o conventional
employer mandate.
h e a l t h insurance and
then i n t o the
I n Massachusetts, i n g r a i n e d l i b e r a l i s m ,
r e i n f o r c e d by t h e p o p u l a r i t y of Governor M i c h a e l Dukakis
and
v i b r a n t economic growth i n t h e l a t e 1980s, emboldend t h e s t a t e t o
l e g i s l a t e p l a y or pay.
"progressive"
Minnesota and Vermont are a t y p i c a l l y
s t a t e s w i t h uncommonly expansive images o f
government's d u t i e s , a c u l t u r a l p r e d i s p o s i t i o n t h a t combined w i t h
g e o g r a p h i c a l c o n t i g u i t y t o , and
produce s u s t a i n e d
f a s c i n a t i o n w i t h , Canada t o
debate about a s i n g l e payer system.
Democratic enclaves among t h e e l d e r l y i n and
Liberal
around Miami
and
Miami Beach j o i n e d AARP behind a s i n g l e payer b i l l t h a t m i g h t
have won
s u p p o r t a t an u n p r e d i c t a b l e
o f f e r p l a u s i b l e counter-proposals.
pace had moderates f a i l e d t o
When major r e f o r m s
are
p o l i t i c a l l y c r e d i b l e , opponents t h i n k t w i c e b e f o r e d e r a i l i n g l e s s
major ones.
This implies, paradoxically,
t h a t t h e s i n g l e most
p o t e n t f e d e r a l i n c e n t i v e t o make managed c o m p e t i t i o n
s t a t e s i s t o keep a s i n g l e payer system c o n s t a n t l y
prominently
work i n t h e
and
on t h e s t r a t e g i c menu.
Third, leadership
broad c o a l i t i o n s and
s t a t e s have found ways and means t o b u i l d
d u r a b l e consensus i n t h e i r p a r t i c u l a r
p o l i t i c a l circumstances.
T h i s p r o p o s i t i o n sounds l i k e a
tautology d e f i n i n g " e f f e c t i v e leadership",
5
but t h e r e i s more t o
�i t than t h a t .
Hawaii adopted and has f i n e t u n e d i t s l e g i s l a t i v e
package i n a p o l i t i c a l environment t h a t i s s e l f - c o n s c i o u s l y
communitarian and even " f a m i l i a l . "
play-or-pay
Massachusetts l e g i s l a t e d
(among o t h e r reforms) by engaging i n a s t a t e w i d e
m u l t i - p a r t y c o a l i t i o n , under business
sponsorship,
of p u b l i c , p r o v i d e r , payer, and o t h e r groups.
g r a s s - r o o t s , democratic
a wide range
Oregon emphasized
consensus b u i l d i n g by means o f town
meetings and phone surveys.
I n Minnesota, a "gang o f seven"
l e g i s l a t o r s , i n c l u d i n g Democratic and Republican
l i b e r a l s and
c o n s e r v a t i v e s , met v e r y q u i e t l y t o hammer o u t d i f f e r e n c e s b e f o r e
p r e s e n t i n g t h e i r work t o t h e p u b l i c (and t h e Governor).
In
Vermont, s t r o n g commitment from t h e w e l l - r e s p e c t e d House Speaker
moved change along and s u s t a i n e d compromise w i t h s i n g l e - p a y e r
advocates i n t h e Senate.
I n F l o r i d a , House l e a d e r s worked w i t h
Governor C h i l e s t o b r i n g a f f e c t e d i n t e r e s t s aboard t h e r e f o r m
coalition.
I n each case, r e f o r m p o l i t i c s r e c a l l e d t h e p e r i l s o f
P a u l i n e , b u t i n each, t h e s u b t l e a r t s and w i l e s o f l e g i s l a t i v e executive r e l a t i o n s prevailed.
I n Oregon, Minnesota, and Vermont, key l e g i s l a t o r s t o o k t h e
l e a d , w i t h Governors l o o k i n g on b e n i g n l y from t h e s i d e l i n e s
(Oregon),
j o i n i n g i n f i r m support
b a r g a i n i n g f o r an a c c e p t a b l e b i l l
and F l o r i d a , governors
(Vermont), o r s t a y i n g a l o o f and
(Minnesota).
I n Massachusetts
helped t o d e f i n e and advance t h e r e f o r m
agenda, b u t depended on s t r o n g l e g i s l a t o r s
( P a t r i c i a McGovern i n
Massachusetts and E l a i n e Bloom i n F l o r i d a ) t o see i t s a f e l y
through.
I n most, " l i b e r a l s " took t h e l e a d , b u t i n a l l w i n n i n g
t h e s u p p o r t o f s o l i d , s e n i o r , w e l l - r e g a r d e d c o n s e r v a t i v e s was
�essential t o coalition-building.
The c o n s e r v a t i v e s worked f o r
change p a r t l y because t h e i r c o n s t i t u e n t s were c l a m o r i n g
for i t ,
p a r t l y because t h e y f e a r e d a rush t o hasty r a d i c a l measures
( e s p e c i a l l y a s i n g l e payer system), a n d — v e r y i m p o r t a n t — p a r t l y
because p a r t i c i p a t i o n i n e a r l i e r commissions and t a s k f o r c e s had
educated them about problems and o p t i o n s .
and
implementation
Successful
adoption
o f managed c o m p e t i t i o n i n t h e s t a t e s w i l l
demand s i m i l a r p o l i t i c a l dynamics on a l a r g e s c a l e .
Where t h e S t a t e s Are Heading
A l t h o u g h no s t a t e has y e t harmonized t h e elements o f managed
c o m p e t i t i o n i n t o a coherent l e g i s l a t i v e package, many a r e moving
i n s t r a t e g i c d i r e c t i o n s b r o a d l y c o n s i s t e n t w i t h t h a t approach.
The major s t a t e t r e n d s t h a t h e l p l a y t h e f o u n d a t i o n f o r managed
c o m p e t i t i o n a r e these:
—
Managed Care.
Many s t a t e s a r e l o o k i n g t o managed care t o
generate s i z a b l e savings,
e s p e c i a l l y i n Medicaid.
Unwilling t o
make f u r t h e r c u t s i n e l i g i b i l i t y , b e n e f i t s , and p r o v i d e r
payments, t h e y hope t h a t new u t i l i z a t i o n p a t t e r n s w i l l
both
improve care f o r Medicaid c l i e n t s and slow t h e growth o f c o s t s .
The most d r a m a t i c
case i s New York S t a t e :
though t r a d i t i o n a l l y
no devotee o f managed care o r c o m p e t i t i o n , New York aims t o
e n r o l l h a l f i t s Medicaid p o p u l a t i o n i n managed c a r e p l a n s by
1996.
—
Insurance Reform.
p l a i n t s o f t h e uninsured
Many s t a t e s have responded t o t h e
and t h e u n e a s i l y i n s u r e d by passing
r e q u i r e m e n t s t h a t i n s u r e r s honor community r a t i n g , guaranteed
i s s u e , guaranteed r e n e w a b i l i t y , and more.
The b a s i c problem i s
�t h a t t h e two c o n s t i t u e n c i e s a r e i n t e n s i o n :
f o r example,
community r a t i n g may make coverage more a v a i l a b l e f o r t h e
u n i n s u r e d by r a i s i n g p r i c e s f o r those i n s u r e d people whose
d i s c o n t e n t s have g i v e n h e a l t h r e f o r m much o f i t s r e c e n t
muscle.
The c o n f l i c t dramatizes
i s h e a l t h r e f o r m "about"
political
a deep p h i l o s o p h i c a l problem:
f i s c a l s e c u r i t y f o r d i s g r u n t l e d "haves"
or s o c i a l s o l i d a r i t y t h a t shoulders t h e c o s t s o f b r i n g i n g those
h i t h e r t o excluded
—
i n t o t h e insurance system?
Basic B e n e f i t s .
As a p r e c o n d i t i o n f o r r a t i o n a l i z i n g
t h e i r h e a l t h systems, many s t a t e s a r e t r y i n g t o d e f i n e a package
of b a s i c b e n e f i t s f o r a l l c i t i z e n s .
with trepidation.
Most approach t h e e x e r c i s e
To separate medical wheat from c h a f f i s
c o n c e p t u a l l y and m e t h o d o l o g i c a l l y very t r i c k y
(hence t h e
f a s c i n a t i o n w i t h Oregon's r a t i o n i n g scheme, which c o n f i d e n t l y
extends one answer),
and e x p l i c i t y t o deny coverage f o r some
procedures o r groups i n v i t e s p o l i t i c a l c o n t r o v e r s y .
Nonetheless
most s t a t e s p r o b a b l y concur t h a t s e r i o u s r e f o r m cannot advance
w i t h o u t some such l i s t ,
and they remain i n dogged p u r s u i t o f
them.
—
Data Capacity.
S t a t e s g e n e r a l l y b e l i e v e t h a t t h e y cannot
make sense o f t h e broad menu o f r e f o r m o p t i o n s w i t h o u t e x t e n s i v e
data t o h e l p them t a i l o r g e n e r a l p r e s c r i p t i o n s t o t h e i r
particular conditions.
They a r e t h e r e f o r e w o r k i n g hard t o amass
and analyze data on medical outcomes; s m a l l area v a r i a t i o n s ;
p r a c t i c e p a t t e r n s and parameters; deployment o f f a c i l i t i e s ,
t e c h n o l o g y , and p e r s o n n e l ; and more.
T h e i r quest i s o f t e n
m a t e r i a l l y a s s i s t e d by Robert Wood Johnson and o t h e r f o u n d a t i o n s ,
whose s u p p o r t l e t s s t a t e s pursue i m p o r t a n t b u t arcane and t e d i o u s
8
�i n q u i r i e s t h a t might o t h e r w i s e f a i l t o f i n d adequate f u n d i n g .
Though t h e data o f t e n c o m p l i c a t e as much as t h e y c l a r i f y ,
their
a v a i l a b i l i t y b u i l d s p o l i c y m a k e r s ' c o n f i d e n c e t h a t t h e y know ( o r
w i l l one day soon) what they a r e d o i n g .
—
Administrative Consolidation.
Vermont concluded
S t a t e s such as F l o r i d a and
t h a t the fragmentation of a u t h o r i t y f o r
p l a n n i n g , payment, and r e g u l a t i o n among myriad u n i t s impeded
sound problem d i a g n o s i s and a n a l y s i s , and have moved t o
c e n t r a l i z e p u b l i c a u t h o r i t y i n such bodies as F l o r i d a ' s Agency
f o r H e a l t h Care A d m i n i s t r a t i o n and t h e Vermont H e a l t h A u t h o r i t y .
Such c o n s o l i d a t i o n s shine a b r i g h t s p o t l i g h t on r e f o r m a c t i v i t i e s
(and l e a d i n g r e f o r m a c t i v i s t s ) and i d e n t i f y r e f o r m more c l o s e l y
w i t h t h e Governor.
They a l s o t e n d t o be accompanied by t i g h t
t i m e l i n e s f o r t h e i n t r o d u c t i o n o f a m b i t i o u s measures t o extend
coverage and c o n t r o l c o s t s , which i n t e n s i f y t h e p r e s s u r e t o s i f t
o p t i o n s and move l e g i s l a t i o n .
And when l a r g e b l o c s o f people
whose coverage t h e s t a t e f i n a n c e s and r e g u l a t e s come under a
u n i f i e d a d m i n i s t r a t i v e u m b r e l l a , d e l i v e r i n g those b l o c s t o new
p r o v i d e r arrangments ( f o r i n s t a n c e , s e l e c t i v e networks)
becomes a
more a p p e a l i n g and f e a s i b l e o p t i o n .
—
Pooled Purchasing.
States are d e v i s i n g a v a r i e t y o f
p u b l i c measures, and p u b l i c - p r i v a t e p a r t n e r s h i p s , designed t o
s i g n up h e a l t h care purchasers
and use t h e c o n c e r t e d l e v e r a g e o f
t h e p o o l t o s t r i k e good deals w i t h i n s u r e r s ( i n c l u d i n g managed
care p l a n s , o f c o u r s e ) .
H e a l t h insurance p u r c h a s i n g f o r p u b l i c
employees i n C a l i f o r n i a , Minnesota, and Wisconsin
as p r o t o t y p e s o f H e a l t h Insurance Purchasing
can be viewed
Cooperatives.
�P r i v a t e s e c t o r experiments
are abundant t o o — i n 1986,
example, t h e Johnson Foundation
for
s e t out t o encourage 15 of them
i n i t s H e a l t h Program f o r t h e Uninsured.
The program helped
launch, among o t h e r i n i t i a t i v e s , t h e F l o r i d a H e a l t h Access
C o r p o r a t i o n , and Governor C h i l e s now
proposes t o c r e a t e a dozen
or so r e g i o n a l p u r c h a s i n g c o o p e r a t i v e s t o shop and buy
f o r t h e i r members.
insurance
The major lesson of t h e Johnson program,
a l a s , i s t h a t such e f f o r t s a r e - - o r a t any r a t e w e r e — v e r y hard t o
g e t up and r u n n i n g .
H a l f of t h e i n i t i a l s i t e s f e l l by t h e
wayside, t h e program as a whole brought new
coverage t o o n l y
about 26,000 people, and t h r e e s i t e s — F l o r i d a , Denver, and
Arizona—accounted
t r o u b l i n g was
f o r t h e v a s t m a j o r i t y of these.
Even more
t h e low market p e n e t r a t i o n of t h e p r o j e c t s — o n
average o n l y about f o u r p e r c e n t of f i r m s e l i g i b i l e t o buy
s u b s i d i z e d insurance p r o d u c t s d i d so.
The program suggests t h a t
w i t h o u t a f i r m employer mandate many s m a l l f i r m s w i l l
remain
impervious t o t h e moral and economic appeals of even h e a v i l y
discounted
—
products.
Programmatic F l e x i b i l i t y .
As t h e s t a t e s
contemplate
t h e i r r e f o r m o p t i o n s they near-unanimously complain
t h a t the
f e d e r a l government has t i e d t h e i r hands f a r t o o t i g h t l y .
On
the
one hand t h e feds impose c o s t l y s e r v i c e mandates t h a t r a i s e t h e i r
h e a l t h care b i l l ;
on t h e o t h e r , they i n f l i c t c o n s t r a i n t s
( e s p e c i a l l y those embodied i n ERISA, Medicaid,
and Medicare) t h a t
p r e v e n t s t a t e s from l e v e l i n g t h e p l a y i n g f i e l d and
f a i r e r and more e f f i c i e n t systems.
The
designing
s t a t e s t e n d t o urge t h a t
t h e feds should l e a d ( s e t u n i f o r m n a t i o n a l r u l e s and assume t h e
c o s t s of r u n n i n g a u n i v e r s a l coverage program),
10
f o l l o w ( l e t the
�l a b o r a t o r y o f f e d e r a l i s m t r y a range o f i n n o v a t i o n s , study t h e
r e s u l t s , and t h e n f a s h i o n n a t i o n a l p o l i c y i n t h e l i g h t o f s t a t e
successes), o r g e t o u t o f t h e way ( s e t broad, f l e x i b l e r u l e s and
l e t s t a t e s pursue them as each sees f i t ) .
A detailed federal
b l u e p r i n t f o r managed c o m p e t i t i o n w i l l p r o b a b l y
not s i t w e l l with
s t a t e s t h a t chafe under f e d e r a l p r e s c r i p t i o n s and ask t o be
judged a g a i n s t broad outcome c r i t e r i a , n o t narrow i n p u t s and
process r e g u l a t i o n s .
Managed C o m p e t i t i o n
Broadly
organized
and t h e States
speaking, managed c o m p e t i t i o n i s a system i n which
purchasers b l o c s t h a t , i n aggregate, cover t h e whole
population f o r a defined set of benefits, negotiate with health
insurance
p l a n s t h a t b i d f o r business by i n d u c i n g p r o v i d e r s i n
t h e i r networks t o p r a c t i c e more e f f i c i e n t , p r o d u c t i v e , and h i g h
q u a l i t y medicine.
B o i l e d down t o b a s i c s , t h e appeal o f managed
c o m p e t i t i o n l i e s i n i t s power t o r e v e r s e t h e most t r o u b l i n g
i d i o s y n c r a s y i n t h e American c o n j u n c t i o n o f f e e - f o r - s e r v i c e
p r a c t i c e and t h i r d - p a r t y payment, namely, l a i s s e z - f a i r e
arrangements t h a t have encouraged payers t o work w i t h and f o r
p r o v i d e r s , n o t purchasers.
Managed c o m p e t i t i o n promises t o p u t
angry purchasers i n t h e d r i v e r ' s seat f o r t h e f i r s t
time.
T h i s i s an o b j e c t i v e w i d e l y endorsed by p u b l i c and p r i v a t e
purchasers i n most s t a t e s .
A l t h o u g h no s t a t e has y e t adopted
managed c o m p e t i t i o n as an encompassing framework f o r r e f o r m ,
Vermont i s d e b a t i n g
advances i t ,
cons.
it,
F l o r i d a i s b a t t l i n g over l e g i s l a t i o n t h a t
and many o t h e r s t a t e s a r e weighing
i t s pros and
I t may indeed be emerging as t h e wave o f t h e f u t u r e :
11
the
�n a t i o n a l debate has p u t i t on t h e agenda o f commissions and t a s k
f o r c e s i n v i r t u a l l y a l l s t a t e s ; i t o f f e r s an a l t e r n a t i v e t o more
h e a v i l y g o v e r n m e n t a l i z e d approaches i n these moderate t i m e s ; and
i t may s u s t a i n l e g i s l a t i v e - e x e c u t i v e c o a l i t i o n s across l i n e s o f
p a r t y and p r i n c i p l e .
There a r e , on t h e o t h e r hand, abundant reasons f o r c a u t i o n
i n e s t i m a t i n g t h e s t a t e s ' commitment t o managed c o m p e t i t i o n and
t h e i r c a p a c i t i e s t o implement i t . One should d i s t i n g u i s h among
managed c o m p e t i t i o n as p o l i c y idea, s t r a t e g i c c h e c k l i s t , and
i n t e g r a t e d system.
Most s t a t e s a r e now drawn t o managed
c o m p e t i t i o n as a p o l i c y idea, and many have i n s t a l l e d some o f i t s
s t r a t e g i c elements (a few have i n s t a l l e d many), b u t v e r y few a r e
now prepared t o i n s t a l l i t as an i n t e g r a t e d system t h a t
d i s c i p l i n e s most o f t h e i r p u b l i c and p r i v a t e h e a l t h care
purchasing.
I f managed c o m p e t i t i o n i s t o become a n a t i o n a l
r e f o r m p l a y e d o u t i n and by t h e f i f t y s t a t e s , t h e n a t i o n may be
i n f o r adventures i n f e d e r a l i s m o f unprecedented c o m p l e x i t y and
risk.
Perhaps o n l y a s t r o n g push from t h e f e d e r a l government i s
r e q u i r e d t o make t h e s t a t e s focus on managed c o m p e t i t i o n as an
i n t e g r a t e d system and t u r n t h e i r t a l e n t s t o c o n s t r u c t i n g i t .
I t
i s a l s o p o s s i b l e , however, t h a t t h e c l o s e r t h e s t a t e s s c r u t i n i z e
t h e grand scheme and i t s p r e c o n d i t i o n s t h e more t h e y w i l l hedge
t h e i r bets.
There a r e t h r e e main reasons why f e d e r a l
planners
should a v o i d assuming a l i n e a r and i n e v i t a b l e p r o g r e s s i o n
managed c o m p e t i t i o n i n t h e s t a t e s .
12
toward
�F i r s t , a l t h o u g h press accounts
l a r g e l y obscure t h e p o i n t ,
managed c o m p e t i t i o n i s n o t a f r e e s t a n d i n g comprehensive t h e o r y o f
reform.
I t presupposes, b u t does n o t i t s e l f s u p p l y , answers t o
t h e t o u g h e s t q u e s t i o n s — b y what mix o f new and r e d i s t r i b u t e d
p u b l i c and p r i v a t e d o l l a r s do we f i n a n c e coverage f o r everyone,
and f o r what s e r v i c e s ?
I t f u r t h e r presupposes (and does n o t
i t s e l f d e l i v e r ) r a d i c a l reform of t h e h e a l t h insurance
market—
p r e f e r r e d r i s k s e l e c t i o n i n i t s many i n s i d i o u s g u i s e s must cease
and p l a n s must compete s o l e l y on e f f i c i e n c y and q u a l i t y .
There
remain t o o q u e s t i o n s whether managed c o m p e t i t i o n should be
complemented by some form o f spending c a p — g l o b a l budgets,
on i n s u r a n c e premium i n c r e a s e s , o r o t h e r c o n s t r a i n t s .
limits
Managed
c o m p e t i t i o n , i n o t h e r words, i s t h e middle o f a p o l i c y t a l e t h a t
needs a b e g i n n i n g and an end t o become c o h e r e n t .
The b e g i n n i n g
and end demand v e r y tough d e c i s i o n s — a b o u t employer mandates; new
t a x e s on s i n n e r s , p r o v i d e r s , and who knows whom e l s e ; whether
h e a l t h p l a n s should be chosen by employers o r by workers
d i r e c t l y ; t h e need f o r , and a p p r o p r i a t e form o f , budget caps; t h e
r o l e o f t h e s t a t e s i n making these and o t h e r d e c i s i o n s (and t h e
r o l e o f s t a t e government w i t h i n t h e s t a t e ' s r o l e ) , and more.
S t a t e s embody a wide range o f p r e f e r e n c e s on these i s s u e s — a n d i t
may w e l l be these i s s u e s , n o t managed c o m p e t i t i o n , t h a t preoccupy
t h e i r a t t e n t i o n and consume t h e i r p o l i t i c a l c a p i t a l as t h e r e f o r m
debate u n f o l d s .
Because t h e r e i s so much more t o f i g h t
about,
managed c o m p e t i t i o n , and t h e c l o s e a t t e n t i o n t o and c u l t i v a t i o n
of i t s p r e r e q u i s i t e s , may g e t pushed t o t h e p o l i t i c a l
i n t h e s t a t e s , s t a l l i n g progress.
13
sidelines
�Second, even i f one factors out before and after issues and
focuses on managed competition i t s e l f , i t i s hard to know what to
make of state progress to date.
The laboratory of federalism can
be, to mix images, a double edged sword.
Building national
policy on state experiments can be u s e f u l — f o r instance, the
federal decision to build i t s Prospective Payment System on
ratesetting models in a few states, especially New Jersey. I t
can also miseducate policymakers and overlook opportunities for
l e a r n i n g — f o r example, the PSROs, some 200 of which were created
on the dubious foundation of a peer review prototype in Utah, and
then received no evaluation capable of d i s t i l l i n g p r a c t i c a l
lessons.
State efforts can enlighten and inspire policy and they
can confuse and mislead.
How does one know in advance whether
prototypes do the one or the other?
These are salient concerns for the current crop of HIPC
prototypes, most of which retain employer choice of plan, mainly
cover large public and private employers (which d i f f e r in many
ways from the broker-centered small group market and from
Medicaid), and have taken hold in states with r e l a t i v e l y
favorable attitudes toward, and experience with, health
maintenance organizations and other managed care variants.
Those
prepared to dismiss the most accomplished state, Hawaii, as
ungeneralizable, should perform a similar experiment in
imagination with California, where the demand for, and supply of,
managed care arrangements seem to be unusually strong.
From the viewpoint of state policy, the basic problem with
the HIPC prototypes i s that they address hardly any of the
thorniest design issues that an integrated system of managed
14
�c o m p e t i t i o n would p r e s e n t .
Who "owns" t h e H I P C — i t s
c o n s t i t u e n c i e s , t h e s t a t e , o r both?
business
I f t h e s t a t e has a f o r m a l
r o l e , how accountable w i l l t h e HIPC be t o s t a t e e l e c t e d
officials?
( S t a t e o f f i c i a l s do n o t want a l l t h e bucks t o s t o p
w i t h them, b u t t h e y w i l l n o t support s t r a t e g i e s t h a t leave them
out o f t h e p o l i c y loop.)
and r e g i o n ?
Who decides?
How many HIPCs w i l l t h e r e be per s t a t e
How much f l e x i b i l i t y w i l l t h e HIPCs
e n j o y t o adapt t o s p e c i f i c c o n d i t i o n s i n t h e i r s t a t e o r r e g i o n ?
Can r e g i o n s have competing HIPCs?
and underserved
W i l l t h e Medicaid p o p u l a t i o n
groups go i n t o t h e pool?
What i f meeting
their
needs means c h a r g i n g more t o " c o n v e n t i o n a l " members who o b j e c t ?
Can t h e scheme work i f Medicare s t a y s o u t s i d e ?
What w i l l p r o t e c t
these f i n a n c i n g and r e g u l a t o r y bodies from c a p t u r e by t h e w e l l heeled, w e l l — o r g a n i z e d payer networks w i t h which t h e y deal? I f
t h e y a r e c a p t u r e d , who w i l l know, care, o r respond?
customers do n o t l i k e t h e i r HIPC?
What i f
How l i k e l y a r e t h e HIPCs t o
a c q u i r e and use t h e voluminous data and t h e s o p h i s t i c a t e d methods
t h e y need f o r p r u d e n t purchasing?
What w i l l happen t o HIPCs t h a t
l a g on r i s k adjustment, q u a l i t y m o n i t o r i n g , and r e d r e s s i n g
consumer grievances?
little
P r o t o t y p i c a l experience t o date sheds
l i g h t on these q u e s t i o n s , which f e d e r a l and s t a t e
p o l i c y m a k e r s — i n some combination as y e t u n c l e a r ( i t s e l f a major
issue)—must
r e s o l v e i f managed c o m p e t i t i o n i s t o succeed.
T h i r d , managed c o m p e t i t i o n as a p o l i c y idea presupposes a
long s t r a t e g i c c h e c k l i s t t h a t d i f f e r e n t s t a t e s w i l l
assess
d i f f e r e n t l y as they ponder t h e i r a l l e g i a n c e t o an i n t e g r a t e d
system.
The l i s t r e q u i r e s a t l e a s t t h e f o l l o w i n g
15
elements:
�managed care p l a n s t h a t o f f e r good care a t reasonable r a t e s ; a
consumer p o p u l a t i o n w i l l i n g t o accept t h e management o f care
required t o sustain savings; t h e i n s t i t u t i o n - b u i l d i n g
skill to
d e s i g n s u c c e s s f u l HIPCs, a d v i s o r y boards, and t h e l i k e ;
risk
adjustment methods t h a t secure f a i r payments; agreement on
whether and how p r i v a t e s e c t o r savings w i l l be " c a p t u r e d " by t h e
p u b l i c s e c t o r ; g e o g r a p h i c a l a p p r o p r i a t e n e s s ( f o r example, do
r u r a l and i n n e r c i t y areas have s u f f i c i e n t networks o f p r o v i d e r s
and payers t o make t h e p l a n w o r k ) ; and consensus on whether
managed c o m p e t i t i o n presupposes o r f o r e s t a l l s a sharp break w i t h
past voluntary p r a c t i c e s .
(Some a p p a r e n t l y see HIPCs as a
v e h i c l e t h a t makes employer mandates
unnececessary).
Working down t h e l i s t , s t a t e s can develop b e s t o r w o r s t case
scenarios.
Managed care may o f f e r s i z a b l e , s u s t a i n a b l e s a v i n g s
or one-shot g a i n s t h a t t h e n leave purchasers a t t h e mercy o f
c o s t - i n c r e a s i n g f o r c e s t h a t managed care cannot manage.
Consumers may welcome an i n t e n s i f i c a t i o n o f t h e managed care
r e v o l u t i o n as t h e p r i c e o f easing t h e b i t e o f h e a l t h care c o s t s
on t h e i r incomes, o r t h e y may r e c o i l from i n c e n t i v e s designed t o
move them beyond t h e l o o s e - j o i n t e d IPAs and PPOs t h a t have seen
most o f t h e growth o f managed care t o d a t e .
I n s t i t u t i o n a l design
i s s u e s may y i e l d t o o l d - f a s h i o n e d American i n g e n u i t y o r t h e y may
r e p r i s e t h e PSROs and HSAs, on a l a r g e r and more c o s t l y s c a l e .
Risk a d j u s t m e n t methods may be good enough, o r t h e y may generate
disparities
and b a n k r u p t c i e s .
The p u b l i c s e c t o r may acknowledge
i t s p r e v i o u s c o s t s h i f t i n g and leave p r i v a t e purchasers t o e n j o y
t h e i r new found savings i n peace, o r i t may l a y c o n t e n t i o u s c l a i m
t o them.
J u r i s d i c t i o n s n o t y e t ready f o r managed c o m p e t i t i o n may
16
�learn to r e c r u i t or reconfigure providers and payers, or we
may
have to write off half the nation as unsuitable for the strategy.
States (and myriad interests within them) may swallow the whole
package of pro-competitive
regulation required to make managed
competition work as a f a i r exchange for keeping a single payer
system at bay, or they may declare that HIPCs correct market
f a i l u r e for small groups and should buy more time for voluntary
efforts.
States contemplating
these p o s s i b i l i t i e s and their own
w i l l and a b i l i t y to manage them w i l l come to very different
predictions and preferences.
The federal government may make
some of these decisions for them, but the states w i l l inevitably
face major implementation duties that w i l l , as ever, oblige them
to formulate policy substance.
How the Feds Might Help
Given these caveats, a detailed federal blueprint that
presumes broad, deep state enthusiasm for and capacity to run
integrated systems of managed competition seems to be
inadvisable.
The t r i c k — p e r h a p s not d o a b l e — i s to fashion a
framework that i s firm enough to ensure the benefits of managed
competition while avoiding (avoidable) costs, but leaves the
states adequate f l e x i b i l i t y to finetune the system to f i t their
policy preferences and administrative a b i l i t i e s .
Perhaps the
federal government should define a typology of HIPCs and l e t the
states choose the type they like best.
Some, for example, might
choose to emulate Hawaii by emphasizing employer mandates,
extensive insurance reform (including community rating for small
groups), a public thrust toward prevention and primary care, and
17
�hard bargaining w i t h p r o v i d e r s — b u t without e s t a b l i s h i n g formal
HIPCs ( " i m p l i c i t HIPC").
approach:
Others might be drawn t o t h e Garimend;
purchaser payments would channel t h r o u g h a s i n g l e HIPC
buying u n i f o r m b e n e f i t s f o r a l l ( " s i n g l e payer HIPC").
I n some
states t h e w i l l i n g n e s s of the p u b l i c sector t o concert
purchasing
for
i t s employees and c l i e n t s might exceed t h a t o f t h e p r i v a t e
s e c t o r ; p u b l i c groups might pursue t h e i r c o l l e c t i v e p u r c h a s i n g on
t h e assumption t h a t c o s t s h i f t i n g t o more r e t i c e n t p r i v a t e
c o u n t e r p a r t s ( o r elements o f them) would soon b r i n g them around
("Public-centered
for
concentrated
HIPC").
purchasing
I n others, p r i v a t e sector
readiness
might o u t s t r i p t h a t o f a p u b l i c
s e c t o r unable t o reach agreement among s t a t e and l o c a l employees,
Medicaid
c l i e n t s , and o t h e r s .
They t o o might proceed, i n a
r e v e r s e o f t h e abovementioned p a t t e r n ( " P r i v a t e - c e n t e r e d HIPC").
Choice among these models (and o f course many o t h e r approaches
c o u l d be devised)
would o f f e r both f l e x i b i l i t y and t h e
t h e o r e t i c a l hope t h a t n o n - p a r t i c i p a n t s would r e v i s e t h e i r
The
views.
f e d e r a l government c o u l d o f f e r t h e s t a t e s a f l e x i b l e
menu o f HIPC t y p e s , however, and s t i l l d i s c o v e r t h a t many,
perhaps most, s t a t e s a r e n o t prepared
c h e c k l i s t t o system.
means o f d i a g n o s i n g
t o leap from idea t o
The feds t h e r e f o r e , need, f i r s t ,
t h e c o n d i t i o n and progress
second, i n c e n t i v e s t o encourage t h e i r p r o g r e s s .
sound
o f t h e s t a t e s and,
Federal
planners
c o u l d s t a r t w i t h t h e i r own c h e c k l i s t o f elements t h a t workable
managed c o m p e t i t i o n presumes.
t h e i r progress
toward
S t a t e s should be assessed f o r
securing:
a set of regional
purchasing
cooperatives; a sophisticated administrative i n f r a s t r u c t u r e
18
�within and around the cooperatives; methods to identify the
distribution of health r i s k s among plans and to adjust payments
accordingly; networks of managed care (or other) plans,
providers, and payers adequate to sustain competition; systems to
acquire and study data on practice patterns and their
consequences, including advanced techniques to monitor and assure
quality of care; mechanisms to assess consumer satisfaction and
concerns with plans, to redress grievances, and to advocate on
members' behalf; and information systems that help consumers
understand options and their consequences.
Checklist i n hand, federal planners should estimate how far
each state has come in meeting these needs and how far i t has to
go.
(Outside expert and internal self-diagnosis would doubtless
be blended.)
Some states-^-perhaps California, Minnesota,
Arizona, and Florida—have put most of the pieces i n place and
are poised to tackle the transition to an integrated system.
Others—New Mexico, Idaho, New Hampshire, Alabama?—may meet few
of the preconditions and need help learning to walk before they
try to run managed competition.
Most states probably
fall
inbetween—half way there, they need encouragement to extend
their checklist and consider the systemic synthesis of i t s
elements.
In thinking about strategies to encourage managed
competition in these d i s t i n c t camps, the feds might find i t
useful to overlay the e a r l i e r typology stages of change i n
leading innovative states onto the typology of current state
conditions and predispositions.
States with few preconditions
now i n place are unlikely candidates for a great leap forward
19
�right away.
They mainly need a stimulus to think i t a l l through
and ponder how to begin putting the pieces i n place.
I f the
e a r l i e r p o l i t i c a l analysis of leading reform states i s accurate,
the f i r s t step would be one or more commissions or task forces
that explore the uses of managed competition i n the state in
question and what the strategy would demand of whom. The federal
government could make funds available to constitute, staff, and
run such commissions, which would agree to address a specified
set of questions about the requirements of managed competition,
and would issue a public report.
The feds could require that the
state touch a number of specific bases, but should leave broad
discretion in how they do so. Likewise the states should have
wide latitude i n composing such commissions, but they should
probably take a leaf from previous success stories that were
broadly i n c l u s i v e — o f the executive and l e g i s l a t i v e branches; of
business, consumers, and provider groups; and of partisan,
ideological, and regional variations.
These bodies should aim to
concentrate e l i t e and public attention on the opportunities for
managed competition, should anticipate and address major
c o n f l i c t s over i t , and should move as fast as possible toward
p r a c t i c a l consensus on next steps.
States that are halfway there might get federal assistance
to complete their checklists and finetune the individual
elements.
Federal and state o f f i c i a l s could diagnose the state's
progress i n building data systems, designing cooperative
purchasing plans, and such, and then agree on what more needs to
be done.
Federal funds and technical assistance could help with
20
�data analysis, staffing to plan or expand cooperatives, building
provider networks i n underserved areas, and the l i k e — t h e
s p e c i f i c s depending on the diagnosis and the prescriptions agreed
to by feds and states.
With assistance from, say, the National
Governors Association, federal o f f i c i a l s could thus identify
governors and l e g i s l a t o r s prepared to invest i n managed
competition, and reward their efforts.
Finally, states ready to adopt managed competition as an
integrated system mainly need help in l e g i s l a t i v e consensus- and
coalition-building to resolve the many thorny p o l i t i c a l issues
that are understandably saved for l a s t (must a l l state and local
public employees enter the purchaser pool?
be mandated for a l l Medicaid clients?)
should managed care
The feds should not
involve themselves d i r e c t l y in these delicate matters, but they
could make financial and other rewards contingent on the
successful design and early implementation of such as system, as
measured by reasonable (albeit elusive) indicators such as a
slower rate of growth of costs without v i s i b l e compromises i n
quality, or better quality and satisfaction with no increase i n
the rate of growth of costs.
A r i c h assortment of such rewards
could be pictured, from minor (funds to enhance administrative
capacity) to major (Medicare waivers to create a seamless
system).
To move effectively along these lines the federal government
would need three things:
a sensible checklist of variables
required for successful managed competition systems (a l i s t
detailed enough to be r e a l i s t i c , but f l e x i b l e enough to l e t
states express their p o l i t i c a l personalities); tools to diagnose
21
�state's conditions and rates of progress toward managed
»
competition and to negotiate terms of participation in federalstate capacity-building projects; and rewards and incentives
tailored to the stage of evolution of the states and significant
enough to move the margins of state policymaking,
significantly.
perhaps
Such an approach would build on state progress to
date without overestimating their accomplishments or demoralizing
them with r i g i d rules issued from on high for quick
implementation.
Whether such a strategy would produce enough
managed competition fast enough to f u l f i l l i t s hypothetical
promise as a national strategy i s another question.
managed.Idb
22
�CRITERIA FOR JUDGING STATES' READINESS AND
CAPACITY TO IMPLEMENT HEALTH CARE REFORM
Extent to which states have institutions or systems already in place which could be
used to implement new national plan. Examples include:
Health care purchasing authority for public employees (e.g. Washington,
Wisconsin)
Buying cooperative for small employers (e.g. Florida Health Access
Corporation)
Adopted health insurance market reforms
Adopted rate-setting systems which could be used for short term and even
longer term controls, (e.g. New York, Maryland)
Statewide payment authority to do uniform billing & claims processing
(e.g. New York)
State public subsidized insurance programs, (e.g. Minnesota Care; Washington
Basic Health Plan)
State efforts to promote integrated health systems (e.g. Minnesota)
Extent to which state leadership is already committed to implement state-based
reforms as evidenced by having:
•
•
•
Passed legislation for state health care reform
Undertaken major demonstrations or studies
Reached broad consensus on seriousness of problem and overall approach to
be used to expand access and control costs
issued blue ribbon commission or task force report
State willingness and capacity to innovate and develop new approaches, on
demonstration basis. Examples include:
•
•
Develop new managed care initiatives for Medicaid
Develop new systems to strengthen and restructure delivery systems in rural
areas (e.g. seven states funded by HCFA for Essential Access Community
Hospital Program).
Evidence of meaningful collaboration between public and private sectors on elements
of health care reform.
�INDICATORS OF STATE READINESS AND CAPACITY
TO IMPLEMENT HEALTH CARE REFORM
1.
Number of states which have or are about to pass significant
health care reform legislation
_6.
Hawaii
Minnesota
Florida
Vermont
Oregon
Washington
2.
Number of states which are undertaking a major demonstration
to build capacity for health care reform
3
California
New Jersey
New York
3.
Number of state which have passed legislation calling for a major
study or demonstration on health care reform
_8_
Colorado
Connecticut
Iowa
Maryland
New Mexico
North Dakota
Oklahoma
Virginia
4.
In addition to above, number of states which have established
commissions or task forces to develop recommendations on health
care reform
_23_
�,NASHP=
Assisting States in implementing Heaith Reform
Health reform will fundamentally change state responsibilities regarding the financing,
delivery and quality oversight of health care. New organizational structures and
capacities will be required; old technologies and administrative entities will need to be
replaced and existing relationships among the state and Federal governments and the
private sector will unfold. As the details of the policy emerge, attention will shift to
how the new proposal will be implemented. This paper identifies the kinds of issues
likely to require state attention and proposes an approach to assist states address those
issues in a timely and responsible fashion.
I. Key Technical Assistance Needs
States have varying levels of capacity and sophistication in health reform and there is
even inconsistency within states. Some states have enacted comprehensive insurance
reforms but have little managed care capacity; others have strong public health and
delivery systems but little capacity to collect and analyze data. The diversity among the
states is both a strength and a weakness and defies efforts to create one technical
assistance strategy that will meet all states' needs or even all the needs within a state.
Before finalizing any state technical assistance plan, forums of key state officials, in
addition to the considerable input sought by the task force, should be convened to
examine the proposal as soon as it is complete and identify additional issues which
need resolution in order to implement the plan. Such a process, like implementation
itself, is iterative and more issues will constantly arise as states gain experience in
reform.
Without knowledge of the final proposal, it is not possible to have confidence that the
issues listed below are all those that should be considered . Rather, this list is an
example of topics with which states will likely need technical assistance:
A. Federal/State Roles and Responsibilities - General Issues
1. What are states now responsible for? Need summary "laundry list* of new state
responsibilities, those that were state responsibilities and now fall to the federal
government or the purchasing authorities. States will need help analyzing and
developing state specific responses.
2. What organizational and administrative structures will work best to help states
conduct new responsibilities? What is the role of existing agencies, how could new
health authorities be created? Who will serve on purchasing authorities, what
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geographic area will be served? How will purchasing authorities be certified and
monitored?
3. How will states respond to anti-trust and ERISA changes? What are the implications
for states?
4. What mechanisms will be needed to control capital expenditures? How will current
certificate of need programs be transitioned or eliminated?
5. How will Medicaid be transitioned ?
6. What mechanisms will assist in the deployment of state employees whose functions
are now those of the federal government or the purchasing authority? How can state
employee unions be engaged in the solution?
7. How will public employees be transitioned to a new health coverage program?
8. How will state insurance laws and regulations need to be modified? Is there model
legislation? What is the implication of laws recently enacted by states ?
9. Currently the Americans with Disabilities Act (ADA) has little bearing on health
coverage because existing underwriting takes precedence. Once insurance and
underwriting reforms are implemented what will be the impact of the ADA? Will
revisions need to be made in the basic benefit package to meet the needs of people
with disabilities?
10. For both public and private sector employees, what is the status of negotiated
health benefits? If labor contracts expire after the effective date of a plan, when are
unionized workers included in the purchasing authority? What benefits can be
collectively bargained and how?
B. System Financing
1. What are the states' responsibilities to finance or assure benefits beyond the
Federally prescribed standard?
2. How are current financing burdens redistributed (eg: Medicaid match) and how will
public subsidies be developed and administered?
3. How will states establish and enforce budgets and ensure the solvency of plans?
4. In rural areas which may not immediately move to a purchasing authority, during the
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transition phase and for the fee for service option, how will costs and benefits be
defined, regulated and restrained?
6. How will states set or determine meaningful capitation rates to facilitate conversion
to managed care? How will Medicare rates affect the transition?
6. How will current hospital rate setting programs and provider fee structures be
replaced or adopted?
C. Creating Purchasing Authorities
1. What models, guidelines and options do states have concerning governance,
membership, process, geographic jurisdictions, number of PAs? Can states require
suburban PAs to cover rural areas?
2. How can states help PA staff, leadership and board members develop the
negotiating skills necessary to establish provider networks that are effective and
financially solvent?
3. How should states regulate PAs and deal with MEW A related issues?
4. What models can states follow in designing RFPs for selecting health plans and other
contractors? What criteria can be used? What's the minimum/maximum number of
people to be included in a PA?
5. What computer systems will be necessary for a PA to handle enrollment, billing and
payment functions?
6. What are the implications for self-insured companies who maintain their own plans?
What impact will they have on cost containment components?
7. How will states establish global budgets or other cost containment programs though
PAs?
D. Administrative capacity/ Quality assurance and consumer protection
1. What will states need to establish and maintain adequate baseline and on-going
data? Who will monitor costs, utilization, solvency and how will it be done?
2. How can states build a sufficient, comprehensive quality assurance system? How
will current licensing and certification programs be revised or eliminated? How will state
based provider certification for the Medicare program be handled? What provisions will
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be made for consumer grievances?
3. How will enrollment, public subsidies and billing be administered?
4. How will consumer friendly information and education be assured and who will
conduct it?
5. How will the outcome of plans be measured and reported? For rural and frontier
areas where competition and comparisons may not be possible among providers, could
systems be put in place to compare service among like areas in different states?
E. Organizing the Delivery System
• General
1. What does the basic benefit support? How is integration among preventive, primary,
acute and chronic and long term care assured?
2. What is the role of traditional public health providers? How much flexibility will
states have regarding the delivery system?
3. What changes should be made in licensing and credentialing to support creation of
more primary care capacity? What other incentives can be developed to enhance
service delivery capacity, particularly in rural areas?
4. What best practices from other states and nations can be transferred to build
capacity?
5. Will Medicaid funds now supporting graduate medical education be retained at the
state and if so how can they best be invested?
6. How can integrated delivery systems be encouraged without creating monopolistic
insensitivities?
7. What are the special needs of rural areas and how can they best be addressed?
« Vulnerable Populations/Transitioning Medicaid
8. How will the special needs of vulnerable populations be met? How can the essential
services provided by Medicare, mental health. Income maintenance,housing and other
programs be integrated with accountable health plans? How does the state draw the
line between uniform benefits and supplementary services to promote access? (eg:
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transportation, translators, social services)
9. How can managed care capacity be developed to meet the needs ot populations not
now served well by these systems (children with special needs, people who are
mentally ill. physically handicapped, elderly) Should managed care systems be required
to serve these populations? If so, what special standards need to be defined and met
governing their special care needs?
10. How can acute and long term care be integrated? Special needs clients move
between both systems and systems will need to be assure their continuity of care.
11. How will enrollment and client education be conducted and by whom for people
with special needs?
F. Long Term Care
1. What kind of infrastructure and benefits need to be developed to assure a range of
community based options for care?
2. How can the current institutional bias of Medicaid be overcome in a new system?
3. What are the appropriate roles for private and public financing of long term care and
what role should insurance departments play in regulating those markets?
4. How can acute and long term care be coordinated?
5. What data and quality assurance systems need to be put in place?
6. What best practices can be transferred from other states and nations?
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//. Methods to Provide Effective Technical Assistance
A. Define Audience and Scope of Needed Assistance
There will be many audiences for state based technical assistance. Governors and
Legislators will need general information and policy briefings while staff responsible for
implementing reform will need both technical help and more timely, detailed
information. Because much of the work of implementation involves developing new
strategies and appropriate responses to policy change, a critical component of technical
assistance is to provide forums for state officials to plan and think together. Because
reform will cut across traditional agency lines and professional disciplines, it will be
necessary for these forums to include different agency perspectives and as broad
expertise as possible. These workgroups will need staff support and regular methods of
communication that is timely.
The workgroups will need access to expert help as well as the opportunity to learn
from each other. Each state is likely to have local expertise to assist in implementation
but all states will need access to national talent with expertise is particular topics such
as creation of purchasing authorities, rate structuring, data system development and
the like. To facilitate timely implementation and maximize communication among
experts and states a mechanism for coordination will be needed.
B. Establish a reliable clearinghouse
• Purpose of the clearinghouse
Any major policy reform proposal yields uncertainty and fear from which is born rumor
and misinformation. States will need to answer questions from consumers, providers,
business, local press and their own employees about what health reform means for
them. While the Administration will launch a major public information campaign, states
will need specific help related to particular programs and responsibilities. Every trade
association and professional group, including those of state agencies (eg: Medicaid
directors, Insurance commissioners) will publish and disseminate analyses which will
need to be coordinated and responded to from a state government perspective.
Moreover, states will need to carefully analyze proposals to identify, from both an
executive and legislative perspective, what changes will be required within state
governments to make reform a reality.
As states move to implement reform, common areas of concern will be identified and
policy and program revisions will be proposed. A clearinghouse can assure states ready
access to up to date information and analysis so that they can consider together what
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approaches might work best and can learn from each others mistakes and successes. It
can also serve to coordinate a cadre of experts and simplify the states' access to
reliable help.
Such a clearinghouse will need to be trusted by the states, provide timely information,
and be multidisciplinary, representing all aspects of state government, both executive
and legislative. The clearinghouse should have the capacity to regularly convene state
officials from both branches of government to work together and with Federal officials
to analyze common problems. States will be besieged by consultants eager to assist in
implementing reform and many of those will provide essential expertise. The
clearinghouse would have a different function of providing one source of consistent
information to states and the capacity to respond to questions, refer to consultants and
provide networking among state officials working on common problems.
• Audience for the clearinghouse
The purpose of the clearinghouse is to give specific help to state administrators,
legislators and their staffs who will be responsible for implementation. Therefore the
audience is not Governors or Legislators themselves so much as the staff they hold
accountable for the details of implementation. Developing and enhancing this network
of individuals, who are the constituency of the National Academy for State Health
Policy, is particularly important given that 1994 is a gubernatorial election year in
thirty-five (35) states. Just as reform is enacted, many Governors will be embroiled in
reelection campaigns and at least seven (7) new Governors will take office in January,
1995 in those states where the incumbent cannot run again. Legislative leadership will
also be effected by the elections so that a clearinghouse that works with both arms of
state government and which builds capacity within the bureaucracy and legislative
staffs will provide continuity and a resource for newly elected officials and their staffs.
• Products of the clearinghouse
The clearinghouse would convene , coordinate and staff state workgroups, could
provide model legislation, policy briefing papers, regular seminars and telephone
conference calls to facilitate exchange. It would coordinate with other sources of
expertise to assure states have one stop shopping but through the clearinghouse could
access the widest variety of expertise. No one entity could provide all the help states
will need but ia clearinghouse should contract or coordinate with other experts to
assure the full range of help needed.
Given the need for timely information, computer electronic mail exchanges, telephone
and interactive television conferences and short fax bulletins will need to replace or at
least supplement newsletters and more usual forms of communication. Seminars would
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be held as needed and could be videotaped for broad distribution. In addition groups of
state officials would be convened in carefully structured focus groups to identify issues
and critique policy and program proposals presented by expert consultants and/or other
states and short, timely papers summarizing findings and model programs would be
developed on a regular basis. Finally, site visits and regular contact would be
maintained with each state to identify emerging issues to assure assistance remains
responsive and to assure on-going networking and information exchange.
In summary, the tasks involved in establishing effective technical assistance include:
A. Establish a national technical assistance clearinghouse.
B. Create state working groups of officials from various legislative and executive
branch agencies who are responsible for implementation of reform
C. Develop a detailed technical assistance workplan with the state working groups
D. Identify key consultants/experts to address each aspect of the workplan and develop
timetables for completion of specific technical assistance and policy analysis papers
E. Establish regular reporting from consultants to clearinghouse and convene regional
seminars, issue papers, fax and E-mail bulletins and provide videotapes of seminars to
keep states informed.
F. Prepare policy and program option briefing papers and summaries of state model
programs, convene expert panels of state officials to critique them and publish findings
H. Convene annual state health policy conference, open to both state officials and
others, to exchange information and best practices
G. Retain regular communication with all states and conduct on site visits to assure
clearinghouse has independent information about what works and what doesn't.
I. Provide information to media, trade organizations and professional associations to
facilitate information exchange and negotiation among all interested parties.
J . Convene state health policy seminars for candidates for elective office and, in
February 1995, for staff of newly elected Governors, new legislators and legislative
staff to assure continuity during and following the 1994 election and to provide
information about state activities in health reform to date.
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///. Readiness of States to implement Reform
States have been active laboratories testing different approaches to health reform but
their level of sophistication and capacity varies. The enclosed chart assesses each
state's capacity to implement reform based upon the following criteria;
• Experience in administering a health reform program (eg: Robert Wood Johnson
demonstrations, state based programs such as Medicaid expansions and waivers,
childrens health plans, state tax credits or subsidies for small business coverage)
• Enactment of significant reform legislation
• Significant managed care penetration in both private sector and Medicaid
• Evidence of executive and legislative branch leadership and cooperation
The enclosed listing of anticipated state readiness reflects the current status of state
initiatives. Several states have plans underway and other states have made remarkable
progress in very short time periods and risen quickly as leaders. Thus, this list is subject
to revision to reflect state activity.
Nations/ Academy for Stft* HMtth Poficy
\
EstimrtwJ Stat* Raadlnatf to Implement Reform
Likely to be
ready
State
Could be
ready
Less likely
to be ready
Comments
•
Alabama
Alaska
•
Series of policy commissions
Arizona
•
Strong statewide managed care
system
Arkansas
•
Planning underway for managed
competition in rural areas; RWJ
demonstration grant
California
•
HIPC knowledge, major proposals
Colorado
•
Recommendations on HIPC model due
in July, 93: managed care capacity; [
RWJ demonstration grant
|
•
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9
�=NASHP=
•
Connecticut
Active health commission, several
reforms passed
Delaware
Active health policy commission
Florida
Reforms laws passed, authority to
create HIPCs has passed legislature;
strong managed cere eystem; RWJ
demonstration grant
•
Georgia
Hawaii
1 Idaho
tt Illinois
Indiana
Iowa
Kansas
Kentucky
U Louisiana
Maine
Maryland
Massachusetts
Michigan
| Minnesota
N Mississippi
•
•
Operating mandate; strong managed
care; purchasing pool
•
•
•
•
•
•
•
»
Fully capitated Medicaid managed
care
Recent commission report
RWJ planning grant; some managed
care
Governor submitting a plan
|
Market reform plan being submitted
\
Market reforms passed, access
demonstration underway; legislation
pending; little managed care
|
Series of commission reports have
laid ground work for reform; managed
care capacity; all payer rate setting
experience
•
•
•
Law passed; strong managed care;
RWJ demonstration grant
•
| Missouri
•
U Montana
•
Fully capitated Medicaid managed
care
=NASHP=
10
1
�r-
I I
>> i i
_
=NASHP=
•
Nebraska
Nevada
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
| Oregon
B Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
fl
||
Partially capitated Medicaid managed
care
•
New
Hampshire
New Jersey
Two commissions have issued
reports; no managed care
Market reforms have passed.
•
•
•
•
RWJ demonstration grant; permanent
health policy commission
•
Market reforms; RWJ demonstration
program; reform proposals developed
by legislative and gubernatorial
commissions
•
Proposals submitted
•
RWJ demonstration grant
•
•
Active commission; RWJ
demonstration grant
Comprehensive reform passed;
Medicaid waiver granted; RWJ
demonstration grant
•
Governor developing managed
competition proposal; managed care
capacity
•
Limited Medicaid managed care;
developing children's program
•
Fully capitated Medicaid managed
care
»
•
Fully capitated Medicaid managed
care
•
Governor's task force has issued
report.
•
Legislative task force operating; some
managed care capacity
•
Law passed; implementation
underway; RWJ demonstration grant
=NA$HF
11
|
�:NA$HP=
•
Virginia
Washington
Active legislative policy commission
•
Comprehensive reform pending in
legislature; RWJ demonstration grant;
managed care/mental health plan
•
Washington,
DC
West Virginia
Wisconsin
Limited fully capitated Medicaid
managed care
•
•
•
Wyoming
=NASHP=
12
�A P R - 1 2 - 9 3
flUH
1^ : S 5
H ASHr"
k i i o tj i r w
n
'
NASHP
IV. Role of the National Academy for State Health Policy in Providing
Technical Ass/stance to Implement Reform
The National Academy for State Health Policy is uniquely positioned to assist the
states implement reform since it is now in its sixth year serving as a non-profit forum
for leading state health policy officials to exchange ideas and information. The
Academy ie run by and for leaders in state health reform and its membership is
comprised of officials from both the Legislative and executive branches of state
government. The Academy conducts policy research and evaluation, provides technical
assistance and training and convenes an annual state health policy conference and
seminars throughout the year.
The National Academy for State Health Policy is unique in that it brings a
multidisciplinary approach to the issues of state level reform. Its members consist of
insurance commissioners, legislative leaders and their staffs. Governor's staff. Medicaid
directors, public health staff, health care authority staff and researchers from state
universities. Unlike membership organizations, the Academy is free to explore a wide
range of cutting edge issues and best practices unconstrained by disciplinary turf or
membership politics.
The work of the Academy is directed by an executive committee of leading state
officials and five steering committees. They are: Alternative Systems and Cost
Management Primary Care and Prevention; Perinatal and Child Health; Long Term Care
and Uninsured and Medically Indigent.
Key Academy activities include:
• Convenes annual state health policy conference (Upcoming: August 8-10,1993,
Pittsburgh)
• Sponsors Center for Vulnerable Populations with Brandeis University
• Administers Medicaid Managed Care Resource Center
• Publishes series of guides for state health policy including: Access and the
Uninsured; Medto'id Managed Care; State Health Reform CnmmiMinna: Status of
America's Vulnerable Ponulatinns and The ADA and Health Reform
• Serves as a recognized clearinghouse on state health reform activities
• Convened an Institute on State Health Policy for newly elected officials and staff
following the 1990 state elections. Secured the co-sponsorship of the National
NASHP
13
�• •_'
Ill-Is
=NASHP=
Governors' Association, National Conference of State Legislatures, Agency for Health
Care Policy and Research and others. Faculty included Judith Feder and Kenneth
Thorpe among others.
The Academy is positioned to respond immediately to assist states and has a national
network of experts with whom it works. In addition to formal affiliations with Brandeis
University and the University of Southern Maine's Muskie Institute for Public Affairs,
the Academy is now negotiating an affiliation with the University of Washington where
our executive committee member Robert Crittendon, M.D., has become associated
following his service as health policy advisor to Governor Booth Gardner. The Academy
has experience sponsoring conferences and seminars across the country, has contacts
among the state health policy community in each state and regularly contracts with
consultants in Denver and Washington, D C. and in other parts of the nation to conduct
studies.
Several activities are now planned which address the technical assistance needs ot
states as they consider how to implement reform:
April 13-14 "National Conference on Medicaid Managed Care for Mothers and Young
Children", Baltimore - Designed to build state capacity in managed care
April 26 "Focus Group on Managed Care for the Elderly", Boston -Designed to identify
technical assistance needs of states
May 21 "Seminar on Children's Health Plans", Washington, D.C. -Designed to identify
issues surrounding the transition of these state initiatives to national reform
August 8 • "Identifying State Issues in Implementing National Reform* - An intensive
seminar for state and Federal officials, Pittsburgh
August 9-11 Sixth Annual National State Health Policy Conference, "Health Reform:
Now Who Does What and How?", Pittsburgh
October, 1993 Regional seminars - "Serving People with Disabilities through Medicaid
Managed care: Best Practices" Planned sites: (San Francisco, Atlanta, Chicago, Boston)
NASHP=
14
�To:
Rick C u r t i s
Deanne Freidholm
Lauren K e l l y
Larry L e v i t t
N i k k i McNamee
Mary Jo O'Brien
Lois Quam
Anya Rader
Ray Scheppach
Carl Volpe
Alan Weil
Pete Welch
From:
Janis O'Meara
Date:
A p r i l 21, 1993
Re:
H i g h l i g h t s o f A p r i l 20 meeting
Please review t h e attached h i g h l i g h t s o f yesterday's meeting.
Let me know, as soon as p o s s i b l e , i f you have any changes or
a d d i t i o n s t o make. You can b r i n g your comments t o room 106, f a x
them t o me a t 456-2889, or g i v e them t o me a t today's meeting.
Thanks.
�MAIN POINTS OF MEETING WITH NGA
1.
ON APRIL 20
TRANSITION ISSUES
Implementation
The NGA l i k e s the State Phase-In option and f e e l s i t
should be the one that i s pursued. They had problems
with a l l of the other options.
There was some discussion about states that may be
ready in 12 months rather than 18 months. Three states
may be ready i n 12 months. Because the federal
government would not be able to send out model RFP's
and contracts to states in time, i t was thought that
the minimum would have to be 18 months.
The NGA thinks there are at l e a s t 9 states that could
be ready i n 18 months.
Penalties were discussed in terms of when the federal
default would k i c k - i n . The feeling i s that the states
w i l l be given strong incentives to meet t h e i r deadline
because the federal government has no intention of
running the system.
I t was suggested that the penalties be modeled after
those proposed when the unemployment compensation
program was implemented. The proposed penalties were
successful because a l l of the states met the deadline
and penalties were never imposed.
The NGA has a problem with the p o s s i b i l i t y of having
penalties i n place at the same time a federal default
i s in e f f e c t . An option being discussed would allow
the federal government to disallow employers from
deducting health care costs, at the same time the
default i s i n place.
Technical
Assistance
C r i t e r i a need to be determined for: 1) l e g i s l a t i o n ; 2)
the state's plan; and 3) the subsidies. An assumption
should be made that each state's plan w i l l be approved.
The federal government should make suggestions for
s p e c i f i c changes, i t should not approve or disapprove a
state's plan. The c r i t e r i a should be based on
measuring output rather than determining an
implementation process.
�Release of Federal Funds
*
Two methods for releasing federal funds were discussed.
*
Lois presented a three part plan for the release of
funds: 1) Planning money: states would be given
planning money (a minimum amount plus some per capita
determination, possible range $250,000 - $2 m i l l i o n ) ;
2) Money for Set-Up and Operation: after passing
state l e g i s l a t i o n the states would not be receiving
money from the premiums so states would receive more
money from the federal government to e s t a b l i s h the
a l l i a n c e s (Question: Will there be a state match?);
3) Money for Subsidies: s i x to nine months a f t e r
passing state l e g i s l a t i o n , the state's would receive
subsidy money from the federal government.
*
Ray Scheppach suggested another method. He thought
that states should be given one-third of t h e i r money to
get the l e g i s l a t i o n passed. This would show p o l i t i c a l
commitment on t h e i r part. The money would be used to
identify key personnel, streamline the implementation
process and develop a timeline. The other two-thirds
should be given to states immediately following the
passing of l e g i s l a t i o n to keep the momentum going.
Ombudsperson
*
A suggestion was made that a central person ( i . e
ombudsperson) should be hired/assigned a t the federal
l e v e l to help the states deal with any problems. This
person would be the state's a l l y at the federal l e v e l .
The NGA would prefer that t h i s person work at the White
House, not HHS.
Enrollment
The states are not interested i n taking over subsidy
enrollment because i t e n t a i l s e l i g i b i l i t y
determination.
Health Alliance Enrollment (I'm not sure what they said
here, I think they liked the idea of enrollment
occurring at the federal l e v e l ) .
2.
BUDGET ISSUES
The NGA l i k e s the idea that large employers (1000+)
w i l l be allowed to stay outside of the Health
Alliances. They don't want to be at r i s k for them.
They do think that employers outside the Health
�Alliance should be given a target to meet or face a 34%
tax on anything they spend over the target.
* .
The NGA has _a problem using CPI i n the budget update
because some states may face a recession when others
may not.
* .
The NGA i s concerned that when the interim cost
controls are l i f t e d , costs w i l l increase, they would
l i k e the federal government to wait before l i f t i n g the
controls.
*
The NGA i s concerned about how the budget w i l l be
allocated. They are a f r a i d that with a l l the changes
happening at the same time, the states w i l l face a
great jdeal of r i s k because they are not sure how a l l
. the change w i l l e f f e c t costs. They are also concerned
, . abojiit the h i s t o r i c a l data from CBO that are being used
' to "determine the budget.
(
*
The NGA proposed an option instead of the budget band,
t h e ^ would prefer a looser, more symmetrical budget (no
d e t a i l given, see Alan Weil).
A more detailed discussion on the budget i s needed. Larry i s
preparing a paper for the NGA and then there should be a meeting
where issues and options are discussed.
Emerging Issues
The NGA would l i k e to discuss ERISA, Medicare managed care and
long-term care.
Attendees
Rick C u r t i s
Deanne Freidholm
Lauren K e l l y
Larry L e v i t t
Nikki McNamee
Mary Jo O'Brien
Janis O'Meara
Lois Quam
Anya Rader
Ray Scheppach
Carl Volpe
Alan Weil
Pete Welch
�POSSIBLE WORKING ASSUMPTIONS
BASIC PRINCIPLES OF HIPCs
Possible Working Assumptions:
1.
HIPCs would aggregate purchasing power on behalf of employers and consumers
covered through the HIPC.
2.
In general, HIPCs would manage competition among private health plans. They
would negotiate premiums, distribute information and marketing materials to
consumers, handle enrollment, collect premiums, and pay health plans. The
system would be designed to stimulate competition based on price and quality,
rather than on the basis ofriskselection.
3.
Health plans within the HIPC would be required to offer the standard,
comprehensive benefits package, and thus compete on price and quality rather
than benefit design.
4.
Employers would be required to pay a percentage (perhaps 75 or 80%) of the cost
of the benchmark plan for their employees and their dependents. Consumers
could choose from among all plans offered by the HIPC. Consumers would pay
out of pocket for the additional cost of plans more expensive than the benchmark
plan. Special provisions may be necessary to ensure adequate choice for low
income consumers.
5.
One key purpose of managed competition is to encourage the development of
efficient health plans that integratefinancingand delivery functions and to
promote competition among such plans. In less populated areas, the precepts of
competition among multiple, efficient health plans may not be applicable. In such
areas, the HIPC's function in representing purchasers might be different (e.g.
encouraging the development of a single, integrated health plan; or using direct
provider price controls).
Beginning Questions:
a.
What level of state flexibility would be permitted in determining HIPC
functions? Could HIPCs have roles in addition to that of purchasing
agents (e.g. planning)?
b.
How would a HIPC select participating plans, and how much authority
would it have to limit the number of plans?
c.
Would supplemental benefits be allowed, and if so how would they be
structured (e.g. offered inside or outside of the HIPC, standardized
packages or not)?
�GOVERNANCE
Possible Working Assumptions:
1.
FEDERAL: A National Health Board would set the standard benefits package.
Other standards would be set for all health plans, including at least basic data
reporting requirements.
2.
STATE: Within federal guidelines, states would have authority to designate the
number of HIPCs, their geographic boundaries, and at least certain elements of
their structure.
3.
HIPCs: HIPCs would, at a minimum, purchase and structure coverage on behalf
of employers and consumers. HIPCs therefore should be governed by purchasers
and not providers.
Beginning Questions:
a.
Should a HIPC be a private, not-for-profit organization, a quasigovernmental entity, or could it be a governmental agency?
b.
What degree of autonomy should states have in determining the nature of
the financing and delivery system?
INSURANCE REFORMS
Possible Working Assumptions:
1.
Health plans contracting with HIPCs would offer a standard benefit plan at a
community rate with no medical underwriting.
2.
Coverage outside of the HIPC would be subject to similar rules (e.g. to assure
availability, equity, and continuity of coverage).
�l
DRAFT
DRAFT
March 12, 1993
DRAFT
DRAFT
DRAFT
DRAFT
DRAFT
DRAFT
DRAFT
State Government
Activity
Define the powers available to the purchasing pool to negotiate rates, develop
health plans, and create incentives and mandates to cover populations to be
served.
Define and enforce insurance regulations including rating practices, solvency
standards, and consumer protection standards.
Determine the geographic boundaries of purchasing pools, and the number of
pools to function within state.
License health plans for participation i n pooling arrangements.
License and define the scope of practice for health care professionals.
Define the terms under which larger employers may be permitted or required to
participate i n the pool.
Determine the specific measures that demonstrate
health care services exists.
whether or not access to
Determine the geographic area of the HIPC.
Determine the licensing standards for health plans which w i l l show that access
exists.
Assure provider access i n underserved areas.
Foster development of integrated networks.
Develop l e g i s l a t i o n to appropriate money to implement reform.
Develop RFP to secure federal technical assistance.
Development and implementation of data system.
Establish supply controls for specialized services and high technology.
Determine HPIC and state powers with
sanctions to non-compliant plans.
regard
to qualifying
and applying
Determine purchasing pool powers to select and negotiate with AHP's and/or
providers.
Establish governing board.
Modify administrative procedures act as necessary.
�DRAFT
DRAFT
March 12, 1993
DRAFT
DRAFT
DRAFT
DRAFT
DRAFT
DRAFT
HPICs
Hire staff.
Develop and issu^RFP^TJfor acturial, benefit consultant services,
services, marketingaftd information services, claims processing, etc.
^
Foster and oversee development of integrated provider networks.
legal
AHfs
Establish enrollment process and criteria.
^
Establish and implement eligibility process.
F
^Distribute information to employers. f u M ^ ± ^
Administer subsidy program (share with state).
Distribute information to individuals.
^
jf^tl^
u
\ ^ S a ^ J ^
Cjn^ul^ $
Collect and assure premium payments
Contract and negotiate with qualified plans.
Monitor access and quality standards of qualified plans.
Adjust for adverse risk selection.
Educate and monitor providers in fee for service program.
Establish supply controls for fee for service program.
Establish customer member service program.
Establish and monitor complaint and appeals procedures.
^7
^
i^^^iC
l^&Yt^J^^t/O^
Enroll groups and individuals and maintain eligibility data.
-Establish and maintain data system.
n
goo 4
�MINIMUM FEDERAL REQUIREMENTS
1.
States must assure the jninimum benefit package i s offered by
a l l alternative health plans in HIPC's and by a l l large
employers not i n HIPC's
2.
States must stay within hard budget for federal subsidies.
Statute must specify what happens i f t h i s budget i s exceeded.
3.
States must agree to participate i n outcomes measurement and
reporting systems and assure HIPC and plan data meet minimum
standards.
4.
States must assure that any privacy
standards for data are met.
5.
States must assure that standards for electronic submission of
claims and computerized patient records are met.
6.
States must assure that any fiduciary standards for HIPC's and
plans are met.
7.
States must assure that any plan standards for f i s c a l
solvency,
any requirements
for guaranty
funds, any
requirements for minimum capitalization, any requirements for
plan grievance mechanisms, etc. are met.
8.
States must assure that HIPC's meet any minimum
boundaries.
9.
States must assure that HIPC's meet open enrollment
requirements and minimum lock-in period requirements.
10.
States must meet maintenance of effort requirements for
Medicaid funds and for other state health programs, e.g.,
state mental health system.
11.
States must meet any special requirements for r u r a l or
vulnerable populations.
12.
States must assure that HIPC boards meet any representational
requirements established by law.
13.
States must comply with any federal overrides of state laws
regarding
mandated
benefits,
any willing
provider,
malpractice, or other laws.
14.
States
must participate appropriately
in eligibility
determination and subsidy determination functions i f that i s
a r e s p o n s i b i l i t y of states.
15.
States must assure that health plans meet any requirements
that precltydle./ y ^ V i * ^ periods, medical underwriting, preexisting condition q^auses, rate of increase l i m i t s , community
1
and confidentiality
population
�rating, etc.
16.
States must assure that everyone in the state has access to at
l e a s t one health plan that offers the minimum benefit package.
17.
States must enforce any requirements that the actuarial value
of the richest plan wont exceed the actuarial value of the
poorest plan by a given percentage.
18.
States must monitor plan marketing and other practices to
assure they meet standards.
19.
States must assure that there i s a system for r i s k adjustment
i n the state that meets standards and i s state-of-the a r t .
20.
States must assure that HIPC's monitor fee-for-service plan
deductibles and coinsurance to assure that they are in line
with any benefit package requirements.
�III. Functions (unless the PC is a single payer)
Enrollment
-Provide standardized information
"^D c ^ r ^ v ^ e ^ i -
-Conduct outreach
i&TTTrH individuals in health plans
^ /
Plan contracting
^
D
u A ^\ ^LU^
^
-Negotiate with health plans to establish premiums and service areas
-Select health plans
$t> < ^ \ ^ ^
Offer at least one free-choice plan
^ * \ ^
^ c L V ^ ^
f
1
1
s^-^
Fiscal authority
-Collect and deposit premiums in trust fund
-Authorize payments to health plans
-Establish the benchmark premium
_
^-Sponsor a health plan and contract directly with providers (optional)
-Set maximum payment rates that plans may pay providers (optional)
-Protect consumers from balance billing
-Establish grievance and appeals processes
-Oversee health plans to ensure quality of care
^
^
^-^-
-Approve supplemental benefit offerings
-Risk adjust premiums
,
^
j>*cJ^y^
^
�Coarxzt Drur.
SO
sJl-.'SSAX*) Fix: s.M-.\NS-n.'65
April 5, 1993
Ms. Valerie Melino
Heallh Care Financing Administration
Office of Coordinated Care Policy and Planning
330 Independence Ave. S.W.
Room 4360 - Cohen Building
Washington. DC 20201
Dear Valerie:
Thank you for the opportunity of meedng with you and your co-workers three weeks ago. We
appreciate your time very much and enjoyed the chance to discuss HBA"s services and the needs
of the Office of Coordinated Care.
Cost Estimate for Services
Enclosed pleasefindcost estimates for the services we discussed in the meeting and subsequent
telephone call. The estimates are based on performing services for a population of
approximately 200,000 medicare beneficiaries in a metropolitan area with four or five managed
Medicare options available. These services include:
Production of a personalized statement showing the managed medicare options
available to medicare beneficiaries. EligibiUty would be determined by home ZIP
Code.
Production of a single Lrifold coniaining a summary of Medicare Pan A and Pan
B benefits and a sumrr.irv of the managed Medicare options available in the area.
Mailing of the personal:zed statemen: and ihe infold io the home add-resses of the
Medicare b-eaeficiaries.
Siafnng of i toll-free, quest:;*:, and answer/material rec/jesi ho-.iine cesigned to
answer questions regriing available op'.ions and take oxers :'o: plan-specific
directories and marketing maiehais.
HMO PaniciD3tion in Oi^t of Sen ices
During ou: -eedng. ue ciscussed H3A"S ex-erler.ce wi:h the willingness of HMOs :o sna:e in
the cos: of H3A's services. Our curren: resea:;':. shows mat most (mere than "5 pe:ceni.i of :r.e
HMOs are --tiling to help share in the cos: of services on an administrahve fee. Typicailv. ti-ere
is no effec: cn rremium. The a~o_n: of cost-sharing is variable based on the score and cost
cf ser--ices and tre number of HMOs he:?::.; share ::: the cost.
�Page Two
Valerie Melino
April 5, 1993
Test Market Options
As you requested, I have looked at possible test market options. I will need your help in
determining if either of these cities has 200,000 Medicare beneficiaries.
Denver, CO:
currently has five managed Medicare options: Comprecare (Risk),
HMO Colorado (Risk), Kaiser (Risk & Cost), Qual Med (Risk),
and Rocky Mountain HMO (Cost).
Portland. OR:
currently has four managed Medicare options: Kaiser (Risk &
Cost), HMO Oregon (Risk), Paciftcare (Risk), PACC Health Plans
(Cost).
Please remember that the cost information represented on the following page is an estimate. The
estimate is based on the cost of similar services we currently perform for some of our existing
clients with a similar-size population.
Thank you again for your time. Please call me after you have had a chance to review the
document.
Sincerely,
Chris Funk
Senior Manager National Accounts
enclosure
�HEALTH BENEFITS AMERICA
Cost Estimate to Provide Services
to a 200,000 - Member Population
April 5. 1993
Information Gathering, Design, and Printing of Personalized Options Statement
Gaiher service area (ZIP Code) information from five plans
Program personalized options to be driven by ZIP Code
Design statement
Print 200,000 single-sided 8.5" x 11" personalized statements showing
available managed Medicare options
S 22,410
Information Gathering, Design, Typesetting, and Printing of Trifold
Gather managed Medicare information from five plans
Design trifold
Typeset trifold
Print 200,000 copies, one color, 65# white paper
30,950
Collation and Distribution of Personalized Statement and Trifold
Collation of 200,000 packets containing one personalized statement
and one trifold into 9" x 12" envelope
Use ACCUMAIL* to print ZIP+4 and help correct erroneous
address informaiion
First class mail to home addresses (approx. S.52 each)
149,385
Question and Answer/Material Request Hotline
Receive 80,000 telephone calls
Operate hotline nine hours/day. five days/week,
four weeks (21 working days)
Average length of call (in minutes): 5
Average speed c: answer (in seconds): 15
Answer rate: 95%
Number of representatives to hire: 94
Average represenratives-per shift: 61
Requests for HMO-specific directories and
marketing maieri'Js: 20.000
Creation of question and answer database for use by represents::•• es
330,455
:•jlfillmen; of Orders for Plar.-Specific Directories and Materials
Gather and wrehouse directories-'materials for five plans
rii! 20.000 orders for pin-specnic directories'materials
Send orders in " x 12" envelope using
f:.-s:-:iass mail -in-orox. 51.2! each)
32.340
:
tal
> 565.540
st per population n;ember
>
2.83
�Mailing Address:
89 Main Street
Drawer 20
Montpelier, VT 05620-3601
Office Location:
City Center, 3rd Floor
Street
Montpelier, VT 05602
Tel.: (802) 828-2900
Fax: (802) 828-2949
8 9
$
J^Sp^r'
M a i n
State of Vermont
Health Care Authority
INTRODUCTION TO INTEGRATED SYSTEMS OF CARE: WORKING DOCUMENT
DRAFT 2
April 16, 1993
The Vermont Health Care Authority Board is required to present to the General Assembly,
on or before November 1, 1993, the Board's recommendations for a universal access plan
based on the concept of regulated multiple payers and the Board's recommendations for a
universal access plan based on the concept of a single payer.
The Health Care Authority is committed to the preparation of plans based on the two
financing models. It is becoming clear, however, that there could be major areas of
commonality between the two plans; notably in the nature of the delivery systems from
which Vermonters receive their health care services as a result of universal access
legislation. Fundamental to any plan's foundation must be a commitment to universally
accessible, high quality health care. Financing methods will change with changes in national
and state policies, and the delivery system design must be able to accommodate these
changes. Finally, the system design should support continuous quality improvement as a
central, unifying objective.
This working document is the first of several that the Health Care Authority will release to
assist the development of the two universal access plans. It is our hope that by putting
forward preliminary design models, the Authority will receive focused comments from the
many groups and individuals interested in health care reform in Vermont.
Goals - Integrated Systems of Care
The development of integrated systems of care in Vermont is based on the belief that such
systems will provide demonstrable on-going benefits for the people of the state. These
potential benefits fall into the following categories:
1. Improved Access - Vermont's reform law specifies that all Vermonters should have access
to a uniform benefit plan. Integrated systems of care will have responsibility for providing
access to the range of services contained in the uniform benefit in an appropriate manner.
No individual eligible for the uniform benefit will be denied access to any system authorized
to provide the uniform benefit. Integrated systems will also have responsibility for assuring
convenient and geographically accessible services.
Health Policy Council
•
Hospital Data Council
�Page 2
2. Improved Quality of Care - Assuring the quality of health care is also an important part
of the Authority's mission. Integrated systems of care provide an opportunity to address
quality from three perspectives: the process of health care delivery, the quality of individual
providers' services, and the quality of care from the consumers' perspective, particularly as
related to outcomes.
Health care is a complex process often involving multiple providers, facilities, and diagnostic
and treatment capacities. Integrated systems of care link these multiple providers and
facilities and also provide the organizational structure within which to evaluate the quality
of care provided. Data on the provision of services can be collected and evaluated by
providers within the system to identify patterns of service delivery that could be improved
through the application of practice guidelines or other methods. These same data systems
can provide information on progress toward meeting established goals for improvement in
the outcomes and quality of services provided. This information can also be used by
consumers to evaluate the quality of the integrated system and its participating provider
network.
Integrated systems will be responsible for the quality of care provided to people
participating in their system. Activities focused on quality improvement will be guided by
information-based principles and practices.
3. Improved Health - Health care services are but one of several factors contributing to
health. Integrated systems of care are able to continually assess the health problems of the
individuals participating in them. They are able to direct resources to address those health
problems. Some of these resources may focus on prevention or educational interventions,
while others may be directed to treatment services. Ideally, all dimensions of health should
be considered within the integrated system's domain. An informed and responsible
consumer will be essential to achieving improved health, as well as other benefits to be
derived from the proposed reform of the health care system.
4. Assuring Choice - Choice is an important feature which can be maximized through
integrated systems of care. Under the current system, freedom of choice is predicated on
whether the individual has coverage, the different rules employed by different insurers, and
the availability of providers in certain areas. Integrated systems of care can offer much
greater certainty of choice by assuring that a continuum of health services will be available
to consumers. Patients should be able to choose between integrated systems of care and to
choose a primary care provider within an integrated system. Affirming the relationship
between the patient and the primary care provider will be an essential element in successful
system design.
5. Improved Cost Containment - Managing costs requires a management structure.
Integrated systems of care offer a structure for the management of costs at the level of the
delivery system. Act 160 has formulated a cost containment structure that includes the
�Page 3
concept of a statewide global budget for health care services. Integrated systems are the
management structures through which the global budget can be realized. This will directly
link responsibility for service delivery with cost management and will ensure that resources
are allocated to best meet the goals of the system - providing the uniform benefit, improving
quality, reducing the rate of increase in costs, and improving health.
Vermont Uniform Benefit Plan
A major mission of the Health Care Authority is to work with the General Assembly to
ensure that all Vermonters have access to a spectrum of health care services. These services
would result from the passage of specific legislation making a Vermont Uniform Benefit
Plan available to all Vermonters.
The discussion of integrated systems of care in this document is limited to the delivery of
the services provided by the uniform benefit plan. However, a variety of different types of
provider could deliver these services, and Integrated Systems of Care could deliver other
services beyond the uniform benefit plan. Also, it should not be interpreted to preclude
measures necessary to meet the needs of special populations requiring access to services
consistent with the uniform benefit plan (e.g., services for children with special health needs
or for persons recovering from traumatic injuries).
The uniform benefit plan provides a benchmark defining the continuum of health care
services that the State of Vermont has agreed to make available to all its citizens. The
uniform benefit plan becomes the central defining criterion for the integrated system of
care, in that it must provide the relevant health care services; and for a portion of the global
budget, in that these are the health care services Vermont will commit to have financed
through the universal access legislation.
Benefits design for universal access should be governed by the needs and preferences of the
majority of Vermonters and should take into account promoting wellness, improving health
status, the effectiveness of services, and consideration of out-of-pocket expenditures.
Benefits will be defined by understandable and predictable rules for the delivery of services
which will strive to avoid burdensome requirements that interfere in the consumer/provider
relationship. To promote accountability to consumers, Integrated Systems of Care will be
required to provide to the Authority, a description of the services provided under the
uniform benefit plan, along with the names of authorized providers and specific measures
for the accommodation of consumer preferences in the delivery of services. Consistent with
the goal of meeting individual needs and supporting continuous quality improvement, the
Authority will periodically study the uniform benefit plan, with public participation, and
make recommendations for the inclusion and/or deletion of specific services.
�Page 4
Vermont Integrated Systems of Care
An integrated system of care is a network of providers, facilities, and administrators which
has been established under a single management structure for the explicit purpose of
providing a range of health care services for Vermonters. At a minimum, these include the
services provided for in the Uniform Benefit Plan.
All Vermonters would receive their health care services, as established in the uniform
benefit plan, through Certified Vermont Integrated Systems of Care and Vermonters would
be able to join the system of their choice. In addition, there could be provisions for care to
be provided by another system upon request by the patient and approval by his or her
system. Systems would be free to provide additional services beyond the scope of the
uniform benefit plan.
There would be an open enrollment period at least on an annual basis. However, a person
could only belong to one integrated system at a time and for a fixed period of enrollment.
There might also be systems for individuals with special health care needs, including longterm care.
The Health Care Authority would develop criteria for integrated systems of care and would
establish a certification process. The criteria and process for certification would be
periodically evaluated to ensure that the Authority's objectives are being met. The general
criteria could include the following:
1. Has the capacity to deliver and assure the coordination of services covered under the
uniform benefit plan to all individuals who are enrolled in the system. This capacity includes
a network of providers sufficient to offer reasonable choice of providers suitable to the
individual's health needs within the uniform benefit plan, and adequate to meet the needs
of the enrolled population. If the existing delivery system is insufficient, the system may be
required to develop a plan for improving access as part of the certification process;
2. Is an organization incorporated in Vermont, including a board that is representative of
the membership of the system. Each system would be required to have a process that
identifies and meets community health care needs;
3. May not refuse to enroll any individual, during defined enrollment periods, who is eligible
for coverage under the uniform benefit plan. Patients will not be discriminated against on
the basis of gender, race, sexual preference, religion, economic class, type of disease or preexisting conditions;
4. Has a system to ensure confidentiality of patient records;
5. Has a comprehensive data system capable of identifying the health needs and utilization
�Page 5
of services by enrollees; systems for monitoring utilization and quality; and participates in
the quality review program established by the Health Care Authority pursuant to Act 160.
The data system shall adhere to a confidentiality code established by the Authority to
ensure that the information is handled in an ethical manner. The Health Care Authority
shall have jurisdiction over quality assurance issues. It may establish criteria under which
an integrated system of care could provide quality assurance review acceptable to the
Authority through an independent accreditation organization;
6. Assumes financial responsibility for the provision of the uniform benefit plan;
7. Has procedures to ensure that the organization is financially sound and has appropriate
administrative and management structures;
8. Has a well publicized grievance procedure to provide for the timely resolution of
grievances for individuals enrolled in the system;
9. Has an organized clinical staff or other methods to provide clinical direction, methods
to assure that staff or participating providers have the appropriate credentials, and a
program for staff or provider education and training;
10. Provides services to enrollees in sites that are geographically accessible, has a system
for after hours and emergency coverage, and provides hours of operation that are
convenient for individuals enrolled in the system;
11. Provides prevention and educational service programs to all enrollees, and develops
policies which promote shared decision-making between providers and enrollees.
The solvency of an integrated system of care would be an important element of certification.
The Department of Banking, Insurance and Securities would assist the Health Care
Authority in determining the criteria and monitoring procedures to assure solvency initially
and on a periodic basis.
The management unit of each certified integrated system of care would be a Vermont-based
Corporation. Through this mechanism, the provision of care by out-of-state facilities and
providers would be allowed as long as it was consistent with the policy objectives, quality
criteria and reimbursement standards of Vermont's health care reform effort.
It is anticipated that there will be more than one certified Vermont Integrated System of
Care. An integrated system would ensure that all participants have reasonable geographic
access to necessary services, and would have responsibility for expanding services into areas
of unmet need. One of the major responsibilities of the Health Care Authority would be to
ensure that all Vermonters had reasonable access to an integrated system of care.
�Page 6
Each integrated system of care would assume management responsibility for the providers
and facilities within the network. For example, this could include reimbursement, capital
expenditures and continuous quality improvement. Continuation of a limited certificate of
need program and hospital budgeting process with regard to the integrated system will
require further examination, as will issues relating to providers or organizations offering
shared services to integrated systems.
Council of Vermont Integrated Systems of Care
A Council of Vermont Integrated Systems of Care would be created to deal with systemwide issues such as group purchasing of prescription drugs and supplies; specialized
procedures (e.g. transplants); and recruitment of physicians. A major function of the Council
would be facilitation of health promotion and prevention activities; collaboration and
dissemination of innovations; and the pooling of resources for educational and training
purposes. It could also advise the Health Care Authority on the establishment of the
Vermont uniform benefit plan budget and the uniform benefit plan.
It may be advantageous to establish a joint reinsurance mechanism which all the certified
integrated systems of care would be members. This would help to ensure that an integrated
system of care does not become insolvent due to a disproportionate number of enrolled
individuals that require extraordinary levels of care.
Vermont Health Care Purchasing Trust
A Vermont Health Care Purchasing Trust could be established to act as an agent and
advocate for the payers and consumers of health care services. The structure of the Trust
would be designed to achieve public accountability. A chair and a board of directors for the
Trust would be appointed by the Governor. The membership of the governing board would
reflect the composition of payers and consumers covered by the uniform benefit plan. The
Trust would serve as the Health Insurance Purchasing Cooperative (HIPC) if such
organizations were authorized as part of a federal refoim initiative.
All Vermonters could be required to be members of the Trust in order to receive the
uniform benefit plan. The Trust could contract with Vermont Integrated Systems of Care
on behalf of consumers for the delivery of health care services appropriate to the uniform
benefit plan. Each Vermonter would be able to select his or her Integrated System of Care
and choose his or her primary care provider within that system. During the transition from
open delivery systems to statewide availability of integrated systems of care, the Trust could
reimburse the health care services delivered by both the open delivery system and the
integrated systems.
�Page 7
Duties of the Trust could include the following:
- contracting with integrated systems of care;
- negotiating with integrated systems of care the amount of the annual expenditure
base on which the capitation rate will be established and revenue requirements
determined;
- monitoring grievance procedures and quality assurance programs to assess the
quality of care being delivered by integrated systems of care;
- providing consumer education, and collecting data on consumer satisfaction and
complaints;
- promoting shared service facilities including Centers of Excellence;
- continuously reviewing the uniform benefit plan and recommending changes to the
Health Care Authority; and
- collecting revenue from the members of the Trust and making payments to the
Integrated Systems of Care. This function may be performed by another entity
through contract.
Vermont Uniform Benefit Plan Budget
A significant portion of Vermont's overall health care expenditures will relate to the costs
for the provision of care associated with the Vermont uniform benefit plan.
The establishment of the costs associated with the uniform benefit plan, including
administrative costs, multiplied by the population served, would equal the budget for the
Vermont uniform benefit plan. This is significant in that it represents the amount the
General Assembly would commit to have raised through the enactment of legislation that
assures Vermonters universal access to a uniform benefit plan. The Health Care Authority
would be charged with the enforcement of the specific amount associated with the Vermont
uniform benefit plan budget.
The Health Care Purchasing Trust could be responsible for negotiating with each Integrated
System of Care, the expenditure base from which the capitation rate for providing the health
services appropriate to the uniform benefit plan is determined. These negotiations would
take place under the supervision of the Health Care Authority and operate within the
context of guidelines set forth by the Health Care Authority. These guidelines could include
the following:
�Page 8
a. the prior year's expenditure base;
b. the budget goals established by the Health Care Authority;
c. an appropriate inflation factor;
d. a requirement that there be uniform payment between the integrated systems for
hospitals and other providers that are part of more than one integrated system;
e. an allowance for short-term capital;
f. solvency standards that have been developed in cooperation with the Department
of Banking, Insurance & Securities; and
g. the framework for Health Care Authority negotiations with any health care
bargaining group created under T.18 § 9409.
Once the Health Care Purchasing Trust and each Integrated System of Care arrived at a
proposed uniform benefit plan budget, it would be filed with the Health Care Authority for
approval. If the Health Care Authority rejected the proposed budget, it could be sent back
for further negotiations or the budget could be established by the Health Care Authority.
The negotiations would lead to a single community rate to be paid to the Trust by all
payers. The negotiations would also determine the amount from which the capitation rate
paid to each Integrated System of Care would be developed.
There would be adjusted capitated rates established for each integrated system. These would
be based on the factor adjustment applied to each Integrated System of Care. Factors that
could be applied to the base capitation rate in order to establish the final capitation rate
include:
1) age/sex or other actuarially determined risk factors of the population being
served;
2) correction of resource deficiencies within the integrated system;
3) quality, efficiency or consumer satisfaction;
4) additional depreciation and interest expense for approved capital projects.
The amount paid to each integrated system would be the single capitation rate multiplied
by any factor adjustments and by the population being served. The total amount received
by the Integrated Systems of Care from the Health Care Purchasing Trust, plus services paid
�Page 9
for in an open system, would equal the uniform benefit plan budget.
Other Programs
In this discussion of health care services associated with the uniform benefit plan, there has
been no mention of other programs that currently provide these services under some form
of mandate. Consideration will be given to the inclusion of the health care services related
to the uniform benefit plan offered under workers' compensation policies, automobile
insurance policies and Medicare and Medicaid, as this working document develops. Further
consideration of these issues would require a careful review of information regarding the
populations served, actuarial and utilization data, methods of assessing premiums, current
laws regarding these programs and the maintenance of Federal matching funds.
The Health Care Authority is working with the Governor's Advisory Council on Workers
Compensation to ensure overall coordination between the two groups.
Creating and implementing Integrated Systems of Care will take time, resources and
expertise. Therefore, the Health Care Authority will encourage the development of
capacities to provide ongoing training and technical assistance in planning, management and
quality improvement of Integrated Systems of Care. An existing organization or a new entity
may be the vehicle for addressing these needs.
Areas of assistance may include:
- providing organizational models and assisting in the formation of each Integrated
System of Care;
- providing ongoing assistance to achieve efficient delivery of services; a reduction
in the duplication of services; the reduction of unnecessary care; and decreased
administrative costs;
- assisting in developing a system focus on the improvement of the health status of
the population; and
- developing training programs, supporting innovation, and serving as a clearing
house for sharing system improvements.
�I U J ^ A - ^
^
Federal-State Health Care Issues
Florida's Flexibility Proposal
State of Florida
Agency for Health Care Administration
April 1993
^
�Introduction
The need to fundamentally reform our nation's health care system is finally receiving
the attention it deserves, due, in large part, to President Clinton's commitment to make it a
priority issue in his Administration. The fact that 37 million Americans lack access to a
regular source of affordable medical care can no longer be ignored. In addition, escalating
costs are causing people to question whether we are getting the best value for our health
care dollars. The states are ready to be partners in the campaign to control health care
costs and ensure that all Americans have access to high-quality affordable health care.
States can play a vital role in the nation's health reforms by testing alternatives. To perform
this role, however, the states need flexibility from certain federal statutory and regulatory
constraints that prevent the full implementation of comprehensive health reforms. Florida,
in particular, is willing and able to make valuable contributions because of two major health
reform laws the state legislature recently enacted.
Last year, the Florida Legislature enacted the Health Care Reform Act of 1992, which
contained sweeping plans for fundamentally changing the way health care is paid for and
delivered in the state. The 1992 law sets a firm deadline of December, 1994 for all
Floridians to have access to basic, affordable health care. This year, the state legislature
enacted the Health Care and Insurance Reform Act of 1993, which builds on the 1992 law
and creates community health purchasing alliances to implement a managed competition
model in Florida.
Unique population characteristics also make Florida an ideal site to test health care
reform. As the nation's fourth largest state, Florida has the highest percentage of elders in
the nation--18.4 percent of the population is age 65 and older. It has the third largest black
population and the third highest percentage of migrants and refugees. Approximately 12
percent of the state's population is of Hispanic origin. Florida also has almost 2 million
residents who live in poverty.
The nation's health care problems are magnified in Florida. Most Floridians have
insurance, but 2.5 million residents, 18.5 percent of the population, are uninsured.
One-third of Florida's uninsured are children. Florida has the nation's fourth highest
percentage of non-elderly uninsured residents. Uninsurance is highest in Florida among
blacks, males, people with incomes below $25,000, and those between the ages of 18-39.
Florida's Health Reform Laws
Health Care Reform Act of 199^
Last year, the Florida Legislature enacted the Health Care Reform Act of 1992. This
landmark legislation provided a blueprint for health reform in Florida by establishing for
the first time in state law a firm deadline by which all Floridians shall be ensured access to
�basic, affordable health care. The law was comprehensive and it addressed the state's
health care crisis in a systemic fashion. It contained the following major features:
Florida Health Plan
•
Creates the Florida Health Plan, a multi-strategy, comprehensive health plan. Provides
principles and strategies the state will pursue to address issues of health care access;
cost containment; quality of care; insurance reforms; and health care data collection,
research, and analysis
• Requires that all Floridians have access to a basic affordable health care package by
December 31,1994
•
Creates a unique public-private health care coverage and cost containment program to
encourage employers to offer health benefits to their employees and health care
providers and insurers to reduce health care costs
•
Establishes health care coverage and cost containment targets against which the success
of the public-private program will be measured
•
Provides for the agency to submit to the Governor and Legislature proposals for
implementing more fundamental market and structural reforms if the program is not
successful. The community health purchasing alliances (CHPAs) that are established in
the 1993 legislation provide the state's response to creating a health care environment
in which the program can succeed
Small Business Health Insurance Reform
•
Creates the Employee Health Care Access Act, requiring small employer carriers to
offer on a guarantee-issue basis, standard and basic health benefit plans to employers
with 3 to 25 employees
Agency for Health Care Administration
Created the Agency for Health Care Admimstration, effective July 1,1992,
consolidating health care financing, purchasing, and policy making and planning, as well
as health facility regulation and cost containment functions into a single agency
Effective July 1, 1993, makes the agency responsible for Medicaid, the State Employees'
Health Insurance program, the Florida HealthAccess Corporation, and the Florida
Healthcare Purchasing Cooperative
�Practice Parameters
• Directs the agency, in conjunction with the relevant medical associations, to guide the
adoption and implementation of scientifically sound practice parameters to eliminate
unwarranted variations in health care delivery
Health Promotion Program
• Establishes a comprehensive, community-based health promotion and wellness program
to reduce major behavioral risk factors associated with chronic diseases, injuries and
accidents
Florida Health Services Corps
• Creates the Florida Health Services Corps to encourage qualified medical professionals
to practice in underserved locations of the state
Health Care and Insurance Reform Act of 1993
This year's law makes explicit the state's commitment to pursue market-driven health
reforms. The law states
It is the intent ofthe Legislature that a structured health care competition model,
known as "managed competition," be implemented throughout the state to improve
the efficiency ofthe health care markets in this state. The managed competition
model will promote the pooling ofpurchaser and consumer buying power; ensure
informed cost-conscious consumer choice of managed care plans; reward providers
for high-quality, economical care; increase access to care for uninsured persons; and
control the rate of inflation in health care costs.
The major elements of the law include:
Community Health Purchasing Alliances (CHPAs)
• Improves the efficiency of Florida's health care markets by (1) allowing purchasers and
consumers to pool their buying power; (2) promoting cost-conscious consumer choice of
managed care plans; (3) rewarding providers for high quality, economical care; (4)
increasing access to care for the uninsured; and (5) controlling the rate of health care
inflation
CHPA membership is available to (1) small employers (up to 50 employees), and (2)
the state, for the purpose of providing health benefits to state employees and their
dependents; Medicaid recipients; and MedAccess program participants. Provides for
�"associate alliance members," which include large employers, to participate on the
alliance board and receive data from the alliance
• Creates one non-profit CHPA in each of the 11 health service planning districts
• Each CHPA operates subject to the supervision and approval of a 17-member board of
directors representative of alliance members, consumers, and government
purchasers-no board member may have any connection with a health care provider or
insurer
• CHPAs provide member purchasing services and detailed information to their members
on comparative prices, usage, outcomes, quality, and enrollee satisfaction with
accountable health partnerships
• CHPAs must develop plans to facilitate participation by providers in the district in an
accountable health partnership, placing special emphasis on participation by minority
physicians
• Authorizes CHPAs to issue requests for proposals from accountable health partnerships
for the standard and basic plans and specialized benefits approved by the alliance board
• Provides for preferred provider networks, point-of-service products, exclusive provider
organizations, health maintenance organizations (HMOs), or pure indemnity products
to be offered to alliance members, if such plans are reasonably available within the
CHPA's jurisdiction
• Ensures a wide choice of accountable health partnerships to state employees, including
five HMOs and five preferred provider organizations
• Any employer that employs 30 or fewer employees must offer at least two accountable
health partnerships or health plans to its employees and an employer that employs 31 or
more employees must offer three or more accountable health partnerships or health
plans to its employees
• Makes the Agency for Health Care Administration responsible for certifying the
CHPAs and actively supervising the CHPAs to ensure that actions that affect market
competition are not for private interest, but provide state and federal anti-trust
protection as intended by the legislation
• Requires health plans to be offered by accountable health partnerships; CHPAs may
not directly provide insurance, directly contract with a health care provider, or bear any
risk
�Medicaid
•
Creates the MedAccess Program (Medicaid Buy-In) for Floridians with incomes up to
250 percent of the federal poverty level; premiums will be paid by the individual, the
individual and the employer, or government; providers will be compensated at the
Medicaid reimbursement rates; includes the benefits participants will receive under the
program
• Allows the agency to include Medicaid recipients, MedAccess program participants in
the community health purchasing alliances
•
Creates a new physician fee schedule based on a resource-based relative value scale
• Expands the MediPass primary care case management program statewide by December,
1996
Small Business Health Insurance Reform
•
Enhances the Employee Health Care Access Act of 1992 by extending reforms to
include employers with 1 to 50 employees
•
Requires all insurers that issue policies to small employers to offer their product on a
"guarantee issue" basis to small employers, employees, and dependents without regard
to health status, preexisting conditions, or claims history
•
Requires modified community rating of small business products; adjustments are
allowed for age, gender, family composition, tobacco usage, and geographic location
Single State Agency
•
Implements 1992 reforms by transferring Medicaid and the policy making and
negotiating functions of the State Employees' Health Insurance Program to the Agency
for Health Care Administration, effective July 1, 1993
Practice Parameters
• Amends 1992 reforms, by directing the agency, in conjunction with the health
professional boards and associations, to develop state practice parameters that will
reduce unwarranted variation in the delivery of medical treatment, improve the quality
of medical care, and promote the appropriate use of health care services
�• Provides for the agency, in conjunction with the Board of Medicine, to establish a
demonstration project to evaluate the effectiveness of practice parameters with regard
to the costs of defensive medicine and professional liability insurance
Rural Health
• Creates rural health networks that provide a continuum of care, integrate public and
private resources, coordinate health service planning among providers, and link rural
and urban facilities
• Provides flexibility, certificate of need preferences, a disproportionate share program to
provide financial assistance to statutory rural hospitals, and a rural hospital financial
assistance program if federal funding is not available to implement the disproportionate
share program
Although the federal government should support state initiatives to provide full
coverage of their residents and operate cost-effective health care programs, it has strong
interests in ensuring that states will carry out the intent of the federal programs. Florida
suggests that the following general principles guide decisions on state flexibility:
• the state's health care reforms must be comprehensive, ensuring access to care for all
residents by a certain date;
• the state's reforms must be compatible with reforms enacted at the federal level;
• the state must agree to enter into an outcome-based performance contract in exchange
for being granted waivers or exemptions from federal requirements;
• benefits must include preventive and primary care in the basic plan design; and
• a state must be able to demonstrate that it has either enacted legislation or has the
support necessary to pass its health care reforms into state law.
This paper outlines the federal statutory and regulatory changes Florida needs to
implement its comprehensive health care reforms. It focuses on three main areas:
Medicaid, Medicare, and the Employee Retirement Income Security Act. Each section
reviews the issue, Florida's proposed reforms, how implementation ofthe proposal will
help Florida achieve its health goals, and suggested measures that could be used to ensure
state accountability in exchange for federal flexibility.
�Medicaid
State Comprehensive Health Care Reforms
Issues
Florida's uninsured are the employees of small and medium-sized businesses that either
choose not to offer coverage or cannot afford to do so because of health insurers'
underwriting practices (e.g., use of preexisting condition exclusions, cancellation of policies
because of claims experience, higher premiums because of the assumption of higher risks
for small groups). They are disabled persons who can no longer work or who have their
insurance cancelled by carriers who deem them unacceptable risks. They are people with
low incomes who do not work but are ineligible for Medicaid. Tragically, far too many are
children who are denied a healthy start in life because their parents can neither afford
health care nor meet eligibility requirements for publicly sponsored care.
In addition, the effects of decades of steadily rising health care costs can no longer be
ignored. The Florida Medicaid budget, which has tripled in the last six years to $6.5 billion,
accounting for 18.3 percent of the state's total budget in FY 1993-94. Conservative
projections anticipate that it will almost triple again to $13.7 billion by FY 2000-2001.
Medicaid expenditure increases are now consuming the majority of all new state revenues.
Florida has identified several problems with federal Medicaid statutes and regulations
that prevent the states from ensuring access to health care for all their residents, operating
cost-effective programs, and implementing other comprehensive health care reforms. State
efforts to cover additional low-income, unemployed or part-time workers, implement
wide-scale managed care programs, and demonstrate other cost containment measures
have been limited by Medicaid categorical and income limits, the linkage of federally
supported public and medical assistance eligibility, managed care limitations, and federal
financial participation restrictions.
Approximately 2.5 million Floridians are uninsured; 75 percent of the uninsured are
employees and their dependents; almost one-third are children. More than 600,000
uninsured Floridians, however, are low-income unemployed individuals who are ineligible
for Medicaid. There are several federal Medicaid constraints to the full implementation of
Florida's health reform laws, including improved coverages for people with low incomes:
•
Most of this group cannot be enrolled in Medicaid because of current eligibility
restrictions. Title XIX of the Social Security Act specifies the groups that states are
required to cover in their Medicaid programs. These categorical groups include aged,
blind, or disabled people and members of families with dependent children. To be
eligible for medical assistance, persons who are categorically eligible must also meet
income, asset, and other eligibility standards for the Supplemental Security Income
7
�(SSI) or Aid to Families with Dependent Children (AFDC) public assistance programs.
In addition, certain pregnant women, children, and Medicare-eligible individuals whose
income does not exceed certain federal poverty-related standards must also be covered.
For many eligibility groups, Medicaid is tied to eligibility for economic assistance
programs. Consequently, federal funding is not currently available for health care
coverages for other low-income persons who are categorically ineligible for Medicaid.
To some extent, the states can overcome this problem by increasing their AFDC income
standards, but this requires them to provide economic benefits in order to offer medical
assistance. Even then, assistance is limited to individuals who are categorically eligible.
Like many other states, Florida could increase its AFDC income standards, thereby
increasing federal expenditures for both economic and medical assistance. However, by
decoupling economic and medical assistance income eligibility, Florida would be able to
improve its health coverages without increasing federal expenditures for its economic
assistance programs. In the absence of a national health plan, the federal government
should encourage the states to enact comprehensive health reforms by providing
matching funds needed to provide Medicaid coverage to persons who cannot obtain
insurance at the workplace.
Another aspect of Florida's health reform laws is an increased reliance on managed care
programs for persons enrolled in publicly sponsored health plans. Although the Social
Security Act permits renewable two-year freedom-of-choice waiver programs, such as
Florida's primary care case management program (MediPass), regulations have
significantly limited the expansion of Medicaid managed care plans. To ensure quality
of care, the Social Security Act requires Medicaid HMOs and other prepaid health
plans (PHPs) to maintain a 25 percent commercial (non-Medicaid, non-Medicare)
enrollment. The commercial enrollment requirement, however, is a poor proxy for
quality. Physicians and other providers treating Medicaid patients are often located in
geographic areas other than those in which higher income, commercial enrollees live
and seek care. To require that one-fourth of Medicaid PHP enrollees be commercially
insured inhibits Medicaid PHP development. It also forces many Medicaid PHPs to
accept high-risk commercial accounts simply to satisfy the Medicaid-commercial mix
requirement, threatening the PHP's financial ability to deliver quality care. In addition,
the Health Care Financing Administration (HCFA) requires states to contract for an
outside evaluation of the cost-effectiveness of their freedom-of-choice waiver programs
every two-year renewal period. This time frame does not provide contractors adequate
time to collect sufficient data to support a meaningful assessment. In addition, it wastes
state and federal funds to continue to evaluate programs that have already proven to be
cost-effective.
Section 1902(a)(5) ofthe Social Security Act requires the states to designate a single
state Medicaid agency to administer or supervise the administration of the Title XIX
plan. To qualify as the single state agency, the designated agency cannot delegate
certain authority to other agencies to exercise administrative discretion in the
administration or supervision of the plan or to issue policies, rules, and regulations on
8
�program matters. If any of its rules, regulations, or decisions are subject to review,
clearance, or similar action by other state agencies, it must ensure that its authority is
not impaired. If other state or local agencies perform services for the single state
agency, they must not be able to change or disapprove any administrative decision of the
Medicaid agency with regard to the application of policies, rules, and regulations issued
by the Medicaid agency.
Finally, Medicaid expenditures absorb a large and increasing share of state and federal
revenues. Dramatic health care cost escalation is a powerful incentive for the states and
the federal government to develop cost-effective programs. State innovations that
reduce program costs should be encouraged and rewarded by the federal government.
Proposal
To aid Florida and other states in implementing their comprehensive health reforms,
the following modifications to federal Medicaid laws are proposed:
• Medicaid eligibility requirements should be decoupled from the eligibility requirements
for other public welfare programs. Section 1902 of the Social Security Act should be
amended to make federal funding available to the states to cover a new group of
persons, who are Medicaid ineligible, with incomes up to 250 percent of the federal
poverty level. Safeguards will be developed to minimize the chance of adverse selection
and to initially provide these coverages to persons who are uninsured. In addition, the
eligibility determination process used for this group should be simpler and faster than
the present complex eligibility tests used for Medicaid categorically eligible groups.
Premium cost-sharing for this group should also be allowed. Finally, the states should
be permitted to develop benefit packages for this group that are less comprehensive
than the federally mandated Medicaid benefit standard.
• Section 1903(m)(2)(A)(ii) of the Social Security Act should be amended, eliminating
the 75/25 Medicaid-commercial enrollment requirement. States, however, should be
required to establish sound PHP quality assurance programs. In addition, sections
1915(c)(9)(d) and 1915(c)(9)(c)(l) of the Social Security Act should be changed,
authorizing freedom-of-choice waivers for a longer time period.
• The federal Medicaid law should be amended to require HCFA to establish a state
innovations program that requires the federal government to establish a method for
calculating program savings from state innovations, and to return to the states one-half
ofthe federal savings resulting from such innovative reimbursement, service delivery,
cost containment, or other state Medicaid reforms.
• Section 1902(a)(5) of the Social Security Act should be amended, allowing states
greater flexibility in structuring their health care-related state agencies. This will allow
�a state to design organizational structures that best meet its needs based on its unique
governmental, geographic, demographic, and delivery needs.
Additional Flexibility to Aid the Implementation of Florida's
Comprehensive Health Reforms
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Adoption of Florida's state flexibility proposal would allow Florida to provide basic
health care coverage to all its citizens as mandated by its health reform laws. It would also
allow Florida and other states proposing comprehensive health reforms to test various
reforms that could serve as the basis for a future national health plan. It will allow Florida
and other states to expand their medical assistance coverages without increasing state and
federal expenditures for economic assistance. These proposals are consistent with the
principles and strategies contained in the state legislation, including the assurance of access
to affordable basic benefits for residents of the state regardless of health condition, age, sex,
race, geographic location, employment, or economic status; and assurance that all residents
contribute, based on their ability to pay, to the financing of their health insurance.
Medicaid managed care reforms will foster the development or expansion of Medicaid
PHPs, saving state and federal dollars. It will also expand Medicaid recipients'
opportunities to obtain services from a PHP that offers more accessible and continuous
care than is available through the fee-for-service delivery system. This proposal ensures
that the states will have even greater incentives to invest in innovations to contain program
expenditures. Sharing in program savings would encourage the states to pursue additional
strategies to improve care but contain costs.
State Accountability
Social Security Act amendments authorizing greater state flexibility in designing its
Medicaid program could include the following safeguards:
•
require the states to devote new federal funds to provide basic health care coverage to
additional persons who are currently ineligible for Medicaid;
•
mandate that the states continue to monitor HMO and PHP quality of care through
medical chart audits, patient satisfaction and voluntary disenrollee surveys, provider
credentialing, PHP quality assurance and peer review programs, provider site visits, and
other quality assurance methods;
require the states to establish health care data bases, including a federally prescribed
minimum data set, that will collect needed information on health care coverages and
expenditures;
10
�• require the states to demonstrate that program reforms have not negatively affected the
quality and accessibility of Medicaid services; and
• require the states to set targets for ensuring access to basic health care for all uninsured
persons.
Improved Program Management
Issues
In addition to the changes that are necessary to implement comprehensive health
reform proposals, there are other refinements that could be made to allow states to
improve the management of their Medicaid programs. These changes would provide the
flexibility states need to ensure access to care, while constraining health care costs and
protecting quality of care. Congress and HCFA, in enacting federal laws and regulations,
too often micromanage state Medicaid operations. The regulatory issues mentioned below
are but a few of the examples of efforts by Congress and HCFA to dictate almost every
facet of the operation of a state's Medicaid program. Florida proposes that Congress and
HCFA generally limit their regulation to the establishment of broad parameters for state
programs (e.g., eligibility, service coverage, federal financial participation), only requiring a
state to demonstrate that it has sufficient providers, adequate reimbursement, proper
quality of care, and other program features to ensure that the state offers accessible,
adequate care to all Medicaid-eligible persons. This would require a fundamental change
in federal-state relationships because HCFA would be required to prove noncompliance
rather than a state proving compliance.
The Medicaid Program is a partnership between the states and the federal government
to pay for health care for those Americans who are least able to afford it. Each partner pays
a share of the costs and has a powerful incentive to purchase high-quality care in the most
cost-efficient manner. The goals of the states and the federal government to ensure access
to high-quality, cost-efficient health care are the same. Over time, however, the federal
government has promulgated laws and rules that constrain and even compete with the
states' abilities to achieve these goals by micromanaging the Medicaid Program. What
began in 1965 as a partnership between the federal government and the states to provide
health care coverage for low-income Americans has evolved into a "top-down" approach to
management of the Medicaid program, with the federal government issuing mandates and
the states being forced to comply. The following examples illustrate some of the areas in
which the states need regulatory relief:
• States can obtain waivers to certain sections of the Social Security Act to operate
cost-effective alternatives to the regular Medicaid program. President Clinton stated
his commitment to speeding up the waiver process and HCFA recently granted Oregon
a waiver, which had been rejected by the Bush Administration, to test its Medicaid
reforms. The President is aware that because states invest a substantial share of their
11
�own revenues in the Medicaid program, they have strong financial incentives to make
sure that they operate cost-effectively. For states that are trying to revolutionize their
health systems, and incurring all the political and economic unrest associated with such
a change, delays can be discouraging. Florida appreciates President Clinton's
understanding of the states' dilemmas and wants to work with the Administration to
improve the waiver process. Some additional reforms that should be considered include
extending the time frame for collecting data to analyze waiver renewal requests, thereby
permitting a more valid analysis and streamlining the renewal evaluation process.
• To contain Medicaid acute and long-term care expenditures, the Boren Amendment
was enacted, requiring the states to reimburse facilities at rates that are adequate to
cover the cost of an economically and efficiently operated facility. Congress intended to
create reimbursement ceilings. However, the amendment has been interpreted by
HCFA and the courts in a manner that establishes a reimbursement floor, increasing
state Medicaid program expenditures.
• The Social Security Act and federal regulations sometimes require the states to
implement program reforms that increase costs but do not improve care. For example,
OBRA 90 requires the states to cover any drug manufactured by a pharmaceutical firm
if the manufacturer has signed a rebate agreement with HCFA. States should be
permitted to deny reimbursement for any manufacturer's drug if other drugs in the
same class of drugs are as effective but less costly. In addition, states are required to pay
the Medicare Part A and Part B premiums for certain Medicare beneficiaries. As a
result, the state may pay more for a beneficiary's premiums, coinsurance, and
deductibles than it would have paid for total Medicaid coverage of the individual.
•
States may lose valuable Medicaid matching funds for minor technical infractions which
do not affect quality of care. Disallowances for infractions that do not affect Medicaid
recipients' access to or quality of care cost the state millions of dollars, reducing
available funds for meeting critical state needs.
•
Effective this year, federal law requires that all physicians delivering services to
Medicaid eligible pregnant women and children be board-certified in pediatrics, family
practice, or obstetrics; hold admitting privileges at a hospital participating in Medicaid;
be employed by a federally-qualified health center (FQHC); or be a member ofthe
National Health Services Corps. The legislative intent is to ensure high quality care for
Medicaid recipients. At best, however, the requirement is impractical because it will
require a complex system for identifying and monitoring the board eligibility of
physicians delivering services to pregnant women and children. At worst, it will deny
payments to physicians and other practitioners who are not board-certified but are
licensed by the state, further reducing recipient access to fully qualified practitioners
who have chosen not to invest the time and money in seeking board certification, or for
whom board certification is not applicable. To ensure good outcomes for pregnant
12
�women and their children, the states are developing complex managed care systems that
use the full array of qualified practitioners. The board certification requirement will
severely limit the range of providers who can serve Medicaid recipients. It also has the
likelihood of disrupting the states' managed care systems, and could possibly result in
poorer health outcomes.
•
Each April, the states are required to submit to HCFA an amendment to their Medicaid
state plans, documenting physician participation rates in the specialty areas of obstetrics
and pediatrics. The plan amendment must also document physician fees for a wide
array of procedure codes commonly used in the delivery of pediatric and obstetrical
care. The federal requirement is intended to ensure that prenatal and child health care
services are accessible and provided in a way which will reduce infant mortality and low
birthweights and otherwise promote better health outcomes for infants and children.
Practically speaking, however, the amendment diverts staff time from important
activities that have a greater potential for achieving the desired outcomes. The
inclusion of some provider types and not others as legitimate providers of obstetric and
pediatric care has been a source of great debate.
Proposal
The Social Security Act should be amended to permit the states the flexibility to manage
their programs in the most cost-effective and efficient manner. Federal laws and
regulations that seek to provide uniformity across all states may in fact inhibit them from
managing their programs efficiently. The following technical changes would allow Florida
to improve the administration of its Medicaid program without sacrificing high quality care
for its recipients:
• Amend sections 1902(a)(13)(A), 1903(i)(13), and 1902(a)(30)(A) ofthe Social Security
Act to (1) clarify that federal Medicaid reimbursement principles are designed to set
upper reimbursement limits but permit the states to develop reimbursement methods
that further control provider payments, while ensuring accessibility to and quality of
care; (2) eliminate the requirement for board certified obstetricians and pediatricians;
and (3) eliminate the physician participation documentation requirements.
•
Amend the Social Security Act to permit states to demonstrate that alternative policies
may be more cost-effective yet provide a comparable level and quality of care.
• Allow states with successful waiver programs to convert them to optional Medicaid
programs that do not require waivers. Current waivers that could be authorized as
optional services include programs for AIDS, developmentally disabled, and aged
recipients that prevent or delay more costly institutionalization, mandatory HMO
enrollment programs, and mandatory primary case management programs that
emphasize preventive care.
13
�Allow states to establish optional services that have been successfully demonstrated in
other states.
Enact federal legislation to prohibit federal disallowances for minor technical
noncompliance issues or infractions that do not involve any serious allegations of harm
to patients. Sections 1102 and 1902(a)(4) of the Social Security Act could be amended
to ensure that states' resources are used to provide greater coverages not pay the federal
government for meaningless noncompliance. This will greatly aid improved
federal-state relationships.
Additional Flexibility to Aid the Implementation of Florida's
Comprehensive Health Care Reforms
Current federal requirements limit state experimentation with alternative
reimbursement methodologies, expanding or developing cost-effective programs, or using
the most appropriate range of qualified and licensed health care professionals. The
technical changes proposed in the previous section would give the Florida Medicaid
program the ability to focus on the development of high-quality, cost-effective programs
rather than complying with bureaucratic controls that neither improve quality nor contain
costs. Unnecessary federal administrative requirements, such as forcing states to renew
waiver programs that have already proven to be cost-effective and providing documentation
of access to obstetric and pediatric care, distract states from concentrating on developing
strategies to achieve desired patient outcomes rather than bureaucratic controls to avoid
compliance issues. To the greatest extent possible, states should be left to experiment and
develop their own innovative, cost-effective programs that meet broad federal mandates.
State Accountability
In exchange for increased flexibility in the administration of its Medicaid program,
Florida proposes that the following safeguards be included:
•
require states to ensure that technical changes to their Medicaid programs will not have
a negative impact on quality of care;
•
require states to demonstrate that access to care is not limited by program changes;
•
require states to show that the changes are cost-effective or budget neutral over a
reasonable period of time;
•
require states that convert waivered services to optional services to manage these
services in accordance with federally approved state plan amendments;
14
�• require states to conduct internal evaluations that focus on quality of care and patient
outcomes rather than using reimbursement payments as a proxy for these measures;
• require states to address reimbursement levels each year to determine if rates are
adequate to support high quality, accessible care;
• require states that are allowed to waive mandates that are not cost-effective to assure
that cost-effective equivalent policies are implemented;
• require states to contract with health care professionals who are qualified under state
law; and
• require the states to implement state audit programs to detect federal compliance issues
and implement timely corrective action.
15
�Medicare
Issues
Medicare is a federally administered entitlement program that provides comprehensive
health care benefits for elders and some disabled persons. However, current Medicare
statutes only allow state-administered cost control demonstrations:
• Section 402(a)(1)(A) of the Social Security Amendments of 1967 (P.L. 90-248), permits
the Secretary ofthe Department of Health and Human Services (HHS) to experiment
with alternative methods of Medicare and Medicaid reimbursement. The amendments
specifically authorized incentive reimbursement demonstrations to determine if such
experiments would increase the efficiency and economy of the health services covered
under Medicare and Medicaid without adversely affecting the quality of services.
Under Section 402(b) of the Social Security Amendments of 1967, the Secretary has
broad discretion to waive Medicare and Medicaid reasonable cost and reasonable
charge provisions as necessary to conduct projects under Section 402(a). Section
402(a)(1)(C) authorized state rate-setting demonstration projects, permitting Medicare
and Medicaid to participate in such demonstrations and to evaluate the effectiveness of
adopting a state's method of determining hospital payment levels.
• Section 222 of the Social Security Amendments of 1972 (P.L. 92-603) amended Section
402(a) of the Social Security Amendments of 1967, permitting the Secretary to waive
compliance with Medicare and Medicaid payment methodologies. The 1972
amendments authorized experiments of a broad range of payment methods, including
prospective reimbursement.
• In 1980, Section 1814(b)(3) was added to the Social Security Act to provide for a
continuation of state hospital reimbursement demonstrations first authorized under
Sections 402 and 222. However, this continuation was only permitted if the rate of
increase in hospital costs per Medicare inpatient admission was equal to or less than the
rate of increase for Medicare admissions to hospitals generally.
• Section 1886(c) of the Social Security Act, as guided by the Tax Equity and Fiscal
Responsibility Act of 1982 (as since amended), gave the Secretary the authority to waive
ordinary methods of Medicare payment and permit experimental state cost control
systems for hospital reimbursement. To be eligible for waivers, states had to apply their
reimbursement controls to substantially all nonfederal acute care hospitals in the state
and all payers (including federal and state programs) equitably. The system must also
not cost the Medicare program more money for the same hospital services.
16
�• However, in a policy statement published in the Federal Register in October 1982, the
Health Care Financing Administration (HCFA) indicated that, in connection with
statewide hospital reimbursement demonstration projects, it was narrowing itsfieldof
interest to projects that used a diagnosis-related unit of payment. Accordingly, to be
considered for approval, a demonstration project should (1) apply to all acute care
hospitals in the state, (2) result in cost savings to HCFA programs, (3) use
diagnosis-related groups as the unit of payment, (4) result in equal sharing of risks for
all participating payers, and (5) allow HMOs to negotiate reimbursement rates with
hospitals.
Under these demonstration authorities, HCFA has supported a variety of Medicare and
Medicaid prospective reimbursement and rate-setting programs administered by several
states. The most notable experiments using these waiver authorities were the all-payer
reimbursement systems authorized in Maryland, Massachusetts, New Jersey, and New
York. However, more recently HCFA has narrowed its demonstration interests, virtually
ignoring the Congressionally authorized waivers to further test state cost control systems.
Proposal
Titles XVIII and XIX of the Social Security Act should be amended to permit
wide-scale state-administered demonstrations of alternative Medicare and Medicaid payer
systems, including capitated and negotiated rate systems and Medicare beneficiary
managed care programs. Additional statutory language is needed to specifically:
• set time limits for HCFA approval of state waiver applications;
• establish federal-state risk-sharing and cost savings allocation arrangements;
• only require that state demonstrations achieve budget neutrality over a multi-year
period;
• authorize longer demonstration periods (unless a national health plan is adopted) with
automatic renewals for efficiently administered systems;
• permit states to consolidate Medicaid and Medicare coverages for Medicare
beneficiaries; and
• permit states to offer additional Medicare benefits to contain acute and long-term care
costs.
17
�Additional Flexibility to Aid the Implementation of
Florida's Comprehensive Health Reforms
Congress should authorize a new round of state-administered Medicare demonstrations,
including state administration of Medicare benefits through managed care initiatives. In
enacting the Medicare and Medicaid programs, Congress chose to establish a
federally-administered program for the elderly and some disabled persons, but a
state-administered program of medical assistance for low-income families and other
disabled and long-term care patients. There is no inherent reason that administration of
these programs should continue in this way.
In fact, the continuation of this peculiar administration will impair implementation of
Florida's comprehensive health care reforms. In many respects, Medicaid is becoming a
supplemental insurance program for low-income or institutionalized Medicare
beneficiaries. But the states do not have the discretion to merge Medicare and Medicaid
supplemental coverages for the nation's elderly. In addition, the states are unable to
maximize the value of Medicare investments by broadening long-term care coverages to
include home and community-based services. Consequently, elder health reforms have
lagged behind innovations for families and children because of federal Medicare
administration.
Because of extraordinary increases in Medicare expenditures, state innovations in
managed care and utilization control programs, and state comprehensive health care
reform proposals, the federal government should authorize state demonstrations to learn
how to better control Medicare beneficiaries' use of services, improve the quality of needed
care, and contain per capita costs. States are more knowledgeable of their populations and
health care systems than the federal government is, but their unique ability to plan
programs for Medicare beneficiaries that provide greater levels of service at less cost is
hampered by rigid, uniform regulation.
State Accountability
Social Security Act amendments authorizing additional Medicare cost control and
managed care demonstrations could include the following safeguards:
• require the states to demonstrate budget neutrality over a multi-year period, but
permitting higher front-end costs offset by later year savings;
• limit federal expenditures over a multi-year period to Medicare baseline expenditures
adjusted for inflation, demographic changes, and benefit package changes; however, the
financial risk of the demonstrations should be based on Congressionally-adopted
overpayment calculation formulas and equally shared by the state and the federal
18
�government up to a prescribed level above which the state would be totally responsible
for cost overruns;
• prohibit state reductions of Medicare benefit levels;
• require states to share savings with the federal government;
• require states to allocate Medicare savings to enhanced benefits for Medicare
beneficiaries;
• require states to demonstrate that implementation of their health care reforms has not
negatively affected quality of and access to care.
19
�Employee Retirement Income Security Act
Issues
Section 514 of the Employee Retirement Income Security Act of 1974 (ERISA)
preempts state regulation of employee benefit plans, including employer self-funded health
insurance plans. Congress determined that the national interest required legislation to
protect employee benefits. It also determined, because of the growth in the size, scope,
numbers, and interstate nature of employee health benefit plans, that state regulation of
benefit plans must be preempted. Advocates for continued ERISA preemption want to
prevent four things: (1) state regulation of health and pension plans negotiated by
management and labor; (2) state interference in collective bargaining; (3) state taxation of
premiums; and (4) dilution of the pressure on Congress and the President to enact a
national health plan. However, this preemption no longer serves the nation's interest. It
will delay the further development and implementation of the states' comprehensive health
care reforms that include universal coverage, "play or pay" employer mandates, and
mandated benefit floors for all insurers. States failing to secure ERISA amendments may:
•
implement their comprehensive health care reforms (e.g., Massachusetts), risking a
likely ERISA challenge that could delay implementation for years; failure to modify the
ERISA law prevents states from setting minimum mandated benefits for all residents
and spreading risks equitably across all groups;
• delay implementation of health reforms, fearing litigation of more comprehensive
reforms but unwilling to implement minor incremental changes; or
•
abandon the employer-based, private insurance system that Americans seem to prefer
and implement universal coverage programs modeled on the Canadian system,
sidestepping ERISA preemptions.
Fearing employer mandates, businesses may rush to self-insure, further eroding state
regulation of health insurance and preventing the universal sharing of risk that is common
to most major health reform proposals.
Proposal
There are several legislative options that would provide the states with the flexibility
needed to implement their health reforms:
•
Repeal the ERISA preemption clause, allowing the states to fully regulate health
insurance, including self-funding plans; this will permit states to regulate all insurers
equally.
20
�• Repeal the ERISA preemption for all health benefit plans, except those that are
negotiated by interstate employers or by national unions, but require employers with
interstate agreements to demonstrate actuarial equivalency to state mandated benefits.
• Repeal the ERISA preemption clause for states that implement or have adopted in
legislation a firm date for ensuring universal coverage.
• Allow the Secretary of the Department of Labor to waive statutory requirements to test
ERISA-prohibited reforms, such as employer mandates.
•
Additional Flexibility to Aid the Implementation of
Florida's Comprehe
To ensure that all Floridians have adequate health care coverage by December, 1994,
the state must have the flexibility to establish a minimum benefit package that applies to all
insurance plans, commercial or self-funded, and to establish alternative payer mechanisms
that supersede employer or insurer payer arrangements.
State Accountability
ERISA amendments authorizing state regulation of self-funded health benefit plans
could include the following safeguards:
• require the states to implement universal coverage programs by a prescribed date;
• require states to establish a benefit floor within broadly defined federal limits,
permitting the states to negotiate their basic benefit plans with their citizens;
• require states to exempt employers with actuarially equivalent interstate health plans
from state regulation; and
• require states to demonstrate that implementation of their health care reforms has not
negatively affected quality of or access to care.
21
�Attachment 1
Florida Health Plan Reforms and
Corresponding Federal Statutory Reforms
Federal Statutory Reforms
Florida Reforms
MEDICAID
Implement a Medicaid Buy-In Program. Amend
Sections 1902,1905, 1906, and 1916 of the Social
Security Act (SSA) to eliminate categorical
restrictions, increase income limits, and eliminate
cost sharing, amount, duration, scope and
comparability requirements.
Waive Section 1115 of the SSA to allow managed
Expand managed care programs.
care of persons with chronic medical conditions not
covered under the state plan, if it can reduce costs.
Waive Section 1915 of the SSA to allow additional
primary care case management programs. Amend
Sections 1902,1903, and 1905 of the SSA to
eliminate the 25% commercial enrollment
requirement for Medicaid qualified HMOs and
PHPs, and permit states to establish primary care
and other case management programs.
Contain the costs of Florida's health care programs. Amend Section 1902 of the SSA to allow states to
eliminate high-cost drugs from the Medicaid
formulary if they offer no significant therapeutic
advantage, to reduce prices to drug retailers, and
selectively contract drugs. Amend Section 1905 of
the SSA to substitute Medicaid benefits in the same
amount, duration, and scope as Medicare benefits
for Medicaid-eligible Medicare beneficiaries if states
can show it would be less costly than financing
Medicare beneficiaries' deductibles, premiums, and
copayments. Amend the SSA, adding a new
section that exempts a state from cost-promoting
policies if a state can demonstrate that no policy or
alternative policies are more cost-effective yet
provide a comparable level of service and quality of
care. Amend Section 1903 of the SSA to prohibit
federal disallowances for minor technical infractions
that do not involve any serious allegations of harm
to patients.
Expand publicly financed programs for persons
unable to obtain insurance at the work site.
Expand coverage for alternative treatment services,
such as home and community-based services.
Amend Section 1905 of the SSA to allow states to
establish as optional services waiver programs that
have been successfully demonstrated in other
states. Amend Section 1915(c) of the SSA to allow
states with successful waiver programs to convert
them to optional services that do not require
waivers.
•
�MEDICAID
Ensure adequate numbers of health care
practitioners throughout the state.
Eliminate certain physician specialist requirements
by repealing Section 1903(1)(13) of the SSA to
eliminate the requirement that pregnant women and
persons under 21 can only be treated by
board-certified family practice, pediatrics, or
obstetrics physicians. Amend Section 1926 ofthe
SSA to eliminate the annual submission of obstetric
and pediatric payment rates to HCFA.
Amend section 1902 of the SSA to permit states to
develop reimbursement methods that control
provider payments while ensuring accessibility and
quality of care. Waive Section 402(a)(1)(A) of the
SSA to allow states to experiment with alternative
methods of Medicare and Medicaid reimbursement.
Amend Section 1115 of the SSA to permit
wide-scale state administered demonstrations of
alternative Medicare and Medicaid payer systems.
Amend the SSA, adding a new Medicaid statute
that establishes a state innovations program that
includes a method for calculating program savings
from state innovations, and returning one-half of the
savings to the state.
Authorize wide-scale alternative reimbursement
demonstrations.
Establish a state innovations program.
ERISA
Implement common forms and administrative
procedures for all commercial and self-funded
plans.
Require employers to contribute to the cost of a
standard benefit package or pay into a public
program for each employee; exempt interstate
employers with actuarially equivalent plans.
Establish statewide uniform provider
reimbursement rates.
Establish a single or regional payer system.
Establish a basic benefit standard to serve as the
minimum coverage level for all public, commercial,
and self-funded plans.
Amend Section 514 to allow Florida to regulate
self-funded health insurance plans.
MEDICARE
Expand managed care programs.
Amend Sections 222, 402,1814, and 1886 of the
SSA, authorizing a new round of state administered
Medicare demonstrations.
�Robert Wood Johnson Foundation
State Initiatives in Health Care Financing Reform
Planning and Development Grants
Percent of
RWJ
Support
Total
Budget
Total
Average
Annual Budget
Staff
Senior
MidLevel
Support
Funding Allocated
to Subcontracts
and Consultants
73%
391,009
4
8
4
$101,800
806,895
70
403,448
5
3
1
85,000
683,616
66
683,616
5
13
1
185,000
Iowa
1,357,183
51
678,592
1
6
1
247,430
Minnesota
2,768,876
32
1,855,147
1
23
4
359,275
New Mexico
1,493,051
57
746,526
2
13
1
446,500
New York
2,951,077
32
1,475,538
5
19
2
63,472
882,034
76
441,017
1
2
0
586,277
1,100,927
78
550,464
2
13
1
149,400
884,004
72
442,002
3
6
1
114,400
2,522,793
32
1,261,397
4
13
3
550,000
992,876
64
496,438
1
4
2
45,500
Arkansas
$ 583,596
Colorado
Florida
North Dakota
Oklahoma
Oregon
Vermont
Washington
]
Average
||
785,433
(iiiiiiiiii lllpllll) ' i illlll
244,505
�
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<p>This collection contains records on President Clinton’s efforts to overhaul the health care system in the United States. In 1993 he appointed First Lady Hillary Rodham Clinton to be the head of the Health Care Task Force (HCTF). She traveled across the country holding hearings, conferred with Senators and Representatives, and sought advice from sources outside the government in an attempt to repair the health care system in the United States. However, the administration’s health care plan, introduced to Congress as the Health Security Act, failed to pass in 1994.</p>
<p>Due to the vast amount of records from the Health Care Task Force the collection has been divided into segments. Segments will be made available as they are digitized.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+1"><strong>Segment One</strong></a><br /> This collection consists of Ira Magaziner’s Health Care Task Force files including: correspondence, reports, news clippings, press releases, and publications. Ira Magaziner a Senior Advisor to President Clinton for Policy Development was heavily involved in health care reform. Magaziner assisted the Task Force by coordinating health care policy development through numerous working groups. Magaziner and the First Lady were the President’s primary advisors on health care. The Health Care Task Force eventually produced the administration’s health care plan, introduced to Congress as the Health Security Act. This bill failed to pass in 1994.<br /> Contains 1065 files from 109 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+2"><strong>Segment Two</strong></a><br /> This segment consists of records describing the efforts of First Lady Hillary Rodham Clinton to get health care reform through Congress. This collection consists of correspondence, newspaper and magazine articles, memos, papers, and reports. A significant feature of the records are letters from constituents describing their feelings about health care reform and disastrous financial situations they found themselves in as the result of inadequate or inappropriate health insurance coverage. The collection also contains records created by Robert Boorstin, Roger Goldblatt, Steven Edelstein, Christine Heenan, Lynn Margherio, Simone Rueschemeyer, Meeghan Prunty, Marjorie Tarmey, and others.<br /> Contains 697 files from 47 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+3"><strong>Segment Three</strong></a><br /> The majority of the records in this collection consist of reports, polls, and surveys concerning nearly all aspects of health care; many letters from the public, medical professionals and organizations, and legislators to the Task Force concerning its mission; as well as the telephone message logs of the Task Force.<br /> Contains 592 files from 44 boxes.</p>
<p><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+4"><strong>Segment Four</strong></a><br /> This collection consists of records describing the efforts of the Clinton Administration to pass the Health Security Act, which would have reformed the health care system of the United States. This collection contains memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, newspaper articles, and faxes. The collection contains lists of experts from the field of medicine willing to testify to the viability of the Health Security Act. Much of the remaining material duplicates records from the previous segments.<br /> Contains 590 files from 52 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+5">Segment Five</a></strong><br /> This collection of the Health Care Task Force records consists of materials from the files of Robert Boorstin, Alice Dunscomb, Richard Veloz and Walter Zelman. The files contain memoranda, correspondence, handwritten notes, reports, charts, graphs, bills, drafts, booklets, pamphlets, lists, press releases, schedules, statements, surveys, newspaper articles, and faxes. Much of the material in this segment duplicates records from the previous segments.<br /> Contains 435 files from 47 boxes.</p>
<p><strong><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0885-F+Segment+6">Segment Six</a></strong><br /> This collection consists of the files of the Health Care Task Force, focusing on material from Jack Lew and Lynn Margherio. Lew’s records reflect a preoccupation with figures, statistics, and calculations of all sorts. Graphs and charts abound on the effect reform of the health care system would have on the federal budget. Margherio, a Senior Policy Analyst on the Domestic Policy Council, has documents such as: memoranda, notes, summaries, and articles on individuals (largely doctors) deemed to be experts on the Health Security Act of 1993 qualified to travel across the country and speak to groups in glowing terms about the groundbreaking initiative put forward by President Clinton in his first year in the White House. <br /> Contains 804 files from 40 boxes.</p>
Publisher
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William J. Clinton Presidential Library & Museum
Identifier
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2006-0885-F
Text
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Paper
Dublin Core
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Title
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Working Group 18 – Transition to the New System [1]
Creator
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White House Health Care Task Force
Health Care Task Force
Health Care Interns
Identifier
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2006-0885-F Segment 3
Is Part Of
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Box 12
<a href="http://clinton.presidentiallibraries.us/items/show/36148" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12093075" target="_blank">National Archives Catalog Description</a>
Provenance
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Clinton Presidential Records: White House Staff and Office Files
Publisher
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William J. Clinton Presidential Library & Museum
Format
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Adobe Acrobat Document
Medium
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Reproduction-Reference
Date Created
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3/16/2015
Source
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42-t-12093075-20060885F-Seg3-012-003-2015
12093075