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Health Chairs Project
Survey of
State Health Priorities for 2002

Executive Summary

Introduction

Findings and Analysis

Part II: Analyses

Charts

2001 Health Chairs Survey

Executive Summary

In a recent survey of legislative priorities, 64 chairs of state health committees, representing 46 states and territories reported their top health priorities for the 2002 session.

1. health care costs and financing
2. public health preparedness and terrorism
3. aging and long term care
4. health care access and availability
5. health care workforce and providers
6. mental health and substance abuse

The survey was conducted by the Health Chairs Project, collaboration between the National Conference of State Legislatures and the Schneider Institute for Health Policy at Brandeis University and was made possible by generous funding from the Henry J. Kaiser Family Foundation. State legislative policy priorities reflect state agendas and influence the national agenda. Recently, states have led the way with health policy initiatives such as managed care protections and pharmaceutical benefits for the elderly.

• Health care costs, financing and budget shortfalls are expected to drive state agendas in 2002. Sixty-one percent of legislators responding (39) indicated that this topic is expected to be the overarching priority on their 2002 committee agendas. Rising Medicaid costs and prescription drug costs were cited as the primary culprit for state fiscal concerns by more than 1/2 of the respondents. State Medicaid appropriations alone increased more than 8 percent from FFY 2001 to FFY 2002. In addition to a weakening economy and rising health care costs, states are beginning to face cost overruns and slower revenue growth. These collective fiscal conditions forecast a new framework for the health care issues that were highlighted in 2001 and will likely cause states to reevaluate these issues in 2002.
• Health care access and availability--expanding access to health care for the uninsured and increasing health insurance coverage--followed as the second most frequently listed agenda item; 28 percent of legislators (18) anticipated that this would be a top agenda priority in 2002. Shortages of health care professionals, especially nursing staff were identified as primary concerns. Access issues have assumed a higher position on the priorities scale; they were ranked as the 5^th most important agenda item last year.
• Long-term care and aging issues, including regulation of nursing homes and expansion of community-based services in response to the recent Supreme Court Olmstead holding, ranked third, named by 27 percent of legislators. (17). While several states have already begun to implement and expand community-based long-term care services in response to the 1999 Supreme Court Olmstead holding, many others are just now getting on board. Inadequate Medicare funding for nursing homes and community-based health services was also listed as a key area of concern for the upcoming state legislative sessions. It is evident that legislators are continuing to move forward with their work on long-term care issues; this topic was also ranked as a top priority in last year's survey.
• Public health preparedness and terrorism appeared as a new anticipated agenda item. This issue ranked third (along with long-term care issues) among legislative priorities for 2002. Twenty-seven percent of legislators (17) indicated this would be an important committee priority in 2002. The September 11 terrorist attacks and recent anthrax incidents have made issues related to public health preparedness, terrorism and bioterrorism a top concern for legislators.
• Health care workforce and provider issues -including provider shortages, scope of practice and practitioner licensing and staffing issues came in fourth as an expected committee issue for legislators. Sixteen percent (10) respondents ranked this as an area that will receive health committee attention in the 2002 session. Despite a deluge of 2001 legislation aimed at reducing provider (primarily nursing) shortages, this remains a significant problem for a majority of states.
• Mental Health and Substance Abuse including parity, funding, service delivery and system design was listed as an area that will likely be addressed by 11 percent of legislators (7). Children's mental health issues also remain a persistent concern for legislators. There has been significant legislative action in this area over the past year; twenty-four states currently some form of mental health and/or substance abuse parity and an additional 12 states offer mandated benefits for individuals with mental health needs. Although a relatively small percentage of legislators ranked these issues as an expected priority for 2002, nearly a third listed them as health issues that they were most personally interested in.

Introduction

In a recent survey of legislative priorities, 64 chairs of state health committees, representing 46 states named five issues as their top priorities for the 2002 session:

• health care costs and financing (specifically, Medicaid costs and Prescription drug costs) 75%
• access to health care 53%
• aging and long term care 50%
• terrorism and public health responses 31%
• mental health and substance abuse 30%
• health care workforce and providers 30%

As in previous years, the Health Chairs survey was conducted by the Health Chairs Project, which is a joint collaboration between the National Conference of State Legislatures (NCSL) and the Schneider Institute for Health Policy at Brandeis University. This year, the Health Chairs Project joined with the Health Policy Tracking Service at NCSL to design a joint survey. The survey instrument was sent to the chair of every standing health care authorization committee in the states (approximately 130), as well as to a much broader audience that included rank-and-file legislators serve on state health committees and key legislative and executive health staff. More than 150 legislators responded to the survey, including 64 chairs of health committees from 46 states.

In addition to the priorities they listed individually, the chairs also selected among 154 issues in 14 categories to indicate which were likely to be given high priority in the 2002 legislative session. The top ten issues they picked each received nearly 40 percent of their votes.

• Maximizing federal Medicaid payments (67 percent)
• Health workforce shortages, primarily nurses (61 percent)
• Medicaid budget shortfalls (60 percent)
• Medicaid waivers (53 percent)
• Drug rebates and discounts (51 percent)
• Medicaid reimbursement rate increases (47 percent)
• Pharmaceutical assistance programs (44 percent)
• Children's mental health (39 percent)
• Modification of current tobacco settlement fund allocations (39 percent)
• Home and community-based services/Olmstead-related initiatives for persons with developmental disabilities (37 percent)

Respondents reflect the national political make-up. Forty-eight percent are Republicans (31) and 52 percent are Democrats (33). Fifty-three percent of respondents are Senators (34); 47 percent are Representatives/ Assemblymembers (30).

Health committee chairs (including chairs of standing health care authorization and finance committees as well as chairs of joint health care committees) play a critical role in setting state health policy agendas and are integral figures in the establishment of health care initiatives and legislation. The 130 health-related committees in state legislatures review legislation proposed by other legislators, identify emerging policy issues and introduce new bills. State-level debate and legislation continues to lead way with urgent health policy initiatives. In recent years, state action on priorities such as pharmaceutical benefits for the elderly and managed care protections have set the stage for federal deliberation on these issues.

Findings and Analysis

Part I

Health Care Cost and Financing

Seventy-five percent of legislators responding (48) identified rising health care costs, cost containment and budget shortfalls as a top committee priority, an expected agenda item due to holdover from the 2001 session, or an area of personal interest. Sixty-one percent of legislators (39) indicated that cost and budget issues would be a top priority in their committees in 2002. Forty-five percent (29) also believed that cost was an unresolved issue from 2001 that would resurface in 2002 and 34 percent (22) listed this as an area of personal interest.

Health care costs and budget shortfalls are expected to drive state agendas in 2002. Seven states scheduled special sessions toward the end of 2001 to address budget deficits. As the economy begins to soften and health care costs continue to rise, states are beginning to face cost overruns and slower revenue growth. State Medicaid appropriations alone increased more than 8 percent from FFY 2001 to FFY 2002 and a recent survey conducted by NCSL's fiscal committee revealed that 44 states faced significant declines in projected revenues for the first quarter of 2002. The recent terrorist attacks of September 11^th have compounded state budget problems even further, as many states move to abruptly shift priorities and redirect existing funds toward public health and emergency response initiatives. These collective fiscal conditions have established a new framework for health care issues that were highlighted in 2001 and will likely cause states to reevaluate these issues in the upcoming legislative sessions.

This is a significant change from last year's survey results, where only ten percent of legislators (5) cited "health care costs," resulting from escalating insurance premiums and a steep rise in prescription drug costs as an expected priority on their committee agendas in 2001. In the fall of 2000, when that survey was designed, health care cost was not anticipated to be a critical issue, and was not even included as a separate category in Part II of the survey. While prescription drug cost and access remain an important consideration for states, cost and financing concerns have rapidly expanded to broader areas of health services, including long term care and mental health.

Legislators in Minnesota, New Jersey, North Carolina, Vermont and Washington were among a significant number who specifically identified cost as a pressing issue, while legislators from seventeen additional states expect Medicaid deficit and budget shortfalls to be the primary focus in 2002. Rising costs for prescription drug coverage-in Medicaid as well as in state-funded programs--continues to be a pressing concern. States are looking for additional management tools to control costs, including supplemental rebates, generic substitution programs, step therapy requirements and preferred drug lists.

The current fiscal crunches are indiscriminate and are affecting large western states such as California, where legislators face the possibility of major funding cuts, "in the range of 15 percent across all government programs including health care programs", as well as smaller eastern states such as Rhode Island, where "the cost of Medicaid and prescription drugs for seniors" will likely dominate the 2002 agenda.

One Vermont legislator seemed to capture the problem succinctly, "overshadowing all of these issues is a projected revenue shortfall, with resulting budget cuts. New initiatives that cost money will not receive much consideration. Medicaid is the single biggest expenditure in our General Fund, and its growth is threatening not only other programs but our public health programs themselves." Several legislators commented that given current declining state revenues and budget cutbacks, they will simply be struggling to "maintain health care [funding] at its current levels."

A few legislators mentioned specific actions their committees might take to mitigate the effects of proposed budget cuts. For instance, one Illinois legislator indicated that policymakers in her state would be working to "maximize services in a more efficient manner, i.e., maximizing federal dollars." Legislators in Hawaii, Idaho and Indiana indicated that they would consider similar approaches. Twelve states also expect the use of tobacco settlement dollars to emerge as one potential source of funding to boost dwindling health budgets.

When asked in Part II of the survey if their legislatures would have to address a Medicaid budget shortfall during upcoming sessions, nearly 3/4 of the legislators answered yes. Of those respondents, more than 50% indicated that cuts in their Medicaid benefit packages would likely be considered if it becomes necessary.

Health Care Access

Issues related to health care access were identified as a top committee priority, an expected agenda item carried over from the previous session or an area of personal interest by 53 percent of legislators (34). This issue ranked only second to health care costs among legislative priorities for 2002. Health care access was seen as a likely agenda item by 28 percent of legislators surveyed (18). Twenty-three percent of legislators indicated that health care access was an unresolved issue that would again be addressed in 2002 (15), and 38 percent of legislators (24) listed this issue as one that they were personally interested in. Legislators

from California, Maine, Missouri, Montana and West Virginia specifically indicated that improving access to health care for the uninsured and increasing health insurance coverage would be top priorities in 2002.

Access to prescription drugs for seniors and access to health care in rural areas have resurfaced as expected priority issues again in 2002. Legislators from Kansas and Utah also indicated that they would try to target cost containment through individual market reform. Lawmakers are concerned that the economic downturn, coinciding with sharply higher insurance premium rates, will result in a new group of people being left uninsured and ineligible for existing programs. Priorities include changes to state-funded coverage for the working poor and uninsured, as well as increased hospital and clinic funding.

Long-Term Care

Long-term care and aging issues, including Olmstead-related community-based service expansions, was again identified as a top committee priority, an expected agenda item due to 2001 inaction, or an area of personal interest by 50 percent of legislators (32). Twenty-seven percent of legislators indicated that long-term care would be a top legislative priority in 2002 (17) and 16 percent of legislators (10) indicated that unresolved long-term care issues would be carried over from the 2001 session. Thirty-four percent of legislators (22) listed some aspect of long-term care as an area that they were personally interested in.

In response to the 1999 Olmstead Supreme Court holding--which found that persons with disabilities are entitled to receive care in an integrated setting--many states have begun to implement and expand community-based care services for individuals with mental, developmental and physical disabilities, and the elderly. Forty states and the District of Columbia have established task forces to address issues related to Olmstead implementation. Acting on recommendations from one such task force, Wisconsin approved funding increases to boost service delivery and availability for individuals with physical and developmental disabilities. A blue ribbon task force in Louisiana is currently involved in efforts to increase community-based services through intergovernmental transfer funds. Ten states that have not established Olmstead task forces and legislators in Vermont are considering establishing an Olmstead advisory committee in 2002. Fifteen states have completed Olmstead reports and implemented plans and 12 are currently working toward completion of their reports and plans.

In addition to Olmstead-related initiatives, assisted living regulation and reimbursement, changes in Medicaid assets recovery rules and wage pass through programs for long term care workers are also emerging as important issues for states. Legislators in Florida and Missouri expect to see action regarding the quality of long-term care, while Louisiana expects to address tax credits or deductions for private long term care insurance for the third consecutive session. Legislators from Missouri, Pennsylvania, New Hampshire and Alabama expect to see licensing and regulation of assisted living facilities emerge as an important priority that will be addressed in 2002.

Public Health Preparedness and Terrorism

In light of the terrorist attacks in New York, Virginia and Pennsylvania on September 11^th, along with recent anthrax incidents, it is not surprising that issues related to terrorism and bioterrorism appeared this year for the first time as a top issue for state lawmakers.

Thirty-one percent of legislators responding (20) identified public health preparedness and bioterrorism as a top committee priority, an issue to be revisited from 2001, or an area of personal interest. Twenty-seven percent of legislators (17) indicated that public health and terrorism issues would be a top priority in their committees in 2002. As a testament to the newness of this issue onto state agendas, only 3 respondents ranked this issue as one that would be revisited from the previous session. Nineteen percent (12) listed this as an area of personal interest.

Legislators from a number of states (including Alaska, California, New Hampshire, North Carolina, South Carolina and Texas) anticipate that issues related to terrorism and bioterrorism preparedness and response will be a high priority in their upcoming sessions. Several states also indicated that efforts to increase emergency response initiatives will rank high on their 2002 agendas. Other legislators weren't sure what type of public health preparedness initiatives would appear in 2002. Regardless of the specific issues states may address, many legislators agree that public health concerns have suddenly surfaced, and as one New Hampshire legislator noted, "I don't know what we'll do, but at least we're talking more about public health." Model legislation on public health preparedness recently promulgated by the U.S. Centers for Disease Control and Prevention was mentioned by several legislators as an example of a possible response to this issue.

Workforce and Provider Issues

Issues related to the nation's health care workforce-including provider shortages, access to rural health care providers, licensing of practitioners, scope of practice and staffing issues--were identified as a top committee priority, an expected agenda item carried over from the previous session or an area of personal interest by 30 percent of legislators (19). Workforce and provider issues tied with mental health and substance abuse issues as the fifth most prevalent issue among health chairs. However, workforce issues care ranked much higher than mental health and substance abuse as an expected agenda item. Sixteen percent of legislators (10) indicated that workforce topics this would be a top committee issue, whereas only 11 percent (7) expect mental health and substance abuse issues to appear as an agenda item. Sixteen percent of legislators indicated that workforce issues were an unresolved issue that would again be addressed in 2002 (10), and 13 percent of legislators (8) listed this issue as one that they were personally interested in.

Mental Health and Substance Abuse

Mental health and substance abuse issues including parity, funding, service delivery and systems of care for children also weighed in as the fifth highest agenda item among health chairs. Thirty percent of legislators responding (30) identified mental illness and addiction as a top committee priority, an expected agenda item due to holdover from the 2001 session, or an area of personal interest. While a larger percentage of health chairs ranked behavioral health issues as a top expected priority for last year's agenda (37 percent in 2001 vs. 30 percent in 2002), it appears that this area will continue to receive attention. Eleven percent of legislators (7) indicated that mental health and substance abuse issues would be a top priority in their committees in 2002. Nine percent (6) also believed that mental health was an unresolved issue from 2001 that would resurface in 2002 and 25 percent (16) listed this as an area of personal interest. Twenty-four states currently have some form of mental health parity legislation. Of those, 14 states have parity coverage for mental illness and 10 have parity for both mental illness and substance abuse. An additional 12 states offer some form of mandated benefits to individuals with behavioral health coverage needs.

Part II: Analysis

According to results from the second half of the health chairs survey, the top 10 issues health chairs expect to see on their committee agendas in 2002 are:

• Maximizing federal Medicaid payments (67 percent)
• Health workforce shortages, primarily nurses (61 percent)
• Medicaid budget shortfalls (60 percent)
• Medicaid waivers (53 percent)
• Drug rebates and discounts (51 percent)
• Medicaid reimbursement rate increases (47 percent)
• Pharmaceutical assistance programs (44 percent)
• Children's mental health (39 percent)
• Modification of current tobacco settlement fund allocations (39 percent)
• Home and community-based services/Olmstead-related initiatives for persons with developmental disabilities (37 percent)

While the responses in Part II mirror those given in Part I, several interesting nuances emerge when the data is examined more closely. Most often, the responses given in Part II provides additional layers of information that can be exposed to reveal the broader prominent issues identified in Part I.

A number of issues that appeared as "likely" agenda items last year have gained prominence. Healthcare workforce shortages, for example, was ranked as likely to appear by 45 percent of respondents last year. In contrast, this year more than 61 percent of legislators ranked workforce shortages (primarily nurses), as an issue that had a high likelihood of receiving committee attention. Provider shortages have broadened to include shortages in other areas, such as pharmacists, hospital technicians and dental hygienists. Although more than 1/2 the states enacted legislation relating to rural health in 2001, this issue remains a perennial concern in some states. For example, Representative Fred Dyson commented that "Alaska has a profound problem delivering health care in remote (no road access), small (less than 200 people) villages. We...do not have a large enough population to make it worth while [for a] health insurer carrier [to] want to compete in our state."

The data also reveal specific trends in state action during the past year. In many cases, legislators indicated that an issue would not take top billing in 2002 because it was already addressed in 2001 (or earlier, in some instances). Legislation involving the use of drug courts and treatment in lieu of jail was passed in Arizona, California, Delaware, Idaho, Oklahoma and Washington). Mental health parity legislation was also passed in at least seven of the states that responded. In 2001, 21 states passed enabling legislation or amendments to establish breast and cervical cancer treatment programs. Illinois, Indiana, Maine, Missouri, Pennsylvania and Washington were among the seven states that implemented ticket-to-work initiatives in 2001. Medicaid-buy in programs for the developmentally disabled have been implemented in 18 states. Eleven states (Arizona, Indiana, Missouri, Pennsylvania and Washington) enacted Medicaid buy-in legislation last year, and 2 states (Idaho and Louisiana) passed buy-in resolutions.

Children's mental health remains a priority for many states. Thirty-nine percent of health chairs that answered "yes" when asked if they expected legislation based on children's mental health issues would be introduced in 2002. Of those respondents, 20 percent indicated that legislation involving coordination of systems of care for children would likely be considered.

Several of these states are among the thirty-one states that have taken steps (either through state laws or executive mandates) to provide some type of prescription drug assistance to eligible seniors and individuals with disabilities. Twenty-six states use state funds to subsidize part of consumer costs through pharmacy assistance programs. During the 2001 legislative session, Arizona, Arkansas, Missouri, Nevada, Oregon, Texas and Wisconsin joined the ranks of a growing number of states that passed new subsidy laws, while other states (New Jersey and Maryland) made modifications to existing programs. Iowa, New Hampshire, and West Virginia have established purchasing cooperatives or buying clubs, in which the state or a contracted pharmacy benefit manager negotiates with manufacturers for better prices and passes them on to consumers. California and Florida have discount programs where the pharmacy is required to give lower prices to Medicare beneficiaries.

Public health law, patient safety, trauma and emergency room services and rehabilitation are just a few of the issues that are beginning to emerge this year. Other issues, such as managed care, medical errors and school-based health will appear less frequently on upcoming agendas.

As in Part I of the survey, the current and predicted drains on state healthcare budgets is a recurrent theme throughout the data in Part II; more than half of legislators indicated that financing and funding issues will likely prevent them from moving forward on issues that would otherwise be given priority.

 This survey was a joint effort of the Health Chairs Project (a collaboration between the National Conference of State Legislatures and the Schneider Institute for Health Policy at Brandeis University) and the Health Policy Tracking Service at NCSL. Funding was provided by the Henry J. Kaiser Family Foundation http://www.kff.org/