Lawmakers on Health Care: May 2010

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State Legislatures spoke with five lawmakers deeply concered about health care policy is preparing the May 2010 cover story, "Feds Fight, States Act." These are transcripts of the complete interview with each of the legislators.

Senator Linda Berglin, Minnesota

Sen. Linda BerglinState Legislatures: What is your view on the current status of federal health reform?

Berglin: I am anxiously and desperately waiting for it to happen. We have just ended a long debate over how to continue to fund the General Medical Assistance Care program, our state program for very poor, very sick single adults. Under federal reform, due entirely to their poverty, they would be covered by Medicaid.

SL: In your opinion, what is the proper role of the federal government in health care reform?

Berglin: We really are a lot better off with a federal program, and it’s almost critical for states to help implement it. States are im different places in terms of their appetite for health care reform. In our state, for instance, we have been working on comprehensive health care reform for several years. We are conducting payment reform, restructuring payments so that we pay for value rather than quantity. Over half of our providers are ready to do a medical home. We have a number of systems ready to pay for procedures based on a “total cost of care” model.

But, at the same time, federal insurance reforms are very important. It is more difficult for states set in place guaranteed issue and policy standards. As for exchanges, the federal government could provide standards, but state exchanges make more sense because we can then build on the products in the exchanges.

SL: What’s the most pressing health policy issue facing your state?

Berglin: We’re in a recession here, like many other states, and we have a no-tax governor. So funding issues are our biggest problem. In addition, we have this General Medical Assistance Care problem: our governor has recommended budget cuts in the area of Medicaid-funded group homes, which were also cut last year. Twenty-seven group homes that serve people with developmental disabilities and dual diagnosis, owned and operated by the state of Minnesota, are on a watch list because of funding cuts.

SL: Do you think that market-based style reforms are needed in health care?

Berglin: Yes, I do. There are reforms needed both in how insurance is provided (guarantee issue, rate banding, making sure that people don’t have to resort to risk pools should they become ill, trying to make sure there is a place for people to get continuous coverage) and there is a need for payment reform.

SL: What roles should Medicaid and the private market play in covering the remaining uninsured?

Berglin: Both have a role. Low-income people don’t fit well into the private insurance system. Take this GMC population, for instance: a certain percentage of these patients is homeless – and wouldn’t fit into the private insurance model. For other segments, such as young adults, insurance might work well, but they just can’t afford to pay $800 to $1,000 a month in premiums.

SL: What is the role of personal responsibility in the health care system?

Berglin: First, people must have access to a medical care system that gives them an opportunity to take care of their health. My vision is payment reform that gives people an incentive to care for chronic conditions, without going to specialists that want to operate on them every time they walk in the door.

SL: Some people have suggested health savings accounts are a tool for giving people an incentive to care for their own health.

Berglin: I think of financial incentives as a primary tool because we don’t have a delivery system that can provide that basic care first.

House Speaker Dave Clark, Utah

Utah House Speaker Dave ClarkState Legislatures: What is your view of the current status of federal health reform?

Clark: I don’t support it as is. I’m a firm believer in the individual hand of the marketplace, not the heavy hand of the federal government.

SL: In your opinion, what is the proper role of the federal government in health care reform?

Clark: If the states really are the laboratories for policy intervention, give us the opportunity to find our own solutions. I know a Utah problem, and I think I can create a Utah solution. Each state must find its own solution. For instance, Utah and Massachusetts absolutely want to get to the top of the same mountain in terms of state-based health care reform, but just as our politics are different, so should be our paths. In Massachusetts, 70 percent of the lives are covered by large employers. In Utah, that’s 28 percent. Our political cultures also vary - in some states, regulation is accepted; in others, it is not. States have different population mixes, different rates of uninsured.

SL: What can the federal government do to help Utah meet its health care goals?

Clark: They can get off our backs. We are smart enough to figure it out. When you start adding up all the federal regulations - HIPAA, EMTALA, the IRS – the federal regulatory burden related to health care is very, very heavy. The problem is, when states want to try something innovative, such as electronic medical records, we often find ourselves limited by federal regulation.

What’s worse, the federal government appears to be increasing the load, reducing both our financial and regulatory flexibility. Wouldn’t it be great if the federal government allowed for pilot programs under which we could get relief from certain regulations? We would demonstrate how we will do it, why will do it, how we could measure it, and we would be accountable for our results.

SL: Where does the current situation in Washington leave your state in terms of your goals related to health care?

Clark: We are currently on the right path to creating Utah solutions for Utah problems. I hope Congress won’t eliminate our solutions, because we have launched a number of initiatives. First, we opened our own exchange last August. We are expanding it this year so it is a valuable tool for small businesses. Next, we are piloting three demonstration projects to provide bundled payments in chronic care management of diabetes, maternity care and pediatrics. We are also developing a statewide health information database. We are now going to be able to provide, through our electronic portal, side-by-side comparisons of health plans and information on the lowest prices and best outcomes for the same procedures. We have never aggregated this information and made it available to consumers.

SL: What’s the most pressing health policy issue facing your state?

Clark: Cost. We are engaging in a number of different activities to reduce costs.

We’re beginning to set up best practices following models. We’re looking to find ways to pay for healthy outcomes, to incentivize physicians get it right the first time. A task force of community and health care leaders has spent thousands of hours coming up with recommended solutions.

We’re focusing on tort reform this year. We want to put caps on the payments, and possibly increase the evidentiary rule to the next higher level if physicians can prove they were following best practices.

SL: What roles should Medicaid and the private market play in covering the remaining uninsured?

Clark: Medicaid is a high-value insurance product paid for by the taxpayer. I’m deeply concerned about the burden on taxpayers going forward. I don’t know how we are going to afford to do more. Medicaid is unsustainable.

I would like to see Medicaid reworked into health savings accounts wherein we incentivize individuals to take care of their own health. I also think that before we mandate health insurance coverage through the private market, we need to try as many other solutions to reduce cost and improve quality as possible first.

House Speaker Dave Hunt, Oregon

Oregon House Speaker Dave HuntState Legislatures: What is your view on the current status of federal health reform?

Hunt: Federal health reform is critical to the success of states’ health care efforts. Matching funds to help those in need, aid to help the elderly and uninsured pay for prescriptions and health care services and the support that states received in this recession are all critical components of a healthy federal-state relationship. But we need to move forward together, with efficiency and a common purpose of improving access and cutting costs.

SL: In your opinion, what is the proper role of the federal government in health care reform?

Hunt: The federal government can do much more to control costs in the national marketplace. It should help those with no coverage. It should help those who need access and it should be a willing partner with state governments to try innovative approaches to providing health care.

SL: Where does the current situation in Washington leave your state in terms of your goals related to health?

Hunt: Oregon is the only state last year that made major health care expansion, covering 80,000 additional uninsured children and 35,000 more uninsured adults under our state’s basic health care plan. In addition, we passed legislation consolidating a number of different agencies and functions into the Oregon Health Authority to continue our state efforts toward improving access and controlling costs. So we made a conscious decision in our Legislature to move forward, with or without the federal government. To be fair, the aid we received under the federal stimulus package was very helpful in providing basic needs such as food stamps and other assistance to families in critical need during this global recession.

SL: What’s the most pressing health policy issue facing your state?

Hunt: Like every other state, our most basic problem is controlling the rapidly expanding costs of health insurance. When employers and individuals see double digit increases year after year, and the share of insurance premiums takes a bigger bite out of business, family, and public income, controlling those increases is critical to the health of our health care system.

SL: Do you think that market reforms are needed in health care? If so, whose job is it to foster the reform?

Hunt: The job of reform must occur at both the federal and state levels. But the closer we work together, the more effective we will be. States have proven that using pooling and other techniques to bend the cost curve are effective. Should the federal government get more engaged in this arena, the results will be felt more quickly and likely lead to greater reform. But in the meantime, states MUST push forward with reforms. We can’t wait for the feds, but we sure could use their help.

SL: What roles should Medicaid and the private market play in covering the remaining uninsured?

Hunt: Under the Oregon Health plan, we take Medicaid dollars and other resources and use them to provide basic coverage for tens of thousands of Oregon residents. Our new law to cover Oregon’s 80,000 uninsured children – passed in the 2009 legislative session – is already covering more than 30,000 of those uninsured children and the rest will soon be part of the program.

As we worked on our plan, we worked closely with hospitals and insurers to design a revenue structure that asked the hospitals to pay up front for the expanded coverage, but receive those dollars back in the form of higher payments and less uncompensated care. This unique public-private approach provided us with the funds we needed to expand, bend the cost curve and cover 115,000 Oregon citizens with basic preventive care.

SL: Do you see opportunities for health reform in your own state over the next year or two?

Hunt: We will continue to move forward aggressively with expanding access and controlling costs. Our new Oregon Health Authority Board will bring a plan and legislative concepts forward for our 2011 legislative session. Providing access and controlling costs continues to be one of our top legislative priorities.

Senator Ron Ramsey, speaker of the Tennessee Senate and lieutenant governor

Senate Speaker Ron RamseyState Legislatures: What is your view of the current status of federal health reform?

Ramsey: I hope that it is dead on the federal level. It would be a huge unfunded mandate on the states. We estimate that health care reform would cost our state $1.2 billion over the next three years. It would break states at a time when we could least afford it.

SL: In your opinion, what is the proper role of the federal government in health care reform?

Ramsey: Leave it to the states—the proper laboratories for health care reform.

SL: How could the federal government make it easier for states to implement health care reform?

Ramsey: First, the federal government could loosen the rules around Medicaid to give us more flexibility in how we implement the program. We would like to introduce co-payments and greater types of preventive health measures in Medicaid, all aimed at promoting personal responsibility.

Second, they could allow us to sell health insurance across state lines. We allow it for auto and homeowners insurance. This would lead to greater competition, lower premiums and fewer benefit mandates. A coalition of state insurance regulators could put together some ground rules.

Third, they could learn from our experience with medical malpractice reform. In 2008, Tennessee passed a bill that makes it harder for plaintiffs to sue. Plaintiffs must now give 60-day notice before filing a malpractice suit and they must get a certificate of merit from a medical professional alleging that the lawsuit has merit. In the year that bill has been in place, the number of medical malpractice suits filed in Tennessee has dropped 60 percent. The cost of physician malpractice insurance hasn’t declined, but it hasn’t gone up, either.

This year I’m proposing a bill that would cap noneconomic, punitive damages in medical malpractice suits at $1 million. This is one way to reduce the waste and cost associated with physicians practicing “defensive” medicine.

SL: Where does the current situation in Washington leave your state in terms of your goals related to health care?

Ramsey: We are continuing to pursue our goals regardless of what happens in Washington. Since 2005, we have reined in the cost of our Medicaid program, TennCare, by nearly a third. It was 38 percent of our state budget and growing, now it is 26 percent. We did this by dis-enrolling people who had other options, such as people who could buy health care through a spouse’s program, or people who no longer lived in Tennessee.

SL: What’s the most pressing health policy issue facing your state?

Ramsey: Figuring out how to get people to take personal responsibility for their health. More than 30 percent of our population is obese, and obesity is a trigger for a variety of chronic medical conditions, such as diabetes, heart disease, orthopedic disorders, even cancer. Our main idea is patient education - telling people what is good for them and what is not good for them. We’re also playing with the idea of introducing financial incentives for people with Medicaid who meet certain wellness goals. Can we put $1,000 into a health savings account for our enrollees, and if they meet certain goals, they get to keep it? I’m not sure the federal laws would allow us to do that.

SL: What roles should Medicaid and the private market play in covering the remaining uninsured?

Ramsey: I don’t know exactly, but I do know that I don’t support an individual mandate and I don’t think Medicaid is the best vehicle for covering the uninsured. We need to break down the uninsured into the different categories – the young people who don’t think they need health insurance, the temporarily unemployed, and perhaps those who are poor and really need help – and craft different solutions for different market segments.

SL: Do you see opportunities for health reform in your own state over the next year or two?

Ramsey: We recently increased to six the number of agents in our Office of Inspector General to find Medicaid fraud, and I’d like to see that further expanded. They are doing an excellent job, identifying not only providers who are billing for services they did not render, but also people who are doctor-shopping and buying pills to sell on the street. If we doubled or tripled our staff, they would more than pay for themselves.

House Speaker Joe Straus, Texas

House Speaker Joe StrausState Legislatures: What is your view on the current status of federal health reform?

Straus: I have serious concerns regarding the impact of federal health care legislation on the state. I fear any reform effort will be flawed if it doesn't take into consideration the unique experiences and challenges of a growing and diverse state like Texas. Like many Texans, I am frustrated by the top-down approach that Congress has taken. It should be a process that allows states to share perspectives and what works for individual states and regions.

I felt we needed to take active steps to closely monitor significant pending federal legislation with specific emphasis on health care reform efforts during our interim work period. So, earlier this year, I formed a Select Committee on Federal Legislation to help the House respond in a fiscally appropriate manner regarding Texas' specific needs and challenges and to improve the exchange of information between Texas and Washington, D.C.


SL: In your opinion, what is the proper role of the federal government in health care reform?

Straus: In Texas, we face the challenges of a large population, a high uninsured rate, a low rate of employer sponsored coverage, and access issues, especially in rural areas of the state.

This is a completely different set of challenges than a smaller, Northeastern state like Massachusetts faces, with its small population, high rates of employer sponsored health insurance and few, if any, areas that could be categorized as remote.

The federal government should support and encourage states to develop strategies that address their specific needs and challenges. A one-size-fits-all approach just won't work.

SL: Where does the current situation in Washington leave your state in terms of your goals related to health?

Straus: The Texas Constitution requires a balanced budget and has strong limits on growth in state spending. Like many other states, Texas is preparing for an extremely difficult budget cycle, and uncertainty is never helpful. Will the federal government impose a mandate to expand Medicaid coverage, and how will the state find the revenue to cover that? Will we be expected to cover the cost of sweeping changes to insurance regulation? Will higher Medicaid match rates be sustained and for how long? The answers to these questions will make a difference to the tune of billions of dollars over the next few years.

Increased mandates will have an impact on the quality and availability of services throughout our public health system. For example, the Texas Legislature has provided significant funding for community-based mental health services in recent years. This is a high priority for Texas, but new federal mandates could impact our ability to fully sustain these and other primarily state-funded initiatives.

SL: What’s the most pressing health policy issue facing your state?

Straus: Within the Texas Legislature, you will have many answers to this question -- from access in rural areas to rates of enrollment in children's health insurance. But across the board, I feel the members of the Texas House would agree that our most pressing problem is the high rate of uninsured Texans, which stands at 26 percent. It not only affects the health of families, but also trickles down as an economic strain on local hospitals and communities.

This is a complicated problem with many proposed answers, and last session we took steps to find common ground and consensus on solutions.

SL: Do you think that market reforms are needed in health care? If so, whose job is it to foster the reform?

Straus: My hope is for the Texas Legislature to work with consumers and providers and the many other people in the health care system to come up with solutions that are a good fit for Texas. A top-down model is rarely the best approach.

I do think there are some poorly aligned incentives in our health care systems. This is why I've asked the Texas House Public Health and Appropriations committees to take a hard look at cost drivers and how we might better align payment structures with desired outcomes.

SL: What roles should Medicaid and the private market play in covering the remaining uninsured?

Straus: The private market should be the first place we turn to expand coverage.

Like every member of the Texas Legislature, I want our children to be healthy and lead productive lives, and I want our elderly and people with disabilities to have high-quality long-term care when they need it. I also understand the role that state programs play in supporting these goals. But government programs cannot be the first place we look to expand coverage. Our expenditures on Medicaid are already unsustainable, and adding more individuals to that system is not the answer.

Affordable private health insurance can be a strain on some family budgets, and that's why I prefer a state-based approach like the Healthy Texas Program that was approved in the 81st regular legislative session rather than a federal approach. Texas State Representative John Zerwas, a medical doctor, carried the original bill in the House and worked with Representative John Smithee, our Insurance Committee chairman, to get it passed in the final days of the 2009 session. This program will allow the state to partner with insurers to provide affordable private health insurance products to small employers. This is a shining example of Texas taking the first step to address one of its biggest challenges -- a low rate of employer sponsored coverage.

SL: Do you see opportunities for health reform in your own state over the next year or two?

Straus: I think the state's economy will cause our Legislature to look toward areas of reform and efficiency. The Texas Legislature meets every two years and must plan accordingly. While it has not been hit as hard as many other states, Texas is feeling the impact of the economic recession.

I think the next two years are going to be challenging. That's why it is incumbent upon us to begin looking now for ways to rein in our ever-increasing health care costs. If we can lay the groundwork by bringing costs under control, this will do more to effect real change for Texans than a massive government expansion of health care ever could.

I believe in Texas we can look forward to positive, far-reaching changes in the future.