Interview with Johnny Ellis
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 Senator Johnny Ellis was elected to the House three times beginning 1986, and elected to the Senate five times since 1992. He is Senate Majority Leader and chair of Senate Labor and Commerce. Among other committee positions he is a member of Senate Legislative Budget and Audit, Legislative Education Funding Task Force, the Task Force on the Regulatory Commission of Alaska, Finance Subcommittee on Environmental Conservation, and Senate Rules. This interview was conducted August 13, 2008 and has been edited for length and clarity.
AHPR: This year, you were either prime sponsor or cosponsor of a large number of health-related bills -- ranging from SB 100 Substance Abuse/Mental Health Programs to SB 27 relating to medical assistance eligibility. In your view, what responsibility, if any, does the State of Alaska have regarding the health of residents of the state of Alaska, and why?
Ellis: Well, a concern by the State of Alaska--meaning the governor and the legislature -- is fundamental. It's a [mandate] in our state constitution.
It's there in black and white. Unlike many things the State of Alaska does across the state in terms of provision of public services that aren't mentioned in the constitution, providing for the general health and welfare of Alaskans is clearly enumerated in the constitution. I'm very proud of that.
I take it very seriously. I wish more legislators did in a very specific sense as opposed to just a generalized concern, because I think that we're behind the curve and have never fully realized our true potential and lived up to our true responsibilities under the constitution in terms of the public health.
"So we decided, since we failed at the big step forward, or the great leap forward, we decided to do an incremental approach and dare people to vote against breast cancer screening, and to dare Republicans to vote against prostate cancer screening ... "
AHPR: Thank you. There are a couple of major, important health-related bills from this year that I would like to ask you about. The first is SB 160 Mandatory Universal Health Care, of which you are a cosponsor. I believe the bill did not make it out of Senate Finance Committee, but how would you assess the progress and impact of the bill to date, and what are the prospects of significant health care reform for next year?
Ellis: Dr. Weiss, you'll probably remember that I was a prime sponsor of a single-payer health care reform plan, along with Senator Jim Duncan, about 20 years ago. That bill was an outgrowth of work of a taskforce that Senator Jim Duncan, formerly of Juneau, and I co-chaired -- the Universal Health Care Taskforce -- that looked at cost containment issues and provisions of health services to Alaskans generally.
After a lot of study and discussion, we tried to do a single-payer approach. We got the stuffing beat out of us by all the usual suspects: the pharmaceutical companies, the doctors at Providence and Regional hospitals, the insurance companies -- all of the usual suspects. The same people that terrorized Washington with the Harry and Louise ads beating up on Hillary Clinton's single-payer health plan years ago. So we had a similar Alaska experience. I said at the time that I didn't believe this would ever happen without not just strong legislative leadership, but strong leadership in the business community.
Twenty years ago I said that universal health care in Alaska, which should be the easiest state in which to realize this dream and this human right, would never happen until you also had strong leadership in the business community, and business folks were saying to the government, "We can no longer compete in a competitive marketplace, or a world marketplace, when in all these other industrialized countries they cover -- as a basic fundamental human right and government responsibility -- access to basic health care for their citizens."
I always thought that it would take the business community, and twenty years ago the business community was not on my line of thinking at all. They demonized and terrorized legislators in this regard, and our bill did not pass.
For the last twenty years, I've been incrementalist. I'm still an idealist and a big believer in universal health, portable health care for all citizens, but I decided to become an incrementalist and to dare fiscal conservatives to deny health care to the children of the working class. You know, in Medicaid we take care of the poor people -- income eligibles -- but not the working people that cannot afford health care for their children.
So we decided, since we failed at the big step forward, or the great leap forward, we decided to do an incremental approach and dare people to vote against breast cancer screening, and to dare Republicans to vote against prostate cancer screening and take incremental steps to lead us to this [two or three words garbled] now, after the next presidential election, may be able to take a big step forward to universal health care in this country.
So this year, I've joined with Senator Hollis French in construction of a bill that uses some of the private marketplace forces to try and provide health care in the state of Alaska. There is a mandate that's controversial but we've tried another approach to this. This bill, Senate Bill 160, got further along in the legislative process than any previous health care reform -- major overhaul health care reform bill, systemic reform -- has ever gotten.
The bill passed through the Senate HESS Committee, chaired by Senator Bettye Davis; it passed through my committee, the Senate Labor and Commerce Committee. We put the bill and the sponsors through their paces in each of those committees. But then it went on to Senate Finance where Senator French was, as a part of the majority able to secure a hearing for the bill.
We knew that it was not likely to pass the first time that it had been presented to the members of the Senate Finance Committee but we are encouraged that with the huge revenue surpluses in the state and the prospect of having a president committed to universal health care, that we might make a big change in the future.
Now the person that we need to catch up here is Governor Sarah Palin, who's had her small health task force, and they've taken some baby steps forward and made some tentative kinds of proposals. We're hoping that they will eventually be more in tune with universal health care coverage for all Alaskans.
AHPR: Thank you very much for that very complete answer. Just as a side note, I do remember, not as well as I should but I do remember, the efforts of 20 years ago that you were part of, and Jim Duncan also.
One of the things I remember about that period was that there was a tremendous amount of analysis and policy research to back up what it was you were attempting to do and present. I really feel that currently, there's just a tiny fraction of that research to back up health care reform in this state.
Ellis: That was a funded effort, and it was a good report. All that material is still available through the legislative research service, and if you ever needed any of that stuff, we would let you [garbled, perhaps "have access to it?"] You're right, not as much, no.
I would say there's a good amount of research and analysis on the part of Senator French's staff, Andy Moderow, that underlies Senate Bill 160 but it was not as extensive an effort as the health care reform taskforce, our Universal Health Care Taskforce, that Senator Duncan and I did, but we're ready to try anything to achieve this goal and Democrats or people with my political persuasion never give up until this goal is achieved.
"That was really an ideological plot hatched by Senator Ben Stevens, discredited lawmaker, along with some other folks and some conservative think tanks and some groups out of Washington DC, to "teach public employees a lesson" -- the public sector employees -- a lesson in economic Darwinism, I would suppose."
AHPR: Moving along to a slightly different subject: you were a cosponsor of SB183 -- repeal of the defined contribution retirement plans for public employees. This bill would also restore the former health care plan for public employees, which would be considerably less expensive and more accessible to public employees than the current one. It looks like that bill also died in Senate Finance -- that bill being SB 183. Tell me what, in your opinion, what are the prospects for this issue for next year?
Ellis: I think the prospects get better as time goes on. I was a proponent as were I guess most, if not all the Democrats, of getting a defined benefit for teachers and other public employees. That was really an ideological plot hatched by Senator Ben Stevens, discredited lawmaker, along with some other folks and some conservative think tanks and some groups out of Washington DC, to "teach public employees a lesson" -- the public sector employees -- a lesson in economic Darwinism, I would suppose.
Ben Stevens called in through his father's connections, people with policy [garbled, perhaps "backgrounds"] at the White House and at the American Enterprise Institute and some other places to convince the Alaska Legislature to go down this road and of course, since then we just hear all kinds of problems with recruitment and retention of teachers and public employees across the state in getting rid of what was one of the better public employee retirement systems in the country. And they fomented sort of a false crisis with the liability in our retirement system.
There would be a crisis if everybody retired on the exact same day and demanded all of their benefits simultaneously, and of course, we know that doesn't happen that way, and there were some problems with the retirement system but those are ones that I believe could have been fixed and adjusted, and the legislature's making moves to shore up the retirement system, which is guaranteed to public employees who've earned that under our state constitution. Nobody's in any danger of losing anything if they were entitled to those benefits.
We're talking about new employees and our difficulty going forward in recruiting and retaining troopers and teachers and the full gamut of people who provide public services in our state. [This is a] quiet crisis that is growing in proportion every day, and I believe that we will eventually go back--through the political will, Larry--go back to the defined benefit. It will be a titanic struggle, and a lot of the public employees are going to have to be better educated and hold people accountable -- not for their rhetoric by elected officials and candidates -- but hold people accountable based on their actions.
My conscience is clear, and I believe that it will require a number of people on the other side from me politically who voted for the defined contribution, for them to be defeated or to retire. And then we will be able to have the playing field in Juneau that could allow us to restore the defined benefit and have the ability to recruit and retain quality public employees because quality public employees equal quality public services, and that's what we should have to serve Alaskans well.
"I go back to that phrase in the constitution, "providing for the health and general welfare of Alaskans." This, not in a specific way, in a generalized way, is enumerated in black and white in the state constitution. Legislators swear an oath and we should take that more seriously than we do, ... "
AHPR: I'm again going to move on to a little bit different aspect of health care. Behavioral and mental health services have taken a big hit lately here in Alaska. The Clitheroe detox center, Anchorage's primary detox center serving low-income patients, closed last year due to a lack of funding.
Anchorage Community Mental Health Services, one of the state's largest providers, stopped taking new adult clients earlier this year due to funding and other reasons; and there's other examples, too.
What role, if any, can and should the state have in assuring access to basic mental health and detox services for Alaska residents, and further, do you think there will be any legislation introduced to help deal with this emerging crisis next year?
Ellis: I mentioned the retirement system for employees as a quiet crisis, our ability to recruit and retain quality employees. This fraying of the social safety net is, I guess you could say, it's a quiet crisis as well but it's growing in intensity, and it has much more palpable and immediate human consequences. I would say our social safety net is fraying and ripping in places.
I go back to that phrase in the constitution, "providing for the health and general welfare of Alaskans." This, not in a specific way, in a generalized way, is enumerated in black and white in the state constitution. Legislators swear an oath and we should take that more seriously than we do, and if anybody needed evidence, you've cited some good examples.
There are many of them across the state where the funding from the State of Alaska has not kept pace with rising energy costs, and personnel costs, so those programs have been funded but the eroding factor in those budgets, eroding the purchasing power, [has] really had an effect on services to individuals, for example the methadone clinic in downtown Anchorage.
I visited there, and I don't think they've seen another legislator in maybe a decade, and that's a sad commentary. They had started only accepting pregnant women and turning away other heroin addicts [one or two words garbled] addicts who were desperate for help, there's a six month to seven month waiting list, which is completely unacceptable given the criminality and public safety costs [when] people can't get methadone, and they're hooked on opiates, and they're out burglarizing our houses.
It just makes all the sense in the world to make that kind of investment. But that's just one example along with the ones you gave about detox and the mental health clinics across the state. State funding has not kept pace with rising costs and thus, those program administrators have had no choice but to reduce services, and it's gotten out of hand.
I was a great critic of the Murkowski administration, Governor Murkowski in particular, for all of his bad behavior and bully tactics and things that he did that were so negative in this state. I felt like we lost four years in moving our state forward. But one thing that he did that I applauded was -- the idea of his commissioner of Health and Social Services -- was to combine several offices in the Department of Health and Social Services into a Division of Behavioral Health.
I [one or two garbled words] Bill Hogan and admire some of his changes there at the department. He headed up that shop, not the commissioner of Health and Social Services, and the behavioral health shop there, I thought, started to make some progress.
The Palin budget did not keep pace, and between the legislature and the Palin administration, there's enough shared blame and responsibility for us not adequately funding these services that are to the point of shutting down. So I came along with trying to work some funding into the budget for greater detox services.
I worked with Senator Lyda Green, well, I fought with her for years over funding for substance abuse treatment in the state, and then I [joined] with her in a bipartisan coalition. She was no longer the co-chair of Finance, she was the Senate president. We all worked together in a bipartisan fashion to get along. I met with Senator Lyman Hoffman and Senator Bert Stedman [and they] were much more open to my questions about substance abuse treatment and repairing some of that damage that was done over the last ten years.
In the corrections department, in terms of substance abuse -- because almost all those guys and gals get out of the corrections system and go back, and if they're still addicts or alcoholics, they re-offend. I think that this next legislature, in a positive way, can be about restoring, in corrections and in the community, those kinds of drug and alcohol abuse treatment services. [I] hope to get those waiting lists down and to fund the most successful evidence-based treatment programs.
Many legislators, Larry, over the years would say, "Why the hell are we investing these significant state dollars in substance abuse programs when their success rate is only 28% or 22%? We should cut the funding until we find a program that has an 85% or 90% success rate."
I would get very frustrated and encourage my colleagues to read the research and the data to know that a 28% success rate is incredibly fantastic when you're dealing with substance abusers and self-medicators. That there are no programs anywhere in the world that achieve a 75% or 80% or 85% success rate with this population. It's a very difficult field in which to practice social science. There was a real sort of know-nothing attitude on the part of many legislators.
I was encouraged during the last year, last session, that Senator Hollis French who chairs the Judiciary Committee -- with whom I work on the health reform issues -- held a crime summit. It wasn't just about "throw the book at 'em" and "three strikes and you're out" -- the usual kind of rhetoric about it. It was about, largely, the correlation between substance abuse and criminality in this state and the lack of treatment in the corrections system, and the fact that other places, other jurisdictions, in particular the state of Washington have had success with evidence-based treatment programs.
That was a bill -- Senate Bill 100 -- that I sponsored last year, or the session before last, to require evidence-based treatment programs in our state and for the state to fund those programs that keep track and are most successful. We have a pre-disposition toward evidence-based treatment programs.
Hollis French got very interested in that and got a lot of other public safety folks interested in that. He and I are going to gang up together during the next session to try and restore community-based drug and alcohol programs and to also restore that among the corrections population. We think that there are millions and millions of dollars to be saved -- to be invested and to be saved -- [with] greater commitment at the state level to substance abuse treatment and prevention.
That required a number of people, and largely the same people who were against defined benefit and for defined contribution. Some of those people need to retire as well for us to get the votes together to make a big leap forward -- and I want it to be a two-year project -- of ramping up funding -- not to go hog wild -- but to direct increased state funding toward successful evidence-based drug and alcohol abuse treatment programs -- to ramp up over the next two years and largely in line with the work and recommendations of the Mental Health Trust Authority [two or three garbled words] shop, and the state council on alcohol and substance and drug abuse in the state.
There are several groups that have game plans, blueprints, for how if we had the resources, we would ramp up these services, so we want to do it in a very thoughtful, methodical, intelligent way, and I'm hopeful that that will begin this coming January.
"It's been a long time coming but I think we're on the cusp. With the big surpluses, with the right people in Finance, I think we can do a lot of good."
AHPR: That sounds tremendously exciting, and I really look forward to your success in that regard.
Ellis: It's been a long time coming but I think we're on the cusp. With the big surpluses, with the right people in Finance, I think we can do a lot of good.
AHPR: The cell phone you're talking on periodically cuts out for a second or two so I missed -- you said you visited some clinic here in Anchorage but I couldn't catch what clinic that was.
Ellis: It was the methadone clinic downtown.
AHPR: Thank you.
Ellis: The [Anchorage] Daily News did a big article a couple of months ago about the downtown methadone clinic. I had just been there for their open house and a tour, and then the Daily News did a big feature story and then a big editorial -- about the explosion in heroin use here in southcentral Alaska.
AHPR: Yes, I remember that.
Ellis: Yes, it was good, and I wrote a letter to the editor saying I was going to try and get them the extra $100,000 that they needed to catch up with costs and to open up the waiting list again, and of course, some friends in other substance abuse treatment programs were very upset with me and wrote and said, "Why are you helping the methadone clinic? You should be helping us."
And of course, I'm the kind of guy that will help all programs but at that time, the methadone clinic was in the news and topical. So I'm hoping that folks can all work together to make a bigger pie rather than just fighting over the slices.
AHPR: To move on to a closely related subject, the statewide system of Community Health Centers act as the principal medical safety net in the state, and unlike many other private clinics, the Community Health Centers will see new Medicare patients, and they will see low-income Anchorage residents who do not have health insurance. They are the principal medical safety net for state residents.
However, every year the Community Health Centers are required to see more patients while funding is relatively flat [and] while many of the facilities are too small and too old and in an environment where it is increasingly difficult to recruit health care providers. Some states significantly subsidize Community Health Centers because of the critical services they provide, and the State of Alaska I think, for the first time ever, just did that to a small extent this year.
Ellis: Correct.
"We have the money to do it , and really it's in line with Palin saying the state has to fund more of its own stuff because federal earmarks and the Denali Commission and generalized federal funding will not be able to carry the burden, and Alaskans should do more for themselves with our resource wealth."
AHPR: Do you believe that the Community Health Centers should and will see increased state support, both from legislators and from the Department of Social Services next year and in the coming years?
Ellis: I do. Larry, I believe this year was a breakthrough year in that regard. I've advocated for that for a number of years because those are federally funded clinics, and they've been expanded across the state with Denali Commission money and other federal funds.
For example, 20 years ago, Senator Frank Murkowski and I stood at the Anchorage Neighborhood Health Center -- and I just finished a stint on their board here recently -- but he and I, 20 years ago, turned dirt together for a groundbreaking ceremony there to expand the Anchorage Neighborhood Health Center. I've long been a big supporter. It's in my neighborhood of Fairview.
This year, or last year, I got $5 million into the capital budget, or $10 million into the capital budget. Sarah Palin cut it in half to five. She didn't really know what the [Anchorage] Neighborhood Health Center did when she did that. The rumor was that they were Googling to see if the Neighborhood Health Center performed abortions or handed out condoms or what they were all about. That was just a rumor and gossip, but the governor cut the $10 million to $5 million, then I went back this year and got another $5 million and we educated the governor about what they do there, and that they're one of the few that accept new Medicare patients when people are fired by their doctors at the age of 65.
We educated the governor, and we got a total of $10 million for the new Anchorage Neighborhood Health Center that will be built in the next year or two. And I was very excited that for the first time there was a breakthrough in generalized state funding -- it's almost just a placeholder -- but it was a real breakthrough to get that component into that state budget. I'm hoping that that will be in Sarah Palin's regular budget submission for the coming year, in terms of her operating budget.
I'm encouraging of that -- even if she does or doesn't -- I want the legislature to significantly increase that line. I'll be advocating for that. We have the money to do it, and really it's in line with Palin saying the state has to fund more of its own stuff because federal earmarks and the Denali Commission and generalized federal funding will not be able to carry the burden, and Alaskans should do more for themselves with our resource wealth.
The Public Health Association did a pretty effective lobbying job. There was also money in the budget, Larry, for that project of Dr. Hunt's and that other doctor for the funding for the doctors to provide -- they have this innovative project to provide - basic health care access to people who can't afford it who are above the Medicaid line. Project Access maybe it's called?
AHPR: Yes, right, exactly.
Ellis: We put a chunk of money -- the numbers escape me because I've been doing gasline and energy relief -- but the money from the regular 90-day session, those numbers escape me but we did fund Project Access to some significant level at their request, and I had not been optimistic about that but it made it and then the placeholder incremental funding for the public health clinics. That was a breakthrough, and it really is the foundation of a launch pad for more next session.
"I made buttons in my office that said: Double WWAMI, which I thought was kind of cute. Governor Palin liked my buttons, and she put one on at the bill signing ceremony, and the governor signed that to double the WWAMI medical training program through the University of Alaska and the University of Washington."
AHPR: I have only a couple of additional questions. The growing shortage of health care providers at all levels in Alaska is projected to get worse in coming years even with the tremendous expansion of training offered by the University of Alaska. During the last couple of years I sense a strong renewal of interest in various quarters about health care professions loan repayment programs as one effective way to deal with this issue. Alaska is far behind most other states in this regard.
How do you feel about the idea of a state-sponsored repayment program here in Alaska, and what do you think the prospects are for someone sponsoring legislation in the next year or two?
Ellis: The session before last I sponsored the bill in the Senate -- Kevin Meyer sponsored the bill in the House -- his bill came over, I cross-sponsored, this was the WWAMI increase. I made buttons in my office that said: Double WWAMI, which I thought was kind of cute. Governor Palin liked my buttons, and she put one on at the bill signing ceremony, and the governor signed that to double the WWAMI medical training program through the University of Alaska and the University of Washington.
People ask me all the time, "When are we going to open an Alaska medical school?" It doesn't pencil out at this stage; it may someday in the future but what we've decided to do is this cooperative arrangement with the University of Washington through the WWAMI program. When I had my button on, and before the governor signed the bill, and it was passing in the Senate, I was the floor manager for the Double WWAMI bill.
I stood up and said, "Let's not pat ourselves on the back too hard here. We should have tripled the WWAMI program ten years ago -- ten years previous -- and then we might be approaching the curve, but we are way behind the need."
That was just when senior citizens were starting to flood our offices with dire concerns about losing their doctors at the age of 65. I said, "Who the heck is going to take care of all of you legislators once you reach the age of 65," because most of them are between the ages of 50 and 65, most of the legislators, at least in the Senate.
They looked at me and I think they thought about it temporarily, and I pointed out that there was a health professions task force study that was before us, and just one of many recommendations was the doubling or tripling of the WWAMI program. I think they recommended a tripling year before last, and we did a doubling year before last so we're way behind the curve.
I support the WWAMI program. I think we get a lot of ancillary benefits to the state from that program, and we're not yet ready to have a full-blown medical school in state. But something else that the legislature did, two or three years ago, the only thing I ever worked with Ben Stevens on was the funding of the $90 million in state funds for the Integrated Sciences facility at UAA. That building is nearly complete; it's been under construction the last two and a half years.
Then this year we funded, in a single year, the total amount that Fran Ulmer, the UAA chancellor, asked us for -- $46 million -- for the new nursing and health -- Allied Health Professions building, I believe it's called there at UAA, between the old API and the front of Providence Hospital. There's some land there and that's where that building is going to go. I've been to the lunches with Fran Ulmer -- I wish more legislators would have attended -- where we heard about all the exciting opportunities for good paying jobs for Alaskans.
We spend so much money recruiting these health professionals to come up to Alaska for a few years, but if we grow our own -- and that was the button I made this year, "UA Grow Our Own Workforce Development."
The engineering and the allied health professions were the big tip of the spear in terms of that initiative. The legislature did much better for the university across the board -- all campuses -- this year than the year before.
The year before there were some senators on a personal vendetta against the University of Alaska because Senator Gary Wilken from Fairbanks had been a big promoter of the university in Fairbanks, and he had treated people so badly that when he was put into the minority and other people took over Senate Finance, they had some axes to grind.
They got away with that for one year but the rest of us -- the Democrats from Anchorage -- said "We're not putting up with that again, [and] we will not allow you to take out your personal vendetta on the university. Take it against Gary Wilken but don't take it out against the university and programs that we need."
Fran Ulmer and her faculty and students from UAA, came to Juneau and did a fantastic job lobbying, and the university did much better this year programmatically. Then with the Anchorage legislators, which were Democrats plus Lesil McGuire, in the Senate, we advocated very strongly for the capital needs of the university, and it's very typical to phase these big, expensive buildings.
I think it took three or four phases to get the Integrated Sciences facility money together but Fran Ulmer is so desperate to get the health sciences programs expanded, that she asked us for the $46 million in a single chunk, and we actually downgraded a number of other Anchorage municipal and school district priorities.
I asked Mayor Begich about it, and Mayor Begich said, "Yes, I know you will give a healthy share to roads and other Anchorage public safety facilities and other Anchorage priorities, but we do not begrudge UAA getting their nursing building in a single year. They are bursting at the seams. Those are good paying jobs for young people, and go ahead and allocate $46 million of the Anchorage share of the capital budget..." to -- well, we called it "Fran Ulmer's Health Building." But of course it's the UAA allied health building, whatever it's officially called, and we were very proud of that achievement. So it's a piecemeal, you know it's a multi-faceted strategy, I would suppose, and it came together better this year than ever before.
AHPR: Those are all magnificent accomplishments, but I did want to just see if you believe that there is some positive feelings among legislators, specifically about a loan repayment program, where health professionals that are either trained in Alaska or come to Alaska with outstanding educational loans, would have a program where those loans would be paid back proportionally in terms of how long they would practice their health care trade in the state of Alaska, as a way of retaining them.
Ellis: I am very proud of the accomplishments we made, and I am very results-driven and get as much accomplishments each year as possible. I'm supportive of a loan repayment program though the devil is in the details, and I'm not super optimistic about the ability to do so because as soon as you do so, people say, "Well engineers are a critical shortage area in the state of Alaska, and we want a loan program for them."
There's a list of other needed professionals in the state that would make a claim as well. "Why are you doing it for the nurses and not for the engineers?" It starts to break down among legislators if it's not a very focused initiative that serves a compelling public need. I believe the compelling public need is there. A lot of the support gets lost in the details. It would have to be a very well supported, well thought out initiative to have a chance.
"Though it was much ballyhooed for political reasons from the congressional delegation -- and I have no doubt that they put some effort into it and achieved something -- I believe its wholly inadequate to really leverage the need and demand that's out there."
AHPR: I do have one remaining, specific question and it's somewhat similar to another one I asked you so you may have already answered it in effect. Let me ask it anyway. The congressional delegation has managed to get a 35% increase in Medicare payments to Alaska physicians. Some argue that the increase will be insufficient to encourage family practitioners to see older patients.
If this turns out to be the case, do you believe the state should do something to improve health care access for seniors? For example, directly fund Community Health Centers to support their policy of seeing Medicare patients, or perhaps create some type of financial incentives for providers to provide care to the state's growing senior population.
Ellis: Though it was much ballyhooed for political reasons from the congressional delegation -- and I have no doubt that they put some effort into it and achieved something -- I believe its wholly inadequate to really leverage the need and demand that's out there. It's maybe a tiny step forward but I believe it's wholly inadequate.
I actually advocated that exact thing which was, "let's really pump up the Community Health Centers across the state and require them, as a condition of those state funds, to see these Medicare patients." They already are trying to do that but I want to give them categorical funding to do that and to serve other non-Medicare patients. There was some interest in that. I'm going to try that again next year.
We got a small state increment for -- generally for Community Health Centers but the idea to tie it to seeing Medicare patients didn't catch on, but there's room to try that again next year.
AHPR: I do have one more question, and it's an easy one. Do you have any other issues or topics you would like to address to the readers of Alaska Health Policy Review?
Ellis: It would just simply be to not be apologetic at all for advocating in this area of public policy because you have the constitution on your side. There's a small group of legislators who put this as one of their primary interests and have never given up over the years -- many years of being beaten down.
This is the time to make a stand for these issues at the federal and state level. With the change in the oil tax regime and Alaskans getting a fairer share of our common property resources on state land, this is the time to make big steps forward, and there's no better investment than an investment in the public health of our citizens.
I believe there are huge savings and huge gains to be achieved there. People should not be shy or bashful about claiming our share of resources for something that is enumerated clearly in our state constitution.
AHPR: Thank you so much for taking the time for this informative and most interesting interview.
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Interview with Bill Hogan
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 On July 24, 2008, the Governor appointed Bill Hogan to head the Department of Health and Social Services. Hogan has worked for the department since April 2003. He previously served as deputy commissioner from September 2005 to May 2008, and as director of the Division of Behavioral Health from April 2003 to September 2005. Hogan has spent more than 30 years in the mental health, substance abuse, developmental disabilities and social work fields, with experience as a clinician, supervisor and administrator. Before joining the Alaska Department of Health and Social Services in 2003, Hogan was chief executive officer of Life Quest, a private, nonprofit community mental health center located in Wasilla, Alaska. This interview was conducted August 14, 2008, and has been edited for clarity and length.
AHPR: Thanks so much Commissioner Hogan for taking this time to do an interview with Alaska Health Policy Review. If I may, I'll just jump right into it. The first question is, in your view, what responsibility does the State of Alaska have regarding the health of residents of Alaska, and why?
Hogan: Let me start by reiterating the overriding theme for the department in '09 and going forward, and that's to help individuals and families create safe and healthy communities. To me, what that really means is the role of state government in the health and social service system is a catalyst for change, one that can provide some leadership, and one that can ensure that access to care and quality care and the cost of care. Somehow there's a balance among or between those three aspects of the health care delivery system. And obviously we want to help do planning, work with communities and entities in those communities to ensure that the health care system is meeting the needs of their individual communities.
I think we have sort of a wide and varied responsibility. We certainly have some obligation, don't get me wrong, to ensure that there are adequate resources going into the health care system, but I think ultimately it comes back to personal choice and responsibility. We have unfortunately pretty significant rates of tobacco abuse, alcohol abuse, obesity, diabetes, cancer, heart disease, that sort of thing. At least some of those problems are caused by personal choice and people's lifestyles, so I think really what we want to do as a state system is to work with individuals and families to ensure that they are taking more control of their own lifestyles and more responsibility for their own health care.
AHPR: There are a couple of major important health-related bills from this year that I would like to ask you about. The first is SB 160 Mandatory Universal Health Care. I believe the bill did not make it out of Senate Finance Committee, but how would you assess the impact of this bill to date, and what are the prospects of significant health-care reform for next year? Does the department have an opinion or view about SB 160 or the issue of significant health reform in Alaska?
Hogan: I would say, at least based on my conversations with the governor's office, that the governor supported, in concept, what was in Senate Bill 160. I think that what we would like to see is increased access, as I just mentioned, increased competition, ideally, that may reduce cost, and we want to ensure that there is adequate quality. I think we also need to address the uninsured problem. I can't tell you specifically what that might look like at this point, but I do think that we have an obligation to ensure that people have access to health care, and at least in my mind, that ideally would be through private insurance and expansion of private insurance options.
Having said that, we also recognize that Medicaid and Medicare are two primary payers for health care in Alaska and throughout the country. I do think that the bump in Medicare rates for Alaska will help some with access to care, although I'm also hearing that there are still some concerns on the part of some providers about whether or not they can see Medicare patients. I think the concepts behind Senate Bill 160 are valid.
What I appreciate most about the bill is that it helped us begin to talk about it and to begin to problem solve and to brainstorm about potential solutions. But I think it ultimately comes back to how do we increase access, how do we increase competition, how do we ensure that there's quality, and how do we begin to address the problem of the uninsured?
" ... that it would be the consumer -- this comes back to the personal choice and responsibility -- the consumer would be able to look at quality data across a spectrum of services and procedures and begin to make some informed decisions or choices about where to go for health care."
AHPR: If I could just follow up on one part of what you said -- the quality aspect. Could you give me some example of how you might ensure quality or monitor it or something along those lines to address the quality concern?
Hogan: I think when people go to a health care provider they want to ensure that they're getting an accurate assessment or diagnosis of what their problem is, and that there is a treatment plan that's developed that's going to address their problem in a manner that is cost-efficient and will produce the best outcome.
I know for a fact that hospitals monitor their quality on a regular basis for all sorts of procedures and services, so one option would be to work with the hospitals to have them begin to make public their quality indicators so that people would at least have some sense for how hospitals are performing related to an array of services and procedures.
I'm thinking we could probably do that by working with the hospitals to perhaps begin to post that information voluntarily. I haven't had that conversation directly with them but that was at least one thought. I think that the challenge is that not all health care providers produce that kind of information, nor do all health care providers monitor quality the way that hospitals and some other providers do, so it's a greater challenge with some of those other health care providers.
But at least that's my thinking, that it would be the consumer -- this comes back to the personal choice and responsibility -- the consumer would be able to look at quality data across a spectrum of services and procedures and begin to make some informed decisions or choices about where to go for health care.
AHPR: Thank you. Moving on to another bill that I wanted to specifically ask you about, Senate Bill 183 is the repeal of the defined contribution retirement plans for public employees. I wanted to ask you about this because this bill would also restore the former health-care plan that public employees in Alaska had. That plan, the former one, would be much less expensive and more accessible to public employees than the current one, but it looks like that bill also died in Senate Finance. Does the department have a view or a perspective on this issue?
Hogan: I don't know of any plans or thoughts about supporting a repeal of the defined contribution plan, which would reinstate the defined benefit plan. I have not been involved in those conversations, and I'm thinking the folks in the department of administration and in the governor's office might be able to give you some additional information or give you a heads up as to whether or not there's some discussion about that.
I'm not quite familiar with what you're suggesting regarding the health care plan. I have the current health-care plan, personally, and for my family it's a pretty comprehensive plan. Frankly, I'm trying to remember even if I have to pay more if the premium is up, and the premium may be up a little bit or it might be somewhat different than it was prior to this change, but I don't think there's been a significant change.
AHPR: For employees who fall under the old plans there isn't a significant change. This is only for employees hired after I think it was July 1, 2006.
Hogan: Oh, I see, after this change took place. This sounds anecdotal and I apologize, but I haven't had people come to me saying, "This plan is totally unacceptable and therefore I had really planned to come to work for state government but I'm not going to come because this is a hindrance" or "I'm going to stay where I am because at least where I am the employer pays more" or "the benefits are better." I've not had anybody say that to me directly, but it's very possible that we may have not even gotten candidates as a result of the change in the health-care plan. I just don't know that for sure.
"We absolutely need detox services in Anchorage. I think, in addition to medical detox, we need social detox options as well. Not everybody needs to be medically detoxed."
AHPR: I suspect you will be hearing, in the course of the next year or two, from folks on that issue. Moving along to the next one - -this one I suspect, given your history, is closer to home. Behavioral and mental health services have taken a big hit lately, and I'm thinking specifically of the Clitheroe Detox Center, Anchorage's primary detox center serving low-income patients. Last year, due to lack of funding, it was axed, and then Anchorage Community Mental Health Services, one of the state's largest providers, stopped taking new adult clients earlier this year due to funding and other reasons.
So, my specific question is, what role, if any, can and should the state have in assuring access to basic mental health and detox services for Alaska residents? Do you think there should be any legislation introduced to help deal with this emerging crisis next year?
Hogan: I recognize that some behavioral health providers have been struggling to continue to provide very important services to people who I think that, at least from my perspective, are among some of our most vulnerable citizens in Alaska, and as you know my background is in mental health and substance abuse.
Let me talk specifically about Anchorage Community Mental Health. I do know that they were having some difficulties several months ago. We have worked with them actively over the last several months and I believe now that they are again taking new individuals. Having said that, I think they are still trying to figure out what's the best way to meet the needs of individuals coming through the front door, particularly those with a serious mental illness or a chronic alcohol or drug problem.
We have worked actively with them. I can tell you in this last legislative session, the legislature granted -- I believe it was an eight percent increase in Medicaid rates for behavioral health services. We think that will help some. They also gave us some additional grant dollars to give to behavioral health providers so we think that will also help, and we should be able to get that money to providers shortly because it was granted in this fiscal year. We think that will begin to make a dent or make some impact because we recognize that the cost for providing services has gone up across the board, not just with behavioral health providers but in general.
I would also comment specifically on the Clitheroe detox problem. We were successfully able to transfer at least some of those beds -- I believe it was five or six detox beds -- to Cook Inlet Tribal Council, so there is some detox capacity or capability still in Anchorage. I know specifically about the Clitheroe issue.
They had gotten some funding through a federal grant when we were first designing API. They got some money to help support not only detox but enhanced detox. When that federal money went away, I believe, they even got some money through the efforts of Senator Stevens to continue that capacity, and it was only when the federal dollars ultimately went away that we couldn't quite come up with the number of state dollars to offset those losses, so it was unfortunate.
We absolutely need detox services in Anchorage. I think, in addition to medical detox, we need social detox options as well. Not everybody needs to be medically detoxed. The behavioral health system is an important part of what we do in our department, and I think the increased rates will help, and I know as a department we have been actively working with providers to try to come up with solutions to the problems.
"I think the array of services they provide and the role they play in
the community is critically important, particularly for those
individuals who don't have a third-party payer -- Medicaid, Medicare,
or private insurance."
AHPR: Moving along to a sort of similar problem in the medical arena, the statewide system of community health centers acts as the principal medical safety net in the state. Unlike many other private clinics, or I should say for-profit private clinics, the community health centers will see new Medicare patients -- even before the recent bump -- and they will see low income Anchorage residents who do not have health insurance. It is the principal medical safety net for state residents.
However every year the community health centers are required to see more patients while funding is relatively flat. Of course, they often suffer from old and small facilities, and it's in an environment where it's increasingly difficult to recruit health care providers. Some states significantly subsidize community health centers because of the critical services they provide. Do you believe that community health centers should and will see increased state support, both from legislators and from the department, next year and in coming years?
Hogan: Let me start by saying that I think the community health centers are a critical component of our health care service delivery system in Alaska, and frankly, throughout the country they provide an invaluable service. We've grown the number of community health centers in Alaska, I think we now have 26, I believe, and they're spread throughout communities in Alaska. I think the array of services they provide and the role they play in the community is critically important, particularly for those individuals who don't have a third-party payer -- Medicaid, Medicare, or private insurance.
We worked with the community health centers this past session. I think originally they were proposing a $13 million budget increment to help support their services, and our biggest challenge was to somehow understand how that increment would actually result in increased direct service to clients, patients, and their families. It seemed like primarily the money was going to be used for recruitment and retention of staff, and also for some equipment -- IT infrastructure needs.
I certainly understand, having run agencies, that you've got to have good quality staff to provide the service, and you've got to have good infrastructure or else you can't be in business to do a quality job in an efficient manner, but we had a hard time [understanding how giving them $1 million was going to result in] either increased services, are you going to be able to see more people, and/or are your outcomes for those individuals going to be improved?
So my answer is a bit equivocal in that I think they do a good job -- we certainly want to work with them going forward -- but I think we've got to be better able to define what the increased dollars are actually buying, particularly as it relates to improved outcomes for an increased number of people that they might see. And again, I don't mean to sound so equivocal. I can't really predict or project what the legislature might do, and I know we will have continuing conversations with the governor's office about the community health centers and whether or not we would support funding for them.
AHPR: Thank you. Moving on to a related question -- I guess they're all related -- the growing shortage of health care providers at all levels in Alaska is projected to get worse in coming years, even with the tremendous expansion of training offered by the University of Alaska. During the last couple of years, I sense a strong renewal of interest in various quarters about health care professions loan repayment programs as one effective way to deal with this problem. Alaska is far behind most other states in this regard. How do you feel about the idea of a state-sponsored repayment program here in Alaska, and what do you think the prospects are for legislation in the next year or two?
Hogan: I like the concept of loan repayment. I've been a big fan of the "health person shortage area concept" at the federal level, where people get some support going to school, and when they come out, if they serve in an underserved area either the loan is completely repaid or partially repaid, so certainly I like the concept. I've seen in other states even at the local level, say a county medical society's supporting someone to go to school with the understanding that they would come back and serve in that particular community or in that county for a certain period of time. So I like the concept. To be frank about it, I have not spoken directly to folks either within the department or outside the department, at least in the last couple of weeks, about whether or not we as a department want to go down this road. Again, I like the concept, I think it does provide the kind of incentive that we need to grow our health care workforce or to attract or recruit a quality workforce. I think we need to offer this as an option, I just don't know to what extent or to what magnitude.
"I've heard anecdotally -- I can't even remember where this was a couple of weeks ago -- where somebody came up to me and said, "Well you know, this only means $18 more per visit for me in my family practice, and I'm not sure that that's sufficient to convince me to want to take Medicare.""
AHPR: You touched on this next question a little bit, but I would like to ask it just to see if you have anything to add. The congressional delegation has managed to get a 35% increase in Medicare payments to Alaska physicians. Some argue that the increase will be insufficient to encourage family practitioners to see older patients.
If this turns out to be the case, do you believe the state should and can do something to improve health care access for seniors? For example, directly funding community health centers to support their policy of seeing Medicare patients, or perhaps creating some kind of financial incentives for providers to provide care to the state's growing senior population?
Hogan: Again I want to thank the congressional delegation for helping get the increase in Medicare rates. I think it's up to 35% in many cases. I'm optimistic that the increase will actually create greater access for individuals with Medicare. Having said that, I've heard anecdotally -- I can't even remember where this was a couple of weeks ago -- where somebody came up to me and said, "Well you know, this only means $18 more per visit for me in my family practice, and I'm not sure that that's sufficient to convince me to want to take Medicare."
I'm hoping people will at least give it a chance and to recognize that the congressional delegation went to great lengths to help us with this, and to at least try it. I'm also not naive enough to think that 35% in and of itself is going to make that big a difference, but I'm hoping it will. Again I don't mean to sound equivocal here, but we have not had a conversation about how the state might be able to enhance or supplement Medicare.
AHPR: Well it's not "enhancing" Medicare, but it would be helping to provide better access for Medicare patients by, for example, designating money, additional funds for the community health centers to support their policy of seeing Medicare patients, or to create some type of financial incentives for providers. This is a little mushy I realize, but in any case the concept would be to provide financial incentives for providers to provide care to the growing senior population. So really, it's a separate effort apart from the 35% increase.
Hogan: I think we did get some money in this past budget, I want to say $350,000, through the efforts of the Commission on Aging, to provide some dollars to community health centers to increase the likelihood that they might take seniors or elders in the CHCs, so I think in that sense there is some precedent in trying to help address that. Are you familiar with Anchorage Project Access?
AHPR: Yes, I am.
Hogan: I like that concept, although ostensibly it's for the uninsured or people who don't have a third-party payer, I like that concept and I'm wondering if that might be the kind of concept that we could work with providers on to ensure greater access to Medicare. I mean I think they've done a good job with that. So I understand what you're asking, I think we've tried to help a little bit, at least in the last budget, with some increase to community health centers. I'm not sure how far $350,000 might go but I think we've started to have the conversation, and at least in the last budget, made a little bit of headway.
"Rightly or wrongly, there are a number of folks in state government who think they understand or we understand at the state level what's best for communities. That tends to not be my perspective. I really think community problems are solved at the local level."
AHPR: I would like to ask a different type of question. Most of the public health decisions affecting the people of Anchorage or other towns in Alaska are made by state agencies and via state processes. I would assert that, I think it's true. So then the question is, is it advisable that more control over public health be moved to local communities, and if that is advisable, how would that be done?
Hogan: Oh, this is a tough one. I've been in state government now a little over five years, and one of the things that I sensed within a short period of time after I arrived was this notion that state government tends to be paternalistic. Rightly or wrongly, there are a number of folks in state government who think they understand or we understand at the state level what's best for communities. That tends to not be my perspective. I really think community problems are solved at the local level.
As I was saying earlier, I think we do have a role to play around being a catalyst and providing some leadership and planning and some resources, but I think the real solutions come at the local level. I know when I was doing the behavioral health stuff, particularly, we really tried to include stakeholders in all of the large policy service delivery and financing decisions the best we could, based on the time available. So I think I would like to see communities take on greater responsibility.
I think right now we only have one or two communities who even have health powers. There's got to be some formal entity of some sort that can take this responsibility on, and part of my frustration when I was doing the behavioral health stuff is that many times there was not that entity at the local level. It tends to vary depending on where you are in the state. The Native health corporations I think have done an excellent job in trying to provide health care to their beneficiaries and in some cases non-beneficiaries in our rural communities.
In some cases, the local municipality has tried to do the best they can in health and social services, but in some parts of the state there is no entity or organization at the local level with which to work. I absolutely agree with the concept that local solutions should come from the communities and not from state government. The challenge has been how do you actually began to change that, because the way it is in Alaska right now, a lot of people look to the state for the solution and look to the state for the resources to change things.
I apologize if that's a little bit squishy. I absolutely agree with the concept, but personally I have not been able to figure out a good way to empower communities and have communities take on greater responsibility for not only health care, but also prevention of health problems.
AHPR: I have a follow-up question. When you say that in many communities entities are not available, by "entities" do you mean, for example, agencies of government, or private nonprofits? What do you mean by "entities?"
Hogan: My most salient experience has been with the behavioral health folks. In some communities, for example in the city of Ketchikan, we provided money to the city to provide the service. There were a couple of nonprofits down there, but it was essentially the community. But that is different than it is, say here in Juneau, where we grant money directly to the nonprofits.
So when you're talking about what does the community need, what sort of community health plan should there be, or in this case a community behavioral health plan, it was hard to bring those nonprofits together in some way to ensure that we knew what the community needed, there was a plan to address it, and we could begin to give our resources based on that plan.
There was no entity to pull the organizations together to create that. We can try to help from the state level but we really can't do it for the community. So where there is a local entity, whether it is a local government or some sort of coordinating council or interagency group -- where that exists, it's easier. There is at least an entity that we can work with, but that does not exist in every community.
"I guess I would take a little bit of issue with, ""It doesn't seem like the priorities are any different." I think this is the first time we have been able to articulate these five priorities of substance abuse, health and wellness, health care reform, long-term care, and protecting the most vulnerable Alaskans."
AHPR: Taking a quick look at the published 2009 DHSS Priorities, it doesn't appear that you will have any substantially different priorities than those of the previous commissioner. I wonder if you could comment on what differences, if any, we can expect in DHSS programs, foci, or operations under your leadership?
Hogan: I guess I would take a little bit of issue with, ""It doesn't seem like the priorities are any different." I think this is the first time we have been able to articulate these five priorities of substance abuse, health and wellness, health care reform, long-term care, and protecting the most vulnerable Alaskans. At least from what I've heard, this is the first time that many people have seen these in a page or a page and a half, so I think if nothing else we have articulated what our priorities are.
If you look [at 2009 DHSS Priorities] and dig down a little bit in each priority, [for example] let me use [the category of] "Substance Abuse," and I will start with [the subheading of] "prevention." Under the last legislative session with the help of the governor we did get funding to start a "prevention of under-age drinking initiative," but this is just the first year of that initiative, and we are going to evaluate how effective we are, so going forward we may modify or adapt based on what we learn.
The second thing, targeting "substance abuse and suicide prevention programs," we have not really done that. Our suicide prevention efforts and substance abuse efforts have been pretty broad-based, so the change or the difference would be to target our efforts to a certain geographic area in the state where, frankly, the rates are the highest. How are we going to do it differently? We are going to target these efforts to those communities where there is the most need.
If you look at the next example, we have talked for years about "integrating primary care with behavioral health." Seventy percent or more of the people who get antidepressants get them from their primary care physician or advanced nurse practitioner or physician assistant. So, many people get their mental health services, even if it's only medication, through their family practitioner. We need to do a better job of integrating the two systems because, frankly, people usually need more than just medication, they need counseling. We talk about it, but what this does on this priority sheet is reaffirm the importance. We will be putting a plan together to make sure that this happens.
Under treatment, where I reference the Shields for Families project, about a year or so ago, several judges and people from the court system and people from the Office of Children's Services including myself, went down to Compton in California and saw a program. This agency rented an apartment complex, I think it was 80 apartments, and they are serving primarily single moms with kids in this apartment complex. It is not just substance abuse treatment. They have a vocational training program and they are linking the moms to jobs. They have on-site day care; they have after-school mentoring and tutoring. They have a whole array of other important services in addition to treatment.
Although I think we have good treatment programs we don't have enough, and very few of them are focused on the family. This may be a technicality, at least from your view, but to me, what I am saying here, what we are saying here, is that we need to be a lot more focused on the family. We need to fund programs that keep families together and help them not only get substance abuse treatment but that find jobs and ultimately that find a halfway decent place to live.
"My personal opinion is that it is not just enough to be sober, or to be clean and sober. Now that you are clean and sober, can you be a better dad, a better mom, can you stay in school, can you go back to school, can you get a job, can you keep a job, can you buy a house or rent an apartment and pay your bills on a regular basis?"
AHPR: I have a little follow-up question. I hear over and over again that legislators are reluctant to fund substance abuse programs because they don't believe they work. Is this an issue that in some way you will be contending with or an issue that you have to contend with, or is it an issue at all?
Hogan: It is an issue, and I have been contending with it probably long before I came to work for state government. I think it goes back to things like personal experiences some legislators may have had with either a family member going through substance abuse treatment, or with someone they know, a friend, going through substance abuse treatment. Sometimes it may have taken two or three or four times, not only before the person got sober, but was able to go to work and began to lead a life where they were contributing to their community. I think that there is some direct experience that some legislators have had that makes them doubt whether or not treatment actually does work.
Frankly, we need to create greater awareness and provide additional education that it is not always the first time. Sometimes it takes more than once for somebody to go through treatment and have it stick. We also have, as I was alluding to, the issue of what is a real outcome and substance abuse treatment?
My personal opinion is that it is not just enough to be sober, or to be clean and sober. Now that you are clean and sober, can you be a better dad, a better mom, can you stay in school, can you go back to school, can you get a job, can you keep a job, can you buy a house or rent an apartment and pay your bills on a regular basis? Can you stay out of the criminal justice system if you have had a history of going in and out of the criminal justice system?
There are other indicators about whether or not treatment works other than just completing the program and staying clean and sober. Frankly, I think this is what legislators want from our programs. I think the more that we can show that's the case, the greater likelihood there will be that they will fund these programs.
AHPR: I do have one last question. Do you have any other issues or topics you would like to address for the readers of Alaska Health Policy Review?
Hogan: I would like to refer people to our web site and have them look at our priorities. We have tried to be sensitive to the broad array of programs and services that we fund [and] provide support in the department. We are a pretty darn big agency, so I am hoping that at least one of these priorities hits with what people in Alaska think the Department of Health and Social Services should be focused on.
The last message I want to give is that we can't do it by ourselves as a department. We really do need our partners and our stakeholders. I think we really do have an opportunity here to move our health and social services system forward to better meet the needs of Alaskans. I'm hoping that people will support us in helping to move our priorities forward so that we can create safe and healthy communities.
AHPR: Thank you very much for your time Commissioner Hogan.
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State Level Health Care Reform Summary and Three Studies
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 Kathryn Anderson is president of Pescatore Systems International, an Anchorage-based consulting firm specializing in program evaluation, marketing, and corporate strategy. She has over 30 years in the telecommunications and computer industries, including over 10 years as a senior executive in marketing, strategy, and product development roles. Ms. Anderson will complete her Master of Public Health at the University of Alaska Anchorage in 2009. In addition, she holds a Bachelor of Science degree in Mathematics from Arizona State University and a Master of Science in Computer Science from Rutgers University. She completed the Harvard Business School Advanced Management Program in 1995. Email: kathyjanderson@acsalaska.net
The study of state health care reform can be a blinding maze of complex inputs, outputs, and dynamics. Yet, if we are to make progress in Alaska, we must understand the lessons that can be learned from other states' efforts. This report summarizes an important reform overview paper from the Commonwealth Fund and goes on to examine in more detail three states' efforts in health care reform: Oregon, Maine, and Pennsylvania.
Health care reform is commonly discussed in terms of a "triumvirate" of goals: Cost, Access, and Quality. Cost refers to a "sustainable" financial system of payment, with sources matched to uses. Access refers to the degree to which people can avail themselves of health care services -- it may be limited by supply or location of service or by affordability. Quality refers to the performance of the system versus either what is theoretically possible or current best practice. The overarching goal of healthcare reform is to optimize these three dimensions, although it's generally acknowledged that compromises will be required to achieve a workable balance. These three goals are used by both the Commonwealth Fund paper and by the separate analyses of Oregon, Maine, and Pennsylvania.
The Commonwealth Fund Perspective
In a 2007 paper entitled "State Strategies to Expand Health Insurance Coverage: Trends and Lessons for Policy Makers," (Commonwealth Fund, 2007a), the Commonwealth Fund offered a useful framework for examining efforts made to date in leading states.
The Commonwealth Fund (CWF) is a private foundation. According to their website (www.commonwealthfund.org), the foundation "aims to promote a high performing health care system that achieves better access, improved quality, and greater efficiency, particularly for society's most vulnerable, including low-income people, the uninsured, minority Americans, young children, and elderly adults." They have several subject focus areas within this scope, including insurance, Medicare, health care quality, underserved populations, and state health policy. This paper outlines important reform efforts in Oregon, Maine, and Pennsylvania.
Synopsis
According to the Commonwealth Fund study, the three New England states of Massachusetts, Maine, and Vermont have initiated the most comprehensive state reforms. Other states are concentrating on providing health insurance to children. Finally, several states are working various types of public-private partnerships to address the issue of coverage for low-income workers.
Comprehensive Reforms
The so-called comprehensive reforms aim to provide near-universal coverage and use a multi-prong strategy that may include cost, quality, and disease management initiatives. Massachusetts began with relatively high level of coverage from Employer Sponsored Insurance (ESI) in their demographic, so their plan builds on this strength. In keeping with its goal of providing universal coverage, it mandates individual coverage, which was a huge step. It assesses companies of at least 11 employees a $295 fee annually per non-covered employee if the company does not provide "fair and reasonable" coverage. The reform package also addresses private insurance companies by merging the small-group and the individual markets and by outlining the terms of policies that will be made available through a state clearinghouse agency known as "The Connector." The Massachusetts initiatives are funded through federal matching, state general funds, and the company assessments.
Vermont, unlike Massachusetts, does not aspire to universal coverage, but rather to 95% coverage by 2010. It emphasizes chronic care management as a way to lower demand in the future. Tobacco tax increases as well as federal matching and non-participating employer assessments will be used for funding. Maine, discussed elsewhere in this report in more detail, enacted the earliest reform package, passing the legislature in 2003 and beginning implementation in 2005. Maine has no individual mandate and no non-participating employer assessments, relying instead on voluntary compliance. They have also emphasized direct cost-containment measures such as voluntary caps on cost and operating margins, and they created a Quality Forum to provide information for residents to make choices regarding service. Originally, their funding was to come from providers and insurers who would contribute part of the savings from the overall reduced burden of uncompensated care, but this did not work and they are instead relying on employer contributions, general funds, and federal matching dollars.
California and Pennsylvania were also beginning efforts along the lines of Massachusetts at the time this article was written. California was looking at an individual mandate, expanding its state-sponsored coverage, and specific cost containment measures. They estimated that $12 billion would be required, and they were developing a plan similar to Massachusetts for funding. Pennsylvania, also covered elsewhere in this report in more detail, was working on a proposal that featured elements of Cost, Quality, and Access.
Covering Children
Many states are focusing on covering all or nearly-all of their children. They all work with federal Medicaid dollars in the State Children's Health Insurance Program (SCHIP) to cover the lowest income families. Through the system of "waivers," the federal system allows states some freedom to tailor SCHIP program for local needs. Generally, the new reforms are making SCHIP coverage available on a sliding scale to lower and middle income groups based on family income.
As of the writing of the CWF report, Illinois, Pennsylvania, and Tennessee had all passed legislation along these lines. The theory is that, in addition to fulfilling a moral obligation, covering children lays the foundation for healthier adults and therefore, hopefully, reduced medical costs in the future. Oregon, Wisconsin, New Mexico, and Washington state had also begun to consider child-oriented reform.
Public-Private Partnerships
Several states, including Arkansas, Montana, New Mexico, Oklahoma, Rhode Island, Tennessee, and Utah, are collaborating with private employers and with insurers to create insurance plans to cover low income workers. The premiums are typically paid by a combination of the employer, the employee, and state and federal funds, with the employee portion dependent on income. These programs are aimed at small firms that have not offered health insurance benefits in the recent past. This restriction is designed to prevent a flood of small businesses abandoning their current coverage for the somewhat Spartan plans offered by the states.
Authors' Observations
The authors note that the comprehensive reforms take several years to negotiate and eventually pass, because of the complexity of the system and the intensity of the stakeholders' "stakes." The eventual reform package is often built on prior smaller efforts that were successful.
They also note that stemming the erosion of Employer Sponsored Insurance (ESI) is an important goal, and that measures must be taken to incentivize small businesses to retain any coverage they might currently have. There has been little success in getting businesses who don't currently offer coverage to begin to do so, so another important strategy is to make affordable individual policies available to low income workers.
The question of mandates is crucial. Massachusetts was the first to mandate individual coverage, and not all states are prepared to do that. Nor do all states feel that they can mandate employer coverage, although the assessments charged to non-participating employers are a sort of middle ground. To complicate things, the federal Employee Retirement Income Security Act of 1974 (ERISA) has been deemed in Maryland state courts to prohibit government from mandating that large employers contribute to health care costs.
It's not clear what role the current insurers such as Blue Cross should play in state-level healthcare reform. The three comprehensive reformers (Maine, Vermont, and Massachusetts) all use private insurers, but some states, including Maine, are considering becoming self-insured and even self-administered in order to have better control over premium prices in the future.
The authors point to the importance of states looking at all three legs of the stool, Cost, Quality, and Access. Maine, in particular, has kept its focus on all three.
Commentary
The Commonwealth Fund document is quite helpful as a grounding mechanism with respect to various state initiatives. It provides a nice decomposition of the states' efforts into the three categories, comprehensive, children, and public-private partnerships. Their analysis was not particularly structured, it was rather embedded in their prose, but it does help uncover which features of the various reform packages are the most important, and, of those, which are common to other plans and which are distinguishing.
In relating this real-world reporting to a strategic framework for state health care reform analysis proposed by the McKinsey Global Institute (McKinsey 2006), the comprehensive reform states are paying attention to both supply side and demand side principles, although the issues of quality seem somewhat less attended to. These states are also paying attention to a concept from McKinsey (McKinsey 2006) known as the "intermediator" principal. This principle applies to the intermediators in health care, such as policy makers, regulators, and insurance companies, who are involved in supply/demand management. The principle states that finance mechanisms be sustainable, which entails matching supply and demand.
STATE CASE STUDIES
The three states of Oregon, Maine, and Pennsylvania are in three different stages of health care reform. Oregon was an early leader but fell behind when they ran into serious budgetary constraints. Maine implemented its comprehensive reform package in 2005, earlier than any other state. Pennsylvania is still in the implementation stage, but its approach is among the most comprehensive of any of the states that have passed legislation, with a strong emphasis on quality and cost initiatives as well as on insurance coverage for improved access.
OREGON
Oregon was originally considered a leader in healthcare reform, but the state is not mentioned currently with the likes of Massachusetts, Maine, or California. Rather, it is a fruitful state to study for those interested in analyzing how health care reform can fail.
Oregon became infamous in the late 1980's for its "rationing" approach to healthcare known as the Oregon Health Plan (OHP). The philosophy of the OHP was to deliver fewer services but to more people. Around 2003, a second plan, called OHP2, was introduced. It held core benefits for the poorest, but reached out to the next tier of people (through Medicaid expansion) with a less-rich plan that excluded. The latter, less-rich plan unraveled quickly due to a statewide fiscal crisis and also due to a newly legislated requirement for co-pays for services and premiums. As one director of a community health program, Charla DeHate, said, "Oregon was way ahead of everyone else, and then we went broke." (Yardley, 2008)
History:
Oregon was one of first states to attempt health care reform. In 1987, under the leadership of then state Senate president John Kitzhaber, M.D., the legislature refused to fund a bone marrow transplant for a particular 7-year-old boy. Kitzhaber's argument was that it was more in the state's interest to fund basic services for more people, such as prenatal care for low income women, rather than spend such a large amount of money for such a costly procedure with no guarantee of success for one individual. In this vein, in 1989 the legislature began work on an innovative health care reform bill that included an employer mandate plus Medicaid expansion (i.e. covering more people by raising the qualifying income level).
The bill included a mechanism known as "The List," which was a very detailed prioritized list of diagnosis-treatment pairs. Each year, the legislature intended to "draw a line," based on the state Medicaid budget, above which they would fund and below which they would not. Thus, a diagnosis-treatment pair for a non-emergency situation such as cataract surgery might be covered one year, but not the next, while life-threatening situations like appendicitis surgery would rank high enough to virtually ensure it would be covered every year. Out of 743 original "lines" in the prioritized list, the funding has been established between a high of 606 (1993) and a low of 503 (2008). [(Oregon DHS, 2006), (Oregon DHS, 2008)]
The first version of The List was very coarse and fairly controversial, and it went through several iterations based on feedback from citizens and from the federal government. Many feared it was a framework for rationing, and the national media covered the activities with that perspective. It was used beginning in 1994 to guide basic Medicaid, whose enrollees were below 100% FPL. The employer mandate was removed in 1996, being disallowed by the federal government.
During his 10 years as governor, Kitzhaber continued to make health care reform a priority. In 2002, an expansion of the OHP, called OHP2, was crafted to cover more people. The waiver this time bifurcated the plan into the original, "richer," plan for the lowest income individuals and a less rich plan known as the "Medicaid expansion" for others earning up to 185% of the Federal Poverty Limit (FPL). The Medicaid expansion plan required the insured to pay modest premiums and copayments, for example $250 per hospital admission. Individuals could be refused treatment based on non-payment, and anyone missing a premium payment was locked out of the plan for six months. The terms of the expansion enjoyed bipartisan support, with its extended reach appealing to liberals and the copayment feature appealing to conservatives.
Just after the legislation was enacted, the state hit a serious fiscal crisis as a result of the ".com bust" and contraction in both the residential and heavy construction industries. State revenues dropped, which led to the line being drawn higher on The List, subtracting benefits from the coverage list. In March of 2003, several important benefits were eliminated from the OHP basic plan, including dental care and chemical dependency and mental health treatment.
Under these circumstances, the OHP2 unraveled quickly. There were 104,000 enrollees at implementation time, January 2003. The Medicaid expansion plan lost 53% of its enrollees in 12 months. Enrollees in the basic OHP, for the poorest segment, also became subject to premium and service copayments, and this part of the plan lost 50% of its enrollees in next 18 months (Oberlander, 2007b). Ironically, due to state revenue shortfalls outlined below, had enrollment not declined due to the copayment structure, the state would have had to remove about this many people from the rolls anyway, in order to close the budget. People who remained on the rolls used the system less because of cost.
In 2003, the legislature enacted a $542M tax increase to cover shortfalls across the board, but a voter referendum overturned the tax increase. Lawmakers then passed legislation in 2004 forbidding the use of state general funds for the OHP, which led to the closing of the plan to new enrollment. (Commonwealth Fund, 2008)
In 2007, there were only 17,000 people enrolled in the Medicaid expansion plan. In early 2008, the state levied additional taxes on health plans and hospitals, allowing enrollment to reopen. Approximately 130,000 people qualify for the 7,000 new slots, so a lottery is being held to award applicant status. (Yardley, 2008) The lottery is strictly random and does not prioritize entrants based on need or health.
Analysis
By 2006, the OHP concept came to be viewed more skeptically by Oregonians. In his analysis of the "unraveling" of the OHP, scholar Jonathan Oberlander said that the concept was being seen as "less of a brave experiment in health reform and more as a fiscal burden." (Oberlander, 2007b)
Cost: There was a lot of concern among state leaders that the original plan, while it expanded coverage by 600,000 individuals, did not pay off as it only saved 2% of expenditures (Oberlander et al., 2001). The original philosophy of the plan was to reduce costs by reducing what is termed the "cost shift." "Cost shifting" happens when uninsured people are treated but not charged, for example in the hospital emergency room where care is mandatory regardless of patient ability to pay. The hospital then must charge more to others to make up for this uncompensated care. The result is higher premiums for those who have insurance and higher prices for those who make private payment. The OHP intended to reduce cost shifting by emphasizing managed care, preventive care, early intervention, and primary care; and by not covering ineffective care. There is no data on whether the early days of the OHP decreased cost shifting, but there was a documented increase of over $250M in uncompensated care for Oregon hospitals from 2002 to 2004 during the enrollment contraction, which likely ultimately drove cost of care upward. (OHSU, 2008)
Preventive care elements in the OHP include immunizations, well-child exams, routine physicals, mammograms, and the like. There does not appear to be any concrete analysis of the impact of preventive care treatment on downstream medical costs in Oregon. The general cost effectiveness of preventive care is a complex area of study beyond the scope of this paper, but there is credible evidence that it actually adds to health care costs rather than subtracts, largely because the cost of screening is high and relatively few cases of disease are uncovered. (National Center for Policy Analysis, 1995)
Quality: Analysis showed that the OHP did show an improvement, or at least a parity-with-general-population, effect on mammogram screening, diabetes management, substance abuse management, and access and satisfaction results [(Schillinger, 2000), (Mitchell et al., 2002)]. OHP2, on the other hand, had a scientifically documented detrimental effect on the care and access of the disrupted and lost populations [(Fuller et al., 2006), (Lowe et al.,2006)].
Access: The OHP reduced the state's uninsured rate from 17% in 1992 to 11% in 1997, definitely improving access. However, the rate rose back to 17% in 2006. (Oberlander, 2007b)
Numerous references offered the opinion that "no real rationing" happened in OHP [(Oberlander, 2007b), (Oberlander et al., 2001)], as the "above-the-line" services were relatively generous and physicians found workarounds such as mis-coding to obtain coverage for their patients who needed "below-the-line" services.
One 2001 study documented that OHP adults "appear to enjoy access equal to or better than that of low-income persons with private health insurance and have far greater access than the uninsured." (Mitchell et al., 2002) On the other hand, it was shown that the 2003 cuts led to a 20 percent increase in emergency department visits by the uninsured and to a nearly 50 percent increase in hospital admissions of uninsured emergency patients. (OHSU, 2008)
Lessons learned: The major lessons learned from the OHP/OHP2 experience are
- the importance of planning for sustainability, both political and fiscal
- the importance of revenues, more so than rationing
- the importance of transparency
The original OHP was enacted for seemingly two purposes, to reduce overall costs and to extend basic coverage to more people. Two key features of the original plan were to raise the cigarette tax to generate revenue and to strengthen aspects of managed care within the system to better manage costs. However, given the unfortunate fiscal crisis, these features were unable to sustain the program, as revenues were required for other important state services. As Oberlander put it, "Rationing is no substitute for revenue." Also, with the conservative shift in the legislature, some of the underlying progressive reasons for enacting the original plan were no longer in favor, so the plan's political sustainability waned. The budget director for the governor who followed Kitzhaber declared in 2004 that the OHP "as we know it is gone."
An important innovation was The List and the transparency of the public process that refined it. (Lamb, 2004) The legislature required that community values be incorporated, and the public had several opportunities for review. While initial reactions were in some cases quite strongly negative, when the list was refined and brought into compliance with the Americans with Disabilities Act, public sentiment changed and gradually came to accept the framework. Even with subsequent political shifts, the underlying concept of itemizing treatments in priority order is still supported in the state.
Oberlander (2007b) believes that, in retrospect, policymakers designing the OHP2 Medicaid expansion "badly miscalculated the effects" of the premium and co-pay requirement on the Medicaid expansion population. He describes OHP2 as revealing "a clear mismatch between policymakers' understanding of low-income populations and their actual behaviors." It was not anticipated that so many would leave the rolls and that so much care, especially preventive care, would be foregone.
What's Next in Oregon
Oregon is still seeking a solution to its health care crisis. The 2007 legislature created a citizen panel, known as the Oregon Health Fund Board, which is due to file recommendations for further reform in time for the 2009 legislative session. (Oregon Health Fund Board, 2008) They are currently making visits across the state to solicit community input and they established six committees on topics such as benefits, delivery, federal laws, and finance.
In a separate effort, ex-Governor Kitzhaber started a not-for-profit organization called the Archimedes Movement, which has been working since January 2006 towards an entirely new framework for health care in Oregon. (Kitzhaber, 2007, 2008) Their goal is to build a start-from-scratch universal coverage-oriented plan for Oregonians that can serve as a national model. Unlike many current state-level reform efforts, this group believes that just insuring everyone is an incomplete solution. It espouses moving away from employer sponsored insurance and away from what they term "patchwork" Medicaid mechanisms to create a basic set of services to which each citizen is entitled. Kitzhaber likens the vision to the "K-12" educational system, in which every child is entitled to a public school education, and those who want more and can afford more pay for private school and/or extracurricular activities.
To fund this "K-12" for health care, Kitzhaber suggests pooling all public money currently spent in Oregon, including Medicaid, Medicare, and the federal tax breaks employers get for providing insurance. The movement constructed a health care reform bill, SB27, in 2007, called the Oregon Better Health Act, which would have set up a "transparent process" through which such a system would be designed. The bill did not make it out of committee, but the organization continues to advocate and to grow grass roots support.
It's not clear at this time what relationship will develop between the state-sponsored Health Fund Board and Kitzhaber's Archimedes Movement.
MAINE
Maine's health care reform package, known as the Dirigo� Health Reform Act (Commonwealth Fund, 2004), was enacted in June 2003 and, after two years of planning, was implemented in 2005. Its intent is to make Maine's healthcare system sustainable by improving cost, quality, and access, the same three themes under which virtually all health care reform in the United States is organized. Maine's program was one of the very first in the country to take a comprehensive view of health care reform, being enacted three years earlier than Vermont's Catamount Health Plan and the Massachusetts reforms.
When Maine set out to build its reform, 14% of its citizens were uninsured, about 130,000 individuals. It ranked eleventh among states in per capita health care spending but 40th in median income. It had the highest rate of chronic disease in New England, and spending for these diseases comprised 75% of the state's health care costs annually. (Commonwealth Fund, 2004) It ranked second in the nation in personal health care spending as a percent of Gross State Product (Dirigo Health, 2008). Health insurance premiums for small businesses had increased 58% between 1996 and 2001.
Then-governor John Baldacci (D) was a strong advocate for healthcare reform, and he personally championed the principles of the Act. It was passed after a six month effort from January to June 2003. During the political process, the major objections to the package came from the insurance industry and conservative factions, who viewed it as too expensive, too much regulation and control, and anti-competitive. (Bragdon, 2005) Nevertheless, the Act passed with a two-thirds majority in both the State House and State Senate, garnering bipartisan support.
The Dirigo Plan
The goal of the Dirigo Act, as stated by the Governor's Office of Health Policy and Finance, is to "make quality, affordable health coverage available to every Maine citizen by 2009 and initiate new and important processes for cost containment and quality improvement. "(Dirigo Health, 2006)
Cost: The reform package includes several initiatives aimed at reducing costs (Commonwealth Fund, 2004), including administrative mechanisms such as explicit biennial state health strategic plans and tightened Certificate-of-Need procedures. It also establishes a commission to conduct in-depth studies of hospitals' finances with the intent of looking for potential state actions that would improve costs.
The initiative also included a transparency directive, requiring providers to disclose their average price for certain common services. It established collaborative purchasing across state agencies and expanded regulation of the insurance industry to include small group policies, when only individual policies had been subject to rate review in the past. It called for voluntary caps on health insurance premiums and health care costs.
The most innovative and controversial component of the cost initiative involved cost-shifting, as described in the National Context section of this paper. As more people became insured, it was postulated that more than $275M annually would be saved, as uncompensated care would become a thing of the past with near-universal coverage. Insurers should be paying less to providers who no longer would incur large uncompensated care costs. The Dirigo plan levied an assessment on insurers' revenues in order to capture this savings. This assessment, known as the Savings Offset Payment (SOP) was the fiscal cornerstone of the entire Dirigo plan, as it was expected to provide a large portion of the funding. The Act requires that the state prove the cost savings before levying the fee.
Access: The major access provision of the reform package was the Dirigo Health Plan itself. The plan offers health insurance to everyone regardless of income, but a sliding scale applies to those whose income is between 200% and 300% of FPL. Those above 300% FPL pays full price while the lowest income citizens continue to receive free coverage. Preventive care (immunizations, routine physicals, certain screenings) are 100% covered for everyone, and the higher income groups pay sliding-scale copayments for other services. (Commonwealth Fund, 2004) There is a single risk pool that includes all self-employed, individuals, families, and employees of small organizations that subscribe. The exact terms and benefits of the plan are specified by the state but the policies are issued by a private insurer.
Initially, Anthem Blue Cross/Blue Shield, which held an extremely high market share of private insurance in Maine, was the sole provider, but they were replaced in 2007 by a not-for-profit vendor, Harvard Pilgrim. (WLBZ, 2007) Employers that join must pay a minimum of 60% of each employee's premium. They must offer optional family coverage but they don't have to subsidize it.
Quality: There are two main aspects to Dirigo's quality initiative. First, it established a Quality Forum which acts as a watchdog group. Its purpose is to collect and analyze data from in-state, to promote evidence based medicine, and to stay apprised of new technologies and best practices. The Forum is responsible for building and maintaining a consumer oriented website to make information on costs and outcomes available to the public.
The second prong in the quality strategy is about data sharing. The goal is to capture Maine Health data, within privacy constraints, from all sources, including federal, multiple state agencies, and private in order to better understand the environment. The data will be used for planning purposes, Certificate of Need analysis, and outcome tracking.
Dirigo results
Because this is the oldest comprehensive reform package in the country, there is a reasonable amount of data available on outcomes. Most of the data relates to the Dirigo Health Plan.
The plan can be considered a success in the sense that Maine is reportedly the only state in the nation to see its rate of uninsured drop over a 5 year period ending in 2006. (Alaimo, 2008) Over half of the small businesses that enrolled in the first year had not previously offered health insurance. (Mathematica, 2007)
However, there were and are a number of issues with the implementation. One of the most publicized was the fact that the SOP funding mechanism did not work as planned. It was expected to garner $80M in first year (vs. a cost of the whole program of $90M). (Commonwealth Fund, 2004) Instead, only 30% of total cost was able to be covered by SOP, with members' fees providing 40% and the state general fund 29%. Part of the problem with the SOP was that the plan did not enroll enough members who were previously uninsured, so the impact on uncompensated care fell short of estimates. Additionally, the SOP process is very adversarial, with lawsuits being filed in 2005 by insurers who felt the mechanism was unjust and the calculations suspect.
Secondly, the original estimates of enrollment proved to be overly optimistic. The plan's goal was to enroll 30,000 members in the first year, but there were only 11,000 enrollees after 20 months of operation. The mix of enrollees included relatively fewer small group members and relatively more individual members than originally expected. This unanticipated mix led to an adverse selection situation because those who need individual coverage are typically less healthy than those who are covered through work. The adverse selection led to increasing premiums which affected all enrollees. (Mathematica, 2007)
The program is proving costlier, in terms of state general funds, than expected, so budget constraints lead to periodic freezing of rolls and waiting lists for coverage.
The take rates on Dirigo health did not make a significant impact on the market it targeted, as less than 10% of previously uninsured people became covered. There were inconsistent take rates across small businesses, with the lowest take rates being for very small firms with low wage workers. In absolute terms, only 2.5% of eligible companies enrolled in the program, with cost being the major obstacle among those who did not choose to offer Dirigo.
These failures of enrollment impact the overall program goals quite seriously. Debra Lipson, who did extensive research on Dirigo outcomes, said that Maine "needs incentives or mandates to make the pool big enough to achieve economies of scale and also include high- and low-risk individuals" (Lipson, 2008)
Beyond the Dirigo Health Plan, which is an access measure, no cost initiatives were implemented in the legislature. However, the biennial planning document (Dirigo Health, 2007b), which is included under cost initiatives, was implemented by the administration. It's a robust document that includes a detailed environmental assessment, concrete long and short term goals, and action items toward prevention, health promotion, evidence-based practice, and workforce development. The long term goals include Maine becoming the top state in the country for control of cancer, heart disease, stroke, and diabetes, usings metrics that are a mixture of incidence and mortality. The short term goals include specific measureable outcomes for specific diseases, in the style of the federally sponsored Healthy People 2010 project (USDHHS, 2008). The goals are taken from the Maine Healthy People 2010 document and include, for example, improving the percentage of adult diabetics who have taken a course in self management.
In the spirit of continuous improvement, a Blue Ribbon Commission was created in May 2006 by Governor Baldacci to review the performance of the Dirigo Health Reform Act in its entirety. The panel compiled extensive detailed recommendations (Dirigo Health, 2007a) including considering an option to self-insure and increasing "sin taxes" to further fund the program. They also urged the legislature to consider imposing an employer mandate as well as an individual mandate for those above 400% FPL. They proposed a working group be convened to analyze different insurance structures, including creating a high risk pool, merging the individual and small groups markets, and adding reinsurance to handle major claims.
What's next in Maine?
In April 2008, an important new bill passed the State House that implements some of the Blue Ribbon Commission's suggestions. The House eliminated the controversial SOP and replaced it with 1.8% assessment on insurance company revenues. They agreed to adopt a reinsurance program intended to ameliorate the impact of large claims. Higher taxes on wine, beer and soda at the distributor level were added to fund Dirigo, but no additional tobacco tax was passed. A pilot program was authorized for a new type of policy to be offered to young people, whose participation is needed to help improve the health of the pool. The overall goal of the bill is to reduce insurance costs by up to 40% for participants with the new sources of revenue and the addition of more enrollees. The bill went on to the state Senate where it is currently in committee.
PENNSYLVANIA
Pennsylvania has extensive experience in the Child Insurance arena -- their program, enacted in 1992, served as the model for the 1997 Clinton administration's federal State Children's Health Insurance Program (SCHIP), which is now the nationwide framework.
The governor, Ed Rendell (D), created a program called "Prescription for Pennsylvania." There are two insurance-oriented parts to the program, one for children which was implemented in 2007, and one for all Pennsylvanians, which was first submitted by the Office of the Governor to the legislature in February of 2007. The final component is an extensive list of initiatives covering what is termed "affordability, access, and quality."
The children's insurance program, called "Cover All Kids," extends Pennsylvania's SCHIP to all children, even if their family's income is too high for the federally sponsored part of the program, as long as the parent can demonstrate that they have no other affordable option. It was implemented beginning in 2007.
The other insurance program, called "Cover All Pennsylvanians" (CAP), is an analogous program for adults which is still pending in the legislature. Some of the elements of the initiative list have been enacted and others have not.
Cover All Kids does not have any outcome data available at this time, nor, of course, does the yet-to-be-implemented CAP. There is, however, some data on the original, non-expanded SCHIP program.
Original SCHIP program
The Pennsylvania CHIP program started in 1992. The state contracted with seven in-state Managed Care Organizations (MCOs), such as Blue Cross, for coverage. The 2007 program costs, without the CAP expansion, were approximately $260M, up from about $230M in 2006 and $210M in 2005. Of that, the state paid a little more than 30% with the federal government picking up the remainder.
Per federal government guidelines, the SCHIP program uses proscribed quality measures from the set of measures known as Healthcare Effectiveness Data and Information Set (HEDIS), developed and maintained by the private not-for-profit National Committee for Quality Assurance (NCQA) (NCQA, 2008). Over 90% of health insurance agencies use HEDIS data, making it a useful way to compare outcomes across plans and also year-to-year within a plan. There are 71 measures in the HEDIS set, in 8 different domains. Example measures reported in the 2005 Pennsylvania SCHIP Annual Report (PA CHIP, 2005) include:
- Core performance (e.g. well child visits, use of appropriate medications for asthma, access to Primary Care Practitioners [PCPs], diabetes management)
- Access (e.g. child has a personal doctor, delays are not a problem)
- Timely care (e.g. both routine and emergency/urgent care are available in a timely fashion, caregiver receives help when they phone the doctor)
- Satisfaction (e.g. respect, helpfulness, listening, explanations)
Some positive outcomes reported between 2004 and 2005 were a significant drop in average visits to the emergency room for children below the age of 1 (from 695/1000 enrollees to 489/1000) and a three-year trend of increase in the percentage of enrollees ages 2-11 who visited a Primary Care Practitioner. The percent of children under age 19 and below 200% of FPL who were uninsured is a mixed trend, 5.1% in 1996-1998, 3.7% 1998-2000, 5.5% in 2000-2002, and 6.5% in 2002-2004. However, the absolute number of children enrolled grew consistently, for example by about 47,000 between 2004 and 2005. This is probably partly because more families fell below the poverty line and also because the SCHIP program greatly increased its outreach efforts.
The need for increased outreach was one of the most important learnings from the first few years of operation. In 2005, the state developed several initiatives to better reach the target population, including developing a web-based application and working with other state agencies such as Child Support Enforcement and through an interagency mechanism known as COMPASS (Commonwealth of Pennsylvania Access to Social Services). They also made heavy use of Public Service Announcements on television and radio which had a documented positive effect on the number of calls to the help line. Other outreach efforts included paid advertising on Internet search sites such as Google and brochures distributed in public and private venues. Between January 2006 and December 2006, enrollment increased by more than 9%, or 12,000 children (PA State Government, 2006).
Current Healthcare Reform
The 2006 legislative session passed an important extension to the SCHIP program, which was approved by the federal government in early 2007 and implemented in mid-2007. This extension, known as "Cover All Kids," extended the SCHIP program to all families in Pennsylvania, the only difference being that people with higher incomes are responsible for premium payments and service copayments on a sliding scale. Families above 300% FPL are required to pay full price and to prove that they have no other affordable option. Premiums were about $55 per month per child in families with incomes up to $62,000, with a maximum cost of $150 per month per child. Data is not yet available regarding the number of new enrollees in the extension program.
Also in early 2007, Governor Rendell announced his comprehensive reform package called "Prescription for Pennsylvania." The proposed plan (PA State Government, 2007) includes a wide variety of initiatives aimed at affordability, access, and quality. If implemented in its entirety, more than 70 pieces of legislation would need to be enacted. While aiming for universal coverage, the governor is targeting $7.6B annually in unnecessary and avoidable costs, with $6.2B coming from medical errors, hospital acquired infections, and lack of good chronic disease management and $1.4B coming from the cost-shifting phenomenon described in the National Context section of this report. The Pennsylvania Medical Society, while supportive of the governor's general direction and complimentary of the Prescription's thoughtfulness, is concerned that the $6.2B figure is too high. (Trap, 2007)
Potential funding mechanisms include federal dollars, assuming a Medicaid waiver for families up to 300% FPL is obtained; a new tobacco tax; an assessment of 3% of wages against companies of a certain size that don't provide health insurance, and tobacco settlement money. Since the Prescription is not yet written into law, the funding mechanisms are not detailed.
Cost: The Pennsylvania model uses the word "affordability" rather than "cost." Unlike many other states that include health insurance under "access," Pennsylvania includes it under "affordability." The proposed initiative for health insurance coverage features a program for adults known as Cover All Pennsylvanians (CAP), analogous to the existing Cover All Kids program. Under this proposal, insurance would be made available to any Pennsylvanian, either individually or through a small employer (2 - 50 employees) on a sliding scale based on income. The insurance plans would be managed by insurance companies doing business in the state.
Employers could participate in CAP if they have between 2-50 employees and if they have not offered health insurance for 180 days. They must offer coverage to at least 75% of their employees who work 20 hours per week or more. In the employer context, the premiums would be offered on a sliding scale, depending on income, and the employer could pay up to 65% of the premium on behalf of the employee.
Lowest income otherwise-uninsured adults would continue to be covered for free using Medicaid dollars, while lower-to-middle income adults without employer insurance would pay for individual coverage on a sliding scale but be included in the same plans as the Medicaid clients. The proposal includes disincentives designed to dissuade employers currently offering health benefits from dropping them. Individual mandates are not a part of the current proposal, but reference is made to the potential for requiring it for individuals with incomes over 300% FPL.
Also included in the affordability initiative list are mandates for college students to carry health insurance, holding not-for-profit hospitals accountable for providing charity care, enforcing uniform admission criteria across all hospitals in the state, instituting a process similar to certificate-of-need for capital expenditures, and effective regulation of the individual and small group insurance markets. There is also a requirement for providers to make quality and outcome data available so that consumers may make informed choices.
Quality: Proposed quality initiatives include targeting hospital acquired infections, providing state oversight of quality outcomes for all health care facilities, instituting a pay-for-performance model in which the highest quality providers receive financial incentives, and implementing best practice chronic care models. They also include eliminating any disparities with respect to race, ethnicity, etc., teaching wellness skills to school children, providing choice in long term care, and ensuring that end of life medical care conforms to patient wishes. There is also a proposed mandate for electronic health records to be implemented state wide.
Access: In the Pennsylvania model, access focuses on workforce and health care facility dynamics. The governor calls this "expanding access to the right kind of care, at the right time and place, and for the right cost." There is an initiative directed at workforce development, for example recruiting, training, and compensation. The other initiatives speak to a better matching of services required with level of health care provider. For example, one initiative works toward patients being cared for in the lowest appropriate level of facility (e.g. a doctor-in-a-box rather than the emergency room). Another one emphasizes the importance of patients seeing the lowest appropriate level of practitioner (e.g. a nurse practitioner rather than a medical doctor).
What's next in Pennsylvania
In 2007, three initiatives were enacted toward the full Prescription. One bill allowed nurse practitioners, nurse midwives and dental hygienists to expand their practice to the full extent of their education and training. Another bill increased state authority to proactively monitor hospital performance regarding nosocomial infections (infections acquired as a result of being hospitalized). In addition, an Executive Order was issued to mandate best practice disease management in state-sponsored health plans. The rest of the Prescription is yet to be enacted.
On March 18, 2008, the State House passed a bill (SB1137) containing many of Governor Rendell's Prescription features with strong bipartisan support, including the governor. This bill extends subsidized coverage for adults up to the 200% FPL mark. It does not include any payroll taxes, but Rendell was willing to compromise on that point. It also allows for sliding-scale payments for those individuals with incomes up to 300% FPL, contingent on federal waivers being obtained. (PA Health Law Project, 2008) It's deemed unlikely that the current federal administration would approve such a waiver, however, and, in any case, the bill is likely to encounter strong resistance in the Pennsylvania State Senate, where it has been in committee since April 2008.
Commentary
What is it that makes health care reform so difficult? Jonathan Oberlander (Oberlander, 2007a) calls it a "politically treacherous task" and says that there is "nothing inevitable about [it]."
Part of the answer is the sheer complexity of the system, with its multiple public and private providers, multiple public and private payers, rapidly changing technology, and disparate information technology. The Lewin Group, a prominent health care consulting firm, has developed a computer model called the Health Benefits Simulation Model (HBSM) (Lewin Group, 2007). The model attempts to mirror a particular health care system or proposal and is enormously complicated. They used it to analyze 10 very different national-level health care proposals from various health reform experts (Lewin Group, 2003). It includes variables representing price elasticity, reinsurance effects, employer decisions on coverage, changing dynamics of the insurance market, the impact of various forms of pooling, and variations of tax policy, yet it cautions users that the model is simplified. With so many "moving parts," it is indeed difficult to predict what a reform initiative might do to the landscape.
Another part of the difficulty is the delicacy of making the tradeoffs necessary to balance cost, quality, and access. Clearly, unlimited access raises the overall cost of health care, and reducing costs might impact quality. Early reform states like Oregon, Pennsylvania, Maine, and Vermont have all struggled with budgetary constraints as their publically funded programs enjoyed wider enrollment.
Yet another dynamic contributing to the difficulty of health care reform is the wild-card nature of individual choice and of free market developments, both of which play a major role in the system. In Alaska, for example, it's not at all clear how an individual mandate would be enforced, given there is no state income tax and no politically feasible way to involve Permanent Fund Dividends. Also, individuals have the choice to live a healthy life style or not, and their decision ultimately impacts their health and therefore the overall costs in the healthcare system, regardless of who pays.
Perhaps the most challenging part of why reform is difficult is how entrenched the current system is and how many people profit from it. A single payer system, for instance, would drastically change or eliminate the role of insurance companies, and it would likely have a negative impact on the incomes of certain health care providers. Making major systemic changes would require creating winners and losers amongst today's players, and those targeted as losers will pull out all political stops to prevent being harmed.
Lastly, there is the question of whether health care reform conducted state by state can have the magnitude of impact on the system that is required to abate the "crisis." Implementing fifty different reform packages, with several national payers like Medicare and Medicaid and many regional payers like some of the Blue Cross organizations, could result in more administrative costs rather than less as each payer has to interface with multiple new entities.
Health care reform will be very interesting to watch over the next several years, as the state level initiatives are implemented and measured and the federal government, under a new administration, makes its moves.
Author's Note
This report is an excerpt from an independent study project that I did in 2007 - 2008 towards my Master of Public Health degree at the University of Alaska Anchorage. I participated in a three-person study group headed by Mark Foster, an independent consultant working with the Institute for Social and Economic Research (ISER) at UAA. Michelle Peters, a UAA graduate student in Public Administration, also participated. She and I built case studies about specific states' healthcare reform work. She reported on Massachusetts and Rhode Island (Peters, 2007) and I reported on Pennsylvania, Maine, and Oregon.
My final paper, entitled "State Level Health Care Reform: A contextual analysis and three case studies," contains, in addition to the material here, an analysis of the national context of health care, two additional reviews of important health care reform articles (Lewin Group 2003, McKinsey 2006), and a brief analysis of the presidential campaign and Alaska health care reform efforts. It is available by email request to kathyjanderson@acsalaska.net .
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� Dirigo is the state motto of Maine and is Latin for "I lead"
(c) 2008 K. J. Anderson: State Health Care Reform, May 2008
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