Facebook Twitter RSS

What is Next?

Minnesota can learn from what other states are doing

States continue to innovate in health care. In May 2011, Vermont passed legislation creating a pathway to a unified, single-payer health care system (Green Mountain Care). The bill was crafted after an extensive analysis of barriers, options and opportunities, and completion of an economic analysis of reform options. In this new law, Vermont establishes health care as a human right and guarantees affordable health care to every Vermont resident. The health care system will be transformed over a period of several years and will rely on getting waivers from the Federal government to include Medicare and Medicaid in the unified system. The law encompasses development of a unified single-payer system, payment and delivery system reform, and changes to the medical malpractice system.

Hawaii has recently appointed the Hawaii Health Authority, a board working toward a unified system of health care in that state. Montana’s governor has vowed to follow Vermont’s lead.

Additional Economic Modeling Needed

Several issues were beyond the scope of this project. The Lewin study did not address or estimate non-health care system benefits such as increased worker productivity nor savings in non-health care aspects of our state budget such as the criminal justice system or foster care system, though these may be significant. Chemical dependency treatment greatly reduces crime and prison costs, and can stabilize families and reduce costly out-of-home placements for children.

The Lewin economic impact study did not involve broader macroeconomic modeling of the growth in state gross domestic product and long term job creation resulting from savings in health care spending or the resultant increases in workers’ wages. Recent studies have projected job growth and business expansion under a single-payer model and other reforms that could control premium hikes. A national study found that adoption of a nationwide universal single-payer system would provide significant economic stimulus, with an immediate impact of 2.6 million new permanent jobs at an average of $38,000 per year.

Payment and Delivery System Reform

A large part of the cost containment debate has focused on how we pay for and provide health care. To a large extent, the cost-containment potential of payment and delivery system reforms are theoretical at this point, and each idea has pitfalls and risks of its own. But payment and other delivery system reforms have more potential for cost containment in a single-payer system where there is no incentive to select the healthiest patients, collaboration on comparative effectiveness and quality of care metrics is facilitated, and waste and fraud are more easily detected. Ultimately, any payment or delivery system reform that bends the cost curve without diminishing access, quality or equity can be implemented in a unified single-payer system.

Expanding Cost Containment Measures that Work

Continuity of care: Long-term relationships between doctors and patients, with primary care in a predominant role, is associated with lower total health care costs.

Shared decision making: This includes providing tools and compensating doctors for reviewing risks, benefits, alternatives and expected outcomes of treatment options with patients. Shared decision making should also discuss the costs relative to the expected outcome of the intervention, but ultimately decisions should be based on health care need and most appropriate treatment. Research indicates that shared decision making lowers demand for health care services.

Continuous Quality Improvement (CQI) programs: Led by providers, CQI programs feature adherence to clinical standards and reduce variability in processes of care, thereby reducing waste and error, while not restricting provider flexibility in meeting the unique health needs of each patient. The use of clinical protocols and checklists in surgery can significantly cut error rates, decrease unnecessary testing and save money. Potentially avoidable complications account for nearly 40% of spending on people with chronic conditions.

Comparative Effectiveness Research (CER): Comparative effectiveness research can reduce unnecessary high-tech intervention and unquestioned adoption of expensive technology and pharmaceuticals if they don’t confer added benefit. CER can also reveal those interventions that actually cause harm. The ACA provides more funding for CER.

Advance Directives and Palliative or Hospice Care: Palliative and hospice care not only result in cost savings, but improved quality of life, decreased patient and family anxiety, and oftentimes longer survival.

Disclosure Laws and Conflict of Interest Policies: Laws and policies requiring the public disclosure of payment to physicians by pharmaceutical and med-tech companies can decrease the unnecessary use of expensive devices or drugs.

Innovation and Experimentation in Minnesota

Some delivery systems and employers have experimented with new coverage, payment, delivery or care coordination methods with promising, though mixed, results. Approximately 75% to 80% of practicing physicians in Minnesota work in integrated delivery systems so these changes and pilot programs have the probability of reaching most practices over time.

Health Care Homes: A recent two-year study found that the 21 Minnesota clinics certified as health care homes achieved an increase of 1% to 3% per year in patient satisfaction and a 2% to 7% increase per year in performance on quality measures for the care of coronary artery disease, generic medication use, diabetes and preventative services. The improvements fell short of goals and were only slightly better than other clinics, though with payments for care coordination now in place, the Minnesota Department of Health is hoping for further improvements.

Hennepin County Coordinated Care Center: An innovative program at Hennepin County Medical Center is helping coordinate a range of social service needs for their poorest and sickest patients and managing to steeply curtail costly preventable hospital admissions. The promising project is expanding into a formal demonstration for the state, using a block of money to manage the care of these patients, including their social service and community support needs, rather than being reimbursed for medical expenses as they occur.

Nursing Home Pilot Program to Cut Hospitalizations: A pilot program funded by the state is working to prevent hospital admissions of nursing home patients by instituting checklists and watching for early warning signs, enabling early intervention and preventing unnecessary hospitalizations. The fragmentation of our payment system, however, means that the money saved by preventing hospitalizations accrues to Medicare, while the cost of an early intervention program falls to Medicaid, which pays for 60% of nursing home residents.

Collaboration in Northwestern Twin Cities Suburbs: Allina and HealthPartners are pooling resources in a seven year project to review insurance claims data for keys to improving care and saving money. Changes such as prescribing more generic drugs and fewer antibiotics, reducing elective inductions of labor and increasing patient education upon hospital discharge led to slower than projected growth in health care spending. A uniform system with a single channel for claims processing would enable these care improvement and cost saving measures state-wide.

Fairview’s New Payment System for Doctors: In April 2011, the Fairview clinic network began a new payment system for primary care physicians. Their pay will be based on patient satisfaction (10%), outcomes for patients with chronic conditions, such as asthma, depression, and diabetes (40%), and partly based on encounters with patients, though communication by email and phone will also be encouraged. No physician will face a pay cut initially.

Addressing Social Determinants of Health

Despite the very necessary focus on access to health care and the detrimental economic impact of our current fragmented health care system, our health status is more easily predicted by our zip code than by our access to health care. Social determinants like education, income, neighborhood conditions and access to transportation have a significant impact on our health and longevity. Affordable access to health care is essential to help address and ameliorate the effects of social determinants but a wide range of public and private policy changes are needed to address our significant racial and economic health disparities.

Workforce Issues

Transitioning to a unified system will change the demands on our workforce. Fewer claims processors and others involved in administrative functions will be needed, but there will be increased demand for health care service delivery, from phlebotomists and medical assistants to nurses and doctors. Some of this increased demand can be met by existing providers as they will have more hours to devote to patient care as a result of fewer hours spent on administration. Some of this increased demand will be met by the trained and licensed health care workers currently working in administrative positions at insurance companies.

Reform will probably necessitate more people working to the height of their specialty with a greater share of ambulatory care being provided by advance practice nurses and physician assistants. Some care coordination and patient education will likely be carried out by nurses. A unified system will need to address the cost of provider education and increase opportunities for loan forgiveness for those working in primary care and with underserved populations or regions. Provisions for retraining and job placement assistance for displaced workers will also be needed.

Addressing ERISA

The Employee Retirement Income Security Act (ERISA) was enacted in 1974 as a means to create uniform federal standards and protect employee benefits. ERISA preempts state law from regulating benefit plans, including health care benefits, offered by self-insured employers. ERISA is often thought to create a barrier to state health care reform efforts. While Hawaii was granted an ERISA waiver, as its Prepaid Health Care Act preceded enactment of ERISA; no other state has been granted a waiver. There is no administrative process for an ERISA waiver. Changes to ERISA require congressional action, which is highly unlikely at this point. Given that 40% of Minnesotans currently are covered by self-insured plans, ERISA is a significant factor. The implementation of Vermont’s new single-payer system will be instructive.

Support Our Work