THE COMMONWEALTH

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Fixing The U.S. Health System State By State

Stephen C. Schoenbaum, MD, MPH

Executive Vice President for Programs

April 26, 2007

www.cmwf.org

Kentucky Institute of Medicine

THE COMMONWEALTH

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Commonwealth Fund’s Commission on a High Performance

Health System

Objective:

• The overarching mission of a high performance health care system is to help everyone, to the extent possible, lead long, healthy, and productive lives

• To the Commission, a high performance health system is designed to achieve four core goals

1. high quality, safe care2. access to care for all people3. efficient, high value 4. system capacity to improve

THE COMMONWEALTH

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US Scorecard: US Falls Short of Benchmarks on All Dimensions of a High Performance Health System

69

71

67

51

71

66

0 100

Long, Healthy, &Productive Lives

Quality

Access

Efficiency

Equity

OVERALL SCORE

SOURCE: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006

4

THE COMMONWEALTH

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State Health System Performance Summary

Top Quarter

2nd Quarter

3rd Quarter

Bottom Quarter

Long

, Hea

lthy

Live

s

Acc

ess

Qua

lity

Eff

icie

ncy

Equ

ity

Performance by DimensionRank

Third Quarter

27

28

29

29

29

32

33

34

34

36

37

37

Bottom Quarter

39

40

41

42

43

44

45

46

47

48

49

50

51

Performance by Dimension

Long

, Hea

lthy

Live

s

Acc

ess

Qua

lity

Eff

icie

ncy

Equ

ity

Performance by DimensionRank

Top Quarter

1

2

3

4

5

6

7

8

9

10

11

11

13

Second Quarter

14

15

16

17

18

18

20

21

22

22

24

25

26

Performance by Dimension

THE COMMONWEALTH

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Lessons From The Scorecard

• Care far from “perfect”

• Tremendous variation within the US

• Possible to have higher quality and lower cost

• We need to address multiple issues simultaneously – e.g., coverage, efficiency, quality

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The Discourse Is Changing

FROM:• “Americans have the best health care system

in the world”– President Bush, State of the Union Speech, 2004

TO:• We need to do better

– We spend more on health care than any other country

– We need more value for what we are spending

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We Know The ProblemsNow We Need Solutions

THE COMMONWEALTH

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Keys to Transforming the U.S. Health Care System

1. Extend health insurance coverage to all2. Pursue excellence in provision of safe, effective, and efficient care3. Organize the care system to ensure coordinated and accessible

care for all 4. Increase transparency and reward quality and efficiency5. Expand the use of information technology and information

exchange6. Develop the workforce to foster patient-centered and primary care 7. Encourage leadership and collaboration among public and private

stakeholders

THE COMMONWEALTH

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1. Extend Health Insurance Coverage to All

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Uninsured Non-Elderly Adult Rate Rapidly Deteriorating

Data: Two-year averages 1999–2000 and 2004–2005 from the Census Bureau’s March 2000, 2001 and 2005, 2006 Current Population Surveys. Estimates by the Employee Benefit Research Institute.

WA

ORID

MT ND

WY

NV

CAUT

AZ NM

KS

NE

MN

MO

WI

TX

IA

ILIN

AR

LA

AL

SCTN

NCKY

FL

VA

OH

MI

WV

PA

NY

AK

MD

MEVTNH

MARI

CT

DE

DC

HI

CO

GAMS

OK

NJ

SD

WA

ORID

MT ND

WY

NV

CAUT

AZ NM

KS

NE

MN

MO

WI

TX

IA

ILIN

AR

LA

AL

SCTN

NCKY

FL

VA

OH

MI

WV

PA

NY

AK

ME

DE

DC

HI

CO

GAMS

OK

NJ

SD

19%–22.9%

Less than 14%

14%–18.9%

23% or more

1999–2000 2004–2005

MA

RI

CT

VTNH

MD

NH

Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006

ACCESS: UNIVERSAL PARTICIPATION

THE COMMONWEALTH

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Data: Two-year averages 1999–2000 and 2004–2005 from the Census Bureau’s March 2000, 2001 and 2005, 2006 Current Population Surveys. Estimates by the Employee Benefit Research Institute.

Source: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006

ACCESS: UNIVERSAL PARTICIPATION

Percent of Uninsured Children Declined Since Implementation of SCHIP

WA

ORID

MT ND

WY

NV

CAUT

AZ NM

KS

NE

MN

MO

WI

TX

IA

ILIN

AR

LA

AL

SCTN

NCKY

FL

VA

OH

MI

WV

PA

NY

AK

MD

MEVTNH

MARI

CT

DE

DC

HI

CO

GAMS

OK

NJ

SD

10%–15.9%

Less than 7%

7%–9.9%

16% or more

1999–2000

DE

MARI

WA

ORID

MT ND

WY

NVUT

KS

NE

MN

MO

WI

TX

IA

ILIN

LA

AL

SCTN

NCKY

FL

VA

OH

MI

WV

PA

NY

AK

ME

DC

HI

CO

GAMS

NJ

SD

2004–2005

CT

VTNH

MD

AR

CA

AZ NMOK

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State Action on Employer Coverage

In 2006, nearly 30 states considered bills to require employers to offer health insurance or pay in some way to cover the uninsured. So far in 2007, similar plans have been proposed in 14 states.

2006 legislation failed

2006 legislation passed

2007 proposals introduced

2006 legislation failed but 2007 proposals introduced

Sources: National Conference on State Legislatures and American Legislative Exchange Council

THE COMMONWEALTH

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Massachusetts Health Care Reform

• Enacted 4/06• MassHealth expansion for

children up to 300% FPL; adults up to 100% poverty

• Individual mandate, with affordability provision; subsidies between 100% and 300% of poverty

• Employer mandatory offer, employee mandatory take-up

• Employer assessment ($295 if employer doesn’t provide health insurance)

• “Connector” to organize affordable insurance offerings through a group pool

Source: John Holahan, “The Basics of Massachusetts Health Reform,” Presentation to United Hospital Fund, April 2006.

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Update: Massachusetts Health Care Reform

– The Commonwealth Connector Authority approved draft regulations on creditable coverage:

• Prescription drugs• Coverage of preventive services prior to deductible• Caps on annual deductible and out of pocket costs for

hospital and physician services• No limits on benefits per year per sickness

– New plans called Commonwealth Choice go on sale May 1 and go into effect July 1, 2007

– Deductibles range from $0 to $2,000– Phased-in “minimum coverage” requirement, fully in effect

January 1, 2009– Connector Authority currently developing criteria for exempting

individuals from requirement

THE COMMONWEALTH

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Massachusetts Strategies for Coverage: Everyone “does their part”

• Subsidized insurance• The Connector• Uncompensated Care

pool reform• Improved Medicaid

reimbursement

Government

Individuals

Employers

Health CareSystem

• Individual Mandate

• Fair Share Assessment• “Free Rider” provisions• Mandatory “cafeteria

plans”

• Meet quality and performance standards

• New levels of “transparency”

ExpandedCoverage

Source: Adapted from Amy Lischko, October 16, 2006. “Massachusetts Health Reform.” NASHP 19 th Annual State Health Policy Conference, Pittsburgh, PA.

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Targeted State Coverage Innovations

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Small Business Programs

• Montana: Insure Montana (2-9- employees)

– Refundable tax credits ($100-125/employee/month)

– Small business purchasing pool (subsidized from increased tobacco tax)

– 8000 enrollees in first year

• New Mexico: State Coverage Insurance (<50 employees)

– Waiver to expand Medicaid eligibility to uninsured working adults <200% FPL

– 4400 enrollees, Fall 2006

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States Targeting Employees of Small Businesses

• Oklahoma: Insure Oklahoma (<50 employees):– Premium assistance pays 60% of premium for low

income workers; employer pays 25%; employee pays up to 15%.

– Funded from tobacco tax, federal Medicaid match, and employer/employee contributions

– 1200 enrollees

• New York: Healthy New York (small employers with 30% or more employees earning < $34,000)– State reinsurance keeps premiums affordable – 125,000 enrollees, Fall 2006

CoverTN• Limited-benefit “minimedical” plan

launched by Governor Phil Bredesen in March 2007 to offer low-cost insurance to small businesses and uninsured working Tennesseans

• Administered by BlueCross Blue Shield; Premiums shared by employer, employee, and the state. Each pay between $34 - $99/month.

• Option of two plans, both with no deductible and modest co-pays ($15-$20 for doctor visits; $100 for hospital stays).

– Plan A: Covers hospital stays up to $15,000 per year and up to $75 every three months for drugs

– Plan B: Covers hospital stays up to $10,000 per year and up to $250 every three months for drugs

• Currently enrolled: 1,053 individuals; 89 hospitals; 10,000 physicians; 12,000 businesses pre-qualified

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New Jersey Raises Age of Dependent Status for Health Insurance

• As of 5/2006, NJ requires all state insurers to raise dependent age limit to 30

– Highest age limit in country – Covers uninsured, unmarried

adults with no dependents who are either NJ residents or full-time students

– Premium capped at 102% of amount paid for dependent’s coverage prior to aging out

• 200,000 young adults expected to receive coverage under the law

11.2 11.812.7 13.4 13.7

0

5

10

15

2000 2001 2002 2003 2004

Source: S.R. Collins, C. Schoen, J.L. Kriss, M.M. Doty, B. Mahato, “Rite of Passage? Why Young Adults Become Uninsured and How New Policies Can Help,” Commonwealth Fund issue brief, May 2006. (Analysis of the March 2001–2005 Current Population Surveys)

Millions uninsured, adults ages 19–29

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Illinois All-Kids

• Effective July 1, 2006• Available to any child uninsured for 12 months or more• Cost to family determined on a sliding scale• Linked to other public programs - FamilyCare & KidCare • Funded by federal and state funds

– Children <200% of the federal poverty level funded by federal funds

– Children 200%+ of the federal poverty level funded by state savings from the Medicaid Primary Care Case Management Program

• All-Kids Training Tour– Public outreach program to highlight new and expanded

healthcare programs• Enrollment as of Fall 2006 was 28,600

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New Bold State Proposals

THE COMMONWEALTH

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California Governor’s Proposal (1/07)

• Individual mandate• Shared responsibility• Medi-Cal expansion

– All children below 300% poverty– Adults below 100% poverty

• Premium subsidies for adults below 250% poverty

• Employers must provide health insurance or pay a fee of 4% of wages

• Provider fee assessment (2% of physician revenues to 4% of hospital revenues)

• Insurance exchange– Guaranteed issue; community rating

with age bands– 85% minimum medical loss ratio

Source: D. Rowland, “California Health Reform Proposal,” Kaiser Commission on Medicaid and the Uninsured, Presented January 13, 2007.

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Extending Coverage is Only One Piece of the Puzzle

7. Encourage Leadership and Collabor- ation Among Public4. Increase

Transparency and Reward Quality and Efficiency

3. Organize the Care System to Ensure Coordinated and

Accessible Care for All2. Pursue

Excellence in Provision of Safe, Effective,

and Efficient Care

1. Extend Health Insurance Coverage to All

6. Develop the Workforce

to Foster Patient-Centered and Primary Care

5. Expand the Use of Information Technology

and Exchange

And Private Stakeholders

THE COMMONWEALTH

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Delaware Health Information Exchange

• Delaware Health Information Network– Public-private partnership established in 1997 to

assist in the creation of a statewide health information and electronic data interchange network for public and private use.

– Functions under the direction of the Delaware Health Care Commission.

– In 2006 signed an extendable 6-year contract with technology vendor Medicity, Inc. to create the first statewide health information exchange (Start-up costs =$4 to 5 million).

• Interoperable Health Information Exchange– Gives physicians access to secure, fast, and reliable

electronic patient information at the time and place of care.

– Funded by participating health care organizations, the State of Delaware, and the Federal Agency for Healthcare Research and Quality in the U.S. Department of Health and Human Services.

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Community Care of North Carolina

8.2

5.3

0

1

2

3

4

5

6

7

8

9

10

Access I Access II & III

8.2

5.3

0

1

2

3

4

5

6

7

8

9

10

Access I Access II & III

Asthma Initiative: Pediatric Asthma HospitalizationRates (April 2000 – December 2002)

Source: L. Allen Dobson, MD, presentation to ERISA Industry Committee, Washington, DC, March 12, 2007

In patient admission rate per 1000 member months

• 15 networks, 3500 MDs, >750,000 patients• Receive $2.50 PM/PM from the State• Hire care managers/medical management

staff• PCP also get $2.50 PMPM to serve as

medical home and to participate in disease management

• Care improvement: asthma, diabetes, screening/referral of young children for developmental problems, and more!

• Case management: identify and facilitate management of costly patients

• Cost (FY2003) - $8.1 Million; Savings (per Mercer analysis) $60M compared to FY2002

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Building Quality Into RIte CareHigher Quality and Improved Cost Trends

• Quality targets and $ incentives

• Improved access, medical home

– One third reduction in hospital and ER

– Tripled primary care doctors

– Doubled clinic visits

• Significant improvements in prenatal care, birth spacing, lead paint, infant mortality, preventive care

Source: Silow-Carroll, Building Quality into RIte Care, Commonwealth Fund, 2003. Tricia Leddy, Outcome Update, Presentation at Princeton Conference, May 20, 2005; updated.

Cumulative Health Insurance Cost Trend

Comparison

0

50

100

150

200

250

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

RI Commercial Trend

RIte Care Trend

Percent

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Prescription for Pennsylvania (1/07)

• Affordable basic health insurance for all

• Promote non-emergency settings for non-emergency care

• Improve quality by eliminating hospital-acquired infections, medical errors

• Pay-for-performance

• Long-term care: promote home/community services

• Enhance pain-management, palliative care, and hospice care

• Promote wellness and sound nutrition in the schools and by making workplaces, restaurants, and bars smoke-free

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Components of Comprehensive Health Care Reform Plans

MANY

BlueprintCA PA IL ME

Sen. Edwards

Individual MandateX X X

>300%FPL X X

Employer Shared Responsibility

X X X X X X X

Public Program Expansion

X X X X X X X

Risk pooling X X X X X X X

Subsidies for Low-income Uninsured

X X X X X X X

Wellness and Preventive Health Emphasis

X X X X X X X

Quality Improvement Components

X X X X X X

Provider Fee Assessment X

THE COMMONWEALTH

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Ways States Can Promote a High Performance Health System

• Extend coverage – ideally to all• Reduce cost shifting by adequate funding of public programs• Simplify and streamline public program eligibility and re-

determination• Promote safer care

• Reporting, analysis, technical assistance• Promote more effective, efficient, patient-centered, timely, and

coordinated care• Public reporting• Payment policies – “value-based purchasing”

• Assure competent professionals• Licensure, maintenance of competence, discipline

• Promote the use of health information technology• State-wide information exchanges, capital loans, technical

assistance• Promote wellness and healthy living

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In Sum:

• Efforts at the state level to expand access, improve quality and efficiency are gaining momentum

• States are learning from each other

• States are informing the national debate

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What About Kentucky?

DISCUSSION

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Visit the Fundwww.cmwf.org

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Acknowledgements

Visit the Fund at: www.cmwf.org

Elizabeth Sturla,Executive Assistant

Anne Gauthier,Senior Policy DirectorCommission on a High Performance Health System

Rachel Nuzum,Program OfficerState Innovations

Karen Davis,PresidentThe Commonwealth Fund

Cathy Schoen,Sr. Vice PresidentResearch & Evaluation