November Edition 2008
Hawaii Dumps Budget-Busting Universal Healthcare Coverage Program
On November 1, Hawaii will effectively end universal healthcare coverage for nearly 2,000 children after alleged abuse of the system has sent costs soaring. Keiki Care, serving families with incomes too high to qualify for Medicaid, lasted just 7 short months after state officials discovered that many families with access to private health insurance were dropping that coverage to place their children on the nearly free taxpayer-funded program. Officials also noted that the new program never intended to serve those families that could afford to provide their own coverage; something opponents of the program’s expansion warned would happen.
The end of universal coverage for children in Hawaii underscores one of the major arguments pushed by critics that policies encouraging the movement of healthcare coverage options away from the private sector into the public sector simply create a shift in wealth rather than providing affordable health care. The Chamber made that argument when Illinois’ Governor Blagojevich forced the implementation of a massive expansion of the state’s FamilyCare program by opening up income eligibility guidelines to families that could afford private coverage. That program expansion is now tangled up in the courts creating a messy compliance issue for the state and leaving thousands of new enrollees without coverage.
Hawaii’s elimination of the program also highlights a nationwide trend that is seeing more states, like Illinois, California, and New Mexico, once aggressively pursuing universal coverage, back away from those initiatives in the face of a weakening economy. Most recently, Pennsylvania closed out its legislative session without approving Governor Rendell’s coveted universal coverage plan. While the massive tax hikes necessary to fund these expansion initiatives are not typically welcome in good economic times, states that have aggressively pursued these state funded coverage expansions may face an even tougher road to implementation as the economy continues to erode.
"Hawaii Ending Universal Child Health Care After 7 Mos"
"Pennsylvania, Other State Fail to Expand Health Coverage as Economy Weakens"
"Illinois court rejects plan for expanding health coverage"
Feds Warn Medicaid Spending to Outpace Economic Growth over Next Decade
A U.S. Centers for Medicare and Medicaid Services (CMS) report issued in mid-October projects Medicaid’s growth over the next year to outpace the growth of the economy nearly 2 to 1. Many states, including Illinois, have felt the suffocating effects of the Medicaid program for some time, but the recent federal report further highlights what many state and federal officials fear: the Medicaid program in its current form is not sustainable.
According to the report, Medicaid spending over the next ten years is expected to reach nearly $5 billion; a figure that exceeds the growth in total healthcare expenditures projected for the same period. Two years ago, Medicaid represented nearly 15 percent of national healthcare spending and that figure only continues to grow. In Illinois, Medicaid consumes over one-fifth of the state’s budget that does not include a nearly $2 billion backlog in unpaid Medicaid bills.
In his July 2008 Fiscal Focus issue, Illinois Comptroller Dan Hynes outlined the serious challenges the state faces when it comes to reeling in Medicaid expenses especially in light of the sharp increases in enrollments and expenditures anticipated throughout 2008. Illinois and the rest of the nation also face the challenge of balancing increasing demand for Medicaid services as the economy worsens while budget resources continue to tighten. Comptroller Hynes is now taking his case to the public through a series of statewide town hall meetings highlighting the problems with the Medicaid program while pushing for legislation in 2009 that would prohibit the state from compounding its unpaid Medicaid bills by allowing it to roll over the unpaid bills each fiscal year.
"Medicaid Spending Projected to Rise Much Faster Than the Economy, HHS Reports"
"Hynes Targets Broken Health Care System"
"Hynes Urges Federal Action to Relieve Medicaid Cost Crunch"
2008 Election Countdown: A Final Look at the Candidates on Healthcare Issues
Over the past year, presidential hopefuls Senator John McCain and Senator Barack Obama have had their healthcare reform plans scrutinized and debated under the public’s microscope. The presidential election is now just one week away and one of these candidates will be given the opportunity to test their plan against a nation that is facing tighter resources while growing increasingly more exhausted of paying higher healthcare costs.
While both candidates agree the nation’s healthcare system is in need of repair and federal intervention, the candidates’ proposals for change vary greatly. The Christian Science Monitor takes one last look at how these candidates differ in their solutions to fixing the nation’s healthcare system.
The Kaiser Family Foundation also provides a comprehensive side-by-side analysis of where McCain and Obama stand on healthcare issues ranging from reform to women’s and veterans’ healthcare to Medicare and medical malpractice.
"Candidates' healthcare fixes: tax credits vs. more federal spending"
The Kaiser Family Foundation: Side-by-Side Comparison of McCain and Obama on Healthcare Issues
October Edition 2008
Pharmacy Opens First In-store Clinic
Massachusetts took a bold move this month with the state’s first MinuteClinic. In two rooms seemingly copied from a doctors’ office and implanted into a CVS, nurse practitioners tending to their patients. The clinic’s opening, the first of 28 planned this year in Massachusetts, follows months of controversy surrounding in-store retail clinics in the state in the midst of a shortage of primary-care doctors. The clinic is open nights and weekends and offer a flashy, digital menu of treatments for a variety of minor illness. Treatment for a cold sore will run you $59 while for $10 more, they can help you with your case of mononucleosis. You can also stop by for a $30 flu vaccine. Prices vary depending on a person’s insurance plan and anything more serious requires the emergency room or a family physician.
MinuteClinic began pushing its way into the Massachusetts market more than a year ago, but was met with fierce opposition from doctors and others, including the mayor, who worry that the clinics could fragment healthcare and compromise quality. The clinic’s chief nursing officer says that they aren’t there to disrupt health care; they’re just there to enhance it. MinuteClinic shares patient records with all clinics, both in Massachusetts and in other states. They also make an effort to provide a patient’s primary physician with a record of the visit. If the patient doesn’t have a physician, nurses are supposed to help find one. Since MinuteClinic got started in CVS, Walgreens Pharmacy has submitted plans for 15 of its own clinics.
Pharmacy Opens State’s First In-store Clinic
Candidates’ Healthcare Plans Come Up Short
According to two articles published in a leading policy journal, neither of the presidential candidates has proposed workable fixes to the nation’s most significant healthcare problems. Senator McCain’s reform plan wouldn’t reduce the ranks of the uninsured while Senator Obama’s plan wouldn’t stem rapidly rising healthcare costs.
McCain’s plan will foster competition among health insurers, but it won’t reduce the number of people without medical coverage. The Arizona senator wants to eliminate $200 billion in tax deductions on health insurance premiums paid by employers and employees. Uninsured families would get a $5,000 tax credit to buy insurance ($2,500 for an individual). McCain would also allow consumers to purchase health plans across state lines. Eliminating the tax credit will induce employers to stop offering coverage to as many as 20 million workers who currently have employer-based health insurance, the authors estimate. At the same time, tax credits and insurance-market innovations will allow an estimated 21 million people who are uninsured to purchase coverage. Innovations include the sale of so-called bare-bones insurance plans that offer reduced benefits at a lower cost. The net gain in people covered by insurance will be about 1 million people. However, that will disappear because tax credits aren’t set to rise along with the cost of health care premiums, making insurance unaffordable. By their calculations, upward of forty million Americans would be uninsured with that number likely to grow over time. Meanwhile, millions of people who newly purchase insurance under McCain’s plan will find themselves with less than comprehensive coverage. By creating a national marketplace for insurance, competition will likely flourish, but state laws that guarantee a measure of consumer protection will be superceded.
The second half of the articles argues that Obama’s plan, which favors much tighter regulation of health insurance won’t do nearly enough to bring down health care costs, a primary reason why millions of Americans are uninsured or unable to pay medical bills. The Illinois senator would retain the existing system of employer-based insurance coverage while creating a new government-sponsored option known as the National Health Plan. He’d also set up a new “Health Insurance Exchange,” essentially, a one-stop-shopping setup for health insurance. All exchange participants, including private insurers and the National Health Plan, would have to follow the same rules, providing a minimum set of benefits, offering policies to all comers at uniform rates and meeting certain minimum quality standards. Meanwhile, every employer would be required to offer insurance to workers or pay into a fund. Small businesses would be excluded. All children would be guaranteed health coverage, and subsidies would be available to low- income families. All of these measures “extend the control of government over health insurance, imposing new requirements that will drive up the cost of insurance unless the savings from other policies materialize. None of the policies Obama has proposed to reduce health care costs have been proven to yield significant savings as yet. If health care is promised to more Americans but not made more affordable, and if the government says it will help people shoulder the expense, federal subsidies will grow rapidly and become unsustainable over time.
Candidates’ Health Plans Come Up Short
Feds Call for Eliminating Illinois Law Regulating Hospitals’ Construction
Two federal agencies are calling for the elimination of an Illinois law regulating hospital construction and expansions, saying it shortchanges consumers by weakening competition that would help control healthcare costs. The agencies suggest states let the free market decide what gets built, which some states have done by repealing or scaling back similar laws. The board has been controversial for many years and has been accused of favoring projects pushed by influential lobbyists and thwarting potential competition and innovation should hospitals want to build specialized facilities. Proponents claim that hospitals are allowed to build unregulated tend to expand in affluent areas to tap wealthy patients with health insurance.
Some believe that the requirements have unfairly scuttled many new hospitals proposed for the suburbs. Plainfield had plans for Naperville’s Edward Hospital to build a new $246 million facility that the state rejected. Edward’s proposal has been back-and forth in various forms before the facilities planning board since 2003 and was most recently denied in August. Lake County officials are bracing themselves for the rejection of the area’s first new hospital in 30 years. The facility would have been a 140-bed, $100 million hospital in Lindenhurst.
The state’s certificate-of-need application process has been criticized for being bureaucratic and expensive. Senator Susan Garrett said that the process is unfair but that lawmakers probably won’t get rid of the health facilities planning board or eliminate the CON process entirely. During a time when the economy is going through a downturn, she said it’s unlikely they would remove their oversight of the massive health expenditures. She also stated that although the free market idea is good in theory, there isn’t any evidence that states without such laws have seen lower health-care costs or an increase in access. Senator Bill Brady believes that the fact that half the states have done away with certificate-of-needs laws offers a valid argument against the process. Florida, Georgia and Alaska have requested and received similar analysis and used it to scale back their CON laws. The recent convictions of a facility planning board member and a former political fundraiser for accepting kickbacks from a construction company should give lawmakers pause, Brady added. Most states adopted certificate –of-needs laws to cap or limit runaway healthcare spending and market over-saturation.
Feds Call for Eliminating Illinois Law Regulating Hospitals’ Construction
Feds: Illinois Hospital Regulation Keeps Health Costs High
Hospital Approval Law under Fire: U.S. Antitrust Agencies Decry Illinois Process
September Edition 2008
New Payment Policies to Address Preventable Medical Errors
The U.S. Centers for Medicare and Medicaid Services (CMS) made the first move last year to hold hospitals financially responsible for preventable medical errors by adopting a policy that identifies mistakes for which payment will not be issued. The shift in policy signaled the start of a sea change for the healthcare industry that now has some of the nation’s largest insurers following suit while more and more state Medicaid programs are looking towards adopting similar policies, known as “never events” policies.
Blue Cross Blue Shield of Illinois is among those private insurers that have recently announced they will no longer pay for hospital procedures that result in serious medical errors that are not only emotionally and potentially physically costly to the patient, but also drive up healthcare costs all around. The National Quality Forum, a nonprofit group focusing on healthcare safety, developed a list of 28 medical errors that constitute these “never events” that include everything from serious infection to surgery on the wrong patient or wrong body part to the death of an otherwise healthy patient. Blue Cross, Aetna, and Cigna are among those large insurers that are using the Forum’s list as the basis for these new payment policies that will ultimately create greater incentive for improved quality of care.
Many states are also following up on CMS’ recommendation that their Medicaid programs implement similar policies. Illinois, however, appears to be dragging its feet with the Department of Healthcare and Family Services claiming that they are still studying the issue. Illinois appeared poised to become a national leader on tackling medical errors in 2005 when it enacted two laws creating a Hospital Report Card that will document hospital-acquired infections and nursing staff levels and an Adverse Events Report that will record egregious hospital errors. Those reports have not yet been issued nor do Illinois officials expect to assemble the data necessary to produce those reports until next year.
"Illinois ponders how to treat medical errors"
"More states shred bills for awful medical errors"
Interactive Map: State-by-State look at medical mistake billing policies
Massachusetts’ Healthcare Reform Grows Costlier for Businesses
In 2006, Massachusetts made the unprecedented move to implement an ambitious expansion of its state-subsidized health insurance program known as Commonwealth Care. Since that time, other states have held Massachusetts’ healthcare reform up on a pedestal while others have held it up as a cautionary tale. Illinois, under the Blagojevich administration, has been one of the states that have sought to emulate the Massachusetts’ experience even as reports rolled in earlier this year that the state had drastically underestimated enrollment numbers while hospitals and providers are being made to suffer lower reimbursement rates. Now businesses, already forced to foot some of the bill for one of the largest healthcare expansions in the nation, are being forced once again to pick up the tab to cover the program’s financial missteps.
Massachusett’s Governor Deval Patrick’s administration recently issued new state regulations that will hit businesses, particularly small businesses, in the pocketbook hard, possibly forcing more employers to drop coverage completely. Under the state’s current healthcare program, employers with more than 10 full-time employees have the option of paying at least a third of workers’ premiums within the first 90 days of employment or ensuring that at least a quarter of their full-time workforce is covered by an employer plan. The new state regulations, if adopted, will now force employers to meet both requirements or face a financial penalty. With the state doing little to reduce healthcare costs, many employers may find it more cost-effective to drop coverage and pay the fine.
State lawmakers also had to approve supplemental funding earlier this month to cover a $100 million shortfall in the program for this past year. This funding was scraped together by imposing an additional assessment on health insurance companies’ reserve accounts, requiring additional payments from hospitals and shifting money out of a state fund that is dedicated for health insurance for the unemployed.
"Leaders nip, tuck healthcare policy"
"Businesses rip healthcare proposal"
"Opinion: Small businesses pay for plan's shortcomings"
Marketplace Efforts Temper Rise in Healthcare Costs
According to a recent survey of insurers conducted by Aon Consulting Worldwide, healthcare costs are expected to increase an average of slightly more than ten percent in 2009. While the survey shows no change in the upward trend of national healthcare costs, that projected rise is one of the smallest increases surveyors have seen in six years, thanks in part to efforts employers and insurers are making towards enhancing wellness and disease management programs.
The rise in healthcare costs still translates into higher costs for employers, who will most likely see their costs increase more than ten percent over the next year. For many employers struggling with keeping on top of these costs, the increase will mean higher costs for employees and changes in benefit designs.
The souring economy will also leave many companies feeling little relief from the slowing increase in healthcare costs. For instance, General Motors recently announced major changes to its employee healthcare plan in an effort to counteract sagging sales, starting with the cancellation of benefits to retirees age 65 and older. Current employees will be forced to absorb higher co-pays and monthly contributions and dependents are no longer eligible for coverage on their 24th birthday.
"Health care costs seen rising 10 percent in 2009"
"More health care cost pain seen in 2009"
Small Businesses Push for Pooling Opportunities
Although the increase in healthcare costs appears to be waning, small employers are still seeing huge jumps in their costs when compared to those of larger businesses. The National Federation of Independent Business (NFIB) reports that small businesses have seen their health insurance costs rise by nearly 130 percent over the last eight years and still pay, on average, nearly 20 percent more in premiums than large businesses pay for the same benefits. As a result, Congress is seeing more initiatives surface that small employers hope will provide them with greater relief.
Illinois Senator Dick Durbin has previously championed legislation known as the Small Business Health Options Program (SHOP) Act that would allow small businesses with 100 employees or less to come together in either a statewide or national pool in order to obtain lower health insurance rates. Last month, Delaware Congresswoman Nydia Velazquez also introduced another similar measure known as the Cooperative for Healthcare Options to Improve Coverage for Employees (CHOICE) Act to allow small firms to pool their employees through voluntary state cooperatives in order to obtain reduced health insurance rates. Both initiatives also extend tax credit incentives to small businesses that pick up some of the costs of their employees’ coverage.
Both the CHOICE and SHOP proposals have successfully wooed bipartisan support, but none of the pooling initiatives have received serious debate. The insurance industry and regulators also have not weighed in completely on the proposals, but supporters remain hopeful that the push to shape the healthcare reform debate around market-based approaches will thrive regardless of November’s election outcome.
"Healthcare debate may hinge on pooling"
August Edition 2008
Healthier Employees, Healthier Business: Rethinking Wellness in the Workplace
One of the major initiatives of the Healthcare Council this year is identifying ways in which businesses can begin responding to increasing healthcare costs and coverage issues within the realities of the current marketplace. This has undoubtedly been easier for larger, self-insured companies that have the flexibility to provide financial incentives to their employees for voluntarily addressing their own health risks. This year, the Council attempted to extend that flexibility to smaller and more medium-sized privately insured businesses by introducing legislation that would authorize health plans to provide incentives to enrollees engaged in wellness programs aimed at influencing health behavior so as to reduce long-term healthcare costs.
Although the widely supported legislation, which is still caught up in the General Assembly, is considered a key factor in helping smaller businesses tackle budget-busting healthcare costs, it is certainly not the only way businesses can begin to rethink their approach to healthcare and implementing greater health value into its bottom line. In its "Small Business Link," the Wall Street Journal highlights some of the ways in which companies can start shrinking their healthcare costs by introducing small and innovative ways to challenge employees to adopt healthier lifestyles.
While the incentive for most businesses pursuing a wellness-based program is reducing healthcare costs, the overall goal is to help employees develop awareness for their own lifestyle choices, adopt behaviors that support good health, and ultimately, transform them into happier, more productive individuals. From changing the snacking and/or meal options available to employees, to inspiring friendly competition either through existing programs or through other creative means, more businesses are finding that investing in a little creative innovation is producing noticeable long-term results.
"Workplace wellness: A growing interest for businesses"
"Can your company force you to be healthy?"
"Providing Health Benefits on a Budget"
Medical Home Pilot Projects Use Old-Fashioned Approaches to Reap Huge Cost-Savings
As the nation continues to grapple with skyrocketing health insurance costs, more states, private insurers, and even the federal government, are looking towards experimenting with new approaches of paying doctors in order to inspire a more old-fashioned, cost-effective system of delivering care. While the basic premise of the “medical home” model is to introduce payment reform into the primary care delivery system, the expectation is that this reform will reward primary care physicians for establishing a closer doctor-to-patient relationship and coordinating the overall spectrum of care for that patient. The ultimate goal of the medical home model, however, is to enhance quality of care while producing measurable cost savings.
Although some state Medicaid programs and many private insurers have already established medical home pilot projects that have proven successful, the concept is still relatively new to one of the largest healthcare programs in the nation: Medicare. This year, the federal Medicare program will select eight states to test the medical home model under the program in an attempt to not only save the program from consuming itself, but also transform the primary care profession back into the old trusted family doctor-type of care to make care more responsive to the patients’ actual needs.
One of the largest hurdles the medical home model must overcome, however, is the dwindling number of primary care physicians themselves. Among the various medical fields, primary care physicians do not typically earn the highest salaries and are often overloaded with patients, accounting for much of the patient disconnect today. While the medical home model is attempting to correct this, there are still inroads to be made.
"Trying to Save by Increasing Doctors' Fees"
"Old-fashioned docs inspire new 'medical homes'"
Research Shows Benefit Mandates Increasing Nationally; Eroding Health Insurance Coverage
Health benefit mandates are nothing new to Illinois with this past legislative session generating a large number of mandate proposals ranging from everything to coverage for autism spectrum disorders to shingles vaccinations. This trend towards forcing insurance providers to cover very specific conditions, however, is not just isolated to Illinois nor does it appear to be on the decline nationally. According to a recent health policy publication issued by the Pacific Research Institute (PRI), there was an average of 32 mandates per state in 2007 compared to only 5 per state 30 years ago and evidence suggests this trend is growing more prolific.
While policymakers often seek health benefit mandates to “expand” coverage options, evidence suggests that these mandates are having the opposite effect, contributing to an actual increase in the number of uninsured. The U.S. Department of Justice and the Federal Trade Commission, in a joint report even noted four years ago that “in practice, mandates are likely to limit consumer choice, eliminate product diversity, raise the cost of health insurance, and increase the number of uninsured Americans.”
PRI also notes that many of these mandates are created in a vacuum; that is, many states do not account for any cost-benefit analysis prior to implementing a new health benefit mandate. Although 30 states do require mandated benefit studies, legislators are often not beholden to those studies, meaning a mandate that is not considered cost-effective could still be enacted to satisfy popular demand. Thus, an increasing number of consumers are being forced to absorb higher costs for coverage options they may never use and only benefit a small percentage of the population.
Council for Affordable Health Insurance: Health Insurance Mandates in the States 2008
Council for Affordable Health Insurance: Trends in State Mandated Benefits, 2008
Return on Investment (ROI) Calculator Highlighted in Latest “States in Action” Newsletter
The Commonwealth Fund, a private foundation that supports independent research on healthcare issues, publishes a bimonthly newsletter examining various state innovations in health policy. In the June/July 2008 edition of the newsletter, the Commonwealth Fund features a new ROI calculator designed by the Center for Health Care Strategies that is aimed at assisting state Medicaid agencies and other stakeholders assess the potential return on investment from initiatives that target higher risk and higher cost enrollees.
July Edition 2008
Fed Chair Weighs in on Healthcare Reform Debate; Employers Blasted as Being ‘Too Passive’
In his testimony before the U.S. Senate Finance Committee’s hearing on healthcare reform on June 16th, Fed Chairman Ben Bernanke issued a rare warning over the rising cost of healthcare and its eventual impact on the U.S. economy. The Fed Chair’s comments specifically related to the amount federal healthcare programs consume in government spending and the challenges it must overcome to reign in that spending before current trends drive interest rates up.
Bernanke cited the need to tackle access to healthcare in order to address a growing population of uninsured. He also pointed to the challenges of addressing cost issues while providing for an aging population whose medical needs are typically greater. While Bernanke focused much of his comments on his fears that healthcare spending left unchecked could consume half of all federal spending in the next forty years, he offered little in the way of solutions, stating those were best left to policymakers to determine.
In the meantime, Senate Finance Committee members also heard from employers and health insurers who both agreed that employers, while openly lamenting the high cost of health insurance, have taken a back seat approach to the issue. Intel Corporation Chairman, Craig Barrett, admitted that Intel has simply “been writing checks” while doing little else to address inefficiencies in the system. Industry experts and policymakers have both stated that businesses need to assume a much more active role in demanding more value for their money, particularly when the U.S. now spends more on healthcare per capita than any other industrialized country while continuing to rank very low on quality ratings.
Full text of Bernanke's remarks before the Senate Finance Committee
“Bernanke: Health care seen as challenge”
“Writing New Prescriptions for Change”
"Employers seen passive on health-care costs"
‘Micro Businesses’ Face Toughest Challenge in Overcoming Healthcare Costs
A new survey released by the National Association for the Self-Employed (NASE) confirms what public sentiment has long projected: that the most significant barrier to the nation’s smallest businesses when it comes to purchasing health insurance coverage is cost. They survey also shows that many of the businesses that have the least amount of resources available to cover health insurance costs are also those that pay some of the highest costs. Those micro-businesses that offer health insurance are also passing much of that cost onto their employees, who are finding it harder and more disadvantageous to hold onto that coverage.
The challenges facing small businesses are also appearing in national statistics that show large spikes in the number of uninsured and underinsured. Healthcare experts are particularly alarmed by the rise in the number of adults that are considered “underinsured,” or those that have health insurance, but not enough to cover their medical costs. In a recent study released by the Commonwealth Fund, the number of uninsured and underinsured has now reached its highest level since 2003, with nearly half of the U.S. population aged 19 through 64 with little or no health insurance.
Health experts also agree that while healthcare reform has often remained in the policymaking spotlight, the rapid growth of the uninsured and underinsured is prompting even greater pressure to place healthcare reform at the top of the list. National polls have consistently shown that healthcare ranks among the top three policy concerns for Americans.
"Health Insurance Falling Short"
Doctors Turn Table on Insurers; Issue Health Insurance Report Cards
Earlier this year, health insurers and doctors announced a landmark agreement to implement national standards and physician performance reporting in order to provide a basis for pay-for-performance initiatives and other patient-centered payment reform measures. Doctors are now going one step further by issuing their own ranking of health insurance companies aimed at reducing the cost of claims processing.
The American Medical Association (AMA) claims that many insurers are not doing enough to ensure efficiency and accuracy in the processing and payment of patient claims. These inefficiencies are hitting doctors in the pocketbook and making it more difficult to deliver quality services. The AMA further claims that these inefficiencies can tack on more than $200 billion to the nation’s already increasing healthcare costs.
The AMA’s report card ranks health insurance companies, including Medicare, in terms of their ability to pay physicians on a timely basis, how often claims were denied, and how well the insurers fulfilled their overall contractual obligations, particularly at the agreed rate. The AMA hopes the effort will not only create more transparency and improve efficiency in the payment system, but it will also provide another angle to achieve savings in the effort to overhaul the nation’s healthcare system.
AMA Health Insurance Report Card - 2008
"AMA calls physician reimbursements flawed"
New National Report Shows Illinois Weak in Healthcare Quality
The U.S. Department of Health and Human Services’ Agency for Healthcare Research and Quality (AHRQ) recently issued a national review of state healthcare quality in which Illinois appeared as “weak/average” in its overall healthcare quality rating. The rating meter provides a summary illustration of 100 healthcare quality measures reported at the state level and included in the National Healthcare Quality Report (NHQR).
The report also includes an additional meter reading for specific types of care, including preventative, acute, and chronic care, as well as different settings of care and care in clinical areas. Nearly 75% of these meter readings showed Illinois’ performance had declined and areas where the state had improved, its performance rating still showed up “weak” or “very weak.”
To view the full dashboard snapshot of Illinois’ healthcare quality ratings, please click here.
June Edition 2008
Recent Audit Reveals Troubling Findings in Illinois’ Medicaid Payment System
The state’s mounting pile of unpaid Medicaid bills have dominated media reports and prompted warnings from lawmakers and the Comptroller for months, but until earlier this month, those unpaid bills have been largely blamed on a budget crisis rather than systemic problems within the Department of Healthcare and Family Services (HFS). On May 13th, the Illinois Auditor General released a year-long performance and management audit of the process by which the Department uses to pay Medicaid providers, revealing problems that extend well beyond the state’s inability to keep pace with the unpaid bills.
The audit, performed at the request of the Legislative Audit Commission, specifically examined HFS’ Medicaid and Group Health Insurance Program activities, as they related to the provisions of the state’s Prompt Payment Act and the processing of Medicaid claims. In addition to the time providers were forced to wait before they received full payment, the audit cites numerous instances where the Department fails to even have an adequate system in place to process certain claims. In some cases, the Department appears to have implemented policies that either misinterpret the original law or attempt to validate Departmental practices that already run counter to the law.
Overall, the audit’s findings add more than anecdotal claims that the state’s Medicaid program is in dire need of reform. Many Medicaid providers have gone months without receiving state reimbursement for services, resulting in denial of Medicaid patients, or in the most severe cases, the closure of entire facilities. Until recently, the administration has responded to provider concerns by pointing the finger at legislators for not providing an adequate budget. The administration, however, must now answer to legislators who have already shown increased unwillingness to support any health care expansion proposal that places further strain on a program that the Department is already failing.
To read the full report, please click here.
“Audit points out ‘appalling’ problems with Medicaid bills”
“Audit fuels criticism of Blagojevich on health care”
“Our Opinion: Obvious that Medicaid needs fixing”
Health Savings Accounts Gaining Popularity and Critics
America’s Health Insurance Plans (AHIP) recently released a new census report showing that over 6 million Americans are enrolled in health insurance plans that make them eligible for health savings accounts (HSAs). The number of individuals selecting this type of insurance plan is up 35% over last year, indicating a major shift in how consumers are responding to their health care needs. While proponents of HSAs see the increased use of these accounts as critical to the advancement of consumer-driven health care, HSAs are also sparking heated political debate.
HSAs, first authorized four years ago, are designed to encourage individuals with high-deductible insurance plans to establish a savings account for medical expenses that is not subject to tax and may be used in conjunction with that plan. Supporters of HSAs claim the accounts place the consumer in the driver seat and encourage individuals to assume a more active role in responding to their healthcare needs, ultimately reducing healthcare costs across the board. According to AHIP’s report, California, Florida, Texas, Ohio, and Minnesota rank among the states with the highest HSA-enrollments with the largest percentage of enrollees hailing from large employers.
HSAs, however, have already drawn a line in the political sands, with many critics blasting them as tax shelters for the wealthy. These critics have cited a recent report released by the U.S. Government Accountability Office (GAO) that finds that HSAs are being utilized more by wealthier individuals seeking tax relief than by those individuals and families attempting to make a concerted effort towards planning for their current and future healthcare needs. Congressional Democrats have already started to push legislation that would place increased regulations on the use of HSAs; a move that many HSA-defenders believe stifles movement toward market driven healthcare reform.
“Use of health savings accounts up 35%; critics see tax shelter”
“Use of health savings accounts is stirring political debate”
Presidential Candidates’ Positions on Healthcare Scrutinized
Healthcare reform was one of the major issues to dominate the early presidential campaigns, but as the campaigning has sloughed on, much of the focus has been placed on a sluggish economy, skyrocketing fuel prices, and the war in Iraq. The November 2008 election, however, is fast approaching and with the field of candidates soon to be narrowed down to one Democrat and one Republican, their positions on a wider array of issues will once again be more publicly scrutinized.
Those positions have already started to fall under the media’s microscope with recent articles published by experts in the health policy arena weighing in on the feasibility of the remaining candidate’s plans for healthcare reform. In his recent Wall Street Journal article, Dr. Scott Gottlieb, a resident fellow at the American Enterprise Institute, takes on Senator Obama’s position on health care and how it stacks up against his voting record on healthcare-related legislation during his tenure as an Illinois senator.
Similarly, Dr. David Gratzer and Paul Howard, both senior fellows at the Manhattan Institute, take on John Cohn, senior editor at The New Republic, in their analysis of McCain’s healthcare plan. Dr. David Gratzer was also one of the featured speakers at the Chamber’s annual Healthcare Conference on May 15th in Chicago.
In the January issue of the Chamber Policy Review, we also provided an analysis of the Democrat and Republican candidates plans for healthcare reform. That chart has since been updated to provide a summary and comparison of each of the three remaining candidate’s plans for healthcare reform.
To view the chart, please click here.
Health Technology Takes on Instant Bill Pay
The evolution of health technology has not only produced such innovations in healthcare services that have provided for more rapid diagnosis and treatment, transmission of patient information, and the elimination of duplicating or competing health treatment options, this technology is now allowing patients to pay their medical bills instantly. Currently, patients can sometimes expect a follow-up bill from their insurance company or provider months after a service has been delivered. Recent advancements in health technology software, however, are making it possible for providers to determine what a patient owes before they ever leave the office or the hospital.
HealthNation, the company that has developed this software, caters to the recent growth in retail market-based healthcare, as well as the consumer-driven movement occurring within that healthcare market. The idea behind providing for immediate bill pay involves a number of things to happen, however, including coordination between the providers, insurers, and employers, as well as the digitization of an individual’s personal health information. Instant bill pay also requires patients to assume a stronger role in managing their own healthcare needs.
The Commonwealth Fund Newsletter Offers Peek at Other States’ Innovative Approaches towards Healthcare Reform
The Commonwealth Fund, a private foundation that supports independent research on healthcare issues, publishes a bimonthly newsletter that offers a glimpse into health policy innovations that are taking place in other states. In the most recent April/May 2008 edition, the newsletter offers an analysis of the Massachusetts healthcare reform on its second anniversary, as well as value and cost containment initiatives taking place in Colorado, Minnesota, and Wisconsin.
“States in Action: A Bimonthly Look at Innovations in Health Policy- April/May 2008”
May Edition 2008
Comprehensive National Agreement in Place to Provide National Performance Standards for Doctors
Health insurers and doctors announced a landmark agreement earlier this month that many health care reform experts argue will go a long way towards transforming the quality of care, as well as the cost of delivering that care. The Consumer-Purchaser Disclosure Project, a coalition of employers, consumers, and labor organizations that have pushed for the implementation of national standards and physician performance reporting, announced the agreement on April 1st that will ultimately be used as the basis for pay-for-performance initiatives and other patient-centered payment reform measures.
The “Patient Charter for Physician Performance Measurement, Reporting and Tiering Programs” represents a set of principles that will guide measurement and reporting to consumers about a physician’s performance. Health plans that adopt the Patient Charter are essentially agreeing to these measurement and reporting standards and to have their consumer reports assessed by an independent review organization. The Disclosure Project touts the Charter as a way to ensure that consumers have the ability to make informed decisions based on both quality and cost. Physicians will also be able to use the information to help guide them in finding ways to improve the delivery of their care.
Some of the nation’s largest health plans, such as WellPoint, UnitedHealth Group, Cigna, and Aetna have already signed onto the agreement. Charter participants will have three months to hire an organization, such as the National Committee for Quality Assurance (NCQA), to audit pay-for-performance and tiering programs to ensure their doctors’ rating systems subscribe to valid measures.
“National Standards to Rank Physicians Planned”
“Uniform Doctor Ratings Sought”
“Insurers Reach Accord on P4P Principles; Standards Still to be Worked Out”
Federally-Sponsored Hospital Rating Report Evaluates Quality of Care, Patient Satisfaction
The U.S. Department of Health and Human Services (DHHS) launched a new website at the end of March that takes stock of national hospital quality of care issues as perceived through the patients’ eyes rather than benchmarks established by medical experts. The new patient satisfaction data is currently collected on a voluntary basis and less than half of U.S. hospitals are currently participating. The feds, however, have plans in place to encourage more hospitals to participate in the future by holding a portion of Medicare payments hostage for those hospitals that continue to refuse participation.
The data is intended to highlight problem areas for hospitals both on a global scale and an individual basis. The data also shows what areas a hospital may be excelling in, such as pain management, cleanliness, staffing issues, and the communication skills of doctors and nurses. For participating Illinois hospitals, as well as for hospitals nationwide, the new data presents both good and bad news. For example, more than half of Illinois patients reported receiving prompt staff assistance and strong pain management, while less than 40 percent of those surveyed were satisfied with the overall levels of hospital cleanliness.
Although still a work in progress, the new survey represents a major step forward in transforming the overall health care industry in the U.S. While the national debate regarding health care reform largely revolves around addressing rising health care costs and the uninsured, addressing efficiency in and effectiveness of the delivery of health care services also represents a major facet in this debate.
“Patients Rate Their Hospital Care”
Proposal Seeks Single-Payer Health Care for Illinoisans
Much of the health care reform buzz in Illinois has surrounded Governor Blagojevich’s Illinois Covered proposal; a costly proposal that seeks to provide health insurance coverage to a large number of Illinoisans. While the Governor’s proposal has failed to get off the ground in either the House or the Senate yet this year, another proposal has emerged in the House that could prove even more aggressive and controversial than Illinois Covered.
The Health Care for All Illinois proposal, sponsored by Democrat Representative Mary Flowers, would carve Illinois out as the new Canada, implementing a single-payer health insurance system that combines current Medicare and Medicaid funds, increases income taxes and imposes a new payroll tax to take health insurance coverage out of the hands of private insurers. Under the proposal, no Illinoisan could be denied coverage due to a pre-existing health condition and for-profit nursing homes and provider groups would become a thing of the past.
While the legislation has its supporters, opposition to the controversial proposal is widespread. The Illinois Chamber, along with physicians and the insurance industry, strongly oppose HB 311 for a variety of reasons. One of the biggest points of opposition to the legislation is the idea that it would place the state in the driver’s seat, which given the current status of the state’s Medicaid system, would almost assuredly prove disastrous for the universal coverage proposal.
The legislation did receive partisan support of the House Health Care Availability and Access Committee, but may prove a tough sell on the House floor. The sponsor has already indicated that she would like the legislation to serve as the centerpiece of statewide hearings on the issue in the future.
“Universal Health Care a Long Shot in Illinois”
“Doctors Support Universal Health Care: Survey”
Illinois Chamber and Healthcare Council Host First Healthcare Reform Legislative Symposium
The Chamber hosted its first Healthcare Reform Legislative Symposium on April 9th in Springfield. The Symposium focused on providing legislators the opportunity to learn from and discuss innovative and successful healthcare reforms that are taking root in other states and nationally in order to offer a new perspective on the healthcare reform dialogue in Illinois. The Chamber is currently working on follow-up legislative hearings that will feature other state speakers.
The event featured the Secretary of the Indiana Family and Social Services, Mitch Roob, who spoke about Indiana’s recent healthcare reform efforts that took effect on January 1st. The Indiana plan provides for coverage expansion by combining the concept of health savings accounts with high-deductible, back-up commercial health plans to provide coverage for approximately 130,000 Hoosiers. The reform is funded by a 44 cent increase in the state’s cigarette tax and has been hailed nationally as an innovative breakthrough in healthcare reform that provides state-funded coverage expansion while acknowledging the critical role of the consumer and the market.
The event also featured Marcia Salkin, Managing Director of Public Policy for the National Association of Realtors. Marcia, NAR, and NFIB recently joined a group of U.S. Senators, including Illinois Senator Dick Durbin, to announce new bipartisan legislation to offer more incentives to small businesses, such as tax credits, to purchase health insurance. The legislation, known as the Small Business Health Options Program (SHOP), also offers greater coverage flexibility and protections to small businesses that offer health insurance. The proposal is the result of a multi-year effort to offer this support to small businesses and the sponsors are optimistic the legislation will win full congressional approval this year.
“Small Business Health Pools Get Another Shot”
April Edition 2008
Economic Slowdown, Federal Regulations Causing States to Back Away from Aggressive Healthcare Expansion
Despite Governor Blagojevich’s insistence on massive, state-funded healthcare expansion, other state governors are beginning to tone down their efforts for healthcare expansion due to a slowing economy and stricter federal regulations on Medicaid and SCHIP. The struggle most states now face is simply keeping current health programs intact as revenues flag and deficits soar. According to the National Governors Association, 18 states must trim a total of $14 billion to balance their budget this year and 18 states already acknowledge they will fall a total of $32 billion short of their budget for the next fiscal year. Illinois alone is currently facing a deficit that runs nearly $1 billion deep for this fiscal year.
Federal changes to Medicaid and SCHIP have placed an even greater financial burden on states, particularly those that have extended coverage to individuals beyond the federal household income threshold. Illinois is currently one of those states paying the entire cost of nearly 20,000 children and families that make above 250% of the federal poverty level limit that the U.S. Center for Medicaid and Medicare Services (CMS) imposed in August 2007. This regulation changes, as well as others, were implemented to keep a closer eye on how federal dollars are spent, but it also means that states will stand to loose anywhere from $15 billion to $50 billion in federal Medicaid funding over the next five years.
Consequently, many states are trending towards less controversial and less costly healthcare proposals. Other states, like Massachusetts, that have already pursued aggressive healthcare expansions are now fearing the worst as federal resources grow slimmer.
“On health care, govs are tightening belts”
Illinois Senate Republicans Call for Medicaid Spending Slowdown
In contrast to the Governor and his proposal to extend healthcare coverage to thousands at the expense of the state, Illinois Senate Republicans are calling for serious Medicaid reforms. Medicaid represents one of the most expensive state budget items, consuming over a quarter of the state’s funds. Medicaid’s ballooning budget and growing liability has created concerns for many that the program is not able to sustain current capacity, let alone future expansions the Governor has continued to covet.
Over the past several months, the Comptroller has repeatedly warned that the Medicaid backlog could top $1.5 billion by the close of the fiscal year. Providers are now seeing an average delay in reimbursement of nearly 70 days, but in many cases, that delay is well over 120 days. The consequences of this delay go beyond just the denial of Medicaid services; they also mean in the most severe cases that providers can no longer continue to keep their doors open. Without providers willing or able to provide, the quality of Illinois’ healthcare system would erode and it would equal disaster for the state’s Medicaid program.
“Pass bill to speed payments, give realistic budget picture”
“Pharmacies struggling while waiting for Medicaid reimbursements”
Massachusetts’ Healthcare Reform Proving Costly and Unmanageable
When Blagojevich first unveiled his plans to expand state-subsidized health insurance to thousands of low- to- moderate income families in Illinois last year, the administration was quick to cite Massachusetts as the standout model for healthcare reform. Today, Massachusetts’ unprecedented move to offer an ambitious expansion of its state-subsidized health insurance program is proving financially disastrous for a state that drastically underestimated enrollment and programmatic costs.
In early February, the Boston Globe reported that the Commonwealth Care program enrollment and cost estimates are expected to double by June 2011. When former Governor Mitt Romney first signed the reform into law in 2006, the administration estimated the program would only require a “small amount of new money” in the first few years and further failed to issue cost estimates beyond 2009, as they believed enrollment growth would top out by that time. Enrollment, however, is still growing exponentially and current Governor Deval Patrick is now asking the legislature to approve $1.5 billion, half of the reported cost of the program, for the next three years.
In the meantime, hospitals and providers are suffering major financial losses under the new program. Cambridge Health Alliance, one of the largest providers in the Boston-area healthcare network, recently announced that it may be facing a “catastrophic” loss this year with the elimination of about 9 percent of its workforce in order to stabilize costs. The alliance, which consists of three major area hospitals, blames the healthcare reform for its financial woes. Prior to the reform, the state reimbursed hospitals for the full cost of providing services to the uninsured. Now, the hospitals only receive 60 to 70 percent of their cost, which is significant due to the high volume of uninsured patients they serve. Some providers also fear that this reimbursement rate will only continue to drop as the state struggles to contain skyrocketing costs.
“Cost of subsidized insurance program to double in Massachusetts”
“Health provider predicts big loss”
New York City Investing in Health Information Technology
At the end of February, New York City Mayor Michael Bloomberg announced that the city would be making a $60 million investment to outfit doctors with the equipment and technology needed to help track patients’ medical records. Many communities, cities, and states around the nation are exploring similar efforts, while others, like Indianapolis, are already slowly growing their health information technology infrastructure. One of the biggest obstacles towards building a shared network of electronic health data is cost, but cities, like New York, and experts alike agree that the investment will help achieve long term goals of reducing healthcare costs, establishing measurable performance standards, and eventually allow for the restructure of state Medicaid reimbursement rates.
“New York City to Help Doctors Track Patients’ Records Electronically”
Robert Wood Johnson Foundation Announces New Commission to Build a Healthier America
In an effort to seek innovative approaches to improving the health of Americans and ultimately reduce national healthcare costs, The Robert Wood Johnson Foundation has created an independent, non-partisan commission that will examine factors outside of the healthcare system that impact our health. The new Commission to Build a Healthier America will hold regional field hearings to investigate how these factors, such as education, environment, income and housing, can impact an individual’s personal health choices. The commission is also charged with identifying innovative approaches to addressing these factors and shaping healthier behaviors.
March Edition 2008
State Panel Delays FamilyCare Expansion Decision
In November 2007, the Joint Committee on Administrative Rules (JCAR), struck down an emergency rule filed by the Department of Healthcare and Family Services (HFS) that would have drastically expanded the state’s FamilyCare program. The emergency rule was filed in response to the General Assembly’s inaction on the Governor’s coveted healthcare expansion initiative. Shortly after JCAR rendered its decision, however, the Governor declared the committee merely “advisory” and directed HFS to move ahead with implementation of the expansion; a move that was promptly blocked by a lawsuit filed in Cook County seeking a restraining order against the administration.
HFS returned to JCAR on February 13th once again to seek approval of a non-emergency version of the administrative rule (which gives rise to a much slower implementation process), but the panel decided to delay their decision on the rule until after the Governor delivers his budget address on February 20th. The Governor is expected to once again push healthcare expansion as a major policy initiative in 2008, which could once again require businesses that do not offer healthcare coverage to its employees to foot a 3% payroll tax in order to help pay for the costly expansion.
“Panel waiting to decide on healthcare expansion”
“Lawmakers give Governor’s healthcare expansion the cold shoulder”
Comptroller Speaks Out on Distressed Medicaid Finances
Comptroller Dan Hynes sent a letter and a special report on the “state of the state’s finances” to legislators earlier this month warning of a growing budget deficit that nears $3 billion; a total that includes the state’s $2 billion in unpaid bills and the anticipated budget shortfall for Fiscal Year 2008. While much of the report focuses on the budget’s bleak outlook overall, the Comptroller’s report does highlight the mounting backlog of Medicaid bills that now totals over $1.3 billion. The Comptroller further suggests that Medicaid spending will continue to spin out of control if legislators fail to address a “loophole” that allows Medicaid bills to carry over from one fiscal year to the next.
In the meantime, more providers are feeling the pain of not being paid for Medicaid services rendered, in some cases, as far back as September or October of 2007. According to the Illinois Pharmacists Association, pharmacists with large Medicaid populations are supposed to be paid within 30 days, but the current average lag time exceeds that by 17 days, with some pharmacists failing to see reimbursement within 100 days or more.
To read the full Comptroller’s report, as well as a Chicago Tribune article highlighting the financial pressures felt by providers, please click on the following links:
State of the State Fiscal Report
“Editorial: ‘My fellow deadbeats. . .’”
Hospitals Assessment Program Faces Critical Juncture
The current hospital assessment program has provided hospitals over $1.4 billion and another $390 million for other state healthcare needs, such as long term care. The program substantially improves Medicaid reimbursements to hospitals, without which, hospitals can only expect to receive, on average, 62 cents on every $1 of care they provide. That program, however, is set to expire on June 30th and hospitals, legislators, and the Department of Healthcare and Family Services (HFS) are now scrambling to craft a new program that will continue to provide financial support to hospitals statewide while satisfying more stringent criteria set forth by the U.S. Centers for Medicaid and Medicare Services (CMS).
Agreement over a new plan, however, has been difficult to achieve thus far, with two competing proposals on the table: one that would provide a more statewide approach and another that is aimed at providing greater relief to Cook County. HFS is also working with CMS to secure a possible extension of the program in order to buy more time for compromise without endangering critical state and federal funds to hospitals.
In the meantime, hospitals are hoping that legislators will approve a $1.2 billion supplemental appropriation that will allow the state to capture $600 million in federal funds that have already been set aside for Illinois hospitals. Failure to approve the supplemental funding has already resulted in two missed assessment payments to hospitals that are already feeling the crush of the state’s Medicaid backlog. A Senate committee has advanced a bill containing the supplemental funding, but the full Senate, House, and the Governor must first sign off on the bill before hospitals can expect to receive money owed to them for the current fiscal year.
“State, County Officials Introduce Plan to Aid Struggling ‘Safety Net’ Hospitals
“State anxious to fix Medicaid funding”
February Edition 2008
Attorney General Madigan Steps into Fight over Health Care Expansion
Last November, after the Governor’s proposed health care expansion failed to win legislative approval, Blagojevich presented his plan to the Joint Commission on Administrative Rules (JCAR), hoping to implement the program without adhering to the legislative process. Not surprisingly, JCAR voted to block implementation of the proposed rules, but the Governor decided to move ahead anyway. Before the Department of Healthcare and Family Services can dive headfirst into one of the nation’s costliest health care expansions, however, the courts will have to settle the question of whether Blagojevich overstepped his constitutional boundaries after several members of the business community brought suit against the administration.
Now, Attorney General Lisa Madigan is stepping in, arguing on behalf of JCAR’s constitutional authority. According to the Attorney General, the fight has become less about expanding health care and more about the constitutional integrity of the issue. Regardless of the outcome, the battle over government-subsidized health care expansion in Illinois appears far from over.
To read more about the lawsuit and the concerns of some health officials over the practicality of implementing expanding health care, please click on the following stories:
“Madigan to Defend JCAR in Court”
“Commentary: Governor’s Napoleon Complex Advanced”
“State Health Plan Bothers Official”
Illinois Joins California, Pennsylvania in its Battle over Health Care Expansion
Governor Blagojevich was not alone in his call for sweeping health care expansion for Illinois in 2007. Both California Governor Arnold Schwarznegger and Pennsylvania Governor Edward Rendell last year sought after massive health care expansions funded, in part, by assessments on employers who do not offer health care coverage. Like Illinois, both states faced significant political opposition over their health care expansion plans, which ultimately stopped the proposals from moving forward. While other states pursued more incremental policy measures to achieve more coverage for the uninsured, the trend is slowly moving towards pushing large universal coverage plans like those attempted in Illinois, California, and Pennsylvania.
To read more about this, please click on the following:
“States’ Widening of Health Care Hits Roadblocks”
Illinois Hospital Report Card and Other Hospital Safety Reports Suffer Delays
When Illinois first passed two laws over four years ago that would compare and publicize state hospital safety records, it was hailed as the first in the nation to take such bold steps. Now, the Hospital Report Card that will document hospital-acquired infections and nursing staff levels, the Consumer Guide that will compare hospital performances on 30 leading medical procedures, and the Adverse Events Report that will record egregious hospital errors are all bogged down by delay and what many claim to be a lack of administrative leadership.
The original sponsors of the laws and backers of the studies blame Blagojevich’s limited focus on expanding health care as one of the reasons for the lack of resources and priority given to the hospital safety project. In the meantime, many patient advocate groups and hospitals alike are anxious to get the projects off the ground in order to enhance the overall quality of health care available to Illinoisans.
To read more about these delays, please click on the following:
“Hospital Safety Reports Past Due”
2008 Preidential Candidates on Health Cares
Health care reform has remained a predominant issue in the 2008 Presidential Election and both Republicans and Democrats alike have outlined some very definitive ideas about how they believe that reform should be achieved. With the Illinois Primary Election a week from today, it is important to know where the Democrat and Republican frontrunners stand on the issue of health care. The following charts attempt to summarize and compare the presidential candidates’ plans for health care reform.
2008 Presidential Candidates on Healthcare-Democrats
2008 Presidential Candidates on Healthcare-Republicans
January Edition 2008
New Laws in 2008
HB 1066 Hospice Advisory Board- requires the Director of Public Health to appoint a Hospice and Palliative Care Advisory Board to advise the Department of Public Health on all aspects of the Department's responsibilities under the Hospice Program Licensing Act, including the format and content of administrative rules adopted by the Department. P.A. 95-0133
SB 15 Mental Health Disorders Prevention- creates the Perinatal Mental Health Disorders Prevention and Treatment Act to provide state agency coordination with health care professionals and hospitals to develop policies and procedures on the prevention, treatment, and diagnosis of perinatal mental health disorders in women. P.A. 95-0469
SB 21 Insurance Policy Narcotic Exclusion- provides that a group or individual policy of major medical insurance amended, delivered, issued, or renewed on January 1, 2008 shall not, solely on the basis of the insured being intoxicated or under the influence of a narcotic, exclude coverage for any emergency or other medical, hospital, or surgical expenses incurred by an insured as a result of and related to an injury required while under the influence of alcohol or a narcotic. P.A. 95-0230
SB 264 Birth Centers- authorizes a demonstration program covering 10 alternative birth centers licensed by the state to provide additional oversight and foster development of more centers. P.A. 95-445
SB 867 Hospital Staffing Plan- provides that every hospital shall implement a written hospital-wide staffing plan, recommended by a nursing care committee that provides for minimum direct care professional registered nurse-to-patient staffing needs for each inpatient care unit. P.A. 95-0401
Laws effective June 1st, 2008:
HB 1628 All Kids Health Insurance Act- requires annual reports to the General Assembly regarding the number of medical professionals participating in the All Kids Primary Care Case Management Program and the number of individuals enrolled, broken down demographically; further provides for rules regarding standing referrals to specialists. PA. 95-0650
HB 1759 Prenatal HIV Testing- requires health care professionals who provide health care services to pregnant women to recommend or provide HIV counseling and/or testing, unless the patient declines in writing. P.A. 95-702
SB 873 Medicare Caps- caps Medicare rates charged by insurers to the disabled at the highest of the rates charged to elderly individuals. P.A. 95-0436
SB 929 Protection and Advocacy for Mentally Ill Persons- provides clean-up guidelines for HIV testing, namely regarding permission and confidentiality issues. P.A. 95-0007
December Edition 2007
Governor Plans Rollout of Healthcare Expansion
In August, the Governor first announced his plans for a comprehensive health care expansion package that would answer to the General Assembly’s lack of support for his Illinois Covered legislation. The announcement followed what has come to be known as the Governor’s modus operandi: if the legislature does not give him what he wants, he will find another way. Incidentally, the cost of the new plan corresponded to the $463 million he had carved out of the FY08 budget through his amendatory veto; a figure many argued was never his to spend.
By late August, the Governor made his first move towards implementing a part of his new health care expansion package by instructing the Director of Insurance to work with the Departments of Healthcare and Family Services, Public Health and Human Services to develop and implement the All Kids Bridge program: a program that will allow young adults with critical health care needs to continue receiving All Kids coverage through the age of 21 (instead of 18). The All Kids expansion was considered the least expensive of the other coverage expansion initiatives, costing approximately $15 million.
On September 30, the Governor followed up with announcing the expansion of the State Breast and Cervical Cancer Program to provide all uninsured women, regardless of income, with free breast and cervical screenings and treatment. The Governor had priced this expansion at upwards of $50 million, but the final Fiscal Year 2008 budget only provides $6 million for these screenings.
The Governor’s attempts to defy the legislature on his plans for health care expansion reached new heights this month with his push to expand FamilyCare coverage to individuals and families that many argue are otherwise capable of affording their own health care coverage. On November 7, the Department Healthcare and Family Services filed an emergency rule to expand the income eligibility for FamilyCare coverage from 185% of the federal poverty level to 400% of the federal poverty level. The rule also created an opportunity for families within that income bracket that already have their own private health care coverage to enroll by allowing those families to roll off private coverage and onto State-funded coverage if their health care insurance costs represented more than 4% of their total annual household income.
While the administration argued that the cost of such a drastic expansion would only cost approximately $43 million this year, outside analysts argued that the extent of this expansion could top $370 million. Needless to say, the price tag and the extent to which the Governor was going in his attempt to achieve widespread health care coverage did not sit well with members of the Joint Commission on Administrative Rules (JCAR), who voted 9-2 on November 13 to block the rule; a move that in the past would have ceased further action by an agency.
The Governor, however, chose to ignore JCAR’s action and move forward with an expansion that could place a significant amount of stress on an already strained Medicaid system. As of late Friday, November 16, the administration had sent out a memo to the various social service agencies asking them to begin enrolling individuals and families under the higher income eligibility guidelines.
To read more about JCAR’s action and the Governor’s defiance, please click on the following links:
“’No’ Now ‘Yes’ for Health Plan”
“Gov Snubs Lawmakers Again, Expands Health Care”
Blagojevich Administration’s Medicaid Spending Already a Major Concern
With the Governor poised to implement a major expansion of the state’s Medicaid program, a news article recently published by the Rockford Register Star highlights concerns that the Governor’s last health care expansion, All Kids, falls short of his characterization of the program as “a model of success.” The article also touches on some alarming statistics regarding the administration’s Medicaid spending practices, suggesting that with two-thirds of Fiscal Year 2008 remaining, the Department of Healthcare and Family Services has already blown through 45 percent of the state’s Medicaid dollars. The Governor’s latest move to open up Medicaid to receive nearly 150,000 new enrollees not only raises further question as to where the state will find the money to support existing programs let alone a $370 million expansion (federal match is not available for this expansion), but if more providers will choose to cut their losses by cutting off services to Medicaid beneficiaries.
“All Kids health care has mixed results”
Proposed State Managed Medicaid Pilot Program Draws Critics, but Could Produce Much Needed Savings
As the Fiscal Year 2008 budget talks wore on, one of the more obscure issues placed on the table included a pilot mandatory managed care program for Medicaid beneficiaries. Although the pilot program was placed in a version of the budget implementation legislation, it was ultimately cut from the final version that still awaits the Governor’s signature. The pilot originally targeted two counties in Illinois, providing a cost-savings projected by the Lewin Group at $5 million. Although Medicaid eligible individuals in Illinois are enrolled in a primary care case management program, more states are moving towards an HMO-based managed care program as a way to promote efficiency and cost savings.
The Illinois Hospital Association and the State Medical Society, however, have spoken out against the proposal, claiming that the state would not see any significant cost savings and that the move could reduce the quality of care for Medicaid recipients. As the state grapples with soaring Medicaid costs, the idea of enlisting managed care companies to help control costs in the system could continue to gain ground and the idea of implementing a pilot program may still be a thing of the future.
To read more about this, please click on the following link:
“Managed Medicaid Pilot Program Under Debate in Illinois”
Congressional Budget Office Report Presents Sobering Statistics on Future of Health Care Spending
John McCarron, in his opinion piece for the Chicago Tribune, takes the Governor to task on his “spend more” approach to health care coverage, citing a report released by the CBO that suggests health care spending is already set to rise to 25 percent of the nation’s gross domestic product (GDP) by 2025. As McCarron points out, the “spend more” policy is like “pouring gas on a fire.” The CBO’s report, however, serves as a neutral analysis of the nation’s trends in health care spending, particularly federal spending on Medicaid and Medicare. Yet, within the report’s sobering statistics lies the greater question of how the feds, and states, are going to change behaviors in order to maintain support of critical health care programs that could very well collapse on themselves if federal and state spending is not somehow reeled in.
For instance, the CBO suggests that federal spending on Medicare and Medicaid will rise from 4 percent of GDP in 2007 to 7 percent in 2025, 12 percent in 2050, and 19 percent in 2082. While these figures may not appear overly dramatic, the policy battles taking place in the background could have a more profound impact on these projections as Congress battles over expansion of SCHIP and states, like Illinois, continue to press on with large-scale expansions on Medicaid.
To read John McCarron’s op-ed, please click on the following link:
“More spending on health care won’t solve crisis”
“The Long-Term Outlook for Health Care Spending”
November Edition 2007
Federal SCHIP Reauthorization Fight May Upset Blagojevich’s Aggressive Health Care Agenda
The State Children’s Health Insurance Program or SCHIP emerged in the mid-90s as a part of a larger welfare reform effort that focused on extending health care coverage to working-class children whose households did not meet eligibility guidelines for Medicaid. The program has typically enjoyed extensive bipartisan support, but in recent years, program expansion has made it difficult for the federal government to keep costs in check. The expansion of the program has further created tension for the private insurance marketplace as many states, through increases in income eligibility, are generating an incentive for individuals to move off private insurance and into government-funded insurance.
Illinois, particularly under Governor Blagojevich, has been one of those states that have been extremely aggressive in making lower-income parents eligible for SCHIP benefits. Blagojevich’s Family Care program has extended medical coverage to over 130,000 adults, which along with the 170,000 children already enrolled in the program, has allowed the state to draw down more than $400 million in federal dollars. Expansion of the Family Care program to serve adults and children up to 400% of the Federal Poverty Level is one of the centerpieces of Blagojevich’s most recent health care agenda; an initiative that goes to the very heart of the concern that SCHIP has moved away from its intended goal of providing coverage to uninsured children.
President Bush quickly vetoed the SCHIP reauthorization legislation and the vote margins by which Congress initially passed the bill indicated that an override would not be possible. The House, however, did attempt to override the veto on October 18th, but fell 14 votes shy of successfully overruling the President. The administration, in the meantime, is still trying to broker an agreement so as not to allow the program to expire altogether and provide a limited expansion that focuses on enrolling uninsured children currently on the waiting list. For Illinois, an agreement would mean the nearly 200,000 children enrolled would stay on the rolls while the 130,000 adults would be phased out of SCHIP. This means that if the Governor is not able to obtain an agreement with the feds to move those adults onto the Medicaid rolls, Illinois taxpayers could end up footing a hefty bill.
In the meantime, Illinois has joined several states in a lawsuit against the Bush administration that seeks to block proposed rules limiting the total income of families who participate in SCHIP. States involved in the litigation contend that the administration is overstepping its authority by setting these income limits.
To read more about the SCHIP debate and its impact on Illinois, please click on the following links:
“Democrats Press Ahead on SCHIP”
“Illinois Amid States Suing Over Bush Rules to Block SCHIP Growth”
Punishment to Empowerment: Employers are Seeking New Ways to Reduce Health Care Costs
Health care reform is currently a political hot button issue, but for employers who are constantly balancing the pressure to provide health insurance coverage to employees with the increasingly high cost of providing that coverage, the topic has become more than simply a topic for debate. Many employers are not waiting around for Washington to provide the answers, but rather, have developed innovative ways to reduce health care costs. These initiatives range from providing incentives for employees and beneficiaries to quit smoking or trim their waistline to more controversial punitive measures to force a change in employee health habits.
The following articles discuss this trend, focusing on those employers that have chosen the “stick” approach and those that have adopted the “carrot” approach to cutting company health care costs.
Study Examines Health Care Price Transparency
The Deloitte Center for Health Solutions, headed in part by former Secretary for Health and Human Services, Tommy Thompson, recently released a report examining health care price transparency issues and the role states can play in fostering greater transparency to generate transformation in the delivery of health care. The report provides thoughtful recommendations on policies that can create stronger engagement on behalf of health care consumers in order to drive costs down.
The full report can be viewed here.
McCain’s Bottom Line on Health Care: Choice and Control
There are a number of issues that dominate the list of topics to debate as candidates battle it out for the 2008 presidential election, but health care reform is quickly surfacing as a priority topic for the candidates. National polls have shown that health care falls just below the war in Iraq on the list of items voters consider important in the upcoming election. Nearly all the presidential candidates have announced their vision of what health care reform should look like, with the most recent announcement coming from John McCain. While much of the emphasis from the Democrat candidates has been on covering the uninsured and forcing businesses to foot the bill, Republican candidates have honed in on initiatives that focus on cost control. McCain, who is not typically known for his involvement on health care issues, released a plan that gambles on voters caring more about controlling their own health care costs than immediately addressing the ranks of uninsured.
October Edition 2007
Governor Continues to Pursue Healthcare Initiatives
After the Legislature failed to push through the Governor’s sweeping healthcare proposal, Governor Blagojevich announced in mid-August that he would once again bypass the legislative process and pursue his healthcare initiatives through alternate administrative means. The Governor’s announcement was later followed by an amendatory veto that slashed nearly $500 million from the FY08 budget approved by lawmakers in early August. According to the Governor’s revamped healthcare proposal, the total price tag of slightly more than $460 million could be realized through fund transfers and managing program costs as opposed to the 3% payroll tax that had been previously proposed and would require legislative approval.
The Governor’s new healthcare initiative has yet to be unveiled in any manner other than press release form. Governmental Affairs has done an analysis of the new proposal, based on the limited information available. That analysis can be found here.
Other States Grapple with Ambitious Healthcare Plans; Presidential Candidates Push Own Healthcare Initiatives
Universal health insurance is also a battle being fought in other states, with businesses in both California and Massachusetts fighting similar proposals that target business as the primary funding source for universal coverage. Both California and Massachusetts proposals coveted a payroll tax mechanism, pushing the idea that businesses that fail to offer health insurance coverage for their employees must pay their “fair share.”
The following articles provide a more detailed look at the California and Massachusetts healthcare proposals:
The following article from the New York Times also looks at a less controversial proposal to cover uninsured adults that is being advanced by the City of San Francisco.
Presidential candidates have also moved healthcare coverage to the front of the national debate with candidates offering a wide variety of ideas on how to expand coverage to more uninsured individuals. The following articles examine those proposals in more detail:
Battle Lines Drawn in Federal SCHIP Reauthorization
The State Children’s Health Insurance Program (SCHIP) is set to expire at the end of this month and the fight over what that program will look like going forward has hit fever pitch. Both the U.S. House and Senate have passed bills reauthorizing the program and while both bills seek an expansion of the program, they do not agree on the terms of that expansion. For instance, the House version of the bill calls for a 45 cent increase in the federal tobacco tax while the Senate version calls for a much larger increase of 61 cents. Although Congress is working to reconcile differences in the legislation, President Bush has repeatedly spoken out against any sort of expansion in the program and has threatened to veto any bill that expands SCHIP.
In the meantime, the Center for Medicare and Medicaid Services (CMS) is seeking to impose new restrictions under SCHIP that would essentially prevent state SCHIP programs from enrolling uninsured children from families with household incomes above 250% of the federal poverty level. If the new rules are implemented, they could have profound impacts on states that have programs in place that serve children and families in income eligibility thresholds above 250%. This change could also derail the initiatives Governor Blagojevich is currently pursuing.
Read more about the fight over SCHIP reauthorization, as well as New Jersey Governor Corzine’s defiance of the Bush administration’s proposed change in the SCHIP rules:
Motivating Consumers to Get Involved with their Healthcare Plans
A new study by the Midwest Business Group on Health finds that more employees are encouraging their employees to take the reins of their healthcare plans instead of being passive with their plan. Educating consumers on their plans and benefits is key. These days, many consumers are blasé when it comes to cost and quality of services, which can lead to confusion. A lot of the times, consumers assume they get the best quality from the most costly plan, which is untrue.
Consumers should use the tools available to them to come to an educated decision regarding their healthcare plan. The Internet provides easily accessible information regarding providers’ plans and other information. With pressure for health information exchange and transparency, consumers can now find information regarding the quality and cost of doctors, hospitals and providers. While still in the beginning stages, these sites and programs will become an even more innumerous benefit to consumers once the tweaks are worked out.
Health Information Exchange Committee Meets
The Health Information Exchange Committee met on August 29 at the CIGNA offices in Chicago to discuss a Chamber-driven effort to implement some form of a Health Information Exchange in Illinois. Some states, as well as individual corporations, have attempted to create a system that can electronically track an individual’s personal health information in an effort to elevate the quality of care while making the delivery of healthcare more cost-effective. The committee plans to meet again later in September to further discuss goals and objectives.
Financial Week recently spotlighted a similar effort by Intel, Applied Materials, BP America, Cardinal Health, Pitney Bowes, and Wal-Mart to create a Web-based system that tracks employee personal healthcare records to improve care and lower costs.
September Healthcare Council Meeting Update
The full Healthcare Council met September 20 at the Chicago Yacht Club. Attendees were treated to several speakers: Thomas Penno, the COO of the Indiana Health Information Exchange, who spoke on Indiana’s experience on the implementation of their HIE; Len Pagano, the President and CEO of The Safe America Foundation, who covered issues related to emergency health preparedness and a preparedness summit scheduled for this December in Chicago; and Dr. Sharon Langshur, the founder of CarePages, one of the largest web-based networking sites for caregivers, patients, friends, and others to share their personal healthcare stories and offer emotional support. Dr. Langshur and her husband helped co-author a book entitled “We Carry Each Other” based on the stories shared on their website that is scheduled to be released October 1.
Doug O’Brien, Chair of the Council, also gave an update on the HIE committee meeting, as well as issues the Council should look towards addressing in the next year. Jay Shattuck with the Chamber also provided a legislative update on the healthcare-related issues currently circulating at the Capitol.