1. MAINES EXPERIENCE IN EXPANDING COVERAGE The Commonwealth Funds State Innovations Program Changes in Health Care Financing and Organization (HCFO)--a national program of the Robert Wood Johnson Foundation February 1, 2008 Trish Riley, Director Governors Office of Health Policy and Finance State of Maine

2. SETTING THE CONTEXT 2002 – 2003 - All Quiet on the Western Front - No common discussion of cost crises (e.g.: TODAY) - Commonwealth Fund Commission on A High Performance Health System - McKinsey & Co. – Accounting for the Cost of Health Care in U.S. 1

3. THE CONTEXT FOR REFORM THE U.S SPENDS MORE; GETS LESS Need a more effective & efficient health system & healthier people 2

4. Scores: Dimensions of a High Performance Health System SOURCE: Commonwealth Fund National Scorecard on U.S. Health System Performance, 2006 3

5. …but Maine & the US Spend More Per Person Than Other Industrialized Nations Sources: Anderson GF, Frogner BK, Johns RA,, Reinhardt UE Health Care Spending And Use Of Information Technology In OECD Countries. Health Affairs 25(3), 820, for data on US and OECD nations. Maine figure estimated using data from the CMS Office of the Actuary. * UK amount is for 2002. 11 4

6. KEY FACTS New England states spend more than the US average. 2004 Per Capita Health Care Spending Source: CMS 5

7. DIRIGO HEALTH REFORM System Reform – Not just an insurance product Improve Quality Lower Cost Growth Invest in Access Expansion 6

8. Need multiple strategies to cover uninsured and underinsured Maines Uninsured > 300 % FPL 39,000 100-300% FPL57,500 < 100% FPL29,000 Underinsured 2004-2006 Sales of most popular product in individual market -- $15,000 deductible – rose 29% 7

9. Dirigo Health DIRIGO CHOICE MAINECARE COST CONTAIMENT/ IMPROVE PUBLIC HEALTH/ MAINE QUALITY FORUM 8 Assure affordability for those in the market & uninsured > 300% FPL < 300% FPL- Sliding scale subsidies Low income – fully subsidized 3-Tiered Strategy

10. MAINES EXPERIENCE IN EXPANDING COVERAGE The Commonwealth Funds State Innovations Program Changes in Health Care Financing and Organization (HCFO)--a national program of the Robert Wood Johnson Foundation February 1, 2008 Karynlee Harrington, Executive Director Dirigo Health Agency

11. DRAFT 9

12. LESSON 1 Hard to make the case for cost crisis in 2003 Public understood hidden tax of bad debt and charity care from un and underinsured Compromise weakened cost containment Rejected Global budget for hospitals Assessment on insurers not passed onto payers 10

13. FINANCING / SUSTAINABILITY One time State funding Medicaid SOP Capture savings & reinvest - Hard to measure - Savings vs. cost avoidance - Conflict – same funding source advocates for HRP 4 Year effort to stop SOP Blue Ribbon Commission Alternate funding included pay or play plan & individual mandate plus reinsurance – rejected by Legislature 11

14. WHAT HAS DIRIGO HEALTH REFORM ACHIEVED TO DATE Enrolled over 23,000 participants and over 725 Small Businesses in Dirigo Choice and over 5,000 Parents in MaineCare. Strengthened the CON Process. Strengthened Hospital Cooperation Act. Required providers to submit claims electronically in a uniform fashion. Regulated premiums in the Small Group Market for the first time. Hospitals, doctors and insurance companies now share their financial information in new ways allowing for greater transparency, helping to inform the public on how health care dollars are spent. Introduced the State Health Plan, with a goal of making Maine the healthiest state and established new public health infrastructure. Documented over $111M in system savings. Established Maine Quality Forum. 12

15. LESSONS LEARNED / NEXT STEPS Enactment is the easy part Keep your friends close & your enemies closer System reform ala High Performing Health System – must remain the focus Voluntary approach required given high cost of health insurance in Maine; mandates rejected – all eyes on MA & VT Next Steps - Individual market reform / sustainable Dirigo financing - Non-profit partner – Harvard Pilgrim Health Care - Annual Cost Driver Study and recommendations to Legislature 13