Roles of State Legislatures and State Government in Determining Health Care Policy John E. McDonough, Dr.PH., M.P.A. Executive Director Health Care for All Massachusetts House of Representatives ( )

McDonough Slide #2 SESSION OUTLINE I. Three Pillars of Health Policy II. Four Eras in U.S. Health Policy III. Eight Key State Government Roles IV. Federalism and Health Policy V. Your Role in All of This

McDonough Slide #3 I. Three Pillars of Health Policy Cost Cost Access Access Quality Quality  Everything you do affects at least one, and frequently two  Health policy home run – positively influence all three  Childhood Immunization  Most of the time, pick any two…

McDonough Slide #4 Costs: The Big Picture (1) Health Spending in $$$ and as Percent of US Economy

McDonough Slide #5 Costs: The Big Picture (2) Increases in Premiums vs. Earnings and Inflation

McDonough Slide #6 Costs: The Big Picture (3) U.S. Health Spending vs. Other Industrialized Nations U.S. Health Rankings: U.S. Health Rankings:  Infant Mortality: 28 th  Life Expectancy: 24 th  Births to Women Ages in Industrialized Nations: 30 th  Measles Immunization: 14 th

McDonough Slide #7 Access: 45 Million Uninsured Americans % (10) % (8) % (11) % (11) % (11)

McDonough Slide #8 Quality: The Disturbing Picture

McDonough Slide #9 Four Health Policy Eras Era I: Pre/Emerging System Period Pre-1910s Pre-1910s Minimal licensure and professional standards Minimal licensure and professional standards No health insurance as we know today No health insurance as we know today Minimal public investments Minimal public investments No standards for medical education No standards for medical education Infectious disease leading cause of death Infectious disease leading cause of death Life expectancy ~46 years Life expectancy ~46 years See The Social Transformation of American Medicine – Paul Starr See The Social Transformation of American Medicine – Paul Starr

McDonough Slide #10 Four Health Policy Eras Era II: Professionalization and Growth 1910s to 1960s 1910s to 1960s Scientific breakthroughs Scientific breakthroughs Widespread licensure, professional standards, public sector regulation Widespread licensure, professional standards, public sector regulation Development of modern health insurance and insurance regulation Development of modern health insurance and insurance regulation Federal Support: medical education, facilities, research Federal Support: medical education, facilities, research Emergence of chronic disease as leading cause of death Emergence of chronic disease as leading cause of death

McDonough Slide #11 Four Health Policy Eras Era III: Government Regulation 1965 to late 1980s (life expectancy ~70s) 1965 to late 1980s (life expectancy ~70s) Creation of Medicare & Medicaid in 1965 Creation of Medicare & Medicaid in 1965 Market failure as defining metaphor Market failure as defining metaphor Cost control as major public priority Cost control as major public priority Government/business partnership Government/business partnership Key instruments to address market failure: Key instruments to address market failure:  Certificate of need  Health system planning  HMO Act  Hospital rate setting

McDonough Slide #12 Four Health Policy Eras Era IV: Market Dominance 1990s through today 1990s through today Key idea: market failure can be corrected Key idea: market failure can be corrected Phase I: The managed care revolution Phase I: The managed care revolution  Led to backlash and retreat Growth in investor owned health entities Growth in investor owned health entities Major provider consolidations Major provider consolidations Different role for government Different role for government Phase II: Era of the consumer Phase II: Era of the consumer  Health savings accounts (“skin in the game”), transparency, public data release

McDonough Slide #13 What’s Next? “The solution is not a government-run system or a fend-for-yourself marketplace but, instead, a new approach that combines the best care options offered by the private sector backed by the resources and oversight of Federal and State governments.” Sen. John Breaux (D-La.), on his proposal for universal health coverage Still waiting…

McDonough Slide #14 Key State Government Roles in Health Care Public HealthFacility/Professional Regulation Regulation of Insurance/HMOs Health Workforce Education Training Provide/Finance ServiceCost Containment Information Dissemination Health System Monitoring

McDonough Slide #15 Key State Roles: I 1.Public Health Population health, disease control and prevention, sanitation, environmental protection, bioterrorism Schism with Clinical Medicine 2.Regulation: Facilities and Professionals Licensure: e.g., hospitals, nursing homes, clinics, physicians, nurses, social workers; scope of practice; discipline Joint Commission on Accreditation of Healthcare Organizations; Certificate of Need Joint Commission on Accreditation of Healthcare Organizations; Certificate of Need From Quality Assurance to Quality Improvement

McDonough Slide #16 What is Quality? Quality of care is the degree to which services for individuals or populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge. Quality of care is the degree to which services for individuals or populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge. ― Institute of Medicine, 1990 Quality is doing the right thing and doing it right. Quality is doing the right thing and doing it right.

McDonough Slide #17 Key State Roles: II 3. Regulation of insurance and HMOs Solvency concerns, consumer protection ERISA (Employee Retirement Income Security Act of 1974 – your 800 lb. gorilla) 4. Health workforce education Support for medical education, State medical schools, other professionals How to finance fairly in managed care environment and tight fiscal times?

McDonough Slide #18 Key State Roles: III 5. Provision/financing of health care services – Make/Buy?  Medicaid: fee for service/gatekeeper; managed care/capitation  State worker/retiree health insurance  Indigent services: public hospitals, clinics, uncompensated care  Health coverage expansions  Other services: mental health, mental retardation, veterans, other disabilities  Pharmaceutical assistance

McDonough Slide #19 Key State Roles: IV 6. Cost Containment What can government do about rising costs (premiums, prescriptions)? What can government do about rising costs (premiums, prescriptions)?  Pay for Performance  Evidence-Based Medicine 7. Information Dissemination Public reporting on hospitals, physicians, nursing homes, HMOs. Who gets what? 8. Health System Monitoring Anti-trust & mergers, malpractice, for profit conversions, specialty hospitals. When to intervene? Anti-trust & mergers, malpractice, for profit conversions, specialty hospitals. When to intervene?

McDonough Slide #20 Federalism & Health Policy 1960 and 1970s: Mandates and limited discretion, i.e., Medicaid, Employee Retirement Income Security Act of 1974 (ERISA) 1960 and 1970s: Mandates and limited discretion, i.e., Medicaid, Employee Retirement Income Security Act of 1974 (ERISA) 1980s: Transition, i.e., New Federalism, block grants, Boren, Waxman 1980s: Transition, i.e., New Federalism, block grants, Boren, Waxman 1990s and 2000s: Partnership, i.e., Medicaid waivers, HIPAA, SCHIP 1990s and 2000s: Partnership, i.e., Medicaid waivers, HIPAA, SCHIP Is the partnership beginning to fray? Is the partnership beginning to fray?

McDonough Slide #21 Your Role in Making Health Care Work in Your State The Job of a Legislator (Fenno, 1978) The Job of a Legislator (Fenno, 1978)  Being one of them  Getting around, soliciting advice, relating to culture  Providing services  Helping constituents, organizing community initiatives  Acquiring resources  Using prerogatives to obtain resources  Expressing policy views and interests  District/Personal

McDonough Slide #22 Your Role in Making Health Care Work in Your State (cont). What is politics? What is politics?  The way we decide “who gets what” without resorting to violence What is health care politics? What is health care politics?  The way society decides “who gets what” The culture says: Politics is bad/corrupt The culture says: Politics is bad/corrupt Bob Kuttner says: “…Politics is the practice of democracy in real life”. Bob Kuttner says: “…Politics is the practice of democracy in real life”. This is your turn, your moment This is your turn, your moment