State Health Reform Group J Ameen Baker Jason

State Health Reform Group J Ameen Baker Jason Chandler Kim Cox Mike Davis Sharon Goldberg

State Health Reform • National health reform – Medicare reform – Fraud and Abuse – National health reform • States step in – Instead of national initiatives, states are forming initiatives of their own • States are laboratories • State Spending Increasing

State Spending Increasing

Setting the Scene: An Overview • National Level – In 2004, 45. 8 million people uninsured – 68. 1% of Americans covered by employers, the lowest since 2000 – Approximately 16% of GDP spent on healthcare

Setting the Scene: An Overview • State Level – States suffer from increasing healthcare costs – States suffer from increasing health insurance costs – States are moving towards consumer-driven healthcare – States’ financial conditions are improving

Regional Variation in State Growth, 2004 -2005

Total State Expenditures, FY 2004

State Reform Plans • Cost containment efforts – Consumer-directed health care • Ex: Shift higher percentage of insurance premiums to employees – Pay-for-Performance Models • States have created public reports on the quality of care provided by plans, hospitals, and nursing home • • Prescription drug coverage Disease management Expand Health IT Regulatory Authority

States Undertaking Medicaid Cost-Containment Strategies

Historic Legislation • Reform efforts began in the mid 1970 s • Intention: to cover the poor & working uninsured citizens • Crafted at the state level • Required Medicaid 1115 Research & Demonstration Waivers to implement

State Health Care Reform Strategies • Created state-funded programs • Expanded/restructured Medicaid • Experimented with individual & small business subsidies • Reformed the individual & small group insurance markets

State Health Care Reform Strategies • Created Medical Savings Accounts • Established purchasing alliances, high-risk pools, & indigent care programs • Crafted children’s health coverage (SCHIPs) • Implemented expanded information technology and pharmacy systems

Comprehensive Reforms • • Hawaii Oregon Tennessee Massachusetts Minnesota Vermont Washington

Hawaii • 1974: Prepaid Health Care Act employer mandate for all full-time employees • 1991: State Health Insurance Program – subsidized coverage • 1994: QUEST – Medicaid Waiver expanded coverage to 300% FPL

Hawaii’s Democratic & Republican Influences Hawaii currently has a Republican governor, Linda Lingle. In 2002, she was the first Republican elected governor of Hawaii in 40 years. Democratic Opinions "Hawaii has twice the number of doctor visits per capita and one-half the hospitalizations” ~ Edward Kennedy "The only place that has achieved nearly universal coverage and has less of a cost burden on its system is Hawaii" ~ Hillary Clinton

Oregon 1989 Oregon Health Plan (OHP 1) • Goal: Universal coverage • Expanded the Medicaid program • Required employers to offer health insurance to employees & their dependents

Oregon OHP 1 • Services delivered through managed care • Prioritized list of benefits applied (rationing) • Providers were paid their costs

Oregon OHP 2 • Expanded in 2002 • Intent to cover up to 185% FPL • Derailed with a downturn in Oregon’s economy • Premium increases caused drop in enrollment • Providers refused to see patients without co-pays

OHP “Meltdown” • 2003: Enrollment fell by 53% • 2004: Another 50% drop • Closed to new enrollment since late 2004 due to budgetary constraints • Uninsured now at 17%, same rate that existed prior to OHP • 2004: Improved IT and pharmacy systems in efforts to cut costs, provide better coverage for current enrollees

Oregon’s Democratic & Republican Influences In late 2003, Democratic Senator Ron Wyden promoted a national version of Oregon’s health reform plan, which was also endorsed by his Republican counterpart. Recent Democratic governor’s Ø Ted Kulongoski Ø John Kitzhaber, MD

Tennessee Tenn. Care 1994 • Created a global budget of federal & state funds • Restructured Medicaid • Capitated managed care plans

Tennessee Problems with Tenn. Care: • Transition to managed care • Low reimbursement to providers • Administrative problems • Budgetary conflicts • Turnover in key leadership

Tenn. Care: A Success? • Covers 60% more people than traditional Medicaid • Original political deal still intact • Costs reduced & coverage expanded • MDs are still discontent • Overall patient satisfaction is good • Implemented TCMIS Information technology system and Pharmacy Edits • Still has financial constraints and is unable to cover all citizens who need coverage

Tenn. Care: A Success? Pharmacy Edits • Enhances patient safety, lowers cost • Avoids therapeutic duplication • Sets a limit on max drug dose per day • Limits duplication of RXs, prevents abuse • Uses a Preferred Drug List (PDL)

Tennessee’s Democratic & Republican Influences • Democratic Governor Phil Bredesen has reformed the Tenn. Care program and still endorses the state controlling the pharmacy program. However, Bredeson cut funds for Tenn. Care in 2005.

Massachusetts • 1988: Health Security Act – an employer “pay or play” mandate • Employer mandate postponed & later repealed • 1996: cigarette tax increase to fund kids/low income seniors’ health care • Success of children’s program inspired Sen. Kennedy to propose SCHIP at federal level

Massachusetts – A Bipartisan Effort • Currently led by Mit Romney, the Republican governor of Massachusetts – Aims to cover 460, 000 uninsured residents of the state • Works to find common ground with both major political parties – Democrats stress the need to move toward health coverage for all – Republicans promote putting consumers in control

Market Reforms • Most occurred in the 1990 s • Purchasing alliance (28 states) Florida: CHPAs California: HIPC • Rating reforms (NJ, NY, VT) • Standardized plans (NJ & VT)

Current Legislation Human Papillomavirus (HPV) / Schools SB 660 / HB 561

Background • HPV is the most common STD in the United States. • There are over 100 strains of HPV, of which over 30 types can cause cervical cancer and genital warts. • Gardasil, a vaccine approved by the FDA in June 2006, prevents infection in some strains of HPV.

Intentions • Require all middle school girls to receive the Gardasil vaccine • Require schools to educate families about HPV, cervical cancer, and the vaccine itself • Allow parents the choice to opt out of the vaccine

Main Critiques • The timeliness of the bill – Gardasil was approved only 10 months ago • The message being sent – Promoting sex, rather than abstinence • The role of government in this process – Families should be the ones to initiate these types of conversations with girls

Other Critiques • • • Too big a rush to inoculate girls Chance of adverse side effects A question of supply shortages Would be required for just one sex Has questionable motives since it has been marketed so aggressively • Possible damage to the public’s view of vaccines

Strengths • Help prevent the spread of HPV and cervical cancer – A proactive approach to preventing cancer, and improving female health • Likely aid in the education of safe sex practices • Help teach parents the importance of other vaccinations – Increase parental role – Prompt necessary conversations

Strengths • Gardasil is approved by the FDA • Families would still have the choice to opt out of the vaccine • Most doctors are in support of the bill

Weaknesses • Requires a series of 3 shots in 6 months • High costs – 45% would be covered by Florida’s Vaccines for Children program – 55% would be eligible to receive the vaccine for free at county health departments • Lack of support from the Department of Health – Concerns about side-effects, and the financial burden to public health

How Changes would Improve Legislation • The legislation would be improved (and potentially passed) if… – Obtain support from DOH – Gather additional research and information regarding side-effects, benefits, costs, suppliers, etc. – Revisit marketing techniques – Provide more education regarding the importance of vaccines/immunizations

Democrat View • Most support the bill since it encourages government intervention in providing affordable and quality health care to all • Some question Merck’s motives for contributing to the campaigns

Republican View • Most oppose the bill because of the message it might portray (promoting sex) • Others oppose the bill because of the direct role government would play in providing health care • However, there is some Republican support across the state

Past, Present, and Future of the Bill • Was introduced by a Republican, but is more of a Democrat-supported bill • The first vote was postponed, and then amended – The amended motion failed 4 -4 • A vote on the original bill has yet to be scheduled • Is unlikely to pass in Florida because of the strength of the Republican-led house

Proposed Legislation Statewide Medication & Reconciliation Database Act of 2007

Statewide Medication & Reconciliation Database Act of 2007 • Florida • Oversight, Administration, Regulation by AHCA • Allow for a centralized statewide database that compiles all patient medication information from all pharmacies

Rationale • Improve the delivery and quality of patient care • Ensure the preservation of information despite natural disasters, catastrophes (ie: hurricanes) • Urgent need to: – Reduce medication errors – Have a mechanism in place to allow for medication reconciliation – Reduce adverse events – Reduce the costs associated with these preventable errors and adverse events

Rationale • At least 44, 000 Americans die each year as result of medical errors. • Incidence of adverse drug events in hospitals is estimated to be 400, 000 per year. • Medication errors alone estimated to account for over 7, 000 deaths annually. • More people die annually from medication errors than from workplace injuries. • IOM estimates that about 530, 000 medication-related injuries occur each year among Medicare beneficiaries in outpatient clinics. To Err is Human, IOM, 1999 IHI Article, 2007

Rationale • 8. 8 percent of all patients studied throughout the state's hospitals experienced preventable medical errors. - Florida AHRQ • Up to 1. 5 million preventable adverse drug events annually. - IOM Report, 2006

Rationale • One reports says medication errors are so common in hospitals that, statistically, a patient will be subjected to a medication error each day of their stay. • Cost estimates from medication errors – $3. 5 billion in hospital setting – $ 887 million for Medicare beneficiaries in outpatient setting http: //www. consumeraffairs. com/news 04/2006/07/medication_errors. html

Rationale • There as many as 7, 000 deaths annually in the United States from incorrect prescriptions – (Carmen Catizone, National Association of Boards of Pharmacy) • Told The Washington Post as many as 5% of the 3 billion prescriptions filled annually are incorrect… – That’s 150 MILLION WRONG prescriptions! Source: GROUP F Quality http: //www. consumeraffairs. com/news/pharmacy_errors. html

Target Groups • • • Healthcare Providers Insurance Companies Pharmacies (large chains, small ma/pop) Patients/Community Healthcare Facilities • …. Basically everyone!

Mechanism • Standard web-based application to be used by all pharmacies – RFP to potential technical vendors • The medication information will automatically be entered into the database – Mandated for all pharmacies – Will make sure that it is affordable, provided to smaller pharmacies – Will allow for medication reconciliation - will alert for contraindications, identify/prevent narcotics shoppers, etc.

Financing • Anticipated costs: Begin implementation of network (FY 07 -08) – $9, 443, 598 Complete development of network (FY 08 -09) – $8, 742, 898 (FY 09 -10) – $7, 726, 898

Financing • Three options 1. Allocate money from AHCA’s budget 2. 2% tax on all prescriptions 3. Paid for by both the insurance and pharmaceutical companies – All have pros/cons … but everyone will see the amount of $$$ saved in the long-run, thereby making it worth the initial outlay of money

Outcomes • Decreased medication errors, increased quality of healthcare • More standardization/effectiveness across pharmacies statewide – Time for them to find a different way to compete • Potential backlash from pharmaceutical companies • Future Plans: – expansion of database at a national level – Possible IT integration with FHIN, EHRs and CPOE

Questions?