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Roles of State Roles of State Legislatures and State Legislatures and State
Government in Government in Determining Health Care Determining Health Care
PolicyPolicyJohn E. McDonough, Dr.PH., John E. McDonough, Dr.PH.,
M.P.A.M.P.A.Executive DirectorExecutive DirectorHealth Care for AllHealth Care for AllMassachusetts HouseMassachusetts House of of Representatives (1985-97)Representatives (1985-97)
McDonough Slide #McDonough Slide #22
SESSION OUTLINESESSION OUTLINE
I.I. Three Pillars of Health PolicyThree Pillars of Health Policy
II.II. Four Eras in U.S. Health PolicyFour Eras in U.S. Health Policy
III.III. Eight Key State Government Eight Key State Government RolesRoles
IV.IV. Federalism and Health PolicyFederalism and Health Policy
V.V. Your Role in All of ThisYour Role in All of This
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I. Three Pillars of Health I. Three Pillars of Health PolicyPolicy
CostCost AccessAccess QualityQuality
EverythingEverything you do affects at least one, and you do affects at least one, and frequently twofrequently two
Health policy home run – positively Health policy home run – positively influence all threeinfluence all three Childhood ImmunizationChildhood Immunization
Most of the time, Most of the time, pick any twopick any two……
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Costs: The Big Picture (1)Costs: The Big Picture (1)Health Spending in $$$ and as Percent of US Health Spending in $$$ and as Percent of US
EconomyEconomy
4
6
8
10
12
14
16
1970 1980 1993 1999 2001 2003
7%
8.8%
13.3%13.2% 14.1%
15.3%
$73B
$246B
$888B $1.2T$1.4T
$1.68T
CSMith et al. Health Spending Slows in 2003. Health Affairs, Jan/Feb. 2005.
McDonough Slide #McDonough Slide #55
Costs: The Big Picture (2)Costs: The Big Picture (2)Increases in Premiums vs. Earnings and InflationIncreases in Premiums vs. Earnings and Inflation
02468
101214161820
1988 1989 1990 1993 1996 1999 2000 2001 2002 2003 2004
Health Premiums Overall Inflation Workers Earnings
18.0%
0.8%
13.9%
11.2%12.9%10.9%
8.5%
12.0%
2.3%
2.2%
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Costs: The Big Picture (3)Costs: The Big Picture (3)U.S. Health Spending vs. Other Industrialized U.S. Health Spending vs. Other Industrialized
NationsNations
41 4451 57 57
68
100
0
20
40
60
80
100
120
UKJa
pan
Australi
a
Canad
a
Ger
man
y
Switzer
land
USA
U.S. Health RankingsU.S. Health Rankings:: Infant Mortality: 28Infant Mortality: 28thth
Life Expectancy: 24Life Expectancy: 24thth
Births to WomenBirths to Women
Ages 15-19 in Ages 15-19 in Industrialized Nations: Industrialized Nations: 3030thth
Measles Immunization: Measles Immunization: 1414thth
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Access: 45 Million Access: 45 Million Uninsured AmericansUninsured Americans
17.6-27% (10)
15.2-17.6% (8)
14-15.2% (11)
11.7-14% (11)
6.8-11.7% (11)
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Quality: The Disturbing Quality: The Disturbing PicturePicture
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Four Health Policy ErasFour Health Policy ErasEra I: Pre/Emerging System PeriodEra I: Pre/Emerging System Period Pre-1910sPre-1910s Minimal licensure and professional Minimal licensure and professional
standards standards No health insurance as we know todayNo health insurance as we know today Minimal public investmentsMinimal public investments No standards for medical educationNo standards for medical education Infectious disease leading cause of deathInfectious disease leading cause of death Life expectancy ~46 yearsLife expectancy ~46 years See See The Social Transformation of The Social Transformation of
American Medicine – American Medicine – Paul StarrPaul Starr
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Four Health Policy ErasFour Health Policy ErasEra II: Professionalization and GrowthEra II: Professionalization and Growth 1910s to 1960s1910s to 1960s Scientific breakthroughsScientific breakthroughs Widespread licensure, professional Widespread licensure, professional
standards, public sector regulationstandards, public sector regulation Development of modern health Development of modern health
insurance and insurance regulationinsurance and insurance regulation Federal Support: medical education, Federal Support: medical education,
facilities, researchfacilities, research Emergence of chronic disease as Emergence of chronic disease as
leading cause of deathleading cause of death
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Four Health Policy ErasFour Health Policy ErasEra III: Government RegulationEra III: Government Regulation 1965 to late 1980s (life expectancy ~70s)1965 to late 1980s (life expectancy ~70s) Creation of Medicare & Medicaid in 1965Creation of Medicare & Medicaid in 1965 Market failure as defining metaphorMarket failure as defining metaphor Cost control as major public priorityCost control as major public priority Government/business partnershipGovernment/business partnership Key instruments to address market failure: Key instruments to address market failure:
Certificate of needCertificate of need Health system planningHealth system planning HMO ActHMO Act Hospital rate settingHospital rate setting
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Four Health Policy ErasFour Health Policy ErasEra IV: Market DominanceEra IV: Market Dominance 1990s through today1990s through today Key idea: market failure can be Key idea: market failure can be
correctedcorrected Phase I: The managed care revolutionPhase I: The managed care revolution
Led to backlash and retreatLed to backlash and retreat Growth in investor owned health entitiesGrowth in investor owned health entities Major provider consolidationsMajor provider consolidations Different role for governmentDifferent role for government Phase II: Era of the consumer Phase II: Era of the consumer
Health savings accounts (“skin in the Health savings accounts (“skin in the game”), transparency, public data releasegame”), transparency, public data release
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What’s Next?What’s Next?
““The solution is not a government-run The solution is not a government-run system or a fend-for-yourself marketplace system or a fend-for-yourself marketplace but, instead, a new approach that but, instead, a new approach that combines the best care options offered by combines the best care options offered by the private sector backed by the the private sector backed by the resources and oversight of Federal and resources and oversight of Federal and State governments.” State governments.”
Sen. John Breaux (D-La.), on his proposal for universal Sen. John Breaux (D-La.), on his proposal for universal health coveragehealth coverage
Still waiting…Still waiting…
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Key State Government Key State Government Roles in Health CareRoles in Health Care
Public Health Facility/Professional Regulation
Regulation of Insurance/HMOs
Health WorkforceEducation Training
Provide/Finance ServiceCost Containment
InformationDissemination
Health SystemMonitoring
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Key State Roles: IKey State Roles: I1.1. Public HealthPublic Health
Population health, disease control and Population health, disease control and prevention, sanitation, environmental prevention, sanitation, environmental protection, bioterrorismprotection, bioterrorismSchism with Clinical MedicineSchism with Clinical Medicine
2.2. Regulation: Facilities and ProfessionalsRegulation: Facilities and Professionals
Licensure: e.g., hospitals, nursing Licensure: e.g., hospitals, nursing homes, clinics, physicians, nurses, social homes, clinics, physicians, nurses, social workers; scope of practice; disciplineworkers; scope of practice; discipline
• Joint Commission on Accreditation of Joint Commission on Accreditation of Healthcare Organizations; Certificate of NeedHealthcare Organizations; Certificate of Need
From Quality Assurance to Quality ImprovementFrom Quality Assurance to Quality Improvement
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What is Quality?What is Quality? Quality of care is the degree to Quality of care is the degree to
which services which services for individuals or for individuals or populationspopulations increase the increase the likelihood of desired health likelihood of desired health outcomes and are consistent with outcomes and are consistent with current current professional knowledge.professional knowledge.―― Institute of Medicine, 1990Institute of Medicine, 1990
Quality is doing the right thing Quality is doing the right thing and doing it right.and doing it right.
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Key State Roles: IIKey State Roles: II3. Regulation of insurance and HMOs3. Regulation of insurance and HMOs
Solvency concerns, consumer Solvency concerns, consumer protectionprotectionERISA (Employee Retirement ERISA (Employee Retirement Income Security Act of 1974 – your Income Security Act of 1974 – your 800 lb. gorilla)800 lb. gorilla)
4. Health workforce education4. Health workforce educationSupport for medical education, Support for medical education, State medical schools, other State medical schools, other professionalsprofessionalsHow to finance fairly in managed How to finance fairly in managed care environment and tight fiscal care environment and tight fiscal times?times?
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Key State Roles: IIIKey State Roles: III5. Provision/financing of health care 5. Provision/financing of health care
services – services – Make/Buy?Make/Buy? Medicaid: fee for Medicaid: fee for
service/gatekeeper; managed service/gatekeeper; managed care/capitation care/capitation
State worker/retiree health State worker/retiree health insuranceinsurance
Indigent services: public hospitals, Indigent services: public hospitals, clinics, uncompensated careclinics, uncompensated care
Health coverage expansionsHealth coverage expansions Other services: mental health, Other services: mental health,
mental retardation, veterans, other mental retardation, veterans, other disabilitiesdisabilities
Pharmaceutical assistancePharmaceutical assistance
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Key State Roles: IVKey State Roles: IV6. Cost Containment6. Cost Containment What can government do about rising What can government do about rising
costs (premiums, prescriptions)? costs (premiums, prescriptions)? Pay for Performance Pay for Performance Evidence-Based MedicineEvidence-Based Medicine
7. Information Dissemination7. Information DisseminationPublic reporting on hospitals, Public reporting on hospitals, physicians, nursing homes, HMOs. physicians, nursing homes, HMOs. Who gets what?Who gets what?
8. Health System Monitoring8. Health System Monitoring Anti-trust & mergers, malpractice, for Anti-trust & mergers, malpractice, for
profit conversions, specialty hospitals. profit conversions, specialty hospitals. When to intervene?When to intervene?
McDonough Slide #McDonough Slide #2020
Federalism & Health Federalism & Health PolicyPolicy
1960 and 1970s1960 and 1970s:: Mandates and Mandates and limited discretion, i.e., Medicaid, limited discretion, i.e., Medicaid, Employee Retirement Income Employee Retirement Income Security Act of 1974 (ERISA)Security Act of 1974 (ERISA)
1980s1980s:: Transition, i.e., New Transition, i.e., New Federalism, block grants, Boren, Federalism, block grants, Boren, WaxmanWaxman
1990s and 2000s1990s and 2000s:: Partnership, Partnership, i.e., Medicaid waivers, HIPAA, i.e., Medicaid waivers, HIPAA, SCHIPSCHIP
Is the partnership beginning to Is the partnership beginning to fray?fray?
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Your Role in Making Health Your Role in Making Health Care Work in Your StateCare Work in Your State
The Job of a Legislator (Fenno, 1978)The Job of a Legislator (Fenno, 1978) Being one of themBeing one of them
Getting around, soliciting advice, Getting around, soliciting advice, relating to culture relating to culture
Providing servicesProviding services Helping constituents, organizing Helping constituents, organizing
community initiativescommunity initiatives Acquiring resourcesAcquiring resources
Using prerogatives to obtain resourcesUsing prerogatives to obtain resources Expressing policy views and interestsExpressing policy views and interests
District/PersonalDistrict/Personal
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Your Role in Making Health Your Role in Making Health Care Work in Your State Care Work in Your State
(cont).(cont). What is politics?What is politics?
The way we decide “who gets what” The way we decide “who gets what” without resorting to violencewithout resorting to violence
What is health care politics?What is health care politics? The way society decides “who gets The way society decides “who gets
what” what” The culture says: Politics is bad/corruptThe culture says: Politics is bad/corrupt Bob Kuttner says: “…Politics is the Bob Kuttner says: “…Politics is the
practice of democracy in real life”.practice of democracy in real life”. This is your turn, your momentThis is your turn, your moment