The Power of Vengeance…Malloy Strikes Back (at the unions, at progressives, at the public?)

Governor Dan Malloy vetoes one of the more important Health Care Consumer Laws of the last decade.

SB 11: AN ACT CONCERNING THE RATE APPROVAL PROCESS FOR CERTAIN HEALTH INSURANCE POLICIES.

It was a powerful tool put forward last year by then Healthcare Advocate Kevin Lembo as a way to make sure the public interest was heard when insurance companies asked for rate increases of greater than 10 percent.

It required a series of public hearing when insurance companies sought approval for gigantic rate increases.

This year it passed the House 131 to 14.

It passed the Senate 36 – 0.

It passed the Appropriations Committee – with the Republicans voting no.

It passed the Insurance Committee – with the Republicans voting no.

It was sponsored by such notables as Senate President Williams and Senators Looney, Slossberg, Prague, Meyer and LeBeau, (some of the most moderate members of the Senate).

Other co-sponsors included Representatives Willis, Grogins and Nardello.

This year’s version had the strong support of Victoria Veltri, the Acting Healthcare Advocate, who took over when Kevin Lembo became State Comptroller.

State Senator Martin supported the bill saying “I believe that our state would benefit most if Connecticut’s rate review system met the federal requirements such that Connecticut would be permitted to perform its own rate review rather than having the reviews done by HHS.”

Other supporters included ConnPIRG, Citizens for Economic Opportunity, the Connecticut Citizens Action Group, the Connecticut Working Families Party, the CT AFL-CIO and the Advocacy for Patients with Chronic Illness – Connecticut’s leading advocate for those facing serious illness.

On the other hand, big business came out with all guns blazing.  The regional director of America’s Health Insurance Plans spoke against the bill (the nation’s primary lobbying entity for the insurance industry).

Other industry organizations against the bill included the IAC (Insurance Association of Connecticut), the Connecticut Association of Health Plans, the American Council of Life Insurers and Anthem Blue Cross-Blue Shield (who had requested and almost got last year’s record-breaking premium increases).

And then last Friday – hours before the long weekend was to begin – when media coverage was sure to be limited – Governor Dan Malloy came to the rescue of the insurance industry.  He took out his veto pen – for the first time – and used it to veto this important legislation ensuring his commitment to greater transparency was – once again – nothing but empty rhetoric.

Malloy’s rationale; “The Connecticut Department of Insurance already conducts an objective actuarial analysis of each and every rate increase request… The current process fully protects Connecticut’s residents from excessive and discriminatory rate increases.”

mmmm… I vaguely remember candidate Malloy trying to make a campaign issue of Anthem’s outrageous rate increase request last year…

More to come…

Yet Again – Connecticut Is Working Toward Its New Motto: Penny Wise and Pound Foolish

Arielle Levin Becker of the CTMirror had a “must read” story last Friday about the end of the State Medical Assistance Program for Noncitizens.

As she reports, two years ago the Connecticut State Legislature eliminated the program that provides health care coverage for newer non-citizen state residents who are over age of 21.

A subsequent lawsuit led to a court order stopping the State from implementing the new law but earlier this year the State Supreme Court reversed the lower court’s ruling and Connecticut’s Department of Social Services is now ending health care coverage for almost 5,000 Connecticut residents.

You can almost hear some people saying “That will teach those non-citizens a lesson.”

But before people breakout the champagne, remember that ending basic low-cost health insurance for 5,000 people will lead to two things.  First, since emergency rooms must legally treat anyone who walks in, some of these newly uninsured will end up going to emergency rooms where what would be a $25 clinic visit becomes a $500 ER visit.  Secondly, since many of these people will end up postponing treatment, some will not only end up in the emergency room but will then have to be admitted meaning thousands or even tens of thousands of dollars in additional costs.

So, as a result of the state’s uncompensated care payments to hospitals and the cost shift that takes place for non-state compensated care, proposals like these often cost society as much, if not more, than it would have if the government simply allowed people to get the community based clinic care they need.

The Malloy Administration points out that anyone losing their health care insurance can attempt to get coverage under the Charter Oak Health Plan, which former Governor Rell championed, but the premiums as so high that it is hard to believe that many of these 5,000 people will be able to get coverage.

And to those who say, “Hey, times are tough, budget cuts are needed, we simply can’t afford to spend money on  providing some type of health care to non-documented immigrants (aka non-citizen state residents) and Connecticut is not alone in cutting off care for these types of people, well, it is true that Massachusetts is now looking to follow Connecticut’s lead on this issue, but Vermont went in exactly the other direction and included non-citizen residents in their landmark health care reform law because they were convinced that not only was it the right thing to do but it was the economically correct thing to do as well.

But here in Connecticut, where pennywise and pound foolish is becoming the norm, we can feel like we really showed those immigrants a thing or two, even if we end up having to pay more for our vengeance.

Value Based Health Care….Rising from the ashes of Managed Care….

(Cross-posted from Pelto’s Point at the New Haven Advocate)

Will Value Based Health Care save American health care and the Connecticut budget?

Is what is being proposed really Value Based Health Care?

Is it a bit ironic that Anthem Blue Cross, the state’s primary health plan carrier, happens to be rolling out what it claims to be a Value Based Health Care Plan in the Northeast at the very same time?

When the news about the Malloy/SEBAC agreement started to trickle out, many people saw the proposed new “Value Based Health Care” as little more than a form of managed care on “steroids.”

But advocates for the coming changes say that, in fact, this new system is really one based on paying for performance (where the medical community is paid for keeping people healthy rather than the present fee-for-service system that pays doctors and hospitals for simply providing services, regardless of the actual outcome).

The new system is projected to be so much better that the Malloy administration and the State Employee Unions believe that, over the next two years, the state will be able to reduce its state employee health care spending by a quarter of a billion dollars.

Considering that the state will save about $140 million a year from the across-the-board wage freeze, the shift to Value Based Health Care will be the 2nd biggest element in the Malloy/State Employee Concession Package.

The proposed SEBAC agreement describes “Value Based Health Care” as a new system, in which employees will sign “a commitment form each year promising to get scheduled yearly physicals, age-appropriate diagnostics (such as a colonoscopy), and two free dental cleanings per year.  In addition, employees with one or more of the 5 listed diseases (Diabetes, COPD or ASTHMA, Hypertension, Hyperlipidemia (high cholesterol), and Heart Failure) which respond particularly well to disease management programs and which are a large part of total healthcare costs––must enroll and comply with the disease management programs.”

As a result of the free office visits and reduced pharmacy co-pays for any of the listed diseases, plus the other elements of the disease management program, healthcare costs for everyone will go down.

The stick to the carrot is that “Employees who after proper notice refuse to sign the commitment or fail to get their physicals (or if they have a listed
disease, refuse to participate in disease management), will have a premium increase of $100 per month, and a deductible of $350 per person per year.”

Finally, “current retirees will also have the option to participate in value based health care, while new retirees will continue to have a choice of free (the POE Plan) or nominally charged (the POS Plan) health care for life, but will be required to participate in value-based health care or pay the $100 per month extra premium.”

So, if the SEBAC Agreement is approved and adopted, state employees and anyone retiring after 9/1/2011 will be required to participate in the new “value based health care system” or pay an additional $1,200 a year and have an additional $350 deductible per person, per year, on top of their existing deductibles and co-pays.

Google “Pay for Performance” or “Value based health care” for some additional background on these issues, but apparently plans based on this type of reform were initially developed in California in early 2000s, and England adopted a more robust system using value based healthcare in 2004.

One of the questions that immediately surfaces is whether the Malloy/SEBAC agreement is a true change to a “value based health care system” or merely an expanded employee wellness program.  Employee wellness programs can be important for employees but do not fundamentally change the way in which health care is funded. Reading through the available literature on this topic, it appears that a true, value based health care system
(one in which doctors are paid for outcomes rather than services) might save money in the long run; but, according to experts, the “return on investment doesn’t start to really pay off for “several years.”

Another issue is question whether the large health insurance companies are really ready to oversee such an approach. They are only now gearing up to handle these new approaches to health care.

According to a report in the Crain’s Detroit Business journal last year, Anthem is offering a Value Based Health product in Colorado that “that guarantees up to a 3% reduction in subsequent-year premiums if plan members participate in screenings and health promotion programs that
lead to improvements in their health status.”

Crain’s also reports that an Anthem official, Greg Hughes, the company’s commercial product development director, said that the company was awaiting approval for a new “VBID product” that it planned to introduce in the U.S. Northeast.

To back up their claim that savings will be forthcoming, the Anthem official said, “the findings in the [research and medical journal] literature are very compelling. We’ve also had some pilot groups with outstanding results from both a clinical and financial perspective, generally in the [administrative services-only] space,” Mr. Hughes said also, “but if it works in the ASO population, it’s a natural fit to start doing it in the fully insured market.”

Interestingly, the description of the new Anthem plan is very similar to the language being used in the Malloy/SEBAC Agreement.   The Business Journal, quoting Anthem, said, “the product will attempt to remove the cost barrier to medication compliance by reducing copayments for high-value drugs and medical services while encouraging plan members to participate in the insurer’s condition management education programs…Initially, it will target five conditions: asthma, diabetes, coronary artery disease, chronic obstructive pulmonary disease and congestive heart failure.”

But unlike the win/win situation being projected in Connecticut (no increase in premiums and savings of a quarter of a billion dollars in two years” the report goes on to say that, “because of the additional cost of lowering or waiving copayments for prescription drugs and some services, the Anthem official explained, “The pricing is still being worked out…The promise of a value-based insurance design is to make an investment in your employees. When you do that, you are really looking at increasing the plan’s cost.”

In true health care industry fashion, another Anthem official said that it wasn’t so much about reducing premiums as about increasing employee
productivity.  “One thing fully insured clients will benefit from is the effect on overall productivity…when their employees are compliant and educated, they’ll see decreased absenteeism, disability costs and increased productivity.”

Good news about the increased productivity, since the Malloy/SEBAC plan also relies on more than 1,000 employees leaving state service and not being replaced next year.

Here is the link to the Crain’s story for those interested in reading more: http://www.crainsdetroit.com/article/20100315/HEALTH/100319908/fully-insured-market-has-yet-to-embrace-value-based-design#