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Sunday, June 12, 2005
Cost weakens support for Dirigo Health reforms
Copyright © 2005 Blethen Maine Newspapers Inc. | ||||||
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Also on this page: DIRIGO CHOICE NUMBERS | |||||
The undertaking sounded vast, almost insurmountable. Take a health-care system with costs spiraling out of control and clamp down on spending. At the same time, improve quality of care and cover thousands of uninsured Mainers. Other states have attempted health-care reform on one or more of these fronts. But the Dirigo Health reform law, proposed by Gov. John Baldacci and signed into law two years ago this week, drew national acclaim for being the first to tackle all three. The idea worked like this: Insure more people in Maine so there will be less charity care and fewer unpaid bills; improve the quality of care so it is more effective and, as a result, cost-efficient; find additional savings in the ways health care is delivered in hospitals and doctors' offices. Ultimately, costs should go down and premiums should stabilize for everybody. While many agree with the premise, debate over whether Dirigo Health is working resembles the fierce partisan fights in the weeks before the Legislature passed the law in 2003. Supporters say that it's already creating savings in the health-care system while bringing relief to uninsured and underinsured Mainers. Part of the law expanded MaineCare, the state's Medicaid program for low-income residents, and created DirigoChoice, the state-subsidized insurance program that prices premiums on ability to pay. Rebecca Weinstein of Portland is one of 7,300 people who have enrolled in DirigoChoice since it was launched in January. Through the program she is paying $250 a month for coverage that includes 100 percent preventive care - $400 less than through a comparable private plan - and is covering two other employees in her technology consulting firm. "If this plan didn't exist, I can't imagine how I would offer health insurance to my employees," Weinstein said. "At the very best, it would be catastrophic care, which wouldn't be acceptable. I have an employee who needs regular care." Critics, chiefly Republicans and free market advocates, agree with Dirigo Health's goals. Many GOP lawmakers voted for the bill two years ago, handing the governor a 105-38 victory in the House and a 25-8 vote in the Senate. But they say it's since become evident that Dirigo Health is unaffordable. A PUSH TO DELAY SURCHARGE About one-fifth of the state's residents were already enrolled in MaineCare when it was expanded in May - more than the state budget can bear, Republicans say. And DirigoChoice, which is carried by the state's largest insurer, Anthem Blue Cross Blue Shield, is described as too expensive to sustain. After a $52 million one-time allocation by the Legislature runs out next year, the Baldacci administration plans to fund subsidies for income-eligible DirigoChoice enrollees with a surcharge on insurance companies. Called the "savings offset payment," the assessment on paid claims was written into the law to reflect savings insurers should see as a result of Dirigo Health initiatives such as reduced bad debt and charity care. Republicans want to delay the surcharge until summer 2006 and shift the responsibility of determining the savings from the Dirigo Health board of directors to lawmakers and the state's insurance commissioner. The months and years ahead will no doubt lead to more attempts to revise DirigoChoice, which Republicans say won't be able to attract the 31,000 enrollees projected for the first year because the price is not low enough. "I believe it's on a crash course right now unless some fundamental changes are made," said Rep. Kevin Glynn, R-South Portland, who voted for Dirigo Health in 2003 but is now leading the charge to revise it. Supporters concur that Dirigo- Choice prices are similar to those of competitors on the small group market, but they say the benefits are much better and that people can qualify for subsidies. Critics of Dirigo Health are not giving it time to work, says Trish Riley, director of the Governor's Office of Health Policy and Finance and chief architect of his health reforms. "Everybody's got to be around the table: consumers, providers, businesses who buy health care," she said. "But I'm afraid everybody's gone to their corners." In the last couple of years, the state's relationship with hospitals, in particular, has fissured over Dirigo Health. Hospitals, identified by the governor's office as accounting for a third of health-care spending in the state, have voluntarily agreed to meet targets on cost increases and profit margins. But, fearing overregulation by the state, they have protested tighter restrictions on how expensive capital expenditures get approved and killed some of the ideas coming out of a governor-appointed commission created by Dirigo Health to study Maine's hospitals. OPPOSITION FROM HOSPITALS An early proposal by the commission's chairman to merge some hospitals with larger ones and slash jobs to reduce costs prompted a fierce reaction from hospitals, which argued they not only provide necessary care but are the economic engines behind many communities. Hospitals say the state is not in a good position to regulate them considering it under-reimburses for MaineCare patients, forcing hospitals to shift losses onto the privately insured. In response, the state last month settled a legal dispute over hospitals' claims of unpaid MaineCare payments dating back to 1993 and has increased reimbursement rates for both hospitals and doctors. But hospitals say it is not enough and cost-shifting will persist; the May expansion of MaineCare is seen as adding to the problem. "As philosophically agreeable as Dirigo Health is," said Jud Knox, president of York Hospital, "I've never seen the financial underpinnings to support its delivery." The governor acknowledges that "we stepped on some toes along the way, broken some dishes maybe." "But the fact is that the people of Maine wanted a real solution" for health care, he said. Baldacci insists Dirigo Heath reforms are on track and have recorded many successes. He says the coverage of 7,300 people in DirigoChoice is not only keeping people healthy but also helping the economy. It's also made the insurance market more competitive, with Harvard Pilgrim beginning to aggressively advertise in the small group market. On another front, the Maine Quality Forum, the quality watchdog formed by Dirigo Health, is promoting best practices and educating consumers. MORE ON HOSPITAL FINANCES Hospitals are required to report more about their finances. Only a certain number of expensive medical services and buildings will be approved each year, so there is less spending. Coming up is a biennial state health plan that will put to paper a statewide strategy on how to deliver health care in a way that is cost-efficient and best for patients. Emphasis will be placed on preventing chronic conditions, such as diabetes and asthma, the governor's office says. How future Dirigo Health initiatives will fare is unclear, but one thing is for sure: Dirigo Health has raised the profile of health care in Maine. Even Knox acknowledges that the statewide discussion on access to care has influenced his own institution. York Hospital earlier this year raised the income cutoff for eligibility for free care to 250 percent of the poverty level - a much higher level than at larger hospitals. More ordinary Mainers, too, are entering the conversation. Last month, the governor's office held "Tough Choices," a giant focus group on health care. While critics described Tough Choices as engineered, the event clearly attracted people who would not otherwise go to Augusta to speak out on health care. Next up are community forums intended to generate public suggestions on the state health plan. There is still a lot of new territory to cover, and other states are watching to see what works - and what doesn't. "Other states are trying to address the issue of the uninsured and looking at their health-care system," said Laura Tobler, health policy analyst for the National Conference of State Legislatures. "I think Maine is looked at as a pilot project for other states."
Staff Writer Josie Huang can be contacted at 791-6364 or at:
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