Overview

This summary is based on "Comprehensive State Reforms Address Health Care Quality and Efficiency" in the March/April 2007 issue of the newsletter States in Action. Governor Rendell introduced a comprehensive health reform plan in January 2007 intended to provide access to affordable, quality health care for all state residents. It features an individual mandate on those with income above 300 percent of the federal poverty level, and a "Cover all Pennsylvanians" (CAP) program that offers basic, private health coverage to small businesses and the uninsured, with subsidies for lower-income people.

The Issue: State legislatures and governors are increasingly proposing or implementing comprehensive health care reform plans that extend beyond coverage expansion to address the quality of care, health promotion, and cost containment. These multifaceted plans aim to improve the overall performance of the health system—recognizing the imperative to increase the value of care obtained for the dollars spent. Maine, Massachusetts, and Vermont have passed and are implementing such comprehensive reforms, and governors and legislators in many other states, including California, Maryland, Pennsylvania, and Wisconsin, are introducing variations of these reforms as well as new strategies. Since others have written about the coverage aspects of reform plans, this profile focuses on their efforts to address health care quality and efficiency. Most of the quality and efficiency strategies are related to chronic care management, wellness and prevention, patient safety, and transparency through data collection and health information technology. Proponents of these strategies emphasize that these measures to improve the quality of care and health status are integrally tied to cost containment. They argue that practices that help people achieve healthier lives, help providers reduce errors, and help purchasers make better, more informed decisions also generate savings in the long run. The reform plans include both incentives and mandates, both "carrots" and "sticks." A primary focus of many of these comprehensive reform plans is chronic care management, particularly for asthma, diabetes, and heart and lung disease. Policymakers cite data illustrating that the majority of health care costs are attributed to a minority of patients with chronic disease, and that these patients are not receiving the right amount or best kind of care. For example, Pennsylvania's Governor Rendell points out that, "Even though 75 percent of health care costs can be traced to the 25 percent of patients with chronic disease, these Pennsylvanians received only 56 percent of the care they need." The reform proposals seek to increase use of nationally proven models or "best practices" for treating chronic disease through pay-for-performance and other incentives to providers. The reform plans also promote prevention and wellness, with a particular focus on tobacco use and obesity. They feature nutrition counseling, smoking cessation, and exercise programs, provided through such mechanisms as telephone help lines, schools, and community partnerships. Some reform proposals would establish insurance plans that reduce premiums or copayments if enrollees engage in healthy activities. Comprehensive reform plans also include provisions to support health information technology that promotes patient safety (e.g., electronic medical records, e-prescribing), data collection, and public reporting. Proponents expect that making comparative performance information available to purchasers of health care, including state agencies, employers, and consumers, will enable them to make better choices. Such data could also encourage providers to improve the quality and efficiency of the care they provide. Target Population: Pennsylvania residents The Intervention: Governor Rendell introduced a comprehensive health reform plan in January intended to provide access to affordable, quality health care for all state residents. It features an individual mandate on those with income above 300 percent of the federal poverty level, and a "Cover all Pennsylvanians" (CAP) program that offers basic, private health coverage to small businesses and the uninsured, with subsidies for lower-income people. The following are the quality improvement features:

• requirement that hospitals adopt system-wide quality management/ error reduction systems and interoperable electronic medical records;
• pay-for-performance initiative led by the state and other major payers, and eventual cessation of payments to providers for care related to hospital-acquired infections and medical errors;
• alignment of payments to support the use of the national chronic care model;
• development of an integrated model of care for individuals with co-occurring disorders, including substance abuse or mental disorders;
• expansion of palliative care specialists and promotion of advance care directives (presumed to reduce use of expensive and unnecessary end-of-life treatments);
• greater availability of home- and community-based long-term living services and promotion of long-term care insurance;
• smoke-free workplaces, restaurants, and bars, as well as incentives rewarding healthy behaviors;
• expansion of wellness education and access to nutritious foods in public schools; and
• data collection from providers and creation of a consumer-friendly Web site providing information on costs and quality of care and prescription drug costs.

Additional measures to enhance affordability and contain costs include:

• a commission to recommend criteria for determining annual regional and statewide dollar caps on aggregate capital expenditures, based on regional health need and technology assessments;
• adjusted community-rating, rate bands, and a standard of 85 percent or higher loss ratios in the individual and small group insurance markets; and
• greater use of advanced nurse practitioners, midwives, physician assistants, pharmacists, dental hygienists, and other licensed health care providers to both improve access and reduce the cost of care.

For Further Information: Read more about the Pennsylvania Governor's Health Care Proposal and Rx for Quality.