March 9, 2011

SustiNet: As Debate Intensifies, Stakes Rise

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When legislators and policymakers talk about saving money on health care in Connecticut, Praveen Dhulipalla gets nervous.

Eighteen months ago, he opened the Waterbury Pharmacy on East Main Street in the heart of the city’s downtown. The independent pharmacy—one of about 100 in the state—caters to senior citizens and the growing Hispanic population. Roughly 60 percent of his customers are on state-funded insurance, including Medicaid recipients and public employees and retirees. Many more are on Medicare. Dhulipalla offers them free delivery, personal consultations and convenience. But that doesn’t come cheap: his average cost per prescription, he said, is $11 to $12.

So he worries about the long-term effects of a number of proposals swirling around Hartford this year, as Gov. Dannel P. Malloy and the Democratically-controlled General Assembly struggle to cut costs while taking steps toward creating a health care plan, called SustiNet, aimed at bringing coverage to tens of thousands of uninsured state residents within the next few years.

As lawmakers wrestle with the plan’s fine print, Dhulipalla and others wonder: Who’s going to pay? And how much?

Proponents say they can save money and make people healthier through basic economies of scale: more people in the state’s insurance pool would allow Connecticut to bargain better with drug companies, and get prescriptions for less. A bigger pool also would encompass more healthy people as well as the sick, spreading the risk and cutting premiums. And by having a huge group under one insurance provider, the state could essentially reform the way we interact with doctors and hospitals from the top down, by pushing cutting-edge ideas about managing small illnesses in order to prevent more serious diseases.

But in order for the state—and its consumers—to save money, somebody has to lose money.  Dhulipalla is afraid it will be him, earning lower reimbursement rates.

“So they say they’re saving $66 million on this (prescription) bill, but at the end of the day, we can’t see that money, because you’re going to spend a lot of money on the health care, either at the hospital or in the nursing homes,” Dhulipalla said.

It’s also undeniably about his business.

“I have to pay bills,” he said. “I have to pay the rent.”

Dhulipalla is a member of the Connecticut Pharmacists Association, which has been blanketing legislators with calls about the planned prescription changes. It’s a separate piece of legislation from the SustiNet bill, but all of the reform proposals are linked, because expanding access to insurance depends heavily on paring back some of the roughly $8 billion the state spends now insuring state workers and retirees, poor adults and children, and others with special needs.

It’s an example of the difficulty of the task facing Malloy and the legislature: steering health care in Connecticut is a gargantuan undertaking, fraught with all obstacles. While few would argue that the status quo is ideal, the wide spectrum of constituencies with something at stake here is both unusual and vexing.

Add in a decidedly inhospitable budgetary and economic climate, and the equation becomes even harder to solve.

At issue now is whether a goal that some Democratic lawmakers, and supporters of universal coverage, have been chasing for a decade can be realized in the face of these obstacles, including the ongoing uncertainty over the evolution of the health care reform bill Congress passed last year.  A board created by the legislature to study SustiNet finished its job in January, sending a proposal to lawmakers to sort out the details.

More than halfway through the legislative session, the SustiNet bill is grinding through the committee process with the Public Health Committee approving the bill this week but deleting a section that protected doctors against malpractice lawsuits. Without the provision, the Connecticut State Medical Society may withdraw its support of the bill.

What’s At Stake

For supporters of universal coverage, it’s time to move. Stan Dorn, a senior fellow at the Urban Institute, a Washington, D.C.-based think tank, has worked closely with the Universal Health Care Foundation of Connecticut, which has been pushing the concept for years.  Dorn said that for a number of reasons, not least because the federal health care law is loaded with financial incentives for states, it’s imperative that the state move forward this year.

“It’s real simple: in the short term, the proposal is about doing a better job with the people that the state’s already paying for. In the longer term, it’s about offering a new choice that’s for everybody in Connecticut,” he said. “The question is, does Connecticut want to be a leader, the way it is today, or does it want to be at the back of the pack, and just go along with what the federal law says?” Dorn asked. “The legislature has done hard work over the years…does the governor want to say, ‘no thanks, we want to be at the back of the pack’?”

The SustiNet proposal follows this timeline:

• Starting as early as this summer, cities and towns could buy into the state insurance program, for both their workers and retirees.

• Beginning in January, if possible, patients now covered under Medicaid and HUSKY, the state’s child health care program, would join state workers in one big insurance pool, with the same benefit levels each program has now.

•Small businesses, nonprofit organizations and companies that work under state contracts would be able to buy in at some point later, although there’s no firm date.

•If things stay on track, around 2014, individuals and businesses of all sizes could buy in. In theory, this is around the same time that the so-called “exchanges” that the federal reform law sets up in each state would come online. SustiNet, as a true “public option,” would be sold on Connecticut’s exchange, presumably alongside other individual plans sold by private insurers.

In addition to SustiNet, there are a number of other proposals, including the prescription drug idea that has Dhulipalla and his colleagues so concerned. The assembly voted last year to allow cities and towns to piggyback onto state-level savings; this year’s bill would bring Medicaid, HUSKY and Charter Oak patients into a larger pool.

House Speaker Christopher G. Donovan is pushing for the ability to let cities and towns join the state insurance plan, which would essentially complete the first part of SustiNet without allowing full public access over time. That bill also is silent on changes intended to boost both efficiency and efficacy of health care.

Finally, there are multiple bills that aim to lay down rules for the state’s insurance exchange—basically, its market for individual health care. States are waiting on the federal government to offer guidelines, but proponents of acting now, including Comptroller Kevin Lembo, say there are benefits to getting in front of Washington.

Lembo was on the board that mapped out SustiNet’s basic structure and was the state’s healthcare advocate before moving into the comptroller’s office in January. He compared this issue to when Connecticut lawmakers worked successfully with their federal counterparts to ensure a new law aimed at improving mental health coverage didn’t limit the state’s generous mandates.

“If we don’t engage in the rule-making, we may be forced to live with rules we’re uncomfortable with,” he said.

The Basics

As Dorn, Lembo and others emphasize, SustiNet is very different from the universal-coverage law in Massachusetts and from the federal health care reform bill. That’s because, if it becomes law, Connecticut will be making changes on both sides of the ledger: Insuring the uninsured and controlling costs through better-managed health care that, theoretically at least, should improve overall health.

“In Massachusetts, they made a choice between controlling costs and offering access,” said Alice Straight, communications officer for the Universal Health Care Foundation of Connecticut. “SustiNet is looking to deal with both at the same time.’‘

These are the key concepts involved:

• Pooling: By bringing more people under one umbrella, the state can better manage risk because more sick people will be balanced by more healthy ones. Size has other advantages, too, including giving the state a stronger bargaining position with drug companies and care providers, including doctors and hospitals.

• Managing care and improving outcomes: Supporters of reform see Connecticut as a petri dish for proving that managing smaller, less severe medical conditions is both cheaper and more effective than waiting until a more serious disease develops. An example is early stage diabetes, which is manageable through diet, exercise, medication and vigilance, vs. the kidney failure that requires either expensive, limiting dialysis or a transplant.

At the heart of these reform ideas is the concept of streamlining care through so-called “medical homes.” Basically, that means having a primary-care provider—whether it’s a doctor, a nurse, or a physician’s assistant—that is a first contact. By offering access to preventative care, ER visits and other expensive options can be minimized, supporters say.

• Saving money: Proponents point to projections that SustiNet and other reforms can save taxpayers lots of cash. For example, Donovan says that if every town and city in the state joined the state’s health care system, they could save $70 million each year. Another $30 million could come from joining the state’s prescription plan. Advocates say the state could save more than $250 million each year because of the incentives, mostly involving Connecticut’s Medicaid obligations, in the federal health bill.

Ultimately, the long-term savings depend on changing how care is given. Economists and other experts who’ve studied the state’s health budget have lots of projections, but there’s no way to know for sure until these ideas have taken effect.

What’s also unclear is how much start-up money SustiNet would need; despite complaints from opponents who see the proposal as a budget-buster, no estimates of those costs are available.

The hope is that near-universal coverage will be a kind of by-product of pooling and reforms in the delivery of care—by saving money and making everyone healthier, the state, as a not-for-profit insurer, can stand to offer affordable insurance to individuals without soaking taxpayers.

“SustiNet takes out of the equation having to make money for another entity, and therefore the money is being spent on more of the services,” Straight said.

The Politics

After years of debate and discussion these reform concepts are well-known around the Capitol. But, as with all efforts to change course, the dynamics of actually lining up votes are tricky.

The Connecticut Hospital Association and the state’s big insurance companies, major employers as well as political donors, oppose the idea of a public option, although some industry types support other parts of the proposals. Doctors and hospitals, as well as pharmacists like Dhulipalla, worry about payments. The latter is a particularly serious issue, since proponents agree that having insurance is largely useless if you can’t persuade a doctor to see you.

Eric J. George, associate counsel for the Connecticut Business & Industry Association, which also sells insurance plans to its members, said that while his organization supports many of the medical reforms, there’s no concept of a public option it can support. George said a public option would be risky for taxpayers, in part because it depends so heavily on funding from the federal government.

While SustiNet supporters say there’s no way Congress could change the money piece of the health care legislation without revamping the law, George and others remain skeptical.

“To budget in the federal money and rely on it, I think, is dangerous, because you don’t know if you’re going to get it,” he said.

George said the public option would also be unfair to private insurers looking to sell individual coverage on the exchange because there won’t be a level playing field, especially if the state’s coverage is cheaper because of taxpayer-funded subsidies.

Then there’s Malloy, who has repeatedly reiterated his support for the spirit of SustiNet while shying away from committing funding or political capital to the ideas. Malloy’s staffers are ironing out differences over how the state’s exchange will work, and insiders are confident that SustiNet can launch even if the governor refuses to fund its organization.

In fact, there’s a strategy to the thicket of bills under consideration in Hartford: if SustiNet falters, other concepts, including pooling for cities and expanding the prescription program, can survive.

“I think it’s imperative for the state to move ahead quickly with the delivery system reforms and cost reform,” Dorn said. “Now is exactly the time that the state needs to find ways to save money and help people.”

{media_4}Lembo said there seems to be broad agreement that it’s a good idea to bring as many people who are already state clients under the same umbrella. It’s when you start talking about expanding beyond that group and into individuals around the state that the conversation gets heated.

“The well-informed arguments on both sides of this are good arguments and need to be considered,” Lembo said. “But then there’s noise. And it’s difficult to get beyond the noise.”

It’s debatable whether SustiNet should be spun off into its own organization, he said. There are also legitimate questions about the public option idea, and Lembo and others support studying both the wisdom of creating it and the potential business model. Those are less important, especially in the short-term, than pushing the care reforms and moving to curtail spending.

“Call it SustiNet—call it whatever you want—but move the innovation forward,” Lembo said.

The reform process is further along than it ever has been in Connecticut, which has caught the attention of the commercial carriers, Lembo said. He hopes the state’s moves will affect private business practices, pushing the insurers to follow the public sector’s lead in terms of promoting healthier people and more efficient medical care.

“We don’t build a public option just because we can,” Lembo said.

It is difficult to deal with each constituency with something at stake—like Dhulipalla and his fellow pharmacists—as the status quo crumbles. But that, Lembo said, is about forces much broader than reform in Connecticut.

The current system is unsustainable, he said, not just here but around the country.

“All of that is coming one way or another, whether Connecticut does all of this, none of this or some piece of it,” Lembo said. “Change comes.”

Amid all these questions, people like Andrea Penta are watching with a combination of hope and trepidation. Penta, 23, spoke with quiet force when she sat in front of three legislative committees at a public hearing last month. Her message, she said, was simple: give her a way to afford health insurance.

Penta, who lives in New Britain, spent a year working for AmeriCorps after she graduated from college. She’s been uninsured for more than nine months, and said she can’t afford the $350 a month it would cost to buy insurance on her own.

Penta said she was unemployed for a couple of months, and recently got a new job working in a group home for the disabled. But there’s a six-month waiting period before she’s eligible for coverage through her job.

Penta said she sought care from a free clinic last June, but the first appointment she could get was in September. The federal law would allow her parents to put her on their plan, but Penta said that’s not a viable option in her case.

“It’s so ridiculous,” she said. “I’m not just a number.”

Penta told lawmakers that they owe something to the people who are falling through the cracks in the health care system.

“I just wanted to remind them that we elected them, and they should listen to us,” she said.
The Universal Health Care Foundation is a C-HIT funder.

 

One thought on “SustiNet: As Debate Intensifies, Stakes Rise

  1. i pay $90 a month for aetna health insurance which includes dental.  if you’re fairly young and healthy, you should be able to pay for insurance.

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