Minnesota seeks higher-quality, lower-priced health care

A purchasers alliance will reward physicians and health plans for meeting standards, but experts want to know who will set the standards.

By Joel B. Finkelstein — Posted Jan. 3, 2005

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Washington -- A new cost-saving plan put forth by the governor of Minnesota has some physicians worried that the state is going to give up its title as the healthiest in the nation.

Minnesota has earned that distinction nine times in the United Health Foundation annual report, which bases its rankings on rates of health coverage, heart disease, infant mortality and other health factors, which always have been emphasized in the state.

During his campaign, Gov. Tim Pawlenty promised not to raise taxes, and in a state reeling from budget shortfalls, that means cutbacks are inevitable. So, bound by his campaign promise, Pawlenty has been seeking ways to slow the rising cost of health care -- one of the state's biggest expenses.

Pawlenty recently announced the launch of the "Smart Buy" purchasing alliance. The alliance was formed to use market forces to drive higher-quality care, better use of technology and improved management of chronic conditions, according to a statement.

It is made up of large employers, including the state government itself, who will use their combined purchasing power and financial incentives to encourage health plans, hospitals and physicians to meet quality standards and other goals set forth by the group.

The plan, which state officials say can be implemented without legislative action, is the first product of the governor's "Health Cabinet," a quasi-official body set up to devise ways to blunt dramatically rising health care costs.

"The public has the perception that to cut costs you have to reduce the quality of care," said Daniel Wolter, special assistant to the cabinet. "We see things just the opposite."

"Encouraging health care providers to better manage chronic diseases, rewarding providers for improved health outcomes and encouraging patients to use the best providers will not only help contain costs, it will improve the quality of care," Pawlenty stated.

The plan banks on cost savings from cutting waste and excess out of the system, as well as streamlining the bureaucracy of health care. The governor's office hasn't produced estimates of how much the plan will save.

The governor's goals are noble, said Michael Gonzalez-Campoy, MD, PhD, president of the Minnesota Medical Assn. But he is not convinced that the governor's plan is the best way to accomplish them.

"They approached this from the perspective of -- not the patients, not the physicians -- but big business. So it was a great plan for big business, but it left everybody that is important out of the equation," he said.

Physicians are not alone in being concerned that quality care is good in concept, but implementation will depend on how you define quality care.

"Who decides what is inappropriate and unnecessary?" said Twila Brase, president of the Citizens' Council on Health Care, a free-market health care think tank in St. Paul. "This is government and employer groups working together to decide what kind of health care all Minnesotans will get."

As Dr Gonzalez-Campoy pointed out, what is inappropriate in one situation could be appropriate in another. There are wide variations, both regional and socioeconomic, in the appropriate practice of medicine.

By applying a one-size-fits-all definition of quality, the government will end up penalizing, for example, physicians who practice in inner-city clinics, those who are down in the trenches providing care, because they haven't met those quality benchmarks, he said.

Another concern is that the drive to create competition not overshadow the importance of knowledge sharing in health care. There are no trade secrets in medicine, said Ray Christensen, MD, assistant dean for rural health, University of Minnesota Medical School-Duluth.

"There is a strong feeling that in health care, everybody needs to collaborate on care. If we have a way of doing care better, everybody needs to do it," he said.

Other options

As an alternative to the governor's plan, the MMA has proposed adding $1 to the tobacco tax, which would raise $260 million a year in state revenue to take the edge off the rising costs.

"If we put money up front into preventing obesity, diabetes, congestive heart failure, asthma, teenage pregnancy, workplace accidents, we are going to take a significant, significant cost out of the system, by preventing hospitalizations," Dr. Gonzalez-Campoy said.

But the physicians agreed that the governor's plan has aspects they like, such as measures to cut down on administrative burdens.

For example, one regulatory reform is to create a third-party credentialing entity so physicians don't have to go through a verification process with each health plan and hospital for which they provide services.

Physicians also generally embrace information technology such as that being implemented by Medica, the largest health plan in the state. In January, the company will send new cards to members with a magnet strip to let physicians' practices access eligibility and co-pay information using existing credit card machines.

The medical community hopes to keep an open dialogue with the governor's office.

"There is common ground," Dr. Gonzalez-Campoy said. "The common ground is that we all want to do what is best for the health of the state, and we all want to do it in a manner that emphasizes quality of care and emphasizes cutting costs."

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Alliance's agenda

The Smart Buy Alliance has planned four reform strategies designed to influence market-based trends that hold the promise of slowing the growing cost of health care. They will:

  • Either require that physicians are certified by "Best in Class" programs that assess levels of expertise, experience, proficiency, quality of care and outcomes, or, at least, reward those who are certified.
  • Adopt uniform measures of quality and outcomes using value-based purchasing tools that reward physicians, hospitals and others who provide high-quality, good outcomes and cost-effective care.
  • Empower consumers with easy access to information to help them make good health care decisions.
  • Demand better use of information technology, including electronic systems for filing claims and for tracking outcomes and patient satisfaction.

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External links

Minnesota Gov. Tim Pawlenty's Health Cabinet (link)

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