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Published: 29 November 2022 29 November 2022

[This is part 2 of a multi-article series on the Grant County Commission long work session on Nov. 15, 2022. It consists of the second presentation, which talked about the Health Security Act.]

By Mary Alice Murphy

At the Grant County Commission work session o Nov. 15, 2022, Mary Feldblum, executive director of the Health Security Plan for New Mexico, introduced herself before talking about the plan she promotes.

"I am a former academician, with a Ph. D. in sociology and a background in economics," Feldblum said. "I got involved in lobbying, and I was asked to write a health care plan. I represent now a coalition of 170 groups in New Mexico representing many diverse fields. I recently was contacted by the Gallup Hospital. I'm glad to hear you have gotten your arms around your hospit al situation. I see the state is dealing with access and signing up people to Medicaid and beWellnm. Access is important, but will it make insurance more costly? I want to focus on systemic costs. We have to put our arms around costs."

She mentioned a Commonwealth Fund article that points out many Americans have health insurance, but they come with so many cost barriers and exclusions that it's "coverage in name only."

"The issue before us is what we can do about rising health care costs," Feldblum continued. "We will not address access if costs keep going up, because people will not be able to afford the care they can access."

In her handout, she said that covering more people will not address the systemic costs of why the cost of services is rising, and the system has become so complex that it frustrates providers and patients alike.

She describes the Health Security Act as a homegrown approach to a systemic change.

"We have spent years gathering input from New Mexicans from all over the state," Feldblum noted. "We wanted to make sure we addressed both urban and rural issues. The Act would enable our state to create a plan that would guarantee comprehensive coverage for most state residents, along with freedom of choice of health care provider. Companies that self-insure, such as Freeport-McMoRan, can voluntarily join. Those covered through federal programs, like Medicaid, can participate if waivers and agreements are granted that protect beneficiary entitlements and maximize federal dollars received by the state. Services offered should be no less than those received by state employees, and private insurance may pay a supplemental role, as is the case with traditional Medicare."

She said the Act would be administered by a geographically representative citizen's board, like a co-op.

"Right now, my premiums go out of state," Feldblum said. "This co-op would ensure the payments stay inside the state and would feed rural hospitals."

She said three independent New Mexico studies, the most recent in 2020, have demonstrated that such a plan will dramatically reduce the rate of increase of rising health care costs, saving hundreds of millions of dollars in the first five years alone. She presented a couple of graphs in the handout to the commissioners that showed comparisons with baseline costs versus four different scenarios.

Feldblum then asked and answered: "Why does the Health Security approach result in lower costs?"

She said it includes key provisions that, based on experiences of other countries, lead to lower health care costs and provide guaranteed, secure access to care. All countries that have guaranteed universal coverage have developed policies that not only result in lower per capita spending, but also result in better health outcomes than in the United States, she alleged. The countries also have private independent medical practices that are alive and well and also allow a strong private insurance supplemental market.

She listed the key policies that lead to lower costs:

"We have the most complicated system in the world," Feldblum said. "But there is no one way to develop these universal health care policies. That is why the Health Security Plan design process is so critical."

The Health Security Act sets out guidelines for the plan but does not provide details about how it will work. "The focus of the design process is to learn about others' experiences and figure out what will work for our state."

In 2021, the Legislature allocated funding to the Office of the Superintendent of Insurance to oversee the design. In 2022, $790,000 was appropriated to the OSI to continue this work. She described the process as putting together the pieces of a jigsaw puzzle. "You cannot implement one reform without impacting the other pieces."

Two topics build on last year's research. The first is global budgets, for which two consultant reports concluded that global budgets could be a positive approach to address the financial issues faced by too many New Mexico hospitals and the communities that depend on them. Global budgets provide guaranteed revenue for hospitals. The second topic addresses an all-payer rate system that would set uniform reimbursement rates that apply to all health care professionals within a specialty and may apply to both private insurance companies and public programs like Medicaid. It would reduce billing complexity. She noted that Germany and Japan have simplified fee scales.

Other topics to be addressed include prescription drug affordability. She said it was worth exploring, but she doesn't have the expertise. She noted that Malta, with only 500,000 people, negotiates drug prices

An inter-operational IT system would create a system that applies to all New Mexico payers, whether for private insurance or public programs, and all providers, "so that wherever you go for health care, they will have access to your complete medical history." She conceded that it would have to address privacy and security concerns. "I think we have a lot to learn from someone in Germany or Australia. It will take time, but it's an important part of costs.

Feldblum said it is necessary to integrate Medicaid into the plan and maximize the federal dollars, because the program covers more than 900,000 New Mexicans. She said she has heard from independent pharmacists that Medicaid has three different formularies, "so we need to figure out how much it actually costs in New Mexico."

The final topic to address was state health expenditures. Jim Peach, retired NMSU professor of economics, said it is very important for the state to collect annual health care expenditure data so "we know how much we are actually spending. It will be necessary to determine the cost of the Health Security Plan as designed."

Feldblum said the problem with rising costs and global budget is that hospital expenses are increasing at dramatic rates due to higher costs for medical equipment and pharmaceutical supplies, staffing and other factors. She said the superintendent of insurance "has sat on the rising costs and global budgets. We are finding that hospitals are responding to the rising costs by cutting services, such as obstetrics or pediatrics and are also cutting staff. Part of the problem is we see too many examples of people managing our hospitals from out-of-state."

She reiterated that global budgets would provide a stable revenue source for hospitals, rather than depending on filling beds and raising costs.

Feldblum said a Maryland commission developed global budgets and its had success in reducing costs, while maintaining quality, and keeping the savings, as well as allowing investments in patients for follow up.

Last year's reports to the superintendent of insurance from two separate contractors concluded that establishing a global budget system would work in New Mexico and would "be a viable solution for funding New Mexico hospitals."

The superintendent of insurance is seeking consultant to be responsible for overseeing how a global budget could work in New Mexico. "The consultants are asked to create a stakeholders' task force."

Her final thoughts were that "New Mexico cannot afford to continue on the path of patching up a flawed system. …Costs will continue to rise unless we establish policies that enable us to take control of what has become an out-of-control system…. We could become a model for other states."

District 1 Commissioner and Chair Chris Ponce asked if anyone had done a study with providers on an all-payer system. "I understand simplifying the cost system, but will we lose providers? For instance, a cardiologist may charge more than an orthopedist."

Feldblum said the coalition includes a lot of providers. "We've also been talking to a lot of private associations. Most of them had not heard of an all-payer system. We wrote a policy paper on the issue. You have to deal with experience levels. The design process has to be inclusive of all providers. My answer is the physicians will not come just for salary. The wife wants a job; they need to consider schools for the kids; and what they want to do when they are not working. What is frustrating for a lot of providers is not being able to provide health care. I think New Mexico can take control of the system."

Ponce said he would like to see a survey of "our providers."

District 2 Commissioner Javier "Harvey" Salas asked what the average cost would be.

Feldblum said right now, the cost depends on the deal that the provider and the patient cuts. "When an economist looks at the overall cost system, he looks at administrative costs. We don't know what the real cost is."

She said that is the purpose of the design process to come up with how much it will cost and how much "we will pay."

Salas said he sees the pitfall as the availability of surgeons and providers.

Feldblum conceded that are challenges. "Studies from the World Health Organization compare different countries and the New York Times notes that the U.S. spends far more, and the care is less."

Salas asked if the self-insured companies have pitfalls from very expensive procedures.

Feldblum said they often are not covered, so personal medical bankruptcies are increasing.

She noted a group of physicians had written a letter to legislators begging them to fund a design plan. "The Legislature is also concerned about provider recruitment. They are looking at higher payments. I don't think that's the solution."

District 3 Commissioner Alicia Edwards said she was curious to know if Feldblum had a specific request of the commissioners.

"I wanted you to know about the superintendent of insurance and what he is doing," Feldblum said. "I think it is important that you may want someone to represent your interests on the task force. We can't afford to lose rural hospitals."

Edwards asked if that representative should be the hospital CEO, and Feldblum said that decision is up to the commissioners.

The next article will begin with a discussion on flood repair costs, presented by Emergency Manager Justin Gojkovich.

For the previous article, please visit https://www.grantcountybeat.com/news/news-articles/75418-grant-county-commission-hears-public-input-and-presentations-at-work-session-111522-part-1 .