DIRECTOR OF HEALTH TOUTS STATE REFORM BILL

The director of the Missouri Department of Health is anticipating considerable initial opposition to a major health care reform bill unveiled by Gov. Mel Carnahan and House Speaker Bob Griffin Tuesday.

"Everybody with a stake in the health system will be there as a player, said Dr. Coleen Kivlahan. "But we all need to give a little in order to get a good health system in place."

Mindful that health care is a complicated issue, Kivlahan anticipates having to spend a lot of time with state legislators to address concerns, misconceptions, and to educate.

The plan is designed to make sure people who already have health insurance don't lose it, and to provide a way for people without insurance to be covered.

Provisions of the legislation are aimed at ending the practice by insurance companies of picking and choosing who they want to cover. It will establish rates that are based on age and geographic location in the state, with claims experience and pre-existing conditions no longer a factor in rate determination.

A second phase of the plan will eventually bring uninsured people into the health care system. But before that can be fully implemented within existing state revenues, the federal government will have to approve a Medicaid waiver. The waiver will be requested later this year by the Department of Social Services.

Kivlahan, who helped draft the measure, is hoping the plan can win legislative approval before adjournment in May and remain pretty much intact. "We did not put a lot of fat in here," she stressed. "It is a reasonable, incremental approach to changing our health care system and it must be moved as a whole."

Although the plan was released Tuesday, Kivlahan was traveling around the state last week meeting with health care officials and news media to explain details of the package.

The director maintains that the legislation will match up well with any kind of federal health reform system that is adopted and can be accomplished without a tax increase or a significant shift in revenues from other programs.

Ultimately, the key to reforming health care is to control costs and improve access, Kivlahan said.

"This is not a comprehensive total reform of the entire system," she explained. "Because Missouri is who it is, we are not interested in new taxes. And, with the federal reform effort being planned, we don't want to make any mistakes in what we do. These are significant incremental reforms that we are proposing. We don't want to hurt anybody, we just want to make health coverage more affordable. All of us are paying more than we need to pay."

Kivlahan pointed out that in the United States, 15 percent of the gross domestic product is spent on health care, compared with just 6 percent for education -- a clear indication of a need for health care reform.

The health director added that other states and countries that have reformed health care have found that liberal spending does not automatically translate into better care. "There are several states spending less and have better health care by re-directing the money it spends and eliminating unnecessary duplication," she said.

Kivlahan said Gov. Carnahan is firmly committed to the principle of having a statewide plan in place by 1997.

She explained that one of the big problems facing people who have insurance now is that if they have major claims they could be canceled. Or, they are locked into a particular insurance company because no other company will take them and rates are driven up. Kivlahan noted that many people with pre-existing health conditions are fearful of changing jobs because they might not be picked up by the insurance carrier of a new employer.

In order to provide health insurance security, the proposal would require rates be set with a modified community rating, rather than a claims experience rating.

"This reduces the cherry picking that is going on now by insurance companies who pick and choose who they want to cover," said Kivlahan.

The proposal would divide the state into four or five geographic areas that would be the basis for the community rating. The only other factor would be the age of the insured. "Age and geography would come into play; experience is not an issue," said Kivlahan. "Regardless of someone's medical condition, they will be able to buy health insurance at the same rate as the person of the same age next door who can buy insurance."

A State Health Board will be established in the law to set up the geographic boundaries. The board will also determine several packages of coverage that can be purchased, with rates varying according to the kind of coverage people want.

"Every company will charge the same rate for the same package," said Kivlahan, adding that the proposal will not prevent people from buying more extensive coverage than what the plans offer if they wish.

Kivlahan said she is not aware of any state that has gone to a complete community rating system, but believes it can be accomplished in Missouri without having a major upward impact on rates of any individuals.

One of the biggest challenges to health care is finding a way to cover the uninsured. "The trick is going to be coming up with enough money," the director said.

The Department of Social Services is now drafting a Medicaid waiver proposal, which if approved by the federal Health Care Financing Administration, would allow Missouri to withdraw from the Medicaid program and take the money it would have received over five years and use it for a state-designed system.

State officials believe millions of dollars can be saved through a more efficient program, designed specifically for Missouri. Considerable savings in the Missouri program would come from sharing information between service providers and standardizing medical forms.

Medicaid would be expanded from its current role of covering low income people to include the 525,000 uninsured Missourians.

Kivlahan said even if the waiver is granted, the approval will not come until later in the year and well after the 1994 legislative session has adjourned. If the waiver is granted, it will be easier to provide coverage for uninsured.

Whatever plan is adopted, she stressed there will be co-pays and deductibles.

An effort will be made to have integrated networks of health providers. An attempt will also be made to divide up the patients who do not pay among hospitals more evenly.

Part of the problem of providing health care is a shortage of primary care providers. The bill attempts to address this by setting up a foundation to help train, recruit, and retain doctors.

Dwight Fine, executive director of the Missouri Hospital Association, said the bill will begin a shift toward managed care. However, both he and Kivlahan stressed the desire to ensure doctor-patient relationships are maintained.

"If we don't get the waiver, we still have a mechanism for universal coverage," said Fine, using a Health Guaranty Corp. created in the bill. The corporation is an integrated service network that attempts to build public and private partnerships to provide coverage.

Kivlahan said whatever is done needs to keep the quality of the present system and universal coverage for everyone. By having universal coverage, she said money can be saved in the long run because people now uninsured would have access to preventive care.