Lamont says his plan can cut Connecticut’s health care costs

Ending the “fee for service” model that encourages doctors to schedule unnecessary tests and patient visits would be a crucial first step toward reducing a state health care bill that ranks as one of the nation’s highest, according to Democratic gubernatorial contender Ned Lamont.

The Greenwich businessman unveiled a health care plan this week that also would: expand efforts to allow physicians – not insurance companies – to determine state-covered patients’ needs; improve health information technology systems; and offer financial incentives to state employees who stay in good shape.

The plan earned mixed reviews from one of the state’s leading nonprofit, non-partisan health care research organizations.

Ellen Andrews, executive director of the Connecticut Health Policy Project, praised Lamont for his pledges to move beyond “fee for service” and to promote enhanced technology and patient wellness. But she also said Lamont and all those interested in serving in state government next year need to focus more closely on new state burdens created by national health care reform, as well as on long-standing problems like physician and nurse shortages and smoking.

“Connecticut families pay more every year in health care premiums and aren’t getting any healthier,” said Lamont, who will face former Stamford Mayor Dan Malloy in an Aug. 10 primary. “High health care costs keep small businesses from hiring and make it risky for workers to take a new job or state their own company.”

“To get serious about fixing our budget deficit, we need to talk about fundamentally reforming our health care system,” Lamont continued, noting that nearly 40 percent of this fiscal year’s $19.01 billion state budget will be spent on health care or social services. “That’s what I’ll do as governor.”

One step toward that goal, Lamont said, is to move Connecticut towards a system in which doctors, or teams of providers, are given one “bundled” payment for providing a range of services, and not compensated for each individual service, surgery, test or treatment.

State government purchases coverage annually for more than 90,000 workers and retirees, as well as roughly 400,000 patients from low-income households or those enrolled in General Assistance – the state’s welfare program for single adults without children.

The state can leverage its purchasing power, encouraging insurance companies to shift how they pay doctors for serving both public and private sector patients, Andrews said, adding this component of Lamont’s plan has huge potential for long-term savings. Some studies have said unnecessary treatments and fees inflation the nation’s health care bill by as much as 30 percent, she said.

Most insurance companies prefer to follow one payment methodology out of simplicity, not because fee-for-service is more profitable, she said. “The only way you can get everyone together, work toward change and get around the anti-trust problem is if government convenes the group that does it,” she said.

Another key component in Lamont’s plan would be to offer incentives to help health care providers upgrade a medical information distribution system that still relies too heavily on paper records and couriers and not enough on electronic storage and transmission.

“We need automated systems that provide the right information to everyone so that one doctor knows what tests another performed, so the ER nurse knows what medications you’re on, so patients can see the cost of care and quality of providers,” Lamont’s plan states. “We all make better choices when we are well informed.

The elderly and other patients with multiple conditions at times can’t remember every medication prescribed or diagnosis they’ve received, and updated, quickly accessible health records can both improve the quality of care and reduce costs, the plan adds.

Lamont also endorsed “primary care coordination” or paying doctors and other providers to develop treatment plans for each patient. Equally important, those groups, and not a health maintenance organization, would have primary responsibility for resolving questions about what treatments and medications would be covered by a patients’ insurance policy.

Andrews said state government already has taken large strides in this area, including a self-insurance system for state workers and retirees and a primary care case management pilot program for low-income patients covered under the Husky program. “It’s not like this effort is on auto-pilot,” she said, adding Connecticut is going to need a governor “who is prepared to support it.”

Lamont, who says health care reform offers Connecticut the opportunity to surge ahead of other states in an issue crucial both to the economy and quality of life, wrote in his plan that helping companies cut health care costs is a key step toward creating new jobs.

Lamont also pledged to create a new cabinet-level post on long-term health care. This individual would focus on giving residents additional community-based alternatives to nursing home care.

Malloy, who unveiled his own health care plan earlier this month, said long-term care alternatives are important, but these defer – not eliminate – the need for nursing homes, and both Lamont and state government should commit to properly fund the industry.

The state’s largest nursing home association filed suit in federal court last year charging Connecticut has violated federal Medicaid rules by inadequately funding its nearly 240 licensed homes.

“The Baby Boomers are aging,” Malloy said. “We need to accept the reality that many people are going to need nursing homes, they are going to need them later in life, and that means they are going into them sicker than ever.”