State struggles to implement health care reform

Huge. Complex. Difficult.

These are just a few of the adjectives Cristine Vogel throws out as she tries to describe her new job: special adviser to Gov. M. Jodi Rell for health care reform.

At the end of July, Rell tapped Vogel to oversee implementation of the sweeping Patient Protection and Affordable Care Act, which President Barack Obama signed into law last March. A 25-year health care veteran, Vogel started on July 23, and she already feels way behind. Not to mention short-staffed and under-funded.

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Cristine Vogel

But that’s actually an improvement from a few weeks ago, when Vogel was still deputy commissioner for Connecticut’s Office of Health Care Access, helping to oversee implementation of the massive reform law on top of her day job.

“We’ve just been putting out fires for the last few months on health care reform, so I’m looking forward to actually doing it in some coordinated, cohesive manner,” Vogel said in an interview last week, as she was scrambling to meet the latest grant deadline from the federal Department of Health and Human Services (HHS). “A little more predictable and planned out would be nice.”

Vogel pulls out a 3-page summary of what the state had done as of July 30: grant applications submitted, grant applications due, applications in progress, with August deadlines looming.

Connecticut not alone in grappling with the Patient Protection Act. “States are certainly scrambling to interpret and figure out which parts of the law they need to be involved with and then what their options are,” said Richard Cauchi, health program director at the National Conference of State Legislatures. “It’s not a simple picture.”

Vogel said she and other key players face a slew of challenges–from the uncertain political climate in Connecticut to a tight state budget that has left key state agencies under-resourced as they try to sort out the new law.

“We are in deficit, and no agency has extra people,” she said. That’s especially tough when it comes to snagging some of the millions of new federal dollars available under the Patient Protection Act. “We try to put resources toward applying for these grants, but it’s an added on responsibility for our staff,” she said, noting that she faced an imminent deadline for a public health infrastructure grant from HHS that could help move the state’s lagging information technology system into the 21st Century.

Insurance Commissioner Thomas Sullivan said the state’s dire fiscal situation also makes him and other officials wary of beefing up operations with new federal grant money that will likely run out after a few years. While the state has been “very active” in applying for the health care reform funds, “we do that with a very jaundiced eye,” Sullivan said. “Anything we apply for, the first question we ask is, ‘Is this going to create an unfunded mandate'” down the line?

But the biggest immediate policy challenge, Vogel and others said, is laying the groundwork for the new state-based health insurance “exchanges,” competitive markets where individuals and small businesses can shop for insurance.

The insurance exchanges are the crux of health care reform, with proponents of the new law saying these new entities will make insurance more accessible and affordable. They will offer consumers health insurance that is portable and not tied to their jobs. And they will provide a range of health plan options.

“People will have more choice,” said Timothy Jost, a health law expert at Washington and Lee University and a consumer representative to the National Association of Insurance Commissioners. “They will certainly make a huge difference in terms of the quality of coverage and how much [consumers] understand about their coverage.”

But while they offer “the most opportunity for creativity,” setting up the exchanges will be the most complex step for the states, Jost said. He said the NAIC is now drafting model legislation to help guide states as they seek to set up these new exchanges.

Under the federal Patient Protection Act, states can choose an existing state government agency, a non-profit, or a public-private entity to operate the exchanges–or they can turn it all over to the federal government. States can also team up to form regional exchanges, or go it alone. They can have one exchange for the entire state or several, even setting up more than one exchange within a single jurisdiction.

Vogel said she thinks the best way forward in Connecticut is to create a public-private entity to oversee the new exchanges–a proposal that would have to go through the legislature.

“This exchange has an awful lot of power, and it truly is the cornerstone of this health care reform bill,” she said. “If you get the right or the wrong people leading it … it makes or breaks the success of the program.”

She noted, for example, that the insurance exchange managers will have the ability to bargain with health insurers about what benefits they offer at what price, if those firms want access to these new markets.

“It does have a lot of leverage to improve access, quality and affordability,” she said. But if an exchange manager doesn’t use that leverage, “then it’s just completely a portal, and you let any health plan that wants to come in and sell.”

She said tapping a state agency for this task puts it under the influence of the governor’s office, potentially subjecting the exchange to shifting political winds. A quasi-government agency, she said, “appears to be the most practical way forward, so everyone feels they can be involved in the process.”

Sullivan said he was less concerned with how the exchanges are governed than with how they are regulated. “Our work is to ensure that … it’s a level playing field and we don’t lower our regulatory standards,” he said.

The deadline for getting these exchanges set up and able to accept applications is June 2013, and they’re supposed to be fully operational come 2014. Vogel has just started filling out a new HHS application for a $1 million grant that would give her funding to research and plan for the exchange.

While the exchange deadlines may seem like a long way off, Vogel is eager to get things rolling now. That’s in large part because winning approval from the state legislature to create a new public-private agency could take considerable time. She envisions the new agency would function as an advisory board, with members appointed from the public and private sector, who then select an executive director to run the exchange on a day-to-day basis.

Cauchi said that most states are in the initial stages of planning for the exchanges. The only states that already have such entities are Massachusetts and Utah, which both had exchanges before Congress passed health reform. But he said that by the beginning of the 2011 legislative session, most states should have this issue near the top of their agenda.

Like many states, Connecticut has a heated gubernatorial election underway, and it’s not clear what approach the next administration will want to take to health reform. “We’re working feverishly to make sure we have the proper infrastructure in place but we fully realize that some of this will be in the domain and control of the next administration,” said Sullivan.

Vogel also said that state lawmakers don’t seem eager to tackle the subject in advance of the elections. But she’s worried that waiting until after November could put the state behind schedule.

If she tries to draft legislation in the coming months, and “it hits their desks in February, without them being part of the process, I just don’t think it will gain any momentum,” she said. So she hopes lawmakers will engage now and that will pave a “smoother” path for passage.

Sen. Jonathan Harris, D-West Hartford, co-chairman of the legislature’s Public Health Committee, dismissed Vogel’s contention that the legislature was not engaged. He said lawmakers were eager to move forward, but Rell didn’t alert them that she had created this new health reform adviser position or that Vogel had been appointed to it.

“Maybe I was out of the loop that day, but no one from Deputy Commissioner Vogel’s office or the Department of Social Services or the governor’s office has reached out and said, ‘We’ve made this appointment, please we’d like to talk’,” Harris said. “I’m going to reach out to them now to find out what’s going on.”

Harris said a public-private board may well be the best governing structure for the exchanges, although he said he had not studied the issue in detail. More broadly, Harris said he believes Connecticut is very well positioned to put the reform law into place, noting that state lawmakers have been looking at health reform issues for years and in 2009 passed the SustiNet law, aimed at increasing health care coverage in Connecticut. The SustiNet Health Partnership Board was also tasked with, among other things, making recommendations on implementing federal reform.

On health exchanges, the recommendations contemplate how Sustinet could be part of the exchange, offering a kind of public insurance option next to private plans.

“We’ve thought about it, and now it’s just a matter of going through all the pieces and seeing what needs to be changed and what the fiscal impact, both positive and negative, is,” Harris said.

As Vogel examines those questions, she also knows that come January, she will most likely be out of a job as a new governor moves in and puts his own team  in place.

“It’s difficult to work on a project that you’re not sure, come January, if somebody’s going to take your direction or not,” she said. “I’m hoping that the next administration continues what we have started, or at least doesn’t go backward.”

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