The Context
One of every six dollars spent in Maine is spent for health care, and health care expenditures are growing two to three times faster than spending on other goods and services. Maine’s cost structure – the cost of living and doing business in our state – is a barrier that walls out investment, jobs and incomes, and health care prices are perceived to be a big part of this problem. Nonetheless, against this background of excessive spending, many Mainers can’t afford even basic care, while others receive unnecessary or inappropriate services.
Health care currently is financed in one of four ways. For most Mainers, commercial health insurance, provided through the workplace, represents part of an employee’s compensation. Seniors and the permanently disabled receive Medicare, a federal program. MaineCare pays for health services to low-income Mainers, financed through state appropriations and federal Medicaid funds. Finally, about 9 percent of Mainers under age 65 have no insurance and either forego care or pay for health services directly. This latter population lacks any “medical home” and often seeks basic, non-emergency care in hospital ER’s, much of which goes uncompensated.
Contributing to the high cost of our health care system are both the unhealthy behaviors of many citizens and the absence of good preventive care that can reduce the incidence of some illnesses and lower the costs of managing others. With insurance companies serving as the organizing principle of health care delivery, we lack the necessary incentives to reduce or even contain our skyrocketing costs. This system is simply not sustainable.
It will be the overarching objective of the Cutler Administration to effect major reform of this system in order to provide access to essential health care for every Maine citizen, to reward both healthy behavior and the delivery through best practices of cost-effective and accountable care, and to make Maine more competitive as a place to live and to work by achieving a healthier population and workforce at a lower and more sustainable cost.
The Objectives
To ensure that Mainers receive the most effective and highest quality care at a cost we can afford, the Cutler Administration will:
- Align economic and program incentives to identify and reward high quality—not high volume—care.
- Use State financial leverage to support efficient, high quality health care arrangements. The State is a direct purchaser of more than one-third of all Maine health care services, delivered through the mechanisms of MaineCare and via insurance coverage of public sector employees. These public dollars represent an enormous opportunity to advance state-wide delivery and financing reform that will benefit all Mainers.
Assure that any savings derived from organizational and payment reforms are passed on to all Mainers in the form of premium reductions and expanded access.
Guiding Principles
- Preventive care can lower the incidence of many acute and chronic diseases and accidents, as well as reduce the complications of chronic illness. Preventive care should be emphasized and rewarded.
- When physicians, hospitals and other health care professionals provide the highest quality health care, they should be recognized and rewarded for their accomplishments.
- Patients and providers alike must share responsibility for good health care outcomes and be accountable for their own roles.
- Patients should have the right to choose their doctors and providers in a competitive primary care environment; the central role of the doctor-patient relationship should retain its primacy in building a healthy Maine. Increased information transparency will enable purchasers to know which doctors, hospitals, and other professionals provide superior quality and affordable health care.
- A robust public health infrastructure will help to assure a safe and healthy environment, promote initiatives to improve population health, and will help prepare for disaster.
- Health care system savings should be passed through to purchasers and consumers of health care.
- All Mainers should have the opportunity to participate in, benefit from and save from health care delivery and payment reform arrangements.
The Means To These Ends
1. Primary Prevention
Estimates suggest that as much as half of all illness is linked to lifestyle decisions about eating, exercise and tobacco usage. Individuals must take responsibility for avoiding unhealthy behaviors. Primary prevention programs educate and motivate individuals to live healthier lives.
The Cutler Administration will organize and establish programs that will draw on successes in Maine and elsewhere – including the wellness programs pioneered by large employers such as Cianbro, Hussey and Hannaford—and that also will pursue new innovations.
Primary prevention measures include:
- Realigning incentives in health benefit plans to encourage healthy lifestyles and optimal use of preventive physical, oral and mental health services.
- Expanding access to preventive care (for example, coverage of adult oral health services).
- Coordinating among hospitals, community organizations, and public health groups to educate families about healthy lifestyles and to support nutrition and exercise initiatives and other community-based programs.
- Supporting a robust public health infrastructure in Maine to assure that State public health efforts are coordinated with efforts in the private sector.
2. Secondary Prevention
Secondary prevention focuses on individuals with chronic disease. Chronic illness accounts for about 30% of private premium costs and an even higher proportion of MaineCare (Medicaid) and Medicare costs. Our goal is to educate and empower people so that together with their physicians they can better manage their chronic conditions at lower costs and with improvements in both quality and quantity of life.
Secondary prevention measures include:
- Rewarding those primary care providers who develop systems to more effectively manage chronic diseases, including mental illness.
- Supporting development of electronic medical records systems and other appropriate technologies to better identify and communicate with Mainers who may be at risk and to follow, optimize and coordinate their care.
- Disseminating current state-of-the-art hospital discharge planning programs to hospitals statewide to assure better transition of patients from hospital to home and to avoid costly and painful readmission to the hospital.
- Collaborating with providers and large employers who are developing standards and protocols for the co-location of behavioral health and primary care services in order to more comprehensively address patient needs.
3. Promotion of New Organizational Arrangements
Physicians and other caregivers form the keystone of high quality medical care. Maine is fortunate to have many physicians, heath care practitioners, hospitals and community health clinics that consistently deliver high quality health care. Unfortunately, most of our insurance-based payment systems do not differentiate for quality. Quality care is the right care to meet a particular need, provided at the right time and at the right place. Together with physician, hospital, consumer and employer partners, the Cutler Administration will develop care and payment systems that are fair, consistent and reward quality through the following strategies:
- Financially rewarding high quality outcomes and decreasing payments for care that does not meet established quality guidelines and protocols.
- Promoting transparency and comparative data to guide consumers to the doctors, hospitals and other providers that provide best quality for value services.
- Supporting evidence-based strategies that prevent disease and promote health.
- Supporting the development of reimbursement strategies that move away from fee-for-service payment toward payments for maintaining the health of defined populations and for specific episodes of care.
- Paying its bills. The State of Maine owes hundreds of millions of dollars to hospitals for care that already has been provided.
The Cutler Administration will bring public and private payers together to develop a common health services payment system that uses prospective payments; rewards quality; realigns incentives away from medical interventions and toward prevention; strengthens the public health infrastructure; and, encourages individual responsibility for maintaining a healthy lifestyle.
4. Training and Recruiting the Workforce
An emphasis on prevention and primary care will fail if there are an insufficient number of trained professionals in Maine to provide the care. The Cutler Administration will address Maine’s chronic shortages of doctors, nurses and other health care professionals by:
- Supporting the MaineHealth collaboration with the Tufts University School of Medicine, the University of New England’s School of Osteopathic Medicine and its programs in the allied professions and nursing and related programs in the state’s colleges and universities.
- Encouraging Maine’s young people to consider careers in medicine, nursing and other health-related professions.
Lowering the Health Care Costs of Doing Business in Maine
The Cutler Administration is committed to providing Mainers with access to essential, high quality health care at an affordable cost. The steps outlined here describe the first effort that the Cutler Administration will make towards achieving that ambitious goal.
We know that health care costs are one of the major obstacles to growing existing businesses in Maine and attracting new ones. We need to assure that savings and efficiencies reach small businesses seeking to cover their workforce; individuals who pay some or all of their monthly premiums; large businesses that must compete in a world market; and, the state government itself, as it seeks to be a responsible steward of taxpayer dollars.
Accountable Care Organizations
The Cutler Administration will manage the implementation of federal health care reform (the Affordable Care Act) so that it works for Maine. Maine should take full advantage of the opportunities for innovation enabled by the new federal Act, through the creation of new programs and financial vehicles to deliver accountable care and by correcting deficiencies in existing state programs.
The Cutler Administration will work with state employees and other public agencies that provide health benefits to leverage the purchasing power of the state to support the development of Accountable Care Organizations (“ACO’s”) as alternatives to current insurance plans. The new federal law authorizes the development of ACO’s, through which doctors and hospitals work directly with purchasers to provide best practice health services, improve accountability of care, and reduce administrative costs. These new organizations envision payment arrangements in which hospitals, doctors, and affiliated providers accept responsibility, on a contractual basis, for covered health services that meet quality standards. ACO’s will assure that every Maine citizen can choose a primary care provider who will best meet his or her needs. We will effect any regulatory relief needed to ensure Maine’s laws responsibly support these efforts.
The Cutler Administration will also create a Maine-specific Health Exchange which, in addition to providing federally mandated functions, will convene public and private payers to develop shared reimbursement systems. If the ACO arrangements offer significant savings to state programs, as we anticipate they will, those ACO arrangements would be offered as one coverage option for small businesses and individuals purchasing their coverage through the Maine-specific Health Exchange. The Health Exchange will also evaluate and rank health insurance products, select certain products to be offered and serve as a central clearing house for small business and individuals seeking to purchase health insurance.
Our ACO efforts will follow the lead of earlier successes in Maine:
- Maine General Medical Center (Augusta/Waterville) and the State Employee Health Commission have agreed to partner in creating a new organization that advances quality, accountability and cost controls as envisioned by the Affordable Care Act.
- Cary Medical Center (Caribou) and Pen Bay Medical Center (Rockport) have entered into health care delivery and payment reform pilot projects with the State Employee Health Commission.
- Penobscot Community Health Care serves 45,000 patients in the Bangor area; only 8% of their costs go to overhead and administration, considerably less than the rate of an insurance plan.
- Spring Harbor Hospital, in collaboration with local mental health providers, is developing similar initiatives with a focus on the needs of patients with mental illness.
- The Lincme Program in Damariscotta has developed innovative home-based alternatives to expensive institutional services for the elderly.
Harnessing Health Information Technology
Duplicative or unnecessary health care is expensive and can be dangerous. Some experts estimate that 1/3 of all health care services are unnecessary. As one example, systems should be in place to report the result of an x-ray to other health professionals involved in the care of a given patient. Repeat x-rays can increase costs and needlessly expose patients to additional radiation.
Maine’s cost crisis is mirrored across the nation, but Maine has the third highest rate of per capita health care spending of any state. For the most part this is a consequence of how much we use care and how much we pay for it, not the result of an older or sicker population. For example, Maine uses 30% more emergency services than the national average; reducing avoidable use could save $115 million annually. The electronic medical record is one example of a technology that can improve health care quality and reduce costs. Appropriate use of this technology can eliminate duplication, identify emerging epidemics, serve as a disease registry and provide check up reminders to Mainers with chronic diseases (such as diabetes) or who are due for a preventive exam (such as immunization, breast exam or PAP test)
The Cutler Administration will accelerate the adoption of these technologies by:
- Completing the Maine HealthInfoNet Project, one of only a few statewide health information exchanges.
- Disseminating the lessons learned through the experience of MaineHealth, Eastern Maine Health Care and others who are developing health information technologies that better coordinate care among multiple providers and hospital(s).
- Continuing to leverage and steward federal funds to assist providers in the “meaningful use” of health information technology.
Protecting The Safety Net
Whether elderly, disabled or low-income, Mainers who are in need want assurance that cost containment efforts will not deprive them of essential care. MaineCare provides necessary and humane medical services to many of our friends and neighbors. The Cutler Administration will continue to provide these services, but we will also make sure that the services provided are appropriate and not excessive.
Maine has also developed programs such as Dirigo that assist small businesses and individuals with limited resources in purchasing insurance. The Affordable Care Act provides new federal support for these initiatives, and the Cutler Administration will pursue opportunities to transition those enrolled in Dirigo into the new Maine Wellness ACO environment.
MaineCare has been the historic vehicle for provision of care to low-income Mainers, and the Cutler Administration will:
- Develop a more formal managed care approach for the MaineCare population that better harnesses the State’s purchasing power and is consistent with organizational reforms around improved quality, accountability and cost containment;
- Develop more equitable primary care reimbursement;
- Better integrate Medicare and Medicaid benefits and improve coordination with the federal government to improve access to and quality of care for Mainers who receive services through both these programs.
