A Presentation of the Colorado Health Institute1576 Sherman Street, Suite 300Denver, Colorado 80203-1728www.coloradohealthinstitute.org

Hot Issues in Health Care Legislative Conference

November 17-18, 2006

Costs, enrollment and value in public insurance coverage

Colorado’s Medicaid, Child Health Plan Plus (CHP+) and

Indigent Care Programs

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Three primary access points for entry into the U.S. health care system

• Employer-sponsored private insurance

• Public health care coverage• Local innovation in health care

access

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Public health care coverage

Federally financed and administered— Medicare— Veterans Administration health services— Indian Health Service

Federal-state partnership programs — Medicaid— Children’s Health Plan Plus (CHP+)— Colorado Indigent Care Program (CICP)

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Health care is expensive…and growing more so

• Nationally, health care represents 16% of the gross domestic product and is growing more rapidly than the rest of the economy

• The average health insurance premium for a Colorado worker in the private sector was $3,684 in 2004 and $10,228 for a working family

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Factors driving publicly financed health care coverage expenditures

• Enrollment - In Colorado, nearly ½ million children and adults are covered by Medicaid and CHP+– Includes frail elders, adults with disabilities and

children with special health care needs• Comprehensive services - A broad range of

services are covered, including: – Acute and preventive care (doctor visits,

hospitalizations, drugs, immunizations, etc.)– Long-term care (nursing home, assisted living

and home care)– Mental health services

• Medical inflation - Health care costs are increasing, out-pacing inflation in the general economy

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Income limits for Medicaid, CHP+ and CICP eligibility

$41,500

$33,200

$22,078

$16,600

$9,960

Family of 32006

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Medicaid and CHP+ caseloads have been increasing over time

Sources: JBC staff briefing documents and HCPF Nov. 1, 2006 Budget Request

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Low-income elders and individuals with disabilities represent a disproportionate share of costs

Source: HCPF Supplemental Budget Request, Feb. 15, 2006

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Cost of Medicaid and related programs has been increasing over time

Sources: JBC staff briefing documents and HCPF Nov. 1, 2006 Budget Request

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Medicaid and related programs’ portion of Total and General Fund appropriations, FY 2006-07

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Percentage growth in annual Medicaid spending generally exceeds General Fund growth

Sources: Colorado Legislative Council's Economic Forecasts, JBC Staff Briefing Documents and HCPF Budget Requests. Note: In FY 2002-03, the state moved from accrual to cash accounting. This accounting modification generated a one-time savings of $70 million GF in FY 2002-03 and is not incorporated in this graph.

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Per-capita costs for Medicaid medical services

Sources: JBC Staff Briefing Documents and HCPF Budget Requests

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What new resources are available for publicly financed health care?

In the past 3 years, voters have supported increased spending on health care coverage and programs to increase access:

– Amendment 35 (Nov. 2004) – Expanded eligibility for Medicaid and CHP+ programs; provided grants to clinics to expand access to primary care

– Referendum C (Nov. 2005) – Provided funds for health care, K-12 education, higher education and transportation programs

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Could we be getting more value for the dollars spent?

There are policy options legislators can advance to promote increased cost-effectiveness and value-purchasing in Medicaid and CHP+ programs

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Policy options stimulated by legislative leadership

Options for purchasing value in the Medicaid and CHP+ programs include:• Investing in healthy outcomes• Developing and testing an evidence-based

benefits package• Instituting pay-for-performance programs• Improving coordination and service integration

for individuals with chronic illness and special health care needs

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Investing in healthy outcomes

• Keep people healthy through programs that promote healthy lifestyle choices– Colorado’s obesity treatment pilot program (HB 05-

1066)– Arkansas’ Medicaid initiative to reduce child obesity

• Pay for prevention and early intervention services and efforts to ensure continuity of care – Ensure adequate access to prenatal care – Promote medical homes for children traversing

between the Medicaid and CHP+ programs– Better coordination in state-funded immunizations

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Evidence-based benefit package: Paying for treatments with known effectiveness

• Oregon Health Plan – Expanded coverage to Oregon’s uninsured in 1989-

90 through Medicaid benefit package based on prioritized list

– has stood the test of time

• SB 06-036– Implementing an evidence-based benefit package for

standard and basic small group policies

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Pay for performance

• Link performance measurement to incentive payments to providers– Colorado’s annual HEDIS reports

• Provide financial incentives to high performers– Shared savings with Rocky Mountain Health Plans– Ohio: 1% of premium incentive pool for plans– Michigan: $3 million pool– Pennsylvania: 5% of disease management contract

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Improve coordination and service integration

• Aggressive management of the care provided to individuals with chronic health conditions– SB 05-173 and SB 06-128 pilot programs– Manage chronic conditions such as diabetes,

depression and other serious mental illnesses

• Ensure coordinated system of community-based support services aimed at keeping frail elders and people with disabilities in their homes and communities

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Legislatively facilitated involvement of Medicaid in state’s HIT initiative

Promote involvement of Medicaid and CHP+ programs in Colorado’s health information technology (HIT) initiative• Improve quality, efficiency and patient safety

through sharing personal health records across health care providers

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Now for the experts….

Steve Tool– Executive Director, Dept. of Health Care

Policy and Financing– Former Chair, Joint Budget Committee

Bernie Buescher– Current Chair, Joint Budget Committee– Former Executive Director, Dept. of Health

Care Policy and Financing