HOUSE BILL No. 174

PRESENTED BY:

CHARLES B. INLANDER, PRESIDENT

PEOPLE’S MEDICAL SOCIETY

462 WALNUT ST.

ALLENTOWN, PA 18102

APRIL 22, 1999

MR. CHAIRMAN, MEMBERS OF THE COMMITTEE. THANK YOU VERY MUCH FOR ALLOWING US TO TESTIFY BEFORE YOU TODAY CONCERNING HOUSE BILL No. 174, WHICH WILL, IF PASSED, AMEND PUBLIC LAW 408, NO. 89, WHICH ESTABLISHED THE PENNSYLVANIA HEALTH CARE COST CONTAINMENT COUNCIL.

MR. CHAIRMAN, I AM CHARLES INLANDER, PRESIDENT OF THE PEOPLE’S MEDICAL SOCIETY. JOINING ME IS MICHAEL DONIO, DIRECTOR OF PROJECTS FOR THE PEOPLE’S MEDICAL SOCIETY. BASED IN ALLENTOWN, THE PEOPLE’S MEDICAL SOCIETY IS THE LARGEST NONPROFIT CONSUMER HEALTH ADVOCACY ORGANIZATION IN THE UNITED STATES. SINCE OUR FOUNDING IN 1983, THE PEOPLE’S MEDICAL SOCIETY HAS STRONGLY SUPPORTED LEGISLATION AND LAWS THAT HELP HEALTH CARE CONSUMERS RECEIVE MORE INFORMATION ABOUT THE QUALITY OF THEIR CARE, THEIR HEALTH CARE PROVIDERS AND THE INSTITUTIONS SERVING THEM.

SOME OF THE COMMITTEE MEMBERS WILL RECALL THAT WE WERE ACTIVE SUPPORTERS OF THE ORIGINAL LEGISLATION THAT CREATED THE HEALTH CARE COST CONTAINMENT COUNCIL IN 1986. WE HAVE ALSO STRONGLY SUPPORTED OTHER STATE EFFORTS TO HELP BRING THE CITIZENS OF THE COMMONWEALTH USEFUL AND IMPORTANT DATA ABOUT THE QUALITY OF THEIR CARE.

THE COMMONWEALTH SHOULD TAKE GREAT PRIDE IN BEING THE LEADING STATE IN PROVIDING QUALITY RELATED HEALTH DATA TO ITS CITIZENS. THE INFORMATION AND REPORTS GENERATED BY THE HEALTH CARE COST CONTAINMENT COUNCIL ARE SECOND TO NONE IN THE NATION. PENNSYLVANIANS KNOW MORE ABOUT THE QUALITY OF THEIR HOSPITALS THAN ANY OTHER STATE’S RESIDENTS. WE ALSO ARE BEGINNING TO LEARN MORE ABOUT HOW OUR DOCTORS PERFORM IN HOSPITAL SETTINGS. THESE ARE SIGNIFICANT ACCOMPLISHMENTS AND THEY SHOULD CONTINUE TO BE BUILT UPON.

THE HEALTH CARE COST CONTAINMENT COUNCIL WAS CREATED AT A TIME WHEN VERY FEW PENNSYLVANIANS BELONGED TO MANAGED CARE PLANS. THE GROWTH IN ENROLLMENT IN MANAGED HEALTH PLANS HAS BEEN A UNIQUE PHENOMENON OF THE 1990'S. IT’S ESTIMATED THAT THE MAJORITY OF COMMONWEALTH CITIZENS ARE NOW ENROLLED IN SOME TYPE OF MANAGED HEALTH PROGRAM. YET, VERY FEW OF THOSE ENROLLED IN MANAGED PROGRAMS KNOW VERY MUCH ABOUT THEM. MOST PEOPLE UNDER THE AGE OF 65 WHO ARE ENROLLED IN A MANAGED PLAN, BE IT A HEALTH MAINTENANCE ORGANIZATION, A PREFERRED PROVIDER ORGANIZATION OR A POINT-OF-SERVICE PLAN, HAVE BEEN PLACED IN THE PLAN BY THEIR EMPLOYER. VERY FEW OF THESE ENROLLES HAVE ANY INFORMATION TO HELP THEM DETERMINE IF THE POLICIES OF THE PLAN PROMOTE QUALITY OUTCOMES, FOSTER WELLNESS AND PREVENTION, AND ATTRACT THE HIGHEST QUALITY PRACTITIONERS. IN ADDITION, THERE IS VERY LITTLE DATA PRODUCED BY THE PLANS THEMSELVES THAT HELP CONSUMERS DETERMINE WHICH PRACTITIONERS WITHIN A PLAN HAVE BETTER OUTCOMES AND WHICH HOSPITALS WITHIN THE PLAN HAVE THE BEST RESULT FOR THE PLAN’S MEMBERS.

THE SAME ALSO HOLDS TRUE FOR MEDICARE-AGED PENNSYLVANIAN’S WHO BELONG TO MEDICARE HMOs. MANY OF THESE CITIZENS HAVE BEEN LURED INTO PLANS WITH FREE BREAKFASTS OR LUNCHES, PROMISES OF BENEFITS BEYOND THOSE COVERED BY MEDICARE, AND OTHER AMENITIES. HOWEVER, FEW OF THOSE JOINING HAVE ENOUGH RELEVANT INFORMATION TO MAKE THEIR CHOICE ON THE BASIS OF QUALITY. THAT MUST CHANGE.

HOUSE BILL NO. 174 IS A WELL INTENTIONED BILL THAT WILL HELP CONSUMERS LEARN MORE ABOUT THEIR PLANS. WE SUPPORT THAT INTENT. THE PROVISIONS SPELLED OUT IN THE PROPOSED SECTION 6 (d) (2) WILL GIVE CONSUMERS AND OTHER PURCHASERS USEFUL, BUT RELATIVELY GENERAL INFORMATION OF SOME VALUE. HOWEVER, WE FEEL THAT IN MANY WAYS IT WOULD MERELY DUPLICATE WHAT IS ALREADY AVAILABLE ABOUT PLANS THROUGH THE NATIONAL COMMITTEE FOR QUALITY ASSURANCE (NCQA) AND THEIR HEDIS REPORTS. OF COURSE, WE UNDERSTAND THAT THE NCQA CERTIFICATION PROCESS IS VOLUNTARY AND THAT MANY PLANS HAVE NOT APPLIED FOR REVIEW. WE ALSO UNDERSTAND THAT THIS BILL IS INTENDED TO MAKE UP FOR THAT BY REQUIRING ALL PLANS IN THE COMMONWEALTH TO BE EVALUATED. HOWEVER, WE WONDER IF SUCH AN APPROACH WOULD BE AS BENEFICIAL AS EXPECTED. GIVEN THE COST TO BOTH MANAGED PLANS AND TO THE COMMONWEALTH, THERE MAY BE A BETTER WAY TO ASSURE NCQA CERTIFICATION WITHOUT POSING AN EXTRA COST TO THOSE PROVIDERS ALREADY CERTIFIED AND TO THE RESOURCES OF THE HEALTH CARE COST CONTAINMENT COUNCIL.

THE WAY TO DO THAT, WE SUGGEST, MIGHT BE TO REQUIRE AS A CONDITION OF LICENSURE THAT A PLAN APPLY FOR NCQA CERTIFICATION WITHIN TWO YEARS OF LICENSURE AND BE CERTIFIED WITHIN 4 YEARS OF LICENSURE. BY TAKING THIS APPROACH, ALL PLANS WOULD ULTIMATELY MEET THE NCQA/HEDI CERTIFICATION STANDARDS, INFORMATION ABOUT THE PLANS WOULD BE AVAILABLE TO PURCHASERS AND THE PUBLIC, AND CONSUMERS WOULD BE ABLE TO MAKE APPLE-TO-APPLE COMPARISONS.

IT SHOULD BE REMEMBERED THAT NCQA INFORMATION IS RELATIVELY GENERAL. WHILE IT MIGHT NOTE THAT 90 PERCENT OF THE CHILDREN IN A PLAN HAVE THEIR VACCINATIONS, WE DON’T KNOW IF THAT MEANS THEY RECEIVED THEM ON TIME. ALSO, ONE CANNOT DETERMINE IF THE 10 PERCENT WHO ARE NOT VACCINATED COME FROM A PARTICULAR EMPLOYER OR ARE ASSOCIATED WITH A PARTICULAR MEDICAL PRACTICE. IN OTHER WORDS, NCQA DATA IS MORE HELPFUL TO AN EMPLOYER WHO IS SEEKING TO PICK A PLAN FOR A LARGE NUMBER OF EMPLOYEES AND NOT NEARLY AS USEFUL TO AN INDIVIDUAL CONSUMER TRYING TO MAKE A DECISION ABOUT CHOOSING A PLAN OR CHOOSING A HOSPITAL OR DOCTOR FROM WITHIN A PLAN.

THEREFORE, SINCE THIS BILL WOULD REQUIRE VERY SIMILAR DATA TO THAT REPORTED BY AN NCQA SURVEY, WE FEEL THE LEGISLATION, IF PASSED IN ITS PRESENT FORM, WILL NOT BE AS BENEFICIAL TO INDIVIDUAL CONSUMERS AS THE SPONSORS INTEND IT TO BE.

THEREFORE, WE WOULD LIKE TO MAKE SEVERAL RECOMMENDATIONS TO THE SPONSORS THAT WOULD AMEND HOUSE BILL NO.174.

FIRST, AS WE NOTED EARLIER, THE COMMONWEALTH HAS A TREASURE TROVE OF INFORMATION ABOUT INDIVIDUAL OUTCOMES, BY PROCEDURE, AT EVERY HOSPITAL IN THE STATE. IN ADDITION, WE ARE BEGINNING TO SEE SIMILAR INFORMATION ABOUT SPECIFIC DOCTORS PERFORMING SPECIFIC PROCEDURES AT COMMONWEALTH HOSPITALS. THE NEXT LEVEL OF INFORMATION IS TO ATTACH HEALTH PLAN DATA TO THOSE OUTCOMES.

FOR EXAMPLE, WE ALREADY KNOW THAT A CERTAIN NUMBER OF PATIENTS HAD A CERTAIN PROCEDURE AT A PARTICULAR HOSPITAL. EACH OF THE OUTCOMES HAS BEEN ADJUSTED FOR PATIENT SEVERITY. SOME OF THE OUTCOMES ARE BETTER THAN EXPECTED, SOME ARE WORSE THAN EXPECTED AND MOST ARE WITH AN EXPECTED RANGE.

WHAT WOULD BE USEFUL FOR INDIVIDUAL CONSUMERS IS TO KNOW WHAT PLANS THOSE CONSUMERS BELONG TO. IN OTHER WORDS, DID ALL THE "BETTER THAN EXPECTED" OUTCOMES HAPPEN TO MEMBERS OF A PARTICULAR HMO OR A FEE-FOR-SERVICE PLAN FROM A PARTICULAR INSURANCE COMPANY. OR DID THOSE PATIENTS HAVING WORSE OUTCOMES COME FROM CERTAIN TYPES OF PLANS. BY HAVING THIS INFORMATION, CONSUMERS AND POLICYMAKERS WOULD BE IN A BETTER POSITION TO DETERMINE IF CERTAIN REIMBURSEMENT MODELS ARE PRODUCING, BETTER, WORSE OR EXPECTED RESULTS. IN ADDITION, CONSUMERS WOULD BE ABLE TO MAKE A COMPARISON BETWEEN PLANS THAT MAY BE DIRECTLY APPLICABLE TO THEIR CONDITION OR PROPOSED COURSE OF TREATMENT. THIS WOULD TRULY BE EMPOWERING TO CONSUMERS, PURCHASERS, PLANS AND HOSPITAL TRUSTEES.

BUT THE QUESTION ARISES -- IS THIS POSSIBLE? CERTAINLY IT IS. BY USING THE SOCIAL SECURITY NUMBER NOW USED BY THE HEALTH CARE COST CONTAINMENT COUNCIL, SUCH INFORMATION WOULD BE RELATIVELY EASY TO TRACE. WE ARE CONFIDENT THAT THE HEALTH CARE COST CONTAINMENT COUNCIL COULD CREATE THE NECESSARY SOFTWARE TO EXTRACT THIS INFORMATION.

BY THE WAY, THE SAME TYPE OF PLAN SPECIFIC INFORMATION COULD BE APPLIED TO THE HEALTH CARE COST CONTAINMENT COUNCIL’S PHYSICIAN REPORTS.

WITH THIS TYPE OF INFORMATION, CITIZENS OF THE COMMONWEALTH WOULD TRULY HAVE OUTCOME BASED DATA MORE RELEVANT TO THEIR PERSONAL CONDITIONS AND TREATMENTS.

THE BILL SHOULD BE AMENDED TO REQUIRE THE SAME DATA ABOUT ALL HEALTH PLANS. WHILE THERE IS A DEARTH OF INFORMATION ABOUT QUALITY OF CARE IN MANAGED PLANS, THERE IS EVEN LESS KNOWN ABOUT TRADITIONAL FEE-FOR-SERVICE PLANS. WHY SHOULD NON-MANAGED CARE PLAN HOLDERS HAVE ANY LESS INFORMATION ABOUT THEIR PLAN’S QUALITY? WE RECOMMEND THAT THE BILL BE MODIFIED TO REQUIRE THE SAME DATA BE REPORTED ABOUT ALL LICENSED FEE-FOR SERVICE PLANS IN THE COMMONWEALTH.

WE BELIEVE THAT THIS IS A NATURAL EXTENSION OF THE HEALTH CARE COST CONTAINMENT COUNCILS MISSION. IN FACT, THIS TYPE OF DATA WAS ENVISIONED BY THOSE OF US WHO ORIGINALLY MET TO DISCUSS THE IDEA OF THE 1986 LEGISLATION.

WE ALSO HAVE SEVERAL CONCERNS ABOUT THE FINANCING MECHANISMS OF THE PROPOSED BILL. WE BELIEVE FINANCING SHOULD BE PAID BY INSURERS AND SHOULD BE ASSESSED ON A PER PERSON ENROLLMENT BASIS -- INCLUDING DEPENDENTS. IN OTHER WORDS, EACH PLAN WOULD BE ASSESSED -- LET’S SAY -- $10 ANNUALLY FOR EVERY ENROLLEE AND DEPENDENT INSURED. BY SO DOING, ALL PLANS WOULD BE PAYING A UNIFORM RATE BASED ON THE NUMBER OF CLIENTS BEING SERVED, RATHER THAN A PERCENTAGE OF PREMIUMS BEING PAID.

WE ALSO RECOMMEND THAT MEDICAID HMOs BE EXEMPT FROM PAYING FEES AND THAT SUCH FEES FOR MEDICAID HMOs BE PAID BY A SPECIAL ALLOCATION FROM THE COMMONWEALTH GENERAL BUDGET. THE REASON FOR THIS RECOMMENDATION IS THAT IN ORDER FOR A MEDICAID HMO TO PAY SUCH A FEE, IT WOULD BE TAKING FROM MONIES THE COMMONWEALTH IS ALREADY PAYING IT FOR DIRECT HEALTH CARE SERVICES. THUS, IN THIS CASE, THE FEE WOULD ACTUALLY BE TAKING FUNDS NEEDED TO TREAT POOR AND INDIGENT CITIZENS. THERE MAY ALSO NEED TO BE SIMILAR CONSIDERATION FOR MEDICARE HMOs, PARTICULARLY IF THE FEDERAL GOVERNMENT FURTHER CUTS REIMBURSEMENTS.

FINALLY, WE WANT TO ISSUE OUR STRONG SUPPORT FOR KEEPING THESE EXPANDED FUNCTIONS OF DATA COLLECTION AND DISSEMINATION WITH THE PENNSYLVANIA HEALTH CARE COST CONTAINMENT COUNCIL. THE COUNCIL IS THE APPROPRIATE PLACE FOR THESE SERVICES TO BE. AS A FREE STANDING ENTITY, OVERSEEN BY A BROADLY BASED BOARD OF DIRECTORS, THE COUNCIL IS LESS LIKELY TO BE SWAYED AND INFLUENCED BY POLITICAL FACTIONS. THAT IS WHY THE COUNCIL WAS CREATED AS AN INDEPENDENT ENTITY -- TO BE FREE OF NORMAL DEPARTMENTAL POLITICAL PRESSURES AND TO BE REASSURING TO TH E PUBLIC THAT THE INFORMATION PROVIDED IS CREDIBLE.

WE BELIEVE THAT THE COMMONWEALTH IS A UNIQUE PLACE FOR HEALTH CARE CONSUMERS. NO OTHER STATE PROVIDES AS MUCH DATA ABOUT HOSPITAL OUTCOMES AND PHYSICIAN RESULTS IN HOSPITALS. WE BELIEVE THAT THE TREASURE TROVE OF OUTCOME BASED DATA ALREADY COLLECTED BY THE HEALTH CARE COST CONTAINMENT COUNCIL GIVES THE STATE A UNIQUE OPPORTUNITY TO PROVIDE INDIVIDUAL HEALTH CARE CONSUMERS OUTCOME-BASED HEALTH DATA DIRECTLY ATTACHED TO THEIR HEALTH PLAN.

THEREFORE, WE STRONGLY SUPPORT THE INTENT OF HOUSE BILL No. 174 WITH THE MODIFICATIONS WE HAVE SUGGESTED. WE ALSO OFFER WHATEVER SERVICES WE CAN TO WORK WITH THE SPONSORS TO MAKE THIS PROPOSED LEGISLATION ONE OF THE MOST IMPORTANT PIECES OF CONSUMER FRIENDLY LAW IN THE COMMONWEALTH.

THANK YOU VERY MUCH FOR INVITING US TO TESTIFY TODAY. WE’D BE DELIGHTED TO ENTERTAIN ANY QUESTIONS YOU MAY HAVE.

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