Premium Plan

by Nathan Stubbs

For the first time in years, the state is starting to reach a consensus on health care reform. The only question: how to pay for it?

Miles Bruder knows all too well that significant heath care policy reform in Louisiana isn't going to happen overnight. For the past three years, Bruder has been involved with a series of quasi-government committees working to build consensus on how to overhaul Louisiana's public health care system, first on staff with Gov. Kathleen Blanco and now as director of health policy for the Louisiana Recovery Authority. The work has at times seemed to move at glacial speed. Even though most people agree that Louisiana's health care system is broken (it ranks near the bottom of all states in health care services), getting all the parties involved to agree on how to fix it hasn't been easy. So when a 40-member panel ' made up of a cross-section of government, business and academic representatives ' recently approved a plan for overhauling public health care in the greater New Orleans area, Bruder saw it as a significant breakthrough.

"We got a 40-member panel to unanimously agree," Bruder says. "That's been a goal of ours for three years now. We've been criticized for a long time for just meeting and meeting and meeting. I'm very excited that it's finally getting moving."

But while the panel, known as the Louisiana Healthcare Redesign Collaborative, may have agreed on a new model for public health care, it's still a long way from becoming reality. Any makeover of the current system will require the approval of the state Legislature, which has been traditionally wary of any radical changes in health care delivery. And U.S. Department of Health and Human Services Secretary Michael Leavitt, who offered federal assistance for the redesign, has balked at the hefty price tag that comes with the committee's current plan.

Formed at the request of Leavitt, the Louisiana Healthcare Redesign Collaborative was created to help the hurricane-ravaged New Orleans area rebuild with a progressive new model for delivering public health care. While the committee's plan would initially be set up only in the storm-struck parishes of Orleans, Plaquemines, St. Bernard and Jefferson, the plan calls for the model to be adapted across the state over the next five years. And Leavitt expressed hope that it would also become a national model for other states to eventually follow.

"That Secretary Leavitt is giving us so much of his personal attention, this is a blessing," notes Bruder.

The committee's proposal, submitted last month, is visionary in its approach to transforming the state's health care system. The plan incorporates a number of ideas many health care policy experts have been advocating for Louisiana for years: eliminating the "two-tiered" system of health care in Louisiana, where the insured get services almost exclusively through private providers and the uninsured are directed to separate public "charity" hospitals; setting up more primary and preventative clinic-based care that will reduce the need for costly emergency room trips; creating a paperless, electronic system of health records that is cheaper to maintain and easier to transfer with patients; putting less resources in institutionalized charity hospitals and specialized care centers; and focusing on getting more uninsured patients some type of coverage.

"Most of this is targeted toward the small businesses," Bruder says, "which are 95 percent of the businesses in Louisiana. They don't have a bulk of employees that makes health insurance coverage affordable enough. We would simply be subsidizing the purchase of that insurance."

But the new vision won't come cheap. The proposal requests $150 million for hospitals that remained open in the wake of Katrina and another $120 million annually toward recruiting and retaining physicians and nurses. If implemented, the new programs and expanded Medicaid coverage will total an additional $522 million a year on top of what the state now pays. This does not include another $650 million LSU is seeking from both FEMA reimbursement and federal grant dollars to rebuild its Big Charity hospital in New Orleans as a state-of-the art medical education facility.

According to State Sen. Tom Schedler of St. Tammany Parish, "There is a big disparity between the [state] Department of Health and Hospitals' analysis of the costs to implement this versus what [the federal government's] cost is. They think the changes need to be done a lot cheaper."

Schedler, who sits on the health and welfare committee in the state Senate, has been pushing for major reforms to Louisiana's charity hospital system for almost a decade now. He's generally in favor of all the reforms being proposed now, but he's not convinced of their financial feasibility. His main concern lies with LSU's proposal to build a new 350-bed Big Charity hospital in New Orleans. While the redesigned health care model reduces the need for large charity hospitals for the uninsured, LSU and other state officials insist the university needs a sizeable medical training hospital in New Orleans in order to sustain its medical school there. The proposed solution has been to build a new, state of the art Big Charity hospital, with an emphasis on cutting-edge medical research that would help bolster LSU's New Orleans medical school and at the same time put the hospital in a position to compete with the private sector for paying customers, as well as taking in uninsured patients.

Schedler says the plan sounds good, but it is based on a questionable business model ' one that assumes that by the time the hospital is built, in another six years, New Orleans will be back to a population of around 400,000. He also says that the charity hospitals suffer from a stigma that keeps privately insured patients away. "Just because we build a new hospital," he says, "if it's still the charity hospital, I question, have you changed the culture enough that [privately insured] people will start going there?"

Schedler suggests down the road the state will not be able to financially sustain both a major Medicaid expansion and the continual funding of all of the state's rapidly deteriorating charity hospitals. In addition to Big Charity, LSU is seeking funds to rebuild its aging hospitals in Baton Rouge and Alexandria.

"To try to go rebuild new charity hospitals and do redesign at the same time, at some point, after three, four, five years the federal government assistance peels off," Schedler says. "So how are we going to support both systems? We can hardly support the system we have right now. You're in for a collision course."

With financial issues still a major sticking point, most health care reform advocates are nonetheless encouraged that the tide of public opinion seems to have shifted in their favor, and some type of reform seems imminent. "There's been a lot of misinformation thrown around about what people think about the public health system," says Barry Erwin, president of the nonprofit advocacy group Council for A Better Louisiana. "There are some politicians who will tell you, 'Look, we can't change it, this is what everybody wants, this is what the people want. That's not the case."

CABL recently commissioned a statewide survey on health care reform, which found an overwhelming majority of the public, 72 percent, feels the state's public health care system either needs reform or complete rebuilding. Erwin says the survey, which included a high number of uninsured respondents, also substantiated several flaws in the state's current system. "People without health insurance have to wait longer, they have a harder time seeing specialists, their primary place to receive health care is in the emergency room, and they have a whole host of issues that the people with insurance don't have.

"We sort of knew all this anecdotally already," Erwin adds. "It's not a surprise, but what this does is quantify it and show in a fairly straightforward way just what that two tiered system is like."

Erwin maintains Louisiana has traditionally overemphasized various forms of institution-based care such as charity hospitals, nursing homes or developmental centers, rather than community-based public health clinics. "We have been an advocate in the past and continue to be of trying to move away from an overemphasis on institution-based care in the state versus community based care," he says. "We're generally supportive of the direction that things are going. The funding is an issue, and there's still some things to be worked out. But fundamentally, the direction that they are going, we are supportive of."

The Independent Weekly Health Care Reform Luncheon
11:45 a.m. Wednesday, Nov. 29, The Petroleum Club of Lafayette
Participants: State Sen. Tom Schedler of Mandeville; Gery Barry, president of Louisiana Blue Cross/Blue Shield; Dr. Anthony Blalock, president of the Lafayette Parish Medical Society; John Spain, executive vice-president of the Baton Rouge Area Foundation and a member of the Louisiana Recovery Authority health care committee
Tickets for the buffet luncheon are $25 per person or $215 for a table of eight; admission free without lunch. For more info, contact event coordinator Drue Kennerson at 988-4607, ext. 118 or [email protected].