Monthly Review & Commentary On Health Issues From A Rural Perspective - May 1st, 1997

The RWHC Jackie Robinson Award
RWHC has presented its Jackie Robinson Award to the Physician Advisory Committee of the Wisconsin Emergency Medical Services Board for demonstrating that a group's ability to exclude another knows no color, profession or era. Following almost a year of receiving petitions to have even at least one rural, primary care physician on the Committee, it chose to fill the two new positions created for such a purpose with two more urban based specialists.

While falling into the news category of dog bites man, it is important to note that President Clinton has reversed himself and is calling for a Medicare freeze. As stated last month RWHC, "the National Rural Health Association and rural communities will strongly oppose an across-the-board, Medicare freeze. As Medicare spending is considered, it is critical to understand how significantly disadvantaged rural providers already are by the current system. Across the board cuts that fail to recognize the Medicare payment inequities that discriminate against rural communities are destructive of rural health and the maintenance of local access to appropriate care."
Some of you old timers may recognize the above map as the Medicare emblem we used during the rural equity law suit in the 80's. Talk about a coincidence. Within a week of the President's announcement, I received a call from the pin manufacturer who had just discovered a box of one hundred of these green enamel on brass pins. While supplies last, they are available from the RWHC office for $5 postage/handling (limit of one) to those pledging to wear it for the duration.
Public Opinion & Federal Budget Reality Gap
From a story by Eric Pianin and Mario Brossard in The Washington Post, 3/29/97:
"President Clinton and congressional leaders are promising to balance the budget and cut taxes, but the message from a vast majority of Americans is: Don't do it by reducing spending on Social Security and Medicare, according to a new survey."

"Moreover, according to the nationwide poll conducted by The Washington Post, Harvard University and the Kaiser Family Foundation, more than three-quarters of Americans believe the federal budget can be balanced without touching Social Security and Medicare benefits -- despite claims to the contrary by congressional budget experts."
"The poll shows that most Americans believe dire forecasts that Social Security and Medicare, the national health care program for the elderly, will go broke in the next century unless Congress takes action soon. But the action most favored by respondents is for Congress to eliminate perceived fraud, waste and abuse in the programs."
"In the case of Social Security, between half and three-fourths of those interviewed said they would oppose such measures as an across-the-board reduction in future benefits, a gradual increase in the retirement age or an increase in the Social Security payroll tax."
"While roughly seven in 10 respondents believe that Medicare and Social Security, the premier federal entitlement programs, will go bankrupt unless the government takes action, relatively few are willing to make personal sacrifices to correct the problem."
"The survey shows that many are unaware that entitlement programs consume more than 60 percent of the overall budget and that long-term budget balancing would be virtually impossible without changes in Medicare, Social Security and other programs."
"Asked what they considered to be the largest areas of government spending, 64 percent cited foreign aid as the most costly, although that program constitutes barely 1 percent of total government spending. By contrast, only 27 percent of those surveyed believe that Social Security is the costliest program, when one out of every four dollars spent by the federal government goes to cover Social Security benefits."
"Two-thirds of respondents correctly described Social Security as a largely pay-as-you go operation, with taxes collected from workers today going to pay benefits for current retirees. Yet only 28 percent knew that most people, when they retire, get back more in Social Security benefits than they paid in."
Delaying Obvious Will Hurt Us All More
From an article by David S. Broder in The Washington Post, 326/97:
"Sen. Phil Gramm of Texas ran a poor race for the Republican presidential nomination last year and disappeared from the contest before most voters heard him or his message. What Gramm is saying these days makes you wish he had the kind of 'bully pulpit' only the White House provides."
"Gramm has developed a chart talk that does for Medicare what another Texan, Ross Perot, did for the budget deficit with his 1992 presidential campaign infomercials: Make the problem clear."
"The first of Gramm's charts shows that the problems go back to the very creation of Medicare in 1965. That year of President Lyndon Johnson's Great Society program was significant in two other ways. Just before the Vietnam buildup triggered inflation, it marked the end of a period of economic growth that generated a marked rise in real incomes. And it also marked the end of the baby boom that would, as the boomers matured, temporarily swell the number of working Americans whose payroll taxes would pay for their elders' new medical benefits."
"In the 1970s and 1980s, real economic growth and the birth rate both slowed down, while the elderly population began to grow. But another Gramm chart shows that we are barely at the edge of the real senior-citizen explosion. This year, the number of Americans over 65 will grow by 200,000. Fifteen years from now, the annual increase will be 1.6 million -- eight times as large."
"That is why Gramm says these ought to be the good times for Medicare -- a time to be storing surpluses for the crunch ahead. But in fact, the program costs are so out of control that it is running in the red and its reserves will be exhausted in four years."
"As the chairman of the Senate Finance subcommittee that handles Medicare, he may have the clout to get something done. Gramm believes 'that salvation lies in redesigning the aging Medicare program to incorporate the features that have begun to produce genuine savings in the private sector.' "

Bob Dole on Fixing Medicare
From a Washington Post Weekly editorial, 3/3/97:
"To survive, Medicare will have to look much different in ten years from what it looks like today. We face two major problems with Medicare: a short term problem with bankruptcy in 2001 and an even larger long-term financing problem when the baby boomers start retiring in 2010." His suggestions are as follows:
Affluence-test the Part B Premium.
"Unlike Part A of Medicare, Medicare beneficiaries pay premiums that cover only 25 percent of the cost of Part B. It is just plain old-fashioned fairness for affluent beneficiaries to pay a little more (still way below the actual cost of care)."
Keep the link between Medicare and Social Security. "People live longer and retire later than they did earlier in the century when the program was created. The age of eligibility will start to rise a couple of months each year beginning in 2003. We should let (the age) of Medicare eligibility rise with Social Security."
Give senior citizens choice. "Medicare beneficiaries should be able to choose the kind of coverage they want. Innovative ideas such as medical savings accounts should be available, as should managed-care plans and traditional fee-for-service plans. The critical word here is choice."
Cutting providers alone is not the answer. "Some reductions in some areas are justified, but you cannot fix the program by hitting providers alone. Let's move more of the program into a prospective payment system so incentives for the wise use of services are in place. The real problems faced by rural plans as well as urban providers must be addressed as should Medicare's role in paying to train our nation's physicians."
Form a Medicare commission. "If the President and Congress cannot agree on how to preserve Medicare long term, a bipartisan commission should be authorized. As the 1983 Social Security Commission demonstrated, a bipartisan commission can recommend sound long term solutions."
Clinton's Proposed Medicare HMO "Fix"
The President's proposed payment reform is not believed by many to do enough, quickly enough, to expand Medicare HMO availability. As shown below, a $350 floor is implemented in 1998 with a blend of county/national rates at 90/10 in 1998 going to 70/30 in 2002. The dip in 2000 reflects a funding cut of 5%.
The Rural Coalition and others are proposing a 85% floor and a higher rate of blend in order to converge rates more rapidly towards the national average.

Arms Race Between Buyers & Sellers
The following is taken from "Managed Care" by David Drake, PhD in the Journal of the American Medical Association, 2/19/97:
"Predictably, the increased size of third-party purchasers has been followed by provider mergers and growth in the size of provider organizations to strengthen their bargaining position vis-à-vis purchasers. However, until the excess supply of specialized resources is eliminated, buyers should be able to continue downward pressure on provider prices."
"Currently, both buyer and seller organizations are getting bigger as the primary means of implementing and defending against oligopsonistic purchasing practices. Buyers want larger size to obtain lower prices, and providers want to be part of an organization that is large enough to be crucial in gaining consumer acceptability of a managed care network."
"Although larger provider organizations may be helpful in the provision and marketing of comprehensive health services, size has not been demonstrated as needed for either cost-effectiveness or medical efficacy except for highly specialized therapeutic services, such as open heart surgery where increased volume produces better outcomes."

Balancing Back Lash Against HMOs
As HMOs have gained market power, they have appropriately come under a lot closer scrutiny and as the media feeds on the media, there is a cyclic snowballing effect. Just to keep a little perspective, the following may be useful from Health Care Commentary by David Reed at Deloitte Touche Tohmatsu International, 1/97:
"On the other hand, consider the following reports and findings supportive of the quality of care rendered by managed care plans:"
"In October of last year, the Gallup Organization released a survey of federal workers, dependents, and retirees who gave the edge on quality, access, coverage information, customer service, and paperwork to HMOs over indemnity plans."
"The American Association of Health Plans released a study in July of 1996 indicating that HMO and fee-for-service patients are almost equally satisfied with their care, whether they are in excellent or poor health."
"The Journal of the American Medical Association, in its November 8, 1995 issue, reported that patients with hypertension and non-insulin dependent diabetes mellitus fared as well in HMOs as in fee-for-service settings."
"The Los Angeles Times, in an editorial opposing health care reform ballot issues in October , 1996 quoted its own 1995 poll which indicated 92 percent of the Californians surveyed about quality of managed care, rated the care 'good or excellent.' "
Risk Adjustment
The Alpha Center with funding from the Robert Wood Johnson Foundation has published Risk Adjustment, A Key to Changing Incentives in the Health Insurance Market. Copies of this very readable 26 page report can be obtained at no charge by faxing a request to the Alpha Center in Washington D.C. (202-296-1825). A brief introduction follows:
"For the last several decades, health services researchers and policy makers have been working to develop accurate and feasible methods for measuring risk variation in the health care market and compensating health plans appropriately for the health risks their enrollees represent. In the current competitive and voluntary health insurance market, health plans have an incentive to attract only the healthiest enrollees, and devise methods to exclude sicker or higher risk enrollees. They gain more by competing on the basis of risk selection practices than they do by competing on the basis of efficiency and quality."
"A potential method for solving the problems of risk selection is risk adjustment. as noted in this special report, risk adjustment is a corrective tool designed to reorient the current incentive structure of the insurance market. The goal of any risk adjustment mechanism is to reduce both the negative financial consequences for plan that enroll high-risk users and the positive financial consequences for plans that enroll low-risk users. Essentially, effective risk adjusters would make it possible to compensate insurance plans according to the health risk they take on. There are many approaches to risk adjustment, each with its own positive and negative attributes."
"As currently structured, the health insurance market rewards those health plans that manage to sell the largest percentage of their product to people who need it the least--and avoid those likely to use it the most. While profitable for the sellers and workable for the majority of healthy consumers, the situation diminishes the quality of the market and causes difficulty for people most in need of coverage."
Don't Foreclose the Individual Uninsured
An informal coalition of eight statewide and regional organizations interested in reducing the number of people in Wisconsin without health insurance has been meeting for several months. The effect in Wisconsin of the "Kassenbaum-Kennedy" insurance reforms has been studied along with a number of group insurance and individual insurance reforms included in the Governor's budget submission.
They will ask that the individual insurance reforms be taken out of the budget bill and considered separately. Changes in Wisconsin's Health Insurance Risk Sharing Plan (HIRSP) are included as part of the proposed individual insurance reforms. This is a larger and more important issue than who pays for HIRSP.
The following related points are from a white paper being developed by the work group:
"Kassenbaum-Kennedy (K-K) has implications for health insurance in Wisconsin in three major respects:"
· "Limits on pre-existing condition exclusions will be applied to all group health insurance plans, including self-insured plans. Virtually all health insurance plans become "portable" in that when an insured person changes plans, coverage under the old plan must be counted against any period of pre-existing condition exclusion of the new plan."
· "Health insurers offering coverage to the small group market must comply with guaranteed availability and renewability requirements."
· "The state must take steps to assure that individual health insurance is available to persons moving from a group plan to an individual plan (and exhausting their COBRA benefits, if any), without regard to medical condition, and with no pre-existing condition exclusions. The cost of the insurance cannot exceed 200% of the standard market rate."
"What are the reasons why the State should not adopt the individual insurance reforms currently in AB 100 and SB 77?"
· "The proposed changes do not address the inherent problems of access to and affordability of individual health insurance."
· "While many policymakers have pointed out that we need to reduce the demand for HIRSP, the proposed changes will do nothing to reduce demand (by, e.g. giving people other insurance options) and may in fact increase the demand (by eliminating the current pre-existing condition exclusion and capping premiums at 200% of market rates)."
· "The state has a number of options with respect to the K-K requirements in addition to HIRSP. All affected parties deserve a full debate of the ramifications of these options."
· "Acting now to make HIRSP the vehicle for K-K compliance closes the door on opportunities to address both HIRSP and K-K in a broader framework which also looks at such problems as affordability of coverage for farm families, self-employed individuals and small groups with high-risk members; health coverage options for W-2 participants; and low income uninsureds."
· "Cutting the costs of HIRSP through severely reducing providers' payments to Medicaid levels is a misuse of a program (Medicaid) designed to help those in poverty. It is unfair to ask providers to subsidize the underwriting practices of insurers. A full debate is needed to assure that all share in the responsibility for covering the uninsured."
State Role in Nonprofit Conversions
RWHC and the Wisconsin Health and Hospital Association are both discussing issues related to the potential conversion of nonprofit hospitals to for profit hospitals. The following is taken from the lead article, "Public Policy Issues In Nonprofit Conversions," in a special edition of Health Affairs, March/April, 1997:
"The transfer of assets of a nonprofit organization is governed by state charitable trust law because the assets are considered to be held in a charitable trust for the public... If states are not diligent, conversions can clearly result in the loss of nonprofit charitable assets that rightfully belong to a community."
"Conversions of health organizations from nonprofit to for-profit status are interwoven into the changes occurring in the U.S. health care industry. Some conversions have economic advantages in consolidating excess capacity and promoting efficiency. They may also pose the risk that communities lose valuable charitable assets or important health services. The goal of public policy should not be to prevent conversions; such rigid policy could impede desirable change. Rather, the goal should be to preserve valued functions and resources in the context of a competitive marketplace."
"The nonprofit organizational form enhances the potential for community benefit for hospitals... Action could be considered to reduce pressure on nonprofits to convert for reasons other than economic efficiency--for example. ready access to capital, regulatory flexibility or insider financial gains."
"Effective oversight can make the difference between a beneficial or a detrimental conversion. Effective oversight does not require highly specific rules or stringent regulations. Rather, it requires the establishment of a process that enables states to explicitly address and negotiate the multiple issues that conversions raise... States could benefit from enactment of legislation that provides such a process and that avoids the problems that have occurred from a lack of oversight."
Don't Throw Out Community Input
Substantial support has surfaced to maintain Wisconsin's Rural Health Development Council--to exclude it from a proposed slash and burn of citizen input into Wisconsin state government. The Cooperative's support for the Council is typical of many across the state:
The Rural Wisconsin Health Cooperative absolutely opposes the idea of sunsetting the Rural Health Development Council and requests members of the Wisconsin Legislature to turn back this unfortunate proposal.
"There are honorific boutique boards and councils that have long out lived their usefulness; this is not one of them. An annual State expense of $14,000 is more than repaid by the prominent role the Rural Health Development Council has taken in highlighting opportunities for state government to better address the health and development needs of rural communities across the state."
"The Department of Commerce's evaluation of the productivity of the Council is excellent and I believe part of the full report that you have already received."
"The loss of this Council would represent a major step backward, returning to an era with no formal State recognition or voice re the unique challenges of rural health and rural community development."
A brief word to your state representative and senator would still be very useful.
Continuing the Reinvention
Wisconsin's Department of Health and Family Services (DHFS) "has undertaken significant steps to reinvent itself" according to a white paper commissioned by the Wisconsin Health & Hospital Association (WHA). However the paper makes brutally clear that DHFS reinventing is very much a work in progress.
One of the DHFS earliest experiments in reinventing government is the development of the Rural Medical Center model, a public-private sector initiative begun in the late 1980s and still not operational. As noted in the WHA paper, "it is inherently inefficient to manage such an integrated health care provider in such a piecemeal fashion. The amount of paperwork and the professional support time required to document compliance, both by the provider groups and by the Department, is staggering and intrinsically inefficient."
While it appears that DHFS may be getting back on track with the Rural Medical Center initiative, it is now time to fully implement the model as already approved by the Legislature and supported by key members of the Congressional Delegation. Then this approach of integrated regulation could begin to be applied by DHFS to other similar arenas.
Out of the Citadel into Community
The Focus/Health Care column of the April 4th edition of the Milwaukee Business Journal concisely summarizes our position:
" 'While health policy analysis debates how to reduce the overall supply of physicians, there is still a shortage in many areas, including rural Wisconsin,' said Tim Size, executive director of the Rural Wisconsin Health Cooperative. 'The problem is we've got to make sure people don't mistake supply for distribution... If physicians were evenly distributed that would be fine. But they're not...' "
The job of AHEC is to get health professions education off of the campus and out where it belongs, in our communities, particularly in underserved rural and urban communities. This is the most effective way to solve Wisconsin's distribution problem. Getting education off campus has been aided by a federal "grant" but now requires state leadership and committed funding to maintain.
We have finally implemented the AHEC Partnership Council. The state AHEC System has gone beyond academic-community "partnership" rhetoric and actually created a structure to share decision-making on statewide issues and priorities. This happened because it was understood that a world characterized by scarce public funds and private managed care competition, requires health professions education to come out of the citadels into our communities. With the requested state funding, Wisconsin will continue that direction.
Culture, Agriculture & Rural Health
I've finally got around to reading Wendall Berry's classic, The Unsettling of America, Culture & Agriculture. While some may very well disagree with his perspective or language, this is a discussion equally relevant and vital or those of us working to sustain and grow local community health care:
"The terms exploitation and nurture describe a division not only between persons but also within persons. We are all to some extent the products of an exploitive society, and it would be foolish and self-defeating to pretend we don't bear its stamp."
"I conceive a strip-miner to be a model exploiter, and as a model nurturer I take the old-fashioned idea or ideal of a farmer. The exploiter is a specialist, an expert; the nurturer is not. The standard of the exploiter is efficiency; the standard of the nurturer is care. The exploiter's goal is money, profit; the nurturer's goal is health--his land's health, his own, his family's, his community's, his country's... The exploiter wishes to earn as much as possible by as little work as possible; the nurturer expects to have a decent living wage from his work, but his characteristic wish is to work as well as possible... The exploiter typically serves an institution or organization; the nurturer serves land, household, community, place. The exploiter thinks in terms of numbers, quantities, "hard facts"; the nurturer in terms of character, condition, quality, kind."
"I'm talking about the idea that as many as possible should share in the ownership of the land and be bound to it by economic interest, by the investment of love and work, by family loyalty, by memory and tradition."
Between Chaos and Order
The nice thing about doing this newsletter (besides adding some organization to an otherwise chaotic life) is that people send you neat stuff. Oran Hesterman a friend working in sustainable agriculture at the W. K. Kellogg Foundation recently gave me a copy of The Chaordic Handbook: Living, Learning and Organizing at the Edge of Chaos or How Do Messy, Swarmy Things Stay Alive? (By On Purpose Associates, Inc., Circulation Draft - April, 1995) If only for the title, I read on; an excerpt:
"One of the challenges of complex systems is to "tune" their rules to keep them in the "complex" region of dynamics--in other words, to avoid rules that either drive the system into chaos ('boiling alive') or rigidity ('freezing to death'). The process of 'tuning' rules to stay alive is the process of adaptation and learning. Complex systems have the capacity to "tune' their rules, and so are called adaptive systems."
Myrtle Werth Honored Nationally, Again
A RWHC member, Myrtle Werth Hospital in Menomonie, Wis., has been named one of the most successful small, rural, not-for-profit hospitals in the United States. Phase II Consulting, a healthcare consulting firm based in Austin, Texas, identified Myrtle Werth and 37 other hospitals based on Medicare cost reports that hospitals nationwide file annually. "The consulting firm analyzed data from 5,000 to 6,000 hospitals across the country to help other hospitals with their strategic planning efforts," says Thomas Miller III, chief administrative officer of Myrtle Werth Hospital.
The firm considered hospitals successful if they met specific criteria based on efficiency, profitability, expenses per discharge and the number of outpatient services available to patients. In 1994, another national consulting firm, HCIA, ranked Myrtle Werth among the top 100 rural hospitals in the country, based on cost and quality criteria.
WisKids Count Data Book
The 1997 WisKids Count Data Book, A Portrait of Child Health in Wisconsin should be acquired for any one of three reasons: (1) understanding health issues of our children is a basic responsibility, (2) to see an absolutely outstanding model for the packaging and communication of a substantial body of data and (3) as an example of a stable, long-term partnership between the public and private sectors.
A copy of the 180 page Data Book can be ordered for $15.00 (postage included) by contacting The Wisconsin Council On Children And Families at 608-284-0580 or through their web site:
How Do You Approach Change?
Are you a "Conserver, Originator or Pragmatist?" The Change Style Indicator, is an assessment instrument that measures an individuals preferred style when approaching change. It and supporting material can help you to:
"Manage your response to change and its consequences, both as a leader and support person."
"Understand the sources of conflict associated with change and the relationship between conflict and preferred change style."
"Recognize and appreciate the contributions that each change style offers to your team and organization."
Self Scoring Assessments and separate Style Guides are sold for $6.95 each; the Facilitator's Guide is available for $95; available through Discovery Learning (email or call 910-272-9530).

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