Health care proposals worry rural legislators

Health care tops the list of rural Minnesotans' concerns, yet the direction of health care reform working its way through the Minnesota Legislature may harm rural health care.

Health care tops the list of rural Minnesotans' concerns, yet the direction of health care reform working its way through the Minnesota Legislature may harm rural health care.

The Senate was ready to move health care reform legislation last Wednesday to the floor, but rural legislators were able to postpone action.

"We caucused over it, and many of us expressed some real concerns about certain aspects of the proposal, especially with respect of how it will affect our rural hospitals and rural health care," Sen. Mary Olson, DFL-Bemidji, said Friday in an interview.

Olson is a member of the Senate Health and Human Services Budget Division and, although a freshman, has made health care her top legislative issue. She's also authored several health reform measures.

The chairwoman of the panel, Sen. Linda Berglin, DFL-Minneapolis, is a major player in health care negotiations with Gov. Tim Pawlenty, along with Berglin's counterpart in the Minnesota House, Rep. Tom Huntley, DFL-Duluth.


In order to make up a $938 million state budget shortfall, Republican Pawlenty has included $187 million in cuts to state health and human services spending. Berglin, however, wants to put more people on MinnesotaCare, the state subsidized health insurance plan for the working poor.

The Senate plan would call for spending $20 million initially and more over time for computerization, Olson said. Funding would come from the Health Care Access Fund, a surcharge on health care provider bills. Once set at 2 percent, it's now 1.5 percent.

It would "pay for a computer system that the governor is promoting, where he's saying everyone can go on-line and sort of shop for value in our health care system," Olson said.

"This isn't something that anyone has accomplished before," she said. "It seems to me we're going to be spending a lot more money on it on administration under this proposal rather than less money on administration."

And, she said, the proposal would put more administrative burden on hospitals and clinics, "very much like the No Child Left Behind system in education. This is a similar type pay for performance report card system for health care."

One provision would have providers post their rates and treatment outcomes, so patients could compare costs between providers and check a quality rating.

Aside from higher administrative costs to run such a system, Olson says she's also concerned over attaching a ratings to providers, as does the federal No Child Left Behind Act to schools.

"Another concern is that we're going to have different levels, different tiers of payments so that if a person chooses to use what this system determines is a provider that isn't as value-oriented, then the person using that system will have higher co-pays and deductibles than people who are using health care providers determined to be a better value," Olson said.


"In rural communities, we don't have those kinds of choices, for one thing," she added. "We have whoever is in our community."

Value determinations would be based on outcome assessments, Olson said, and just as is with NCLB, "certain populations may be more challenging in terms of reaching those outcomes."

Minnesota 2020, a St. Paul progressive think tank, on Friday released a poll of predominately rural Minnesota voters showing health care as their top concern. Of 800 people polled, 39 percent ranked health care as their top issue in statewide polling, 40 percent as the top issue for non-metro voters. The issue just edged out jobs and the economy as Minnesotans' second top issue.

"Rural Minnesota does have unique needs," Matt Entenza, Minnesota 2020 board chairman and founder, said last week in an interview about the poll. "In health care, there are a lot more issues about even getting access to doctors and nurses and medical services, much less questions about controlling costs and things like that.

"You have to have the doctor before you can start worrying about things like controlling costs," said the former House DFL leader.

That health care is a top issue among rural Minnesotans doesn't surprise Olson -- she campaigned on the health care issue in 2006.

The poll "bolsters my effort to stay very involved in this discussion process, and I would really encourage people to pay close attention to the details that are being proposed and to be expressing their concerns, if they have any, very quickly," Olson said.

Health care reform is also one of half dozen issues community members will discuss Tuesday with state legislators when two busloads of Bemidjians head to St. Paul for Bemidji Day at the Capitol.


At a briefing for trip participants Friday, Jim Hanko, North Country Health Services president and CEO, outlined the health reform bills and issues that local people should lobby legislators.

Big on the list is Pawlenty's budget-balancing proposal to use about $32 million by changing state reimbursements for long-term care facilities. Hanko said improvements need to be made for Medicaid patients in such facilities, as well as restoring hospital reimbursement cuts in the Medicaid program.

"Fifty percent of the folks who are residents at Neilson Place, and would image a greater number of people who live in town and all the other nursing homes in our region" are on the government's Medicaid program, he said.

"It would appear that the $935 million budget shortfall is going to look at Medicaid reimbursements for long-term care for part of their money," Hanko said. "They're also looking raid the Health Care Access Fund."

Hanko said he used "raid" on purpose as the fund is for health care, for putting uninsured working poor on MinnesotaCare. Instead, surpluses have been put into the state's General Fund. "We certainly need to protect that."

He asked the soon-to-be community lobbyists to tell legislators that Minnesota hospitals need to have hospital reimbursement rates under Medicaid restored.

Currently reimbursements for North Country Regional Hospital are at 2002 levels minus 11.5 percent, or at about 1999 costs to provide services, Hanko said. The rate equates to about 75 percent of NCRH's costs to care for Medicaid patients.

"Bemidji has the highest relative Medical Assistance patient load outside the Twin Cities and in the past year, costs exceed reimbursements by $3 million," he said of services provided to patients on public assistance medical care.


Over the last five years, the total costs not reimbursed by the state program equals $12 million, and are costs that are shifted onto other payers.

Hanko said he has been working with Olson to understand health care reform proposals in the House and Senate.

"We are not opposed to health care reform," Hanko said. "Clearly the slope of health care costs can't be sustained, and we need to do something about it as a society."

Most of the health care expenses in the state of Minnesota go to long-term care and not hospital and physician care, Hanko said.

The health care reform proposals have a lot of good suggestions, but Hanko labeled four provisions as "unfriendly to health care in just about every circumstance."

Among them are a proposed health care assessment fee, raising $40 million for public health. "What's an assessment fee?" Hanko asked the briefing attendees. "It's a tax, and to call it anything else is disingenuous."

That proposal would create a statewide public health plan targeting obesity, chemical dependency and tobacco use, and would be funded by a surcharge on nonprofit hospitals and health plans.

There's also a fear that if that fund were to build too rapidly, it too would be a prime target to raid for the General Fund when needed to balance the state budget, Hanko said.


Another concern, he said, is "administrative simplification." Insurance companies are reluctant to embrace such a system as it would mean a costly replacement of their computer software. "We need to have one way to submit all of our bills from hospitals and clinics to insurance companies, and this would be very helpful."

And, "as you create this new health care reform package, you're going to have a huge bureaucracy that's going to result. We need to all be mindful of that."

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