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SustiNet Faces Key Test In Legislature

Federal Health Care Reform Raises Questions About Need For State Changes

Rinker Buck

February 08, 2011

It has been hailed as a landmark reform that puts Connecticut at the forefront of health care reform, a more effective and affordable plan for insuring the health of the state's 3.5 million residents.

But two things happened after the Connecticut General Assembly overrode then-Gov. M. Jodi Rell's veto and passed the SustiNet health care reform law in July 2009.

The U.S. Congress, in the signature act of the Obama administration, passed its own Affordable Care Act in 2010, adopting many features like health exchanges and managed care that are also part of SustiNet. That invited the criticism that Connecticut no longer needs the "reform on top of reform" that SustiNet offers.

And Connecticut, like virtually every state in the country, now is staring down a multibillion-dollar deficit, which makes it both politically and financially impossible for Gov. Dannel P. Malloy to support costly new initiatives.

Those questions and others raised by a complex piece of legislation that appears inscrutable to all but the most devoted health care experts will dominate the health care agenda as the legislature takes up SustiNet in the next few weeks and Malloy unveils his budget plans Wednesday.

To its supporters, SustiNet promises initial savings of more than $250 million a year in state health care costs and the delivery of far better care with reforms already introduced in other states. One of these would be the creation of "medical homes," which would place patients under the continued supervision of a single doctor who would coordinate care with other doctors and be rewarded not just for visits billed but instead according to how a patient's health improved, and at what cost.

To its detractors, mostly business leaders who fear the cost, SustiNet will force insurance plans to offer mandated benefits that will drive up costs for employees and employers alike. This, they say, will create an unfavorable climate for Connecticut companies.

What is the truth of these competing claims, and what can we expect to see as SustiNet begins a new round of legislative hearings next week? Will SustiNet be a boon or a bane for health care?

What It Would Do

SustiNet is the product of several years of research by nonprofit health care groups, led by the Universal Healthcare Foundation of Connecticut, and state policymakers. It was designed to address the needs of an estimated 390,000 Connecticut residents who can't afford health insurance, and the rising costs of paying for the care of needy people covered by the Medicaid and HUSKY programs. After lengthy hearings around the state and meetings with hospitals, insurance companies and small business groups, the Universal Healthcare Foundation proposed an approach that included:

• Creating pools of people already insured by the state, such as state workers, and Medicaid and HUSKY recipients, eventually to be joined by small businesses and uninsured individuals. These large "health exchange" groups are designed to leverage more affordable care by offering doctors and hospitals a larger group of patients. The plan would be offered as an option to individuals and businesses, helping to drive costs down by competing with private insurance plans.

Collecting roughly $250 million in increased federal funding delivered to the state of Connecticut and hospitals under federal health care reform. This will be achieved by converting state-administered health care programs for the poor to federal Medicaid coverage. The program will also expand eligibility for Medicaid, as provided for under federal health care reform.

Delivering higher quality care — and eventually savings in health costs — by encouraging doctors and hospitals to adopt cost-savings changes. These include medical homes for every patient, diversified group practices that charge one fee for the complete care of a patient and discouraging the use of extra tests and procedures practiced under the current system.

After the legislation passed in 2009, an 11-member SustiNet board of directors spent more than a year studying how to implement it and issued their report on Jan. 7.

The board, chaired by Kevin Lembo, who is now state comptroller, and former state Comptroller Nancy Wyman, who is now lieutenant governor, recommended putting the initial administration of SustiNet under the comptroller's officer. While that and other first steps to create a SustiNet system can begin this year, full implementation of the plan is not scheduled to begin until 2014.

Budget aides in the state Office of Policy and Management and Democratic leaders have been huddled since Malloy was inaugurated in early January, working out the details of the governor's proposed budget. But last week Malloy signaled that he was not abandoning the goals of SustiNet when he released a statement critical of a Florida federal judge's decision that found the federal health care law unconstitutional.

"The rising cost of health care is a major detriment to job creation here in Connecticut," Malloy said in a statement, "and I am committed to resolving open SustiNet issues with all parties at the table on behalf of Connecticut residents and businesses."

House Speaker Christopher G. Donovan, D-Meriden, who remains a strong supporter of SustiNet, said last week that he expects the legislature to consider bills that will allow the pooling of state and municipal employees in the same health plan, and coordinating of care reforms. But these early efforts to institute the plan, Donovan says, will have to come with a modest price tag.

"As much as we can, given the realities of the state's financial situation, we'll be concentrating on the reforms that come without a large dollar figure or will save us the most money," Donovan said.

Widespread Skepticism

Business groups across the state, many philosophically opposed to government intervention in health care in the first place, argue there is little proof that SustiNet will actually lower costs and that the program doesn't address the real problems of small companies.

Rick Willard of Wethersfield is an insurance consultant who served last year on the Connecticut Healthcare Advisory Board, which was created by Rell to study state implementation of federal reform.

"I represent companies across the state, generally with fewer than 50 employees, and these are exactly the companies for whom the burden of state mandates for health care are the highest," Willard says. "Connecticut is the fifth-highest state in the country for mandates on health care, requiring small businesses to pay for everything from infertility treatments to full pregnancy care. That really drives up the costs for small businesses, and I don't see how SustiNet addresses that problem."

Donovan counters that SustiNet will eventually provide incentives for hospitals and doctors to deliver comprehensive care at lower costs.

"People who oppose SustiNet like to use the word 'mandates,' while I like to use the word 'benefits,' " Donovan said. "We want to make sure that the plans people are paying good money for actually deliver services, without deductibles that are so high that they make people feel as if they are not insured. SustiNet is all about guaranteeing that."

Andrew Markowski, the Connecticut director of the National Federation of Independent Business, said SustiNet's faults go beyond the problem of duplicating many of the features of federal health care reform.

"What everyone is talking about now is the state's fiscal situation and the need to downsize government," he said. "SustiNet is going to create a whole new quasi-government authority at exactly the time we're trying to move away from that. I have not talked to a single business owner who thinks SustiNet is a good idea."

Successes Elsewhere

Frances Padilla, the vice president for programs at the Universal Healthcare Foundation, said that far from imposing radical change, SustiNet actually is a mix of reforms that already have been tried with success in other states. North Carolina, for example, reaped considerable savings by introducing coordinated care for the chronically ill, which avoided duplication in testing and educated patients about assuming responsibility for their own health. Padilla said this is one of many reforms that SustiNet will foster.

"Connecticut already spends $8 billion a year on health care," Padilla said. "The assumptions behind the program have actually been quite conservative. But if by introducing reforms like this we realize just 1 percent savings, in just the programs that the state of Connecticut runs we could save $277 million a year as soon as 2014, and there would be much more savings later."

Dr. Bruce Gould, an internist who works with poor patients in the North End of Hartford and also as an associate dean at the University Of Connecticut School of Medicine, was a member of the SustiNet board of directors. He echoes Padilla's belief that, by adopting SustiNet, Connecticut will simply catch up with reforms already begun in other states.

"Connecticut is the land of steady habits, and that has meant that in health reform we are actually way, way behind other states," Gould said. "By working on such issues as a single medical home for every patient and coordinated care, SustiNet will actually put us back ahead of the pack. As a primary care doc, this is the way I have wanted to practice for my whole career. If we don't go forward now, it might be decades before we have another chance to transform the health care system."