In PART One, Lee Staley talked about the importance of putting more controls in the hands of the state in order to respond to health care crises related to cost. Deputy Attorney General Adi Goldstein then emphasized the importance of structural change.  

GOLDSTEIN: I think the key word in what we are saying is “structural.” It is not just a matter of giving out some dollar amounts, potentially saying how much this will cost. Ultimately, that is always the question: how much is this going to cost?

This is a short time frame. As far as implementation, of course, people need to agree and buy into it. I don’t expect that to happen on a dot. It is very complicated; there is a lot to discuss, there is a lot to consider. We expect a lot of questions. There are certainly budgetary implications.

So, you know, whether folks agree that this type of structural change is necessary and will be required… And again, this would require vision and leadership.

That’s what it requires. It requires someone to have the lungs, you know, which is difficult in the best of circumstances, and perhaps might be more difficult in an election year.

I think we’re going to put it out there fairly quickly and then, as far as implementation, at that point it is really out of our hands. 

We have a blueprint for implementation that would allow this to be implemented within a couple of years. That would require real buy-in and commitment.

STALEY: On the implementation front, we have been working with the Brown School of Public Health to provide the financial analysis here. 

For the sake of that analysis, the assumption would be that the implementation, the first year in which this would be offered at the soonest, would be 2028.

And, there is some policy rationale for that. Which is, many of the coverage losses that are attributable to HR One, those enacted last July, many of those will become effective in 2028. For example, some of the key Medicaid cuts, so having a plan available by then is really one of the driving forces that set that timeline. But, it is aggressive. And, frankly, there is a lot of work to be done and a lot of decisions to be made.

The key stakeholders need to consider what the right (timeline) would be on a number of different dimensions. 

But I think what is great about what we are providing is really a foundation for thinking about this, and outlining the key decision points along the way, so that people can really concretely grapple with this issue.

GOLDSTEIN: And, the Brown School of Public Health,  (what they are providing), it is really a framework. And, there are different levers that can be pulled here. There are still some different decision points. Again, if there is a buy-in into this whole structure, there are some different decision points for lawmakers and state leadership to make. 

Again, we live in a world that is (constantly changing); there are decisions that they may need to make, given budget realities.

LEVINTOVA: Can I ask some follow-up questions on the framework that you just described. One is very basic; the other is more complex.The basic one is: If this happens and it is implemented, who is the steward of this plan? What office or department, who is running this; who is in charge?    
STALEY: On that, this is again something that we have a framework in thinking about this. I just want to highlight that this is a decision that is really at the state’s discretion, at the General Assembly’s discretion, to decide.

The framework that we’ve been thinking about is establishing a board of directors that would be comprised of key stakeholders and key officials in state government, whose portfolios already touch this issue area so significantly that they would need to be involved.

And, you can imagine who those might be. And, I think we are also exploring and seeing a lot of value in building in community representation on that board. And expert representation. People with a strong background in public policy, health policy, health care financing, to provide an outside perspective. And, from the community representation standpoint, having people who can speak to the on-the-ground reality of the challenges they are dealing with insurance, and helping to drive some of the policy-making in a more human dimension, is going to be really important.

LEVINTOVA: So, in the most simplified sense, there is a pot of money from different sources — whether that’s from employers buying in, from state funds, or federal funds. And, you have a board of directors who are health experts from different corners who are doling out that pot, in the most simple terms.

In that structure, one of the things you mentioned in the challenges of how you got here is the hospital finance piece: hospitals are operating on low or negative margins, in part because their reimbursement rates are low, in part because of deep inefficiencies — reimbursements are low while you have seven different insurance companies that all have the same departments essentially doing the same thing. Like, wouldn’t it be great if we could have just one, that led to a classic streamlining of incentive? 

How does having this public option where many people in the state are on this one simplified plan solve the hospital financing problem and make their finances healthier? 
STALEY: The analysis that we’ve been working with essentially assumes no reduction in payment rates for hospitals. Mainly, keeping that stable. Hold that concept.

And then, number two, to kind of address the point of why does this help hospitals, why does this help providers? The way that I think about it is we need to get, it would be terrific and really necessary to get out of the world where facilities are having to think so closely about their payer mix. And, having different patients being valued at different rates.

We don’t want providers to worry about that type of consideration. And, the more that we are able to aggregate people under a single financing pool, the less hospital leadership has to worry about that dynamic —and can more cleanly assess their own financial condition and forecasts going forward.

Then, I guess, on a more policy driven level, what we have right now is a system where for under-funded hospitals, the state has essentially little to no control over the private insurance market in driving that market to fund those hospitals. 

As Adi touched on earlier, for ERISA plans, the state can’t mandate or regulate insurance payment rates for certain hospitals. The state identified two struggling hospitals that needed support; (yet under the current system) it would be unable to push plans to reimburse them at a higher rate. It’s pre-empted by ERISA; they can’t touch that. The same goes, for the most part, for the private affordable care act exchange plans as well. There is some control that OHIC has over that, but it is really indirect, (by) promulgating affordability standards and targets over time and how to finance hospitals, but it is a very kind of loose control mechanism.

What this public option does is essentially concentrate that decision-making in one board and allow those decisions to be made by an accountable board in state government that has full control... If we see that there are hospitals struggling, can we identify a better budget that would satisfy their needs in a way that allows them to provide access to care in a more favorable way?

Control is the key piece. Building a system that allows the state to have control over those decisions is essential. And, we don’t have that right now.