A Wyoming Heritage Foundation Issue Brief

Wyoming Heritage Foundation= s 20^th Annual Forum

Health Care is one of Wyoming= s most important issues . . . and based on the comments of over 600 people at the Wyoming Heritage Foundation= s health care forum in November, fundamental changes must be addressed.

How concerned are Wyomingites about health care? Very, according to Wyoming Heritage Foundation survey data:

Overall view of America= s health care system:

Concerns about various health care services over the next year:

How Wyoming citizens feel about the health care services they and their families have used over the last few years:

Over 60 speakers and panelists participated in the November forum - - experts from Washington, Chicago, Denver, Los Angeles . . . and state opinion leaders from across Wyoming. Common themes evolved for the 600 people gathered at the meeting - - which was described by Governor Geringer as a  forum of community leaders - - at the community and state levels - - who make things happen with communities, service groups and advisory groups.@ In the words of Jack Faris, President and CEO of the National Federation of Independent Businesses, A I= I've not seen in any state thus far, as encompassing meeting as you= re having here . . . what also means what you came up will have national impact and import.@

The health care forum had two distinct sessions:

This Issue Brief on the health care forum contains quotes from the many speakers. It= s presented in four sections.

The last - - How Will Wyoming Respond includes recommendations from the work session facilitated on Friday night and Saturday morning.

A Look beyond commonly held beliefs to create a new reality. What= s most important in Wyoming at this point in time is the generation of a consensual vision. In health care, we want our future not to be a high probability future, but a preferred future: the best future you can imagine if you make some changes in the way you do things now. So the purpose of a vision is to change reality. If you think the solution is coming from outside, you will be talking about this same subject for the next 100 years. The change that needs to occur is inside, not outside.@

A Create an alternative vision of the future. Embrace and support technology. Demand accountability. Recognize that ultimately all health care comes from the same pot B insured, uninsured, Medicare, Medicaid, disability, worker= s comp, traditional health -- health care is health care.@

A If we as your Legislature are going to be effective in bringing the health care costs under control and improving the quality of health care, we= re going to have to mess with the status quo,@ he said. A We= re not going to have the political ability to do that unless you have spoken with your legislators and told them, > we can= t live with some of the cost increases we= re seeing, we can= t live with some of the problems.@

A Industrialized nations are uniformly finding themselves faced with higher health care costs. A It doesn't matter what the system is or how we pay for it. Every country in the world is having the exact same problems due to two things: aging population and advancing technology which are driving up the costs of health care . . . Medical malpractice insurance premiums are driving health care costs up, and doctors out of business. I have never paid one malpractice insurance premium. My patients pay a lot of malpractice insurance premiums. The doctors don= t pay it, the patients pay it, the insurance company pays it, Medicare pays it, and the health plans pay it. Unless Congress acts to correct an imbalance in the formula for Medicaid and Medicare reimbursement soon, doctors will stop seeing patients enrolled in those programs, or patients can expect longer waits. In rural areas, there is no option to say I= m not going to see Medicare patients, but the option is to pack up and leave and go somewhere else.@

A Other industrialized nations lose productivity as a result of having to pay the sick and injured who are unable to work while waiting for medical care. They control health care costs by creating queues. Europeans do have a much less productive society because of the paid time off benefits . . . A few patients are costing the nation a lot. If we link health care expenses to worker= s compensation, disability benefits, they add another $800 billion. It only makes sense if you pay people to be sick, there are people who will be sick even if they are not sick. About 10 percent of the 210,000 people in Wyoming= s work force will file disability claims. We need to understand not just the health cost but the productivity cost.@

A We have the finest health care system in the world. Let us be careful with this patient and not have radical surgery that is successful enough that it kills the patient.@

A America spends about 15 percent of its Gross Domestic Product on health care and is not reaping benefits. Other countries spending similar amounts are seeing in the form of lowered death rates and better health. Really only Germany and Japan have a greater Gross Domestic Product in U.S. dollars than we spend on health care. We spend $5,140 per person in the U.S. for health care, which is about twice what every other country spends. But other countries have lower infant mortality rates, universal health insurance, and longer longevity.@

A A health expenditure growth will double in the next 10 years. Employers are reducing their benefits or worse, eliminating their benefits. If we don= t do something collectively as a society to keep the health care system private and abate these rate increases and cost increases, we will see a reaction; we= ll probably see some government intervention . . .Outpatient costs are rising faster than pharmaceuticals. Hospital costs, including in and out patient care, represent over half of the increase in health care spending. Outpatient has increased the greatest, 37 percent. On a national level, the problem is the inpatient side is not dropping as fast as the outpatient side is rising. We have buildings, we fill them.@

Rick Smith, Senior Vice President for Policy and Research at the Pharmaceutical Research and Manufacturers of America (PhRMA), Washington, D.C.

A The pharmaceutical companies get blamed for health care cost increases, but drugs help people stay out of hospitals and nursing homes and should be considered a cost-containment tool. Government should pay more for seniors= prescription drugs. We make prescriptions a bigger and bigger part of medical care is we get higher productivity and a better quality of life and those need to be considered in this debate. Pharmaceuticals are often the least expensive form of treatment, reduce other health care costs and have tremendous human implications.@

Barbara Blakeney, President , American Nurses Association, Washington, D.C.

A Fewer and fewer nurses are trying to do more with less and less. Nationally, the average nurse is older than 43; baby boomers are aging and will need more nursing care. Practicing nurses are part of that generation -- more than 30 percent of practicing nurses are over the age of 50.@

A State government is feeling the weight of rising health care costs. Wyoming is basically self-insured in its medical through Great West. Great West premiums from 1999 to 2001 went up 34 percent. The cost of providing Medicaid in the state went up 23.5 percent. Worker= s comp went up almost 41 percent. Department of Corrections health care costs rose 114 percent in two years.@

A In 1999 the state paid out about $37 million for employees= health insurance claims. In 2003 that number is projected to jump to $69 million. By 2010, Wyoming will have per capita the oldest population in America. The older we get, the higher the costs.@

Dr. Brent Sherard, Interim Director, Wyoming Department of Health, Cheyenne

A My department= s two-year budget currently totals $650 million, and two-thirds of that is invested in Medicaid. Sixty-one percent of Medicaid funds spent in Wyoming are federal and 39 percent are state. It= s interesting that Wyoming Medicaid could be B based on eligibility -- the sole source of health insurance for around 65,000 individuals in Wyoming. In other words, Medicaid provides 10 percent of the state= s health insurance. Medicaid covers 80 percent of inpatient and outpatient hospital costs; an additional $10 million would have to be spent to have 100 percent cost coverage. At nursing home facilities, Wyoming Medicaid covers 88 percent of costs. Dentists, physicians, and other providers would have to receive an additional $22 million to achieve 100% cost coverage, $41 million per year is being cost shifted from Medicaid to other payers.@

A We= re seeing rate increases that were double-digit. In 1999 there was a 10 percent rate increase, in 2000 there was a 17 percent rate increase, and in 2001, a 27 percent rate increase. When small employers are confronted with that, they have to make choices to either drop coverage or put more of the cost on employees= shoulders. Wyoming does have some problems in the small group marketplace, and the biggest problem is the affordability issue.

A We are looking at the same problems we looked at eight to 10 years ago. Now it= s $850 a month for health insurance, back then it was $450 dollars and we thought $450 was too much. Costs are twice in Wyoming as what they are in metropolitan areas. In Ft. Collins, Salt Lake City, Ogden, Utah and Billings, there are a lot of people working off the same infrastructure for providing health care shared by more people, by more practicing physicians who can deliver the unit cost a lot cheaper.@

A Wyomingites are taking their health care dollars to other states; about 35 percent of the health care dollars spent by Wyoming residents are going to providers in Montana, Colorado, Utah, and Idaho. What= s left are people with illnesses that are more acute and are more likely to result in litigation.@

Jim Gardner, CEO, Wyoming Medical Center, Casper,

A He has watched pharmaceutical costs rise 126 percent in the last four years. Malpractice premiums have gone from $400,000 to $1.7 million per year in the last 18 months. A I can demonstrate it in that our bad debts have gone from $8.5 million, to $10.5 million, to $12.5 million, to this year almost $15 million . . . There are an increasing number of competitors for Wyoming= s few health care dollars. We= re seeing is competition between hospitals and physicians for those services that pay well and are easy to remove from a hospital. In Casper, a surgery center that is opening is going to remove another $3 million directly off the bottom line in outpatient services that otherwise would have been at the hospital.@

A There are a larger number of patients coming to our emergency room with no insurance. This equates to longer wait times in our emergency room, poor patient satisfaction because we= re used to not waiting in Wyoming and there= s less reimbursement B these people can= t pay, what do we do? Uncompensated care isn= t going to go away.@

Dan Lex, Executive Director, Wyoming Optometric Association and the Quality Health Care Foundation, Cheyenne

A Access is two issues B access to care, and then access to payment for that care. The average annual cost of employment-based family coverage in 2000 in the United States was $6,772, while in Wyoming, $5,998. In Wyoming for employers to provide insurance, they require less participation or co-payment or co-sharing of the cost from employees. On a national level, employees pay 23.8 percent of insurance and in Wyoming, 18.6 percent.@

A Even with a clean record, malpractice costs will increase 40 percent this year, on top of a significant increase last year. Those who have settled one malpractice case have seen 100 percent or more increases in their premiums. Therefore, physicians in this state may have to face some tough choices: 1) tough it out or 2) go elsewhere where malpractice insurance costs less, or 3) retire early.@

A We need to recruit physicians. The inability to do this produces a great hardship on all of our small and large communities. Our ability to recruit is hampered because when you talk to people they will not come here without tort reform. We are in crises here as far as tort reform. If we don= t address the issue soon, it= s going to affect the access to care of everyone. The ones who suffer most are the patients.@

A I operate a 16-bed acute hospital with peripheral services. Malpractice liability insurance was $146,000 this year. That= s $9,000 per bed, before I= ve paid a penny for a nurse, a housekeeper, a drug, or anything else. Obstetric care has gone away in three communities in the state. If we don= t deliver babies, babies and mothers will die in ambulances and private cars trying to get to obstetrical care 200 miles away.@

A We do have a problem in Wyoming with liability insurance. Out of the five applications we sent out, we received two from companies that were willing to write us. One would not write us because of our attached nursing home. The remaining company= s premium was $600,000, and we were at $190,000.@

A Medical malpractice litigation is entirely different than any other kind of litigation. It is extremely expensive. Juries in our state have only found for the plaintiff five times in the last 11 years. The highest of the verdicts was $750,000. Malpractice lawsuits are not on the rise in Wyoming -- they continue to represent less than 1 percent of all civil cases filed.@

A I= ve had clients leave the state because of the medical malpractice climate in the state. I have clients now paying well over $100,000 per year for malpractice insurance. The two companies still providing insurance are limiting who they will insure and are raising their rates. Wyoming has been historically had the reputation to be conservative verdicts. What you don= t see is all the settlements because at least 80 percent of cases settle. It will take a constitutional amendment to put a cap on damages. We need to bring back the professional review panel. Tort reform does work -- it does work in lowering insurance premiums.@

A In the last 18 months, Gillette has lost a surgeon and an obstetrician because their malpractice insurance premiums were more than $150,000 a year. That= s almost $400 a day, day in day out, holidays included. You= d have to see five patients a day just to pay the malpractice insurance, and every one of those five patients could turn around and sue you.@

A We= re seeing a lot of small employers not being able to provide insurance and that affects recruitment and retention. We= re seeing employees leaving because of reduced benefits, going to more attractive employers. We are seeing clients restructure their workforces. We are seeing a higher rate of job outsourcing to consulting firms and bookkeeping service firms so they don= t have to cover employees.@

A I find it= s almost impossible to obtain insurance for my employees. I= ve been in business for 10 years and employ less than 10 people, four of them full time. I am unable to offer my employees coverage. Affordability is a big factor.@

A We believe the solution lies in going back and looking at small group legislation and correcting that imbalance to change rating parameters. It would make health insurance more expensive for sicker people, but reduce subsidy of healthier small groups and make insurance more affordable for them.@

A You have to have a public safety net in order to take care of uninsurables. Wyoming has a risk pool. It works fairly well here. Thirty states have high-risk pools. The high-risk pool becomes a safety net for those people who become uninsurable because they have a preexisting medical condition. We ought to begin to think about health insurance not as something that pays not for everything I can use in health care, but something that pays for rare, catastrophic unforeseen expenses. We use health insurance to pay for things we could easily pay for out of pocket.@

A We cover preventive care, as well as medical care and prescription drug coverage. We= ve worked very hard to educate our workforce about becoming more aware of the important choices they make when they select health care procedures, what their choices are in terms of filling prescriptions.@

A The patient, the consumer, is key to all of this. The consumer has become a health object. The doctor orders the services, another provider performs the service, and everybody knows what his cost is but not the others= . The employer or the insurer pays the bills. The patient asks few questions, is treated paternalistically, and has no idea of cost.@

A MSAs are now being done by private companies. An employee is given X amount of dollars. The employer pays for all the preventive stuff. And then the employer pays for catastrophic, the $150,000 thing that could happen to any one of us B like if we get hit by a bus. In between, the employee is responsible. What happens is, the employee starts to pay attention and says, > maybe I should wear my seatbelt.= There is a big increase in employers that are offering this and saying, > maybe we can trust our employees to make a wise decisions.@

A We= re looking at the possibility of restructuring an insurance product, possibly starting it out with state employees. The concept is that we put the consumer more in charge of their own health care, give them an account they can draw on. The employer would put in so much a month, so the employer puts in first dollars. If the consumer doesn't spend it all, they can carry it over to the next year.@

A Two thirds of the 41.6 million uninsured are working for small businesses that don= t believe they can afford health care coverage. Those people are working full time. We need to figure a way to incent those small businesses and educate them on the benefits of providing coverage. I wouldn= t say our industry goes without looking at, either. We need to look at the rules under which we operate. If we= re going to promote access, we need to make it available for all.@

A The biggest problem or gap in Wyoming is that most employers have 10 or less employees. We used to have 25 or 26 carriers in the small group marketplace and now we= re down to 13. When we interviewed them, they said it was not profitable to be in Wyoming and that it was a business decision to leave.@

A The picture here in Wyoming is horrible. By the year 2005 Wyoming will have nearly 1,200 fewer nurses than it needs. That= s a 30 percent shortage in two years. That figure climbs to 45 percent by the year 2010, and a whopping 63 percent by 2020.@

A The shortage of registered nurses is staring us all in the face and it= s going to get a lot worse, but also pharmacists, lab techs, respiratory therapists, radiology techs. We, like other facilities, are utilizing a lot of agency nurses, pool nurses and they= re very expensive -- $40, $50, $60 an hour for these people to staff our facilities because we want to ensure the quality of care is there.@

A Each 1 percent increase in the gap between nurse demand and nurse supply represents a 2 to 1 percent increase in hospital costs.@

A Fifty percent of all nurses are going to retire in the next 10 years. There= s nowhere near enough nurses coming into the pipeline to replace them. Not just nurses, but pharmacists, respiratory therapists, you name the health care professional.@

A Adopt the characteristics of magnet hospitals to foster a workplace that empowers and is respectful of nursing staff. Magnet facilities have shown to provide better patient care and to retain nurses longer, twice as long as non-magnet facilities. Patients experience far fewer negative outcomes shorter lengths of stay and increased satisfaction at magnet hospitals. One way to keep Wyoming nurses at home is by developing loan and scholarship programs that are forgiven if the graduates stay home and work here in Wyoming.@

A Sen. Tex Boggs has been working on a bill for about two years that has two key parts: nursing students and faculty. Under this bill, if students go back to a community college or the University of Wyoming and want to be a licensed practical nurse or get an associate= s or bachelor= s degree to be a registered nurse, the state will pay for tuition and other expenses -- provided when they graduate they stay in the state and work for 2, 3, or 4 years.@

A In every community in Wyoming, the hospital is the first, second or third largest employer. Talk about sending economic ripples through community, when 50 percent of every dollar at every hospital is for human resources. When looking at cutting expenses, it= s a very, very difficult situation, given the high profile impact of downsizing, or layoffs.@

"When you're treating people, if there= s not personal accountability, it= s hard to keep anybody well. We don= t have systems that encourage people at the first sign of problem to go get help.

A The number one thing we can do to reduce health care costs is to reduce consumption. Prevention is about healthy lifestyles. Do we all lead healthy lifestyles? No. Do we blame somebody else for it? Yes.@

A The biggest things you can do are the things you can do for yourself B don= t smoke, exercise, all the things your doctor tells you to do almost automatically when you go to see him.@

A The unintended consequences of the rich insurance programs of the past have made us less efficient and less effective with our health care dollars. Future plans should reward healthy behavior.@

A If we look at this from a different angle and try to work on being well rather than repairing us once we get sick, maybe we can come up with some better solutions. Be Well in Casper that Blue Envelope and other grant funders are going to work on together is going to do these health risk assessments and not have them be cafeteria things where we have to go and be proactive and do something. Otherwise, health insurance premiums are going to be $1,500 per month instead of $850.@

A The hospitals do not get 100 percent of their costs covered.

A Today families that are 100 percent to 133 percent of poverty qualify for the State Children= s Health Insurance Program, which we call Kid Care. The problem is that with eligibility at 133 percent, Wyoming is the lowest in the country -- most other states are at 185 percent or 200 percent of poverty.@

A The fact we= re dead last in nursing wages tracks with the fact we are dead last in Medicare reimbursement rates. If we try to increase the wages, it has to fall on the backs of the employers of this state who are providing insurance and who are at the limit of what they can afford already. Until we can get that reimbursement discrimination that is really adversely affecting Wyoming dealt with, that won= t change. We have to get Congress to pay for what they promise.@

A For some of our physicians, up to 50 percent of patients are Medicare funded. In addition, 45 percent are Medicaid funded. We= re looking at another 4.4 percent decrease in reimbursement this year. We= re currently averaging 45 percent to 55 percent reimbursement of our fees. We, along with most of the other clinics in Wyoming, are looking at our continued ability to see these populations of patients.@

A My hospital is not reimbursed for its costs. For example, there is a revolutionary new technology called medically-coded stints, which are little devices put in arteries to keep them from closing up and cost $3,200 apiece. Medicare has decided they are going to reimburse prospectively at $2,100.@

A Medicare and Medicaid represent about 67 percent of our total patient base, or 49 percent of our total revenue, and reimburse just 55 cents on dollars we charge them. For every dollar we charge, we lose 15 percent of our cost to pay for those services.@

A With our size and our geography, I would argue the state can only afford one trauma system. The majority of Wyoming= s trauma care is provided at one institution. Hospitals across state wrote off $1.8 million in bad debt last year related to motor vehicle accidents.@

A I saw a trauma patient every two or three months. Was I a trauma surgeon? No. We have got to tie our hospitals together and set up a plan. Casper= s the logical center. What do we do as a group of cities B we pool resources and see if they can afford trauma surgeons. If you have a helicopter, six out of seven patients that come in are no pay. Trauma is a high liability, low pay service.@

A At this point in the bill we have mandatory liability coverage at a minimum of $25,000. We are thinking of moving it to $100,000 because when people are hurt in an auto accident, $25,000 does not go very far.@

A Have hospitals collectively buy the insurance premium for a network of free clinics. In Wyoming you ought to have dozen of free clinics of operating.@

A Our hospital provides financial assistance to insure the Cheyenne Community Clinic is up and running, and it is solely staffed by volunteers. The physicians in our community are very generous.@

A We are a frontier state as designated by the feds, and as a frontier state, we have access to monies coming forward -- at least the President has said many dollars are going to be coming forward B for Community Health Centers. We only have one. We need more.@

A We are managing chronic illnesses more effectively B diabetes, depression, congestive heart failure, asthma -- these are all examples where medicines have been embraced as the best opportunity for overall control of health care spending. Disease management leads to significant increases in expenses on medicines but lowers health care costs. Advertising seems to help people remember to take their medicines. There are numerous Americans who don= t know they have high blood pressure or suffer from diabetes or have major depression who don= t seek treatment. Advertising reaches out to patients encourages them to go to physicians and talk to them.@

A In Wyoming from July 2001-June 2002, Medicaid paid for 312,278 generic prescriptions that cost $5.9 million and 391,301 brand prescriptions that cost $32 million. The average price of a generic drug in Wyoming is $18.80, and for a branded drug, $80.82. A 1 percent switch to generic would have saved $242,684. There were 47,558 branded prescriptions that could have been filled with an equivalent generic drug that would have saved the state $3 million.@

A By far, the biggest number of calls I get is about prescription coverage -- not only for the low-income but those who are above low-income levels.@

A In 2001, think about this, the average American got 11 prescriptions. That number will go up in the next decade, it= s not going to go down. Pharmaceutical companies invest a great deal of money in research to develop breakthrough drugs and technologies. As a result of that investment, they are entitled to patent protection so they can take advantage of that investment and reap reasonable returns on it. There= s no argument for that. My concern is, some of the practices stave off generic drugs and keep them out of the marketplace and that has a cost.@

A When patents expire on branded products, competition should commence the day afterward and not wait while patent expiration is contested. Costs are dramatically increasing yearly.@ Jim Gardner, CEO, Wyoming Medical Center, Casper

A Communication between physicians is probably pretty good. But in terms of hospital-to-hospital communication, in my personal experience there= s very little interaction unless there= s a problem. We can= t afford to have every sort of specialty everywhere. We can= t have tertiary hospitals in every city.@

A Pharmacists would like to assist physicians and patients by counseling and selecting medically-effective and cost-effective medication, and counsel patients on compliance and proper drug use.@

A For every $1,000 I can reduce pharmacy costs, I save the company $700 and can put $300 back in the customer= s pocket. The way I do this is, I intervene on behalf of the patient. For example, Ray is a 61-year-old spouse of an employee in Vernal, Utah. He is diabetic and has heart problems. Even on insurance, his prescription bill was rather high. I gave them a letter to take to the doctor with the scientific and pharmacological basis for my recommendations and I told them to ask the doctor because he may have reasons he doesn= t want to change anything. Ray= s pharmacy bill went from $450 to $250 per month.@