Are existing private sector and state-operated health care alliances working? : hearing before the Human Resources and Intergovernmental Relations Subcommittee of the Committee on Government Operations, House of Representatives, One Hundred Third Congress PDF
Preview Are existing private sector and state-operated health care alliances working? : hearing before the Human Resources and Intergovernmental Relations Subcommittee of the Committee on Government Operations, House of Representatives, One Hundred Third Congress
f\P ARE EXISTING PRIVATE SECTOR AND STATEr \Vj operated HEALTH CARE ALLIANCES WORKING? Y 4. G 74/7: H 34/21 fire Existing Private Sector and Sta... g HEARING BEFORE THE HUMAN RESOURCES AND INTERGOVERNMENTAL RELATIONS SUBCOMMITTEE OF THE COMMITTEE ON GOVERNMENT OPERATIONS HOUSE OP REPRESENTATIVES ONE HUNDRED THIRD CONGRESS SECOND SESSION JUNE 30, 1994 Printed for the use of the Committee on Government Operations iy^- U.S. GOVERNMENT PmNTINC^eHCi^A^^'^OU LlBf^Any 85-738 WASHINGTON : 1997 ^'~***^'*'**^i^!^^rSmnppnr ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC 20402 ISBN 0-16-055507-8 ?9 ARE EXISTING PRIVATE SECTOR AND STATt OPERATED HEALTH CARE ALLIANCES WORKING? Y4.G 74/7: H 34/21 fire Existing Private Sector and Sta... HEAKING BEFORE THE HUMAN RESOURCES AND INTERGOVERNMENTAL RELATIONS SUBCOMMITTEE OF THE COMMITTEE ON GOVERNMENT OPERATIONS HOUSE OF REPRESENTATIVES ONE HUNDRED THIRD CONGRESS SECOND SESSION JUNE 30, 1994 Printed for the use of the Committee on Government Operations U.S. GOVERNMENT PRINTINi 85-738 WASHINGTON 1997 : ForsalebytheU.S.GovernmentPrintingOffice SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC 20402 ISBN 0-16-055507-8 COMMITTEE ON GOVERNMENT OPERATIONS JOHN CONYERS, Jr., Michigan, Chairman CARDISS COLLINS, IlUnois WILLIAM F. CLINGER, Jr., Pennsylvania HENRY A. WAXMAN,-CaUfomia AL McCANDLESS, CaUfomia MIKE SYNAR. Oklahoma J. DENNIS HASTERT, IlUnois STEPHEN L. NEAL, North Carohna JON L. KYL, Arizona TOM LANTOS, California CHRISTOPHER SHAYS, Connecticut MAJOR R. OWENS, New York STEVEN SCHIFF, New Mexico EDOLPHUS TOWNS, New York CHRISTOPHER COX, CaUfomia JOHN M. SPRATT, Jr., South Carolina CRAIG THOMAS, Wyoming GARY A. CONDIT, CaUfomia ILEANA ROS-LEHTINEN, Florida COLLIN C. PETERSON, Minnesota DICK ZIMMER, New Jersey KAREN L. THURMAN, Florida WILLIAM H. ZELIFF, Jr., New Hampshire BOBBY L. RUSH, IlUnois JOHN M. McHUGH, New York CAROLYN B. MALONEY, New York STEPHEN HORN, CaUfomia THOMAS M. BARRETT, Wisconsin DEBORAH PRYCE, Ohio DONALD M. PAYNE, New Jersey JOHN L. MICA, Florida FLOYD H. FLAKE, New York ROB PORTMAN, Ohio JAMES A. HAYES, Louisiana FRANK D. LUCAS, Oklahoma CRAIG A. WASHINGTON, Texas BARBARA-ROSE COLLINS, Michigan BERNARD SANDERS, Vermont CORRINE BROWN, Florida (Independent) MARJORIE MARGOLIES-MEZVINSKY, Pennsylvania LYNN C. WOOLSEY, CaUfomia GENE GREEN, Texas BART STUPAK, Michigan Julian Epstein, StaffDirector Matthew R. Fletcher, Minority StaffDirector Human Resources and Intergovernmental Relations Subcommittee EDOLPHUS TOWNS, New York, Chairman HENRY A. WAXMAN, CaUfomia STEVEN SCHIFF, New Mexico THOMAS M. BARRETT, Wisconsin JOHN L. MICA, Florida DONALD M. PAYNE, New Jersey ROB PORTMAN, Ohio CRAIG A WASHINGTON. Texas BERNARD SANDERS, Vermont (Ind.) Ex Officio JOHN CONYERS, Jr., Michigan WILLIAM F. CLINGER, Jr., Pennsylvania Ronald A. Stroman, StaffDirector Martine M. DiCroce, Clerk Martha Morgan, Minority Professional StaffMember (II) CONTENTS Page Hearingheld onJune30, 1994 1 Statement of: Cook, Douglas, director, Florida Agency for Health Care Administration; Steven Wetzell, executive director. Business Health Care Action Group, Minnesota; and Jason Adkins, executive director, Center for Insurance Research, Massachusetts 24 Nadel, Mark, associate director. Health Financing and Policy Issues, General Accounting Office, accompanied by Tim Fairbanks and Walter Ochinko 6 Letters, statements, etc., submitted fortherecordby: Adkins, Jason, executive director. Center for Insurance Research, Massa- chusetts, prepared statement of 87 Cook, Douglas, director, Florida Agency for Health Care Administration, prepared statementof 28 Nadel, Mark, associate director, Health Financing and PoUcy Issues, GeneralAccounting Office, prepared statementof 9 Towns, Hon. Edolphus, a Representative in Congress from the State ofNewYork, prepared statementof 3 WetzeU, Steven, executive director, Business Health Care Action Group, Minnesota, prepared statement of 116 (III) ARE EXISTING PRIVATE SECTOR AND STATE- OPERATED HEALTH CARE ALLIANCES WORKING? THURSDAY, JUNE 30, 1994 House of Representatives, Subcommittee on Human Resources AND Intergovernmental Relations, Committee on Government Operations, Washington, DC. The subcommittee met, pursuant to notice, at 10:08 a.m., in room 2247, Rayburn House Office Building, Hon. Edolphus Towns (chair- man ofthe subcommittee) presiding. Present: Representatives Towns, Schiff, and Mica. Staff present: Ronald A. Stroman, staff director; Martine M. DiCroce, clerk; and Martha Morgan, minority professional staff member. Mr. Towns. The Subcommittee on Human Resources and Inter- national Relations will come to order. We have all seen the "Harry and Louise" commercial in which Louise condemns health care purchasing alliances as large, bloated government bureaucracy. This and other scare tactics are, unfortu- nately, misleading the American people about workable health care reform. The truth is that numerous States and small businesses all over this country have either created or are considering health care pur- chasing alliances as part ofa local health care reform initiative. Al- most every health care proposal currently under consideration by Congress contains some form of voluntary alliance structure as a way to provide affordable health care insurance. But these alliances are a mystery to most of us. We know little about how health alliances really work. Most people have no idea who will run these alliances. Will we have to go through a maze of bureaucrats in order to see a doctor? How do alliances interact with existing government health care systems like Medicare and Medicaid? Would they really limit our choice of health care plans as we have been told? In order to get the facts about health care purchasing alliances, this subcommittee asked the General Accounting Office to examine the operation of existing health purchasing alliances in several States: California, Florida, Minnesota, Ohio, Washington, and Wis- consin. We also asked GAO to look at the private sector operations ofpurchasing alliances. (1) Today, we will hear the results of the investigation, and we will hear from some of the people who are responsible for overseeing the operation ofthese alliances at the local level. The results of GAO's investigation of alliances are encouraging. GAO has found that existing voluntary alliances are not big bu- reaucracies. Most alliances operate with small in-house staffs which means lower operating costs. Public alliances generally offer a large choice of health care plans. For example. State-run alliances in Wisconsin and California each offer over 25 health plans. Interestingly, it is the private sec- tor alliances which tend to limit the choice ofhealth plans. The GAO report does, however, raise an area of deep concern to me regarding the composition ofthe boards which operate these al- liances. I believe that membership of an alliance should be fairly balanced to represent the interests of senior citizens, businesses, minorities and consumers. The report suggests that a reasonable balance has not occurred voluntarily within public or private sector alliances. Without this balance, I fear that major segments of our society will not partici- pate in the alliances because of a lack of confidence in the ability ofalliances to fairly represent them. This would be unfortunate, since we would lose a major tool in our efforts to provide affordable and quality health care for all Americans. At this time I would like to yield for an opening statement to Congressman Schifffrom Albuquerque, NM. [The prepared statement ofHon. Edolphus Towns follows:] OPENING STATEMENTCHAIRMAN EDOLPHUSTOWNS SUBCOMMITTEE ON HUMAN RESOURCES AND INTERGOVERNMENTALRELATIONS GOVERNMENTOPERATIONS COMMITTEE JUNE30, 1994 We have all seenthe Harryand Louise commercial inwhich Louise condemns health care purchasing alliances as large bloatedgovenmientbureaucracies. This and otherscare tactics, are unfortunately, misleadingtheAmericanpeople aboutworkable health care reform. The truth is that numerousstates and small businesses all over this countryhave eithercreated orare consideringhealth care purchasingalliances aspart oflocal health care reform initiatives. Almost every health care proposal currentlyunder consideration byCongress containssome form ofvoluntaryalliance structure as away toprovide affordable health care insurance. Butthese alliances are a mysterytomostofus. Weknowlittle about howhealth alliances reallywork. Most people haveno. ideawhowill run these alliances. Willwe have togo through a maze ofgovernment bureaucratsinorderto see adoctor? Howdo alliances interactwith existing government health care systems like Medicare and Medicaid? Will they really limitour choice ofhealth care plans aswe have beentold? Inorder togetthe factsabouthealth carepurchasingalliances, this Subcommittee asked the General AccountingOffice toexamine the operation ofexistinghealth purchasingalliancesin California, Florida, Minnesota, Ohio, Washington, andWisconsin. We alsoasked GAO to lookatthe private sector'soperationofpurchasingalliances. Todaywewillhearthe resultsofthatinvestigation, andwewillhearfromsome ofthe peoplewhoare responsible foroverseeingthe oi>erationofthese alliances atthelocal level. The resultsofGAO's investigationofalliancesare encouraging. GAO hasfound thatexistingvoluntaryalliances are notbigbureaucracies. Mostalliancesoperatewith small in-house staffs,which meansloweroperatingcosts. Publicalliancesgenerallyofferalargechoice ofhealthplans. Forexample, state- runalliancesinWisconsinandCaliforniaeachofferover25 healthplans. Interestingly, itistheprivatesectorallianceswhich tendtolimitthe choicesofhealthplans. TheGAOreportdoes however, raise anareaofdeepconcerntome regarding thecoiiqx>sitionoftheboardswhichoperatethese alliances. Ibelievethat membership ofallianceboardsshouldbefairlybalanced torepresenttheinterestsofseniorcitizens, businesses, minorities andconsumers. Thisreportsuggeststhatareasonablebalancehas notoccurredvoluntarilywithinpublicorprivate sectoralliances. Withoutthisbalance,I fearthatmajorsegmentsofoursocietywill notparticipate inthealliancesstructure becauseofalackofconfidence inthe abilityofalliancestofairlyrepresentthem. This wouldbeunfortunate,sincewewould loseamajortool inourefforttoprovide affordableandqualityhealthcareforallAmericans.
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