BLOG Medicine

Maine's Dirigo Health Savings One-Third of Original Estimate

Maine's Acting Insurance Superintendent, Eric Cioppa, ruled last Monday (17 September) that the Dirigo Health Program saved the health care system $32.8 million in its third year of operation; roughly only one-third of the original $92.7 million savings estimate released on 8 July 2007.

Despite Karynlee Harrington, executive director of the Dirigo Health Agency, previously stating in the Portland Press Herald that the agency had refined the methodology used to determine the savings amount based on past decisions of the superintendent, it appears the agency needs a new mathmagician in accounting.

On 27 July, the Dirigo Health Board of Director had reduced the estimated $92.7 million to $78.1 million.  The September 17 ruling of $32.8 million is the lowest savings figure, to date, in the agency's short, but beleaguered history; a possible indication that the agency has lost its steam.  Last year's savings were $34.2 million and the first year savings were ruled to be $43.7 million.

Of the $32.8 million, Cioppa found that the program provided $25 million in hospital savings, $6.3 million in uninsured and under-insured initiatives, and $1.5 million in provider fee savings.  The savings form the basis of the Savings Offset Payment (SOP), the sole funding mechanism for the program.

At a Dirigo Board meeting held after Cioppa's ruling, members discussed the possibility that the decrease in funding may result in the elimination of the subsidies currently paid to a majority of DirigoChoice program participants.

The Maine Dirigo Health program was established in 2003.  Dirigo stopped accepting new enrollees July 1, 2007.■

August a Flurry of Activity

I have to apologize for the abrupt shortage of articles in August, but the month was an absolute flurry of activity, behind the scenes.

In addition to maintaining BLOG Medicine, we operate a parent company (Maynard & Company) that provides healthcare consulting and management services.  Thanks to the steady increase in clients throughout New England, the services provided through Maynard & Company have transitioned to a new entity called Origin Health Group, recently taking on clients in the additional regions of the Mid-Atlantic and Deep South.  The stretch goal for 2008 is for Origin Health Group to have a presence coast-to-coast.

Also, after 11 months of brainstorming and hard work, we've created MedBay, the on-line auction community for healthcare equipment and services.  MedBay is wrapping up testing and is targeted for general release October 1.  Given the heightened awareness about health insurance and reform, MedBay will provide the ideal community mix for patient, provider, and purchaser.  I think MedBay will offer an exciting and attractive alternative to the current more restrictive and cost-prohibitive approach to paying for healthcare.  We'll be providing more information over the next few weeks as we approach our "go-live" date.

Finally, BLOG Medicine is evolving.  Over the next few months, BLOG Medicine will integrate into a larger blog platform that will include a mix of topics written by contributors from throughout the blogosphere.  Although my dedication hasn't changed, due to the other time commitments, my BLOG Medicine entries will now be biweekly on Mondays and Thursdays.  Bloggers interested in contributing to BLOG Medicine and/or the larger platform (including suggesting a name for it) are welcome to comment/contact me here.

Exciting times, indeed.  Expect BLOG Medicine to be back on schedule (and topic) with today's submission and watch for appropriate updates regarding MedBay over the coming weeks and [Insert New Blog Platform Name Here] over the coming months.  As always, I'd like to thank the readers of BLOG Medicine and especially those who have taken the time to comment -- we're nothing without you.■

Dirigo Health: Con Artists, Liars, and Thieves?

With no new enrollment as of July 1 and stated savings estimates and membership numbers gyrating up and down faster than a turkey trot, one has to wonder if Maine's Dirigo Health is made up of con artists, liars, and thieves or if they actually believe their mathmagical accounting.

On 8 July 2007, Dirigo Health released a 2006 estimated savings amount of $92.7 million.  By Friday, 27 July Maine's Dirigo Health Board of Directors had reduced the amount they claim the Dirigo Health program has saved the state's healthcare system in 2006 to $78 million, still more than twice the amount determined in 2005 that required a ruling by the State Supreme Court to be settled.  The recently reduced $78 million figure will now be submitted to the state superintendent of insurance, who has historically reached a lower number than the board, for final determination.

Karynlee Harrington, executive director of the Dirigo Health Agency, was quoted in the Portland Press Herald stating that the agency has refined the methodology used to determine the savings amount based on past decisions of the superintendent seemingly oblivious as to why it should be objectionable that Dirigo's accounting methodologies are changeable, year-to-year and seem to conveniently eliminate Dirigo's earlier cost concerns.  However, not only do Dirigo's accounting methodologies change based on the needs of the day, but the membership numbers experience dramatic unexplained leaps, as well.

On 1 July 2007, when Dirigo stopped accepting new enrollees stating cost concerns, they quoted membership of 14,400, many of whom already had insurance and less than half of the 31,000 Dirigo said they would cover in 2003 and nowhere near the 130,000 Dirigo forecast for coverage by 2009.  By 28 July 2007, only 27-days after halting enrollment, Dirigo mathmagically claims 26,000 Maine residents have been helped.

For their part, as expected, Maine insurance carriers plan to dispute the board's figures, adding that it's a conflict of interest for the Dirigo board to make a determination on savings that will translate into income for its program.

Dirigo's annual attempt to be more than just another failed attempt at healthcare reform with lingering delusions of grandeur is similar, in its own way, to the frivolousness, fantasy, and mathmagical fiction that might be found in a Harry Potter book -- too bad, unlike JK Rowling, Dirigo doesn't know when to end the fairy tale.■ 

Lifespan and Care New England Plan Monopoly (Again)

For the second time in ten years, Lifespan and Care New England, Rhode Island's two large health systems, plan to merge into a single entity to be called Lifespan.

In 1998, the two entities applied for regulatory approvals needed to merge, but pulled their applications in 2000.  If allowed to combine, the resulting entity will control nearly three-fourths of Rhode Island's hospital system.

Lifespan President and CEO George Vecchione expects this regulatory process to only take six to nine months and for the merger to result in some efficiencies, specifically in central-office operations and alignment of system-wide services, but without substantial job cuts.

According to Lifespan, clinical enhancements that would occur under the merger include:

• Butler Hospital will create the state’s first Brain Sciences Institute, which will support research, education and behavioral health treatment. In addition, the Butler campus would be sold or otherwise developed to fund a new Butler Hospital facility on or near the RIH campus
• Kent Hospital will apply to become a level II trauma center and will also seek to create an emergency medicine residency program. Together, these improvements will enhance statewide disaster responsiveness
• Women & Infants will retain its leadership role in neonatal and women’s reproductive health. There will also be a greater opportunity to develop services for conditions that disproportionately affect women and to maximize Women & Infants’ referral network and strong regional presence
• Continuation of Care New England’s VNA under the Lifespan system

Mixed responses to the merger plans include Rhode Island Governor Donald L. Carcieri (R-RI) who notes that the creation "of such a dominant healthcare network" raises "a number of important concerns" and  Lt. Governor Elizabeth H. Roberts, who states that she will "advocate for a focus on the core mission of hospitals to serve the public and recognize the importance of this proposal’s potential for economic growth in the state.”■

Mass Governor Asks Blue Cross to Keep Higher Employer Contribution

At the request of Governor Deval L. Patrick (D-MA), the state's largest health insurer, Blue Cross and Blue Shield of Massachusetts, scrapped a new policy that would have allowed owners of small businesses to contribute just one-third of the cost of their employees' health plan premiums.  Blue Cross is the state's largest health insurer with about 3 million members.

Prior to 1 July, Blue Cross required a minimum 50 percent contribution to premiums from employers with 50 or fewer workers.  The average contribution by Massachusetts employers is about 75 percent.

On 1 July, Massachusetts's healthcare reform law took effect, under which, if a company does not offer health insurance, low income works can receive subsidized coverage under the state's Commonwealth Care plan.  They are ineligible for assistance, however, if their employer offers a company health plan, regardless of the company's contribution to premiums.

Company's not offering health insurance to their employees or contributing less than what the state deems "fair and reasonable" toward their employees' health plan premiums are required to pay an annual fee of $295 per employee.

Harvard Pilgrim Health Care, the state's second largest health insurer with about 1 million members, has said that the insurer will retain its 50 percent contribution after earlier reviewing its policies as a result of Blue Cross's lowering its minimum contribution to 33 percent.■

Pollyanna With a Pen: Maine Governor Signs 18 New Health Care Bills into Law

On Tuesday, 17 July, Governor John Baldacci (D-ME), joined by the state's legislative Democrats, signed into law 18 new health care bills meant to protect the health and welfare of the people of Maine.

You couldn't see the rose-colored glasses on his face, but Baldacci's "Pollyanna" was definitely showing in his prepared statement: "What all these have in common is that they provide further evidence that Maine is the leader in health care reform and in efforts to expand access to quality, affordable health care."

Maine, already heavily burdened with healthcare legislation, has added laws that require health insurers to extend coverage to policy-holder's adult children until age 25, to require health insurers to cover hearing aides, to prohibit advertising of prescription drugs on software sold in Maine, to ensure sterile supplies for needle exchange programs, and to regulate access and screening for HIV and cancer.

Increasing health care costs, postpartum depression, eating disorders, and the role of dental hygienists are all to be reviewed by study groups.  November will be Lung Awareness Month, Free Health Clinics will have lower taxes and, disturbingly, despite widely being viewed as an expensive failure and having stopped accepting new enrollees as of 1 July due to cost concerns, Dirigo Health will now be allowed the even more expensive proposition of self-insurance.

Noticeably absent from Tuesday's "Glad Game" shenanigans was a resolution for the much-needed reform to MaineCare, Maine's overloaded and very broken Medicaid program and a new, functional, self-supporting funding-mechanism for Dirigo Health.

The Maine Legislative Documents signed into new law include:

LD 4 -- An Act to Amend the Prescription Privacy Law

LD 101 -- An Act to Enhance Screening for Breast Cancer

LD 144 -- An Act to Support Maine's Free Clinics

LD 243 -- An Act to Establish November as Lung Cancer Awareness Month

LD 429 -- An Act to Improve Access to HIV Testing in Health Care Settings

LD 431 -- An Act to Enable the Dirigo Health Program to be Self-Administered

LD 792 -- An Act Concerning Postpartum Mental Health Education

LD 807 -- An Act to Prevent Overcharging for Prescription Drug Copayments

LD 839 -- An Act to Establish a Prescription Drug Academic Detailing Program

LD 841 -- An Act to Extend Health Insurance Coverage for Dependent Children up to 25-Years of Age

LD 995 -- An Act to Reduce the Expense of Health Care Treatment and Protect the Health of Maine Citizens by Providing Early Screening, Detection and Prevention of Cancer

LD 1044 -- An Act to Address Eating Disorders in Maine

LD 1129 -- An Act to Increase Access to Oral Health Care

LD 1440 -- An Act to Prohibit Inappropriate Software Advertising of Prescription Drugs

LD 1514 -- An Act to Require Health Insurance Coverage for Hearing Aides

LD 1786 -- An Act to Reduce the Spread of Infectious Disease through Shared Hypodermic Apparatuses

LD 1812 -- Resolve, Regarding the Role of Local Regions in Maine's Emerging Public Health Infrastructure

LD 1849 -- An Act to Protect Consumers from Rising Health Care Costs.■

MassBay Nursing Program in Jeopardy

Massachusetts regulatory officials have barred the Massachusetts Bay Community College (MassBay) from accepting new nursing students pending correction of serious deficiencies in the Wellesley-based college's popular nursing program, one of the largest in the state.  A two-year school, the 432-student nursing program graduated 93 students last year.

Peter Schworm's Boston Globe article describes issues including the lack of a dean, nursing program administrator, and several nursing instructors as well as grade-tampering as the primary causes for the possible loss of the Massachusetts Board of Registration in Nursing's approval.  Nurses are required to graduate from a board-approved program to be licensed.

Schworm describes an unstable school with a nursing program already in disarray, suffering from the school's recent reorganization that resulted in the loss of a significant number of faculty and administrators.  Recruitment efforts have also been hurt by budget constraints that prevent the school from offering competitive salaries.

Problems with the MassBay nursing program couldn't come at a worser time.  An American Association of Colleges of Nurses (AACN) factsheet points to 118,000 vacant RN positions as of April 2006 and estimates more than 1.2 million new and replacement nurses needed by 2014.  Government analysts project that more than 703,000 new RN positions will be created through 2014, two-fifths of all new jobs in the health care sector.

The Massachusetts Center for Nursing (MCN) lists a number of profiles and reports on the Massachusetts nursing faculty shortage including a Massachusetts Association of Colleges of Nurses (MACN) assessment of the current nursing shortage and strategies for expanding educational capacity.

It's time for Carole Berotte Joseph, MassBay's President and the first Haitian to head a U.S. college, to step up and exhibit some much-needed leadership by taking expeditious and appropriate action to correct the nursing program deficiencies and fully address regulator's concerns.  If Berotte Joseph proves not up to the task, MassBay's Board of Trustees have actions of their own to take.  This program is too vital to the patient community and economic health of both the state and the region to be allowed to founder any longer.■

Maine's Dirigo Health Makes More Inflated Claims

Within days of citing cost concerns and putting a hold on new enrollees, Maine's Dirigo Health now predicts it will save the state's healthcare system $92.7 million in its third year of operation.

On 1 July, Dirigo Health stopped taking new members, stating the need to cut costs.  Small businesses and self-employed people were given an additional 60-days, cutting off enrollment on 1 September.  Dirigo recently won its court case over the much-contested savings offset payment (SOP) funding mechanism, securing $34.4 million from insurance companies, but Governor John Baldacci (D-ME) cut the requested additional $16.3 million from the state's current budget, causing Dirigo executives to claim they could only remain operational through the fiscal year beginning 1 July.

The savings calculation is the starting point from which the SOP is determined.  The payment is an assessment made on insurers based on savings created by Dirigo through its enrollment of members -- currently only 14,400 Mainers and no where near Dirigo's first-year enrollment target of 31,000 uninsured, let alone 130,000 by 2009.  Insurers argue that the majority of Dirigo members previously had insurance and that the plan is not meeting its legislated goal of reducing the number of Maine's uninsured.

A hearing before the Dirigo Health board of directors, scheduled for 23 July, is the next step in determining the SOP.

Last year, Dirigo calculated that the plan resulted in close to $100 million in savings.  The Dirigo board reduced that figure to $41.8 million and the insurance superintendent reduced it to $34.3 million.

BLOG Medicine volunteers to check Dirigo's math, because these numbers continue not to add up.  When Dirigo claimed the $100 million savings the plan had approximately 7,000 members.  Now, with 14,400 members and crying poverty, Dirigo claims another, seemingly miraculous, $93 million in savings, that, just in the nick of time, would allow the plan to keep its doors open after next year.  If these savings numbers are even remotely accurate, Dirigo membership must only consist of high-cost catastrophic cases.

If, instead, Dirigo's paltry membership is more broadly based (i.e., the risk pool consists primarily of young, healthy members), then the SOP calculation starting point cannot feasibly be accurate.  However, if Dirigo membership does, in fact, consist primarily of the elderly and severely ill, then Maine legislators have further compounded their financial malfeasance by allowing Dirigo to self-insure, as signed into law by Baldacci in May 2007.

Regardless, on 1 July 2007, 4 years into the experiment of state-sponsored health insurance, Dirigo Health proved it was neither self-sufficient nor financially sound by closing enrollment.  The State of Maine has proved, beyond any reasonable doubt, that it does not belong in the health insurance business.  No inflated claims of unrealistic, unsubstantiated savings should cloud anyone's perception --this emperor has no clothes.■

Maine's Dirigo Health Puts Hold on New Enrollees

Saying they need to cut costs, the Maine state-sponsored insurance program, Dirigo Health, stopped taking new members as of today.  Small businesses and self-employed people have until 1 September.

After 4 years, the program, created in 2003, has 14,400 members, less than half of the 30,000 members they were to have covered in the first year.

The program is claiming that without an additional $16.3 million that was requested and rejected in the last budget, the $34.4 million that insurance companies pay into the program will only keep them operational through the coming fiscal year.

Perhaps rather than continuing to drag out this failed experiment or foolishly move forward into self-insurance, the Baldacci Administration will recognize that they don't belong in the insurance business and instead work to make appropriate reforms that modify the restrictions on managed care that chased the majority of payors out of Maine in the first place.■

Number of Health Care Workers in Maine Shrinking

A recent study of Maine's health care industry by the state's Department of Labor expressed concerns about the imbalance between the demand for healthcare workers and the supply, confirming that Maine's healthcare workers are aging, are unevenly distributed around the state, and fewer people are entering the profession to replace those who retire.

Key numbers reported include:

• nearly one out of three surgeons in the state is older than 60
• two out of three Maine dentists are older than 50
• dentistry specialists are concentrated in southern Maine
• nursing vacancies in the state jumped by 34 percent between 2002 and 2006

Health care is a significant industry in Maine with more than 75,000 workers, more than 13 percent of all jobs in Maine, in 2004; wages totaled nearly $2.7 billion, or 14 percent of the state's total.  The national average for both jobs and wages is 9 percent.

Maine's nursing shortages are not necessarily from lack of interest in the profession.  State nursing schools have waiting lists but not enough instructors.  The Labor Department report suggests the state consider programs to lure existing nurses back into practice noting that 13.8 percent of all licensed registered nurses in Maine are either retired, not looking for work, or employed in another field.  The professions themselves are adapting to address some shortages, with an increasing use of physician assistants and dental hygienists.

Staffing shortages cause facilities to constantly adjust pay and benefit packages to better compete for workers.  Hospitals and physician practices are forced back to the negotiation table to argue for better reimbursement from managed care payors whose primary goal is to decrease reimbursement or, at least, keep payments flat.  Payors commonly cap hospital and physician increases at 2 to 3 percent per year, or keep reimbursement for high volume codes and procedures fixed, while the annual cost of living continues to increase an average 5.5 percent.

In the meantime, Maine's demand for health care is expected to increase in coming years, driven by a population whose average age is 41, making it the oldest in the country, and is getting older at a faster rate than the country as a whole.  Policy changes and directing more resources into education and training may help create a larger pool of workers in the industry, but the impact won't be immediate, making training only a part of a larger, much-needed, answer.■