State of health
There are massive changes in health care coming to Nevada. How will you be affected? RN&R talks to the boss.
Mike Willden is director of Nevada’s Department of Health and Human Services, the largest department in state government. He’s held the job since July 2001. In this capacity, he’s in charge of directing the changes brought on by national health-care reform, the Affordable Health Care Act. Even though reforms are already being seen in Nevada, even more profound changes are coming, with some half-million Nevadans being added to the roles of the insured in 2014. Reno News & Review publisher Jeff vonKaenel sat down with the director to talk about what the most revolutionary change to the U.S. health-care system since Medicare will mean to Nevadans.
Let’s take the analogy of Nevada’s health-care system as a patient. How healthy is the patient?
Well, in Nevada, we’re probably not a state that’s known for national-high rankings. We’re usually a low-ranking state in a sense of per capita spent. If you look at any of the indicators, Nevada is usually in the bottom quartile when it comes to health-care stuff, again per capita spending. Our illness and problems are higher than most states, more smoking, higher suicide rates, more heart disease issues. Nevada is generally an unhealthy state and that’s not anecdotal stuff, that is right out of those big think tanks that rank that stuff.
I think we’re improving in some areas, but we are generally viewed as an unhealthy state. We are generally viewed as a higher uninsured state; those latest rankings came out again. In the stuff that just came out, we’re at about a 21 percent uninsured rate. And so, when you think about 21 percent of Nevadans don’t have access to health insurance, where do they go to get their health care? That’s problematic. Putting that into numbers, there’s roughly 550,000 Nevadans that don’t have health insurance. So trying to drill down, that’s what the Affordable Health Care Act, ObamaCare, whatever people want to call it, is trying to figure out, how those 550,000 Nevadans are going to get access to health care. The theory is if they have access to affordable health care, they’ll get it with or without the individual mandate. With health-care coverage, a lot of these poor health indicators will go away over time, they will improve. I guess, the proof will be in the pudding as to how long that takes with those trends to turn. If 550,000 people get their health insurance is …
The question of the hour?
I divide those people into two groups: Many of those people are going to be what we call below the new Medicaid threshold; there’s a new Medicaid threshold that’s coming out. And again, if you look at Nevada, we have one of the lowest Medicaid eligibility thresholds in the states. In other words, we’re not very generous with our eligibility to be on Medicaid. Nationally, about 14 percent of the states’ population is on their Medicaid program. In Nevada, that was running about 8 percent. We’re now running at about 11 percent because of our economy—people who have lost the availability to get health care through their employer.
So when you say that the federal law now has this new standard of Medicaid eligibles, Nevada has a lot further to go than other states. More enrollees. So one of the big things under health-care reform is that anyone who has income below 138 percent of poverty will be Medicaid eligible. We don’t know the exact number of the 550,000 Nevadans who would be Medicaid eligible, but we’d expect about half of those would be. We have about 300,000 Medicaid eligible-people right now, so we’re looking at going from 300,000 to 500,000 becoming Medicaid eligible. That’s a huge problem in itself. Now the other half of the 550,000 people will need to purchase, with or without a subsidy, their health insurance through an exchange, a health insurance exchange, which states and federal government are working on right now. But those 550,000 right now will either be individuals coming through what we call the individual insurance market, individuals saying, “I’ve got money with or without a supplement, and I want to purchase a health insurance policy from you for my family,” or what we call the “shop it exchange,” which is the small business health exchange. Small businesses are targeted. Small businesses in Nevada is defined as less than 50 employees. Here’s a consumer who’s uninsured, and they’re going to want to get health care. But these consumers, roughly half of them are going to be under 138 percent of poverty, and they’re going to be coming into the Medicaid program, or in Nevada what we call the CHIP [Children’s Health Insurance Program] program, that’s our two publicly funded health insurance programs. So they’re going to need to come in here and get this new coverage that’s going to be available to them in 2014. And those that are over 138 percent of poverty are going to become eligible for this insurance exchange, either as individuals or as employees of small businesses, and get their health-care coverage. That’s a huge task.
So what kind of work’s been done creating the exchange here? And how are you going to keep the exchange, the whole system running?
Well, what we’ve done so far: First, we’re one of not many states, I can’t tell you how many, that have passed legislation to create our health-insurance exchange. That’s one of the things the feds have pushed for; the state’s need to have an implementation mechanism to create their exchange. We’ve passed legislation—Senate Bill 440 in the last legislative session—that creates what we call the Silver State Health Insurance Exchange. And it is a new, public entity governed by a 10-member board. They will govern this health insurance exchange.
So why don’t you describe some of its duties and what it’s going to be doing?
People say that I shouldn’t use these terms, but it’s going to be the Travelocity or the Expedia of health-care insurance. Now you can go out and purchase airline tickets or hotel tickets or whatever-you-want-to-do tickets through those kinds of engines. That’s what the exchange will be doing. It will include a lot of functions, but probably the bigger ones are it has to be a web portal where people can go in to this exchange and shop for their health care. Basically, I’m a person that has a fixed amount of money either out of my pocket or a benefit that my employer provides to me, and if I’m low-income, a tax credit that the federal government will give also, so they’re going to pool that money, and they’re going to say, “I’m going to shop for insurance.” We’ll have to have a web portal for them to do that, and we’ll have a call center. If they don’t want to do it on the web then they can do it by phone, or they can walk into an office somewhere and make an application.
The exchange will be working with all the insurance carriers that will have qualified products. So consumers are coming into the exchange to buy a product, health carriers/health insurance will be coming to the exchange to sell a product, and the exchange will help people with comparison tools, you know, “I want a high deductible, I want a low deductible, I want this coverage, I want that coverage. I want whatever I want.” And we link them up, and then they pick.
Let’s go back to your Travelocity comment. In California, Dave Jones, the insurance commissioner, is talking about the exchange really being able to negotiate with insurance companies, with pharmaceutical companies, to really try to get some better rates. Do you see that in Nevada also?
I don’t see that in Nevada in the initial rollout. We’re going to have a hard time just getting the initial framework together. They call that a “power purchaser.” Some states are going in with that power purchaser, that “we’re going to drive the market somewhere because we now have this market share, this volume.” Nevada will roll out what I call an “all comers”–whoever meets the standards will be able to put their product on the market.
Let’s look at 500,000 people that are currently not getting checkups, not getting preventative work, waiting until they get to the emergency room to get medical care–now they’re going to have health insurance. How ready is the state to handle that influx?
I don’t think we’re ready. You’ve hit a key thing. It’s a huge paradigm shift that 500,000 Nevadans, many of those disabled, many of those with mental illness, behavior health issues, high ER visits with no insurance. A huge paradigm shift: 21 percent of Nevadans showing up with no health care, with no insurance, so theoretically that number will change so that only 5 percent will not have health insurance. Who provides health care will be a huge paradigm shift. The best example of that will be in mental health and behavioral health. Now in Nevada, most low-income individuals get their behavioral or mental health through state-provided services, and it’s because they don’t have a pay source, an insurance product, and so the state of Nevada is the default provider to those people through our mental health system. Once everybody, or 95 percent of Nevadans or Americans, have a health insurance card with coverage behind that, if you will, the wallet biopsy will change. When they go into an emergency room or when they go in for behavioral health needs, for mental health needs, disability services needs, they’re going to be in a network, and insurance network, whether it’s a PPO network, fee for service, they’re going to be directed to different care models rather than be directed to the state. We won’t recognize our service delivery if this stays on track in five years.
Let’s talk about some of the major points. When we’re evaluating our health-care system, particularly as to other countries, and where the Affordable Health Care Act moves it: One would be, of course, paying more for outcomes as opposed to procedures, and secondly putting much greater emphasis on community clinics and working much more on prevention and education. How do you see those unfolding, and what are you working on here in Nevada to help move it that way?
Well, we are working on that. If you look at our Medicaid program, we have about 60 percent of our Medicaid beneficiaries or recipients are in managed care programs. So we’re trying to focus on that front-end-care management.
Where people are being paid on outcomes as opposed to procedures? Are they being paid on per capita?
They are being paid on a capitated rate; it’s not an open-ended thing. The managed care company is paid a capitated rate to manage Jeff’s health care, and you don’t get more money if you manage his health care poorly. So there’s certainly incentive to managed-care companies to work with you as a consumer to make sure you’re not going to the ER, if you can get this done in a clinic, or taking more drugs than you need to be or if you’re doing all the right things. That’s mostly for moms and kids. For elderly and disabled, that’s a more difficult balance because the network and service delivery is not so robust as might be necessary in Nevada.
Why don’t you explain capitated and uncapitated plans?
Capitated is a full-risk model; it’s like an insured model. And a managed care company gets a capitated payment, you know, when we go into various groups and say, “This group, we’re going to pay you $200 per month per head,” and that’s what you get paid. Period. End of story. The full-insured, at-risk model. And they take the population, some people are not sick, other people are very sick, and hopefully the law of averages works for them, and they get to make a reasonable profit, 12-15 percent.
A non-capitated model, we call them ASOs, Administrative Service Organization models, that really they’re not at risk for the medical costs for the individual, but they’re paid a fee to manage that person’s care with incentives and outcome measures and things laid over the top of that that says, “If you do a poor job, you don’t get paid as well, if you do a better job you get paid better.” But it’s not a full, at-risk model.
Let’s talk about the area where I think people will think there’ll be immediate ideas in savings and health care, and that’s in end-of-life decisions. The last six months of life represents some gigantic portion of health care.
Well, frankly we haven’t had that discussion yet in Nevada. It’s pretty touchy, you know. We really haven’t had that policy discussion yet. Even the finance, the actuary models and all that hasn’t occurred yet in Nevada. I’ve read studies in other states, but we haven’t gone there yet. I don’t know if politically people don’t want to touch it yet.
Regarding health care, would you agree that the end-of-life decision is an area where we could get a much better outcome?
There is clearly savings to be made in the end-of-life-decision discussion. And again, in my opinion, it is deeply personal. I can tell you two scenarios, they are personal. My mother’s recent death—she and the family, we made personal decisions: There are no extraordinary remedies. When it’s time, it’s time, “I don’t want to be on a respirator, ventilator, whatever the rest of my life.” And that was very clear. I have a next-door neighbor that I take care of who’s been in skilled nursing now for the last nine months; from acute care to skilled nursing to acute care, back and forth. I’m a helper in that case. His family’s wishes, as are his, are to do everything possible to keep him alive up to the very last minute. And so [those are] two ends of the spectrum. So do you leave it as a personal choice, or do you say, “Well health-care insurers and the government are going to make choices for you”? And again, I’m not sure in Nevada if we’re ready for the government to make [those] choices yet. And again, that’s the discussion, but it really hasn’t happened yet.
I was talking to a hospital [administrator], and she said they have this phenomenal hospice program that’s really not being used as much as it could be or should be and part of the problem is they’re in this quandary: If people go to the hospice program, it has a better outcome for the patient but a horrible outcome for the hospital because all of these procedures that are done, and they get paid for, are not done in hospice. And so they lose an incredible amount of money by people going into hospice.
I agree. How do people make money? They do procedures and do more of them. And so how do you end that? Again, I haven’t lived long enough, smart enough to know the right answer yet. But again, I personally am not ready for the government to come tell me a lot of things, but I do think people should be educated on what their choices are and what it means for their family, their life, their pocketbook—those kinds of things. All of our pocketbooks.
That’s what I’m saying. To go back, what’s the current state of health? We’re in trouble, particularly in Nevada. And with health-care reform, what will be the impacts of that? And if we’re talking about 500,000 more people getting health-care insurance, wow, that will change things a lot. And what does that mean, what do we need to do?
There’s a lot of meaty things. One of the things I think is wrong in America, [is] you don’t really have to help manage your own health care. You can just show up at a hospital ER and under EMTALA laws, they have to serve you. So where’s the incentive to the individual person to take personal responsibility to manage your health care when you can just show up at a hospital and EMTALA laws say the hospital must serve you regardless of your ability to pay?
That raises several different points. One point is, of course, the ridiculous situation where we do that, but then you don’t have to pay for health-care insurance. People were getting upset that they have to pay a bill, but of course, they expect to get health-care coverage even if they’re not paying a bill. And then point two is, yes, you can go get health care, and once your baby is deathly ill, you can get treatment at the hospital, but you can’t get the preventative, prenatal care, all the other kinds of things that would have prevented having to go to the hospital.
Hospitals are a 24/7 operation; they’re accessible. There’s three shifts a day, seven days a week. [But] you can only get generally primary and preventative care one shift a day, 8 a.m. to 5 p.m. And you’re damn lucky if you can call your primary or preventative care provider and get in within two to three days sometimes. So until America and Nevada fixes this system where you can’t get primary and preventative care three shifts a day with a longer time frame than 8-5 with a three-day wait time, we’re not going to change the impact on the deep end of the swimming pool, hospitalization and acute care. That’s my personal opinion.
So if we moved those people out of the emergency room and into urgent care, it would help out a lot?
Yeah. And that there’s more urgent care available. Again, emergency room care is way expensive. Urgent care, those little clinics, whatever, it’s probably 30 percent more expensive than your physician’s office primary care. If I go into my physician, it’s $20 out of my pocket, and then my insurer pays another $74 for an office visit or whatever. That’s what my primary care physician gets. You go to urgent care, it’s $30 out of my pocket, and they’re going to get about $120 from the insurer. Or if nobody’s available, you’re off to the ER, and you’re going to have a $300 bill.