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State and Local Efforts to Close the Gaps Between Public and Private Insurance Coverage (continued)


Vondie Woodbury: I can almost take off from where Vickie ended in terms of the importance of communities as filling a role in dealing with the uninsured. In our community back in the early 90's, we decided to take a swipe at the uninsured and the end result is Access Health. Access Health is a county-specific health coverage program that involves businesses. We did not leave businesses out there. We are not an entitlement program. This is a business model. In the community we sat down, we developed a benefit package. We sat down with our providers, they figured out what it was going to cost, we set up a 501(c)(3) to administer the program. We entered into contracts and we had a partnership with the State of Michigan that allowed us to finance this in a way that made it affordable for businesses. Businesses to buy into our program have to be located in Muskegon County; they cannot have offered a health benefit for the previous 12 months. We did not want to get into crowdout issues. This was not about offering the cheapest product in the county; it was about looking at a niche market that we identified of businesses in our community that were very small businesses that could not afford anything that was commercially available. Our product is offered both to full- and part-time workers. We found that we had people who were working multiple part-time jobs and the median wage has to be $10 an hour. We also knew that we were targeting a certain part of the constituency in Muskegon County who weren't making a lot of money and couldn't afford again what was available commercially.

It is a good product. We are pretty proud of it. The benefit package itself is we think quite substantial. You can't do this without providers and in our case 97 percent of our doctors participate in our plan. Both of our hospital systems, our benefits plan is as far as we are concerned, quite rich. It doesn't leave you with just primary care.

When our doctors sat down and literally they met every other week over the course of a summer, seven o'clock in the morning, loved it. They'd walk in and they would say, this is why it won't work. We'd say, what will make it work? People really can figure these things out and as a result we have just tremendous involvement by our provider community. We are able then not just to give primary care benefits. None of the providers wanted to end up telling someone they had a lump and not being able to refer them. Our plan includes hospitalization, it includes behavioral health, it includes a pharmacy benefit and we have managed to do it and of course keep it affordable. It is quite popular.

Cindy DiBiasi: I know there is an innovative funding formula that goes along with this. Can you describe that?

Vondie Woodbury: We use DSH [disproportionate share hospital funding] and I will get to DSH here in a minute. We are a three share. Some of your audience may have heard of a three share. If you haven't, it means that traditionally when we think of a premium, let me also say here we are not insurance, we are health coverage, we might have to clarify that here in a bit. But when you think about a premium, a premium typically is split between an employer and an employee.

In our case, the employer pays 30 percent of the cost. The employee pays 30 percent of the cost and the community kicks in 40 percent of the cost. The 40 percent is through our arrangement with the State of Michigan so we can attach DSH funds. That means that if you think about the benefit plan that we offer, an individual purchasing that plan can purchase every medical service in Muskegon County for $42 a month. The employer will then match that with an additional $42.

We do have a dependant coverage benefit, but frankly when we go out to these small businesses and we sell Access Health we screen people and if we can find people who are eligible for SCHIP or eligible for Medicaid, those are better benefit packages. Our benefit doesn't cover everything. We encourage them to go in that direction instead. So in terms of a good public partnership blending with policy, it has worked out just beautifully that way for us.

Cindy DiBiasi: You mentioned a little while ago a $10 median salary, does your program target a specific segment of the Muskegon County population?

Vondie Woodbury: Our product actually focuses in on people who are working uninsured. Working uninsured, we found, that as we focused in on our market that that was the fastest growing number of people who were turning up uninsured. We had the benefit of a grant from the Kellogg Foundation that allowed us to basically target what was going on. We could see the growth within our own environment that the people who were turning up uninsured were working. So we focused in on the working uninsured and we found that we actually had two pools of uninsured. Some of those folks were indigent and not working and those who were working were working at really marginal jobs. So that was pretty much how we made that decision.

Cindy DiBiasi: So you decided to target this segment of the uninsured population based on the need, the size?

Vondie Woodbury: Exactly. Exactly. We tell people when they ask us about the program, not to mingle the populations together. Indigent uninsured behave very differently from working uninsured, and they use services very differently.

When we got down, one of the things that we did that I think was very, very important in retrospect and has really been a benefit in terms of our plan and how the plan has evolved is we took a lesson from politicians: we went out and surveyed the population. In surveying the population—both uninsured individuals and uninsured businesses—we were able to learn a lot more than I think we were picking up basically in the popular text. Especially about people in our own community.

When we looked at businesses, we found that the cost of premiums obviously was a barrier and that was a barrier that was insurmountable for these businesses. But what we did find that was important was that they could afford something. Most could afford somewhere between $35-50 per month per person in their business. The told us too, as we talked to them, that they would benefit from having some kind of a product by the virtue of the fact that their employee turnover was such they were losing money on the turnover. So the carrot, if you will, to businesses was we could help them stop that turnover which was costing them a lot of money.

By the way, let me tell you something about how these businesses profiled because sometimes there is a misunderstanding about them. They are small businesses but they are different small businesses than belong typically to Chambers of Commerce or to business associations. They are very small, tend to be disconnected, not to have a whole lot of income, hand-to-mouth businesses. Sometimes not very sophisticated and we have said to our Chambers of Commerce, look, as we sign these folks up, there is nothing that, we want to work with you, and the Chamber then can go out and offer them business products to help them then become better business people.

At the same time as you look at the business, you also have to look at the people who work there. When we looked at the people who worked there and asked them questions (and again we surveyed our uninsured), what we found was basically they profiled very similar to the businesses in that they could afford somewhere between $35-50 a month. They couldn't go over that.

We found there were certain things we learned about the population. For instance, if we said this could be an affordable product, they didn't know what affordable was. They had no concept of affordability if you are making $6.40 an hour. So we found that in our marketing methods we had to be very clear about how something would fit within a budget as opposed to being "affordable." We used a lot of terms sometimes and we don't necessarily study the people who are on the receiving end of those terms.

One thing we learned that became very intriguing for us and has been sort of worn out as we have gone along is the fact that this was a target market that was predominantly female and predominantly under 40 with children. So we found that we had people who we didn't think were going to be adverse in terms of our risk exposure as a community.

Cindy DiBiasi: When you were out signing up this program you brought in so many different groups, as you said, from the beginning.

Vondie Woodbury: Yes.

Cindy DiBiasi: Was that one of the critical factors to success?

Vondie Woodbury: Absolutely. When you put people together at the table, you find that the first thing you get hit with is a whole lot of conflict. Conflict is something that you should expect. It isn't a negative thing at all. When you put them there, you basically hand it all over to them to solve.

In our community, our benefit plan was designed by people from the bottom up. Now Vickie mentioned in her discussion the importance of looking at health indices in a community. In our community, one of the reasons that we got together was to look at how community health assessment in terms of Muskegon County, could be impacted by our ability to bring these people into coverage. We have very high rates of diabetes, very high rates of ischemic heart disease, and end-stage renal disease. So the way in which we wanted to design our plan, we wanted to cut right to the chase on that. We wanted to get people into coverage. We told them that when they signed up we wanted them to identify a primary care provider in the first 6 months. We wanted them to see that primary care provider and then since these were folks who had a long-term history of being uninsured, we also took our coverage and our co-payments and we weighed our co-payments in a way to encourage primary care use and discourage things like ER.

So we have also used the benefit plan as a means of instructing our community. Those are the sorts of things that when you put people at a table, whether they are doctors or hospital administrators or business people or just individuals who are concerned about health status in a community, somebody who wants to do well. You find you work through those issues and you end up with something that in the end is pretty special.

Cindy DiBiasi: How successful is it? What portion of the uninsured in your community does this program currently cover?

Vondie Woodbury: Let me say something first before we get to that. One thing we have not covered yet is exclusions to care and I would really like to, if that is okay. I would like to talk a little bit about that.

I mentioned earlier we are not insurance. We are health coverage. This is a county-based product and by being a county-based product that means that we don't cover anything outside of our county. I don't want anyone to misunderstand that somehow we are competing with a commercial insurance business in Muskegon County because we don't. We don't cover care outside of Muskegon County and we also, because we have contracts with our own health providers, we limit the services in Muskegon county to those services that we provide. We are a secondary market; we are not a tertiary market and so there are certain types of very high-end things—limb re-attachment, transplants, those sorts of things—that we don't do. We don't cover those. However, because many of our people are very low income, they will become eligible for Medicaid spend-down should something like that happen. The doctor still makes the referral whether it is to the University of Michigan or to Spectrum, any of the larger health systems who will take those cases. We just as the community are not risk exposed. I really did want to make that point before we moved on.

Cindy DiBiasi: Let's talk about the success of the program.

Vondie Woodbury: Okay.

Cindy DiBiasi: What proportion of the uninsured in the community is currently involved in your program?

Vondie Woodbury: At present we have 300 businesses, and they are very difficult to convince but you can convince them. We learned, early on we went to HMOs [health maintenance organizations] in our community with a benefit plan and we said why don't you discount this? They said, "No, we are not interested in this market. We really can't sell it," and we learned a lot after that. Once we went out to try to sell it, these are businesses you have to convince, if you offer something new they have to know that it isn't a pilot. That it isn't going to go away in 2 years because that becomes a barrier in and of itself.

For us, our hope is down the road we would get our population up to around 3,000 people. We have had over 1,500 people in the program since its inception. Our hope is then to cover somewhere between 20 and 25 percent of the uninsured that we estimate that we have in our community.

Again, our purpose is not to cover everybody. We don't have the ability to do that, but to cover those people and those businesses who still have the ability to pay. By doing that, we also have the opportunity then to take our safety net dollars and stretch them more effectively within our community to people who really cannot afford anything.

Cindy DiBiasi: You seem to have taken a real crash-course in covering the uninsured. What advice or what information can you give to other communities who are considering this type of program?

Vondie Woodbury: Well, you know, probably the number one barrier to get over is the fact you can't do it. I think a lot of communities look at this kind of work and say, "I think I am going to wait for my State to do something. I am going to wait for the Federal government to do something." In fact, you can wait or you can do something. In reality, both at the Federal and State level there are tremendous tools available now for communities to explore options. Getting over that first barrier of believing you can do something is probably first and foremost the most important.

Secondly, again, separate indigent, uninsured people from working uninsured people. We run two programs under Access Health, Inc., one of which is an indigent uninsured program that is called the State Medical Plan, it is a Michigan Program. The other is Access Health, for the working uninsured. When we compared the utilization of those two groups of people, just in pharmacy for instance, our indigent uninsured and these are people who are very indigent. They don't work. They are adults not eligible for Medicaid. Their pharmaceutical costs run anywhere between $60-70 per member, per month, on average, every month. If we go to our working uninsured people, the people that we have located through Access Health, it runs around $11 or $12 a month. We have found in fact that these people who are working uninsured don't necessarily overutilize services. A lot of times that is a barrier too, for people. You need to build community ownership. There is a political piece of this that has to do with we are all in this together and we are going to do something to help these people. These people are our neighbors and our family members. People have a great affinity to wanting to help their own. As do providers and businesses. We see it differently maybe as opposed to when it comes from the top down and we ought to have the ability I think to expand and be creative in communities.

I think that personal responsibility has been very important to what we have pulled together. The belief that we weren't going to entitle anyone, but everyone was going to pay his or her fair share and that we negotiated that out at all levels, including our providers.

Keeping the focus on the need to sell to businesses, I agree with Vickie, it is the toughest piece to do. Sometimes it is the last thing that anybody thinks about. You need to think about your marketing. You need to think about who these businesses are. Who they talk to. You have to be very creative at getting at them. When we rolled out our program, it looks very much like a commercial product. We used billboards and television ads. We found that when we surveyed the businesses that they were rather averse to government intrusion. In fact, we found the people working for them were too. Many of them had come off welfare and if it sounded or looked like Medicaid, they didn't want to go back there. So we had to be very careful in the way that we marketed. It also takes a sales staff. Somebody has to go out there and pound on doors and talk to businesses. You are going to have to convince some of these people who have never offered a benefit, why they need to offer a benefit and how it can really benefit them. So I think there are a lot of ways communities can learn from our experience.

Cindy DiBiasi: I am sure we are going to have a lot of questions about this program as we move forward today. In a moment, we are going to open up the discussion for your questions. Remember, you can communicate your questions to us in the following ways: if you are on the phone, please dial "14." Note something new today, because we know sometimes it is hard for people to call in and especially be that first caller, so we are going to be giving away a T-shirt courtesy of the Council of State Governments to the first caller, so we really would like you to call in. You may E-mail us your question also at info@ahrq.gov and you may also directly type your question into the messaging field and hit "enter." Please note that your sent message will not appear in the chat box.

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We do have a question for Theresa Sachs. Theresa, besides [unclear] flexibility, what do you think is appealing about HIFA from a State perspective?

Theresa Sachs: Well, I think the bottom line, just to link back to something that Vickie said, building on the SCHIP program of giving States a new way of doing business. I really think that is the key, but a couple of other things that are sort of process features of HIFA that States have told us they are happy with.

We have disseminated guidance so that States no longer have to guess what we might be interested in doing under Section 1115. The guidance is on the CMS Web site and fairly easy to find. There is also an application template where States can check off the different things that they want to do and we have heard that does make it easier. Because of the fact that we have decided on some of the policies ahead of time and built that into a template, the review process also is expedited. We have a goal of rendering decisions on HIFA proposals within 60-90 days of receiving them.

Cindy DiBiasi: Vickie, a question for you. What are you seeing with respect to States and communities working together on this issue?

Vickie Gates: I am actually seeing more and more interest from States in working with communities. I think part of it is because of projects like Muskegon that have been so successful. There are many local projects that have been able to bring resources into the equation, but they have been able to bring providers together in the community and get them to operate in a totally different environment I think than is often the case with a large Medicaid program. The results have been great. We have seen some really excellent health status results out of community projects. It has made States want to do a little bit of re-thinking about the role of communities.

I think that sometimes what States are looking for, they are looking for two things. They have raised two issues with us. One is being able to move in the ready community. The community that has the energy, sees the problem, has some resources, wants to try and do something and not having to try and make that work for the State as a whole.

They also have raised the issue of sometimes there are communities that have very specialized problems. They'd like the ability to be able to target.

When it comes to reaching difficult groups like employers, there honestly is no substitute for the person who lives next door, who drinks coffee in the same coffee shop, word of mouth. All of those things are really incredibly important and so if you are able to create an effective partnership with the community, you essentially, it is the same thing that States did in some regards with SCHIP. You create this infrastructure that reaches out into the community. That changes the complexion of the programs that allows some tailoring to individual circumstances and creates more ownership. It is not simply a big State/Federal partnership. Something that is detached. It is something that people own.

Cindy DiBiasi: We have a caller from Michigan on the line. Brenda, are you on the line? You are our first caller.

Brenda: Oh, terrific.

Cindy DiBiasi: Congratulations.

Brenda: My question was for Vondie. I think I heard you say that Access is only available in Muskegon County? I am actually in Ottawa County and I wonder if there was any plans to be able to bring that to surrounding counties or if there was any talk with the leaders in surrounding counties about bringing that there?

Vondie: We have talked to leadership in Ottawa county at their request and have done a presentation for them and I know there is interest there including the Chamber of Commerce. One of the interesting things that happened once we went "live" if you will, with Access Health, and of course we are putting things on television and all of that is we suddenly started getting calls from neighboring counties and from businesses who wanted to offer it or wanted to take up Access Health. We said if you are not in Muskegon county, of course, you can't have it, but we were more than willing to have them move to Muskegon county which our economic development people loved. Yes, we are, the State of Michigan has just been wonderful in terms of working with us and I think they are interested as well in seeing the model expanded.

Cindy DiBiasi: Theresa?

Theresa Sachs: I also wanted to add for the caller that the State of Michigan has submitted a HIFA proposal to us. We are currently considering it and one of the elements is to have a county component that would cover some low-income people in different counties, sort of on a phased-in basis. I think it looks like State wide there is some interest in doing more with those county programs.

Brenda: Great.

Cindy DiBiasi: Thank you very much, Brenda. From Kentucky we have Michelle on the line. Michelle?

Michelle: [unclear] my question. I would like to know, where could a policymaker locate information on individual health care coverage for individuals who may not qualify for Medicaid and do not have access to employer-sponsored insurance?

Vickie Gates: I think in addition to some general resources that are available through tapping into the Web, there are some Websites that are very specific about resources within an existing State. It sounds as if you are asking about how to solve an individual problem and make some resources available to an individual.

Michelle: Right.

Vickie Gates: Some States also do a much better job than others and creating consumer information you may find that your department of insurance might have a consumer representative who has some information about what options might be available. So it is not a perfect picture, but there are some places that you can go to try and get some additional information.

Michelle: Great. Thank you.

Cindy DiBiasi: Thank you. From Washington, DC, Dee Dee is on the line. I am going to ask people to identify their organization as well, Dee Dee.

Dee Dee: OK. I am with the Healthcare Leadership Council in Washington and for the last caller I just wanted to mention that at our Web site, HLC.org, we have been starting to put up State programs and other types of programs like the Michigan Access Program so if you go to that Web site and click on the State, it will direct you to links, State links, community links and other types of links for access to insurance.

My question was about the HIFA waivers and the States that have submitted waivers thus far, they have used the employer subsidy option and if not, why not and how can they be further encouraged to do so whether that requires legislation or better tools within the waiver itself or how can that be further encouraged?

Theresa Sachs: One of the things that is clearly the case with many of the States that we work with is that they have to get State legislation enacted, many times before they even come to us to start talking to us.

But I will give an overview of what the different States have done so far. In the States of Arizona and California where we have recently approved HIFA waivers, both States have committed to doing a feasibility study to look at whether there is a significant portion of their covered or their target population for the waiver that has access to employer-sponsored insurance that would then direct them toward doing a program to provide premium subsidies. I think it was the case in both States that when HIFA was unrolled and they really wanted to come in and do an expansion, they didn't necessarily have legislation in place and hadn't done what was needed to find out if they could do that with that population.

Right now we are looking at three HIFA proposals that have been submitted to us recently from the States of Michigan as I mentioned before. Also the States of Illinois and Maine and employer-sponsored insurance to one degree or another is part of all of those proposals. The main proposal targets actually a lower-income population where they don't believe there is a large incidence of availability of ESI [employer-sponsored insurance], but they do intend to pursue it to the extent that it is available.

Dee Dee: Thank you.

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