HOUSE BILL REPORT

ESHB 2252

BYHouse Committee on Health Care (originally sponsored by Representatives Braddock, Prentice, Sayan, Vekich, Brekke, Wineberry, Todd, Nelson, H. Sommers, Cole, Spanel and Scott)

Establishing the Washington universal health access and containment commission.

House Committe on Health Care

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (9)

      Signed by Representatives Braddock, Chair; Day, Vice Chair; Brooks, Ranking Republican Member; Cantwell, Chandler, Morris, Prentice, Sprenkle and Vekich.

Minority Report:  Do not pass.  (2)

      Signed by Representatives D. Sommers and Wolfe.

House Staff:Bill Hagens (786-7131)

Rereferred House Committee on Appropriations

Majority Report:  The substitute bill by Committee on Health Care be substituted therefor and the substitute bill do pass.  (18)

      Signed by Representatives Locke, Chair; Grant, Vice Chair; H. Sommers, Vice Chair; Appelwick, Silver, Braddock, Brekke, Ebersole, Ferguson, Hine, Inslee, Peery, Rust, Sayan, Spanel, Sprenkle, Wang and Wineberry.

Minority Report:  Do not pass.  (7)

      Signed by Representatives Silver, Ranking Republican Member; Youngsman, Assistant Ranking Republican Member; Bowman, Doty, McLean, Nealey and Padden.

House Staff:      Maureen Morris (786-7152)

AS PASSED HOUSE FEBRUARY 9, 1990

BACKGROUND:

Despite numerous attempts in recent years to address the lack of access to health services and rising health service costs, at both the state and national levels, problems still exist.  It is estimated that in Washington state 17 percent or about 785,000 persons are without health service coverage (this estimate has increased by 50,000 in the last three years).  Of that group 57 percent are low-income persons; 53 percent are employed; 37 percent are children.

Costs of health services continue to rise at a rate well above the general inflation. Nationally, $660 billion is spent annually on health services. That figure is projected to reach $1.65 trillion by the turn of the century.  Presently, over $8 billion is spent annually for health services in Washington state. If national trends are followed, that figure will reach $22 billion by the year 2000.

Problems of access and cost are likely to have a detrimental effect on state and national economies, particularly regarding the ability to compete in international markets.  Small businesses are greatly affected by high health costs, experiencing annual cost increases of over 30 percent for their employees' coverage.

SUMMARY:

This act addresses the problems of health access, quality of care, and rising costs by establishing a set of policy principles and by creating a commission to develop a universal health plan based on these principles:

Citizens have the prime responsibility for their health status and, accordingly,  should play a key role in the development of their health service system.

Appropriate health services should be available to all Washington state residents regardless of age, sex, race, employment, health status, economic status, or place of residence.

A state health services budget, established in a public manner, is necessary to control costs.

The burden for financing the health service system should be equitably shared by government, employers, and citizens.

Freedom of choice is important from both the perspective of the patient choosing a provider and the provider choosing a practice setting.

Health service providers should receive fair compensation for their services in a timely and uncomplicated manner.

Illness and injury prevention and health promotion should be a major part of the health service system.

Quality of care should be promoted through the establishment of effective health services and by the assurance of acceptable standards for health professionals and facilities.

To put these principles into state policy, the Washington Universal Health Access and Cost Control Commission is created, and composed of 17 members as follows: Two House members, one from each political caucus, appointed by the speaker; Two senators, one from each political caucus, appointed by the president of the Senate; The chair of the Health Care Access and Cost Control Council. The governor shall appoint the following members: Three members representing employers, at least one representing employers of small business; Three members representing employee organizations; Three members representing health service providers; Three members representing citizens; one shall be over 65 years of age and one shall be a current or recent recipient of medical assistance.

The commission's chair shall be designated by the governor from among the members.

The commission shall be appointed by June 1, 1990, and hold its first meeting no later than June 15th of that year.

The commission shall have the usual powers to hire staff, contract for services, and create technical advisory committees.

The commission shall conduct a study of the problems relating to health access, cost and quality and make recommendations for the development of a Washington universal health access plan.  In its deliberations, the commission shall analyze the advantages and disadvantages of including in the plan the elements put forth in the bill.  The commission shall also study other approaches identified that address the problems including various private and public health service financing systems and a variety of mechanisms used by other states and countries relating to the reimbursement of hospitals, and other health providers delivering inpatient and outpatient health services.

The elements put forth are as follows: 

A universal health plan for residents of Washington state, that shall include a uniform comprehensive set of basic health services that is defined through a public process, based on the best scientific information available, and determined to be effective in the prevention and treatment of illness and injury.

A single public or private administrative organization that shall have complete operational authority over the plan, and include a uniform budgeting, billing, payment, and data system.

A state health services budget that shall set forth a finite amount of funds for the purchase of all health services provided in the plan.

A financing system with funds from government, employers, and residents: Government contributions that will include all state and federal sources, e.g., Medicare, Medicaid, public employee benefits, and all others;  employer contributions that are set on a per capita basis, with special consideration for employers with small businesses;  individual premiums that are based on family size, with reduced or no premiums for low-income families.  Employers will be permitted to directly pay employee premiums.  The commission will study the appropriate use of utilization fees and include them in resident participation, if deemed appropriate.

Hospitals will be funded by annual hospital budgets based on historical data and adjusted semiannually.  Health providers will have the options of being reimbursed by way of fee-for-service, capitation, or annual budget, however, there will be incentive to practice in cost effective managed health care settings.  No extra or balance billing will be permitted.

The plan will include portability provisions so residents will be covered when out-of- state.

Long term care will be fully integrated into the plan, as recommended by the current Long Term Care Study Commission.

The commission shall study the advantages and disadvantages of prohibiting care service contractors, and commercial insurers from independently providing health services included in the plan. This would not preclude such entities from independently providing services not included in the plan, such as, excess medical coverage or procedures not covered by the plan, nor union negotiating for additional benefits.

The commission shall analyze all state and federal laws that would need to be repealed, amended, or waived in order to implement the Universal Health Plan.

The commission shall study issues relating to medical malpractice liability and recommend any remedial action necessary.  This analysis shall address the desirability and feasibility of creating a publicly funded malpractice insurance program.

In its deliberation, the commission shall provide for public input, and report to the governor, the state Board of Health, and the Legislature by December 1, 1991.

As an early step in the implementation of this act, the administrator of the Health Care Authority shall develop an implementation plan to place all federal and state funded health services under a single administrative organization by July 1, 1993.

The commission terminates on January 31, 1992.

The commission's report shall be deemed advisory to the governor and Legislature.  No part of the report shall take effect without full legislative enactment.

Beginning January 1, 1992, all insurers, health care service contractors, and health maintenance organizations are require to submit certain patient-related data to the Health Care Authority.

$200,000 is appropriated to the Office of Financial Management to fund the commission.

Appropriation:    $200,000 to the Office of Financial Management.

Fiscal Note:      Requested January 11, 1990.

Effective Date:The bill takes effect on June 1, 1990.

House Committee ‑ Testified For:    (Health Care) David West and Molly Lee, Washington Fair Share; Bud Steele, Multiple Sclerosis Association of King County; Nancy Tietje; Lydia Hamilton; Max Roffman, Mimi Davis, Oscar Hearde and Frank Morris, Puget Sound Council of Senior Citizens; Ned Dolejsi, Washington State Catholic Conference; Lee Celix and Debra Thurgood; Ruben Mehl, Washington State Council of Senior Citizens; Terry Sweeney, I.L.W.U.; Sean Bleck, Evergreen Legal Services; Norm Winnington; Bill Jones, National Association for Retired Railroad Employees; Tom Trompeter, Washington Primary Care Association; Madelaine, Driscoll; Walter Belka, Elder Citizens Coalition of Washington; Dewey Brignon.

(Appropriations) No one.

House Committee - Testified Against:      (Health Care) Susan Johnson, Service Employees Union; Catherine LaDuke, National Union of Hospital and Health Care Workers; Mel Sorenson, Medical Bureaus; Len Eddinger, Washington State Medical Association.

(Appropriations) None.

House Committee - Testimony For:    (Health Care) Problems of health access and costs are so serious that only a systemic approach can work.  The only way to address the access problem is insure that all citizens are eligible for a uniform set of health services, regardless of employment, health or economic status or factors.  Costs will never be controlled until a global budget process is established in a rational manner.  Also a single payer/administrative structure has the potential for substantial savings.

(Appropriations) None.

House Committee - Testimony Against:      (Health Care) The commission directive is too prescriptive toward a Canadian-type health care system. The commission should also study other approaches.  Unions will not be able to negotiate for health benefits.  Note:  The substitute bill may change the positions of those testifying against the original bill.

(Appropriations) None.