"Healthcare Leadership" and "Environmental Factors"

VIEWPOINT Ann Hwang, MD Department o f Health Care Policy, Harvard Medical School, Boston, Massachusetts.

Joshua M. Sharfstein, MD Johns Hopkins Bloomberg School o f Public Health, Baltimore, Maryland.

Christopher F. Koller Milbank Memorial Fund, New York, New York.

Corresponding Author: Ann Hwang, MD, Department o f Health Care Policy, Harvard Medical School. 180A Longwood Ave, Second Floor, Boston, MA 02115 (hwang2@hcp .med.harvard.edu).

jama.comState Leadership in Health Care Transformation Red and Blue Despite substantial differences in t h e local p o litic s o f cove ra g e exp a nsion , sta te s across t h e c o u n tr y are le a d ­ in g m a jo r changes in h e a lth care p a y m e n t a n d de live ry.

For e xa m p le , Arkansas and Tennessee are a v id ly p u rs u ­ in g b u n d le d p a y m e n ts , M a r y la n d has la r g e ly e l i m i ­ n a ted fe e -fo r-s e rv ic e p a y m e n t t o ho sp itals, M assachu­ s e tts has e sta blish ed s ta te w id e cost g r o w t h ta rg e ts, and Id a h o is c r e a t in g a s t a t e w id e n e t w o r k o f m u ltip a y e r m ed ica l hom es.

These e f f o r t s and m a n y o th e rs , w h ile la rge ly u n d e r t h e radar o f n a tio n a l a tt e n t io n , m ay have a p r o fo u n d e f ­ f e c t on t h e h e a lth care system 's a b ility t o p ro v id e b e t ­ t e r care a t lo w e r cost. U n d e rsta n d in g w h y and h o w states o f all p o litic a l hues are engaged in such e f f o r t s and re c ­ o g n iz in g t h e lim ita tio n s o f s ta te -le d r e fo rm are critica l t o a p p re c ia tin g th e o p p o r t u n it ie s and challe n g es o f th is u n iq u e m o m e n t in US h e a lth care.

States as Purchasers R a p id ly in crea sin g s ta te h e a lth care e x p e n d itu re s m o ­ t iv a t e s ta te s t o c a re a b o u t a c h ie v in g b e t t e r v a lu e in h e a lth care and p ro v id e a p o w e rfu l le ve r f o r change. In 2014, s ta te s s p e n t a q u a rte r o f t h e ir b u d g e ts o n M e d ic ­ aid a lo n e .1 M o s t s ta te -le d h e a lth care p a y m e n t in n o v a ­ t io n s o rig in a te in M e d ica id p ro g ra m s as e f f o r t s t o a d ­ dress th is b u d g e t b u rd e n . A f t e r M ed ica id , t h e second la rg e st p o r t io n o f s ta te h e a lth care is s p e n t on h e a lth in ­ surance f o r sta te e m plo yees and retirees. States also p ro ­ v id e fin a n c ia l aid t o local m u n ic ip a litie s and school d is­ t r ic t s , m u c h o f w h ic h g o e s f o r h e a lth care. E ffo r ts t o c o n tro l p u b lic e m p lo y e e b e n e f it sp e n d in g have p ro ve n t o be a n o th e r e f fe c tiv e m eans o f s ta te e n g a g e m e n t in r e fo rm o f d e liv e ry system s.

States as Regulators S ta te s have a b ro a d s e t o f r e g u la to ry to o ls a t t h e ir d is ­ posal. H isto rica lly, sta te s, ra th e r th a n t h e fe d e ra l g o v ­ e rn m e n t, have been t h e p re d o m in a n t reg u la to rs o f b o th com m e rcia l ( n o t s e lf-fu n d e d ) h ealth insurance and m e d i­ cal p ra c tic e . By f a c ilit a t in g a n d s u b s id iz in g t h e p u r ­ chase o f n o n g ro u p insurance, t h e A ffo r d a b le Care A c t (ACA) e x p a n d e d t h e size o f th e m a rk e t tr a d it io n a lly u n ­ d e r s ta te r e g u la tio n , re g a rd le ss o f s ta te d e c is io n s r e ­ g a rd in g t h e o p e ra tio n o f h e a lth in su ra n ce exchanges.

R hode Island and a fe w n o rth e a s te rn s ta te s have d e m ­ o n s t r a t e d t h a t a p p ro v a l a u t h o r it y f o r ra te s an d s u b ­ s c r ib e r c o n t r a c t s can be p o w e r f u l t o o ls t o s h a p e in ­ s u re r p o lic ie s r e g a r d in g d e liv e r y s y s te m s , b u t o t h e r s ta te s have been slo w t o f o llo w th is p a th.

States also license h e a lth care p ro fe ssio n a ls, h o s p i­ ta ls, and clinics. R e g u la to ry a c tio n s b y s ta te s can s u p ­ p o r t m o r e f l e x i b l e m o d e ls o f t e a m - b a s e d ca re , e x ­ p a n d e d scope o f p ra c tic e o f allie d h e a lth p ro fe ssio n a ls.te le m e d ic in e , c o m m u n it y p a ra m e d ic in e , an d in te g r a ­ t io n o f physical and b e h a vio ra l h e a lth care. Conversely, w h e n n o t aligned, s ta te rules can in h ib it t h e a b ility o f c li­ nicia ns and p ro v id e r o rg a n iz a tio n s t o in n o v a te .

States as Providers o f Health Care Services S ta te g o v e r n m e n t s d ir e c t ly p r o v id e h e a lth c a re s e r­ v ic e s t o c e r t a in s p e c ia liz e d p o p u l a t io n s , in c lu d in g th ro u g h c o rre c tio n a l se rvices, p u b lic h e a lth p ro g ra m s f o r c o m m u n ic a b le diseases, m e n ta l h e a lth h o s p ita ls , and p ro g ra m s f o r c h ild re n w it h special needs. Because o f t h e ir hig h ne e ds f o r care, th e s e spe cia lize d p o p u la ­ tio n s can have s u b s ta n tia l e f f e c t o n h e a lth care costs.

P o p u la tio n s n e w ly e lig ib le f o r M ed ica id and Exchange c o v e r a g e u n d e r t h e ACA lik e ly in c lu d e in d iv id u a ls in v o lv e d in t h e crim in a l ju s tic e system , h om eless in d i­ v id u a ls , and th o s e w it h b e h a v io ra l h e a lth c o n d itio n s , f u r t h e r h ig h lig h tin g t h e need f o r in te ra g e n cy c o lla b o ra ­ tio n t o c o o rd in a te care and coverage.

States as Collectors o f Data States have e x te n s iv e d a ta c o lle c tio n and r e p o r tin g re ­ sp o n sib ilitie s, encom p a ssin g a d m in is tra tiv e , survey, and e p id e m io lo g ic d ata. All s ta te s also have so m e c a p a b il­ it y t o fa c ilita te t h e e xchange o f h e a lth in fo r m a tio n b e ­ t w e e n h e a lth care p r o v id e r o rg a n iz a tio n s ' e le c t r o n ic h ealth records, a lth o u g h th e e x te n t o f t h a t ca p a b ility var­ ies f r o m s ta te t o sta te . A ll-p a y e r cla im s d a tab a se s are s ta te w id e r e p o s ito rie s t h a t are rich sources o f in fo rm a ­ t io n a b o u t h e a lth care costs, q u a lity, and p ra c tic e v a ria ­ t io n . Data sources c o n tro lle d b y sta te s can be used t o g e n e r a t e i n f o r m a t i o n t o h e lp c o n s u m e r s m a k e i n ­ f o rm e d h e a lth care choices, h e lp clin icia n s u n d e rs ta n d h o w t h e ir p a t ie n t p o p u la t io n s a re u s in g m e d ic a l s e r­ vices, and h e lp p o lic y m akers m easure t h e p ro g re ss o f re fo rm s t o p a y m e n t and d e liv e ry system s.

States as Grantees T h e a v a ila b ilit y o f f e d e r a l f u n d s f o r h e a lt h r e f o r m p la n n in g a n d i m p l e m e n t a t i o n has b e e n a c a t a ly s t f o r s t a t e a c t io n . T h e C e n te r f o r M e d ic a r e & M e d ic ­ aid In n o v a tio n 's S ta te I n n o v a tio n M o d e ls In it ia t iv e is p r o v id in g a lm o s t $1 b i l l i o n t o s t a t e s t o im p le m e n t ''h o m e g r o w n '' p a y m e n t a n d d e liv e r y s y s te m r e f o r m m o d e ls .2 W ith in M ed ica id , t h e C e n te rs f o r M ed ica re & M e d ic a id Services' D e liv e ry System R e fo rm In c e n tiv e P a ym e n t p ro g ra m w ill p ro v id e u p t o $ 3 .6 b illio n in f is ­ cal ye a r 2015 t o s u p p o r t s ta te -le d h e a lth care syste m red e sig n e f f o r t s . 3 States as Conveners W it h a m p le m o t iv a t io n t o im p r o v e h e a lt h c a re an d m an y to o ls a t t h e ir disposal, s ta te leaders can cre a te a JAMA July 28,2015 Volume 314, Number 4 34 9 local p o litic a l m o m e n t an d s e t an a genda f o r r e fo r m . G o ve rn o rs, regardle ss o f p o litic a l p arty, can fo r m e ffe c tiv e alliances w it h b u s i­ ness leaders c o n c e rn e d a b o u t risin g h e a lth care costs, h e a lth care executives w o rrie d a b o u t th e f u t u r e o f p a ym e n t, and p a tie n t a d v o ­ c a te s c o n c e r n e d a b o u t q u a lit y o f ca re . W it h h a rd w o r k a n d an a p p re c ia tio n f o r its c o m p le xity, h e a lth system tra n s fo rm a tio n m ay be o n e o f t h e f e w p o lic y a re a s in w h ic h lo c a l c u l t u r e t r u m p s n a tio n a l p o litic a l a ffilia tio n s w h e n it co m e s t o d e s ig n in g a re fo rm m od e l and d e p lo y in g sta te levers f o r im p le m e n ta tio n .

As b e fits a fe d e ra lis t m o d e l, s ta te -le d h e a lth r e fo rm e f f o r t s g e t m ixe d review s. N o t all sta te s are le ve ra g in g t h e o p p o r t u n it ie s p r o ­ v id e d t o th e m . The ones t h a t are ch o o s in g t o exercise t h e ir a u t h o r ­ it y in a c o o rd in a te d w a y have a t least 3 challenges.

First, states' m u ltip le roles have t o be aligned to w a rd c o m m o n g o a ls . T h e s e m i g h t in c l u d e s h o r t - t e r m c o s t c o n t a i n m e n t - n e c e s s ita tin g a fo c u s o n t h e s ic k e s t m e m b e rs o f s ta te -fin a n c e d p o p u l a t io n s - o r a b ro a d e r m a n d a te t o im p ro v e p o p u la tio n h e a lth b y a d d re s s in g so cia l fa c to r s such as d ie t, e xe rcise , a n d p o v e rty .

Even w it h c o m m o n goals, sta te roles are fre q u e n tly d iv id e d a m o n g m u ltip le agencies w it h c o n flic tin g m andates. F ra g m e n ta tio n makes c o o rd in a tio n d if f ic u lt , and s tro n g le a d e rsh ip is e ssential t o ensure o n g o in g a lig n m e n t o f goals and e ffe c tiv e c o lla b o ra tio n .

Second, t o be e ffe c tiv e , sta te s need s u p p o r t fr o m t h e fe d e ra l g o v e r n m e n t across a b ro a d range o f p a y m e n t and r e g u la to r y is­ sues. As a p re d o m in a n t payer, M edicare's role is p iv o ta l. The e x te n t t o w h ic h M ed ica re can and s h o u ld a d a p t t o s ta te h e a lth p o lic y p r i­ o ritie s is t h e p rim a r y s ta te an d fe d e ra l h e a lth p o lic y q u e s tio n . Be­y o n d M ed ica re , im p ro v e d a lig n m e n t b e tw e e n th e fe d e ra l g o v e rn ­ m e n t an d s ta te s is n e e d e d o n su ch issues as a d o p t io n o f h e a lth in fo r m a tio n te c h n o lo g y , a n t it r u s t r e g u la tio n , t h e ro le a n d o b lig a ­ tio n s o f s e lf-fu n d e d plans, and d a ta p riv a c y re q u ire m e n ts such as 4 2 CFR Part 2, w h ic h places special c o n f id e n t ia lit y p ro te c tio n s on in fo rm a tio n re la te d t o t r e a t m e n t f o r su b stan ce use d iso rd e rs.

T h ird , s ta te s m u s t be ab le t o su sta in tr a n s fo r m a tio n th ro u g h le a d e rsh ip changes in b o th t h e e xe c u tiv e and le g isla tive branches.

The issues o f leadership tu rn o v e r and a d m in istra tive cap a city are p a r­ tic u la rly a cu te at t h e s ta te level because o f its sm alle r scale. W it h ­ o u t a d e e p b ench o f h e a lth care e xp e rtise , th e loss o f a h a n d fu l o f key leaders can je o p a rd iz e success.

T he re are also challenges in h e re n t t o a s ta te -b a se d , h e te r o g e ­ n eous a p p ro a ch t o re fo rm . W h a t w ill h a p p e n t o s ta te s t h a t d o n o t have t h e p o lic y c u ltu re o r ca p a c ity f o r th e se in te rv e n tio n s ? The f e d ­ eral g o v e rn m e n t, may, o ve r tim e , need t o im p ose changes in f e d e r ­ a lly f u n d e d p ro g ra m s in th o s e s ta te s t h a t c a n n o t m ake p ro g re ss th e m se lve s.

D ir e c tly and in d ir e c tly , t h e ACA has u n le a sh e d n e w a n d u n ­ even levels o f s ta te h e a lth p o lic y e x p e rim e n ta tio n w it h in th e p o lic y and po litica l levers discussed here. State g o v e rn m e n ts have a un ique o p p o r t u n it y t o im p ro v e t h e p e rfo rm a n c e o f t h e ir local h e a lth care syste m s and le arn fr o m t h e e m e rg in g e vid e n ce and e x p e rie n ce o f t h e ir colleagues. The fe d e ra l g o v e rn m e n t's role rem a in s as im p o r ­ t a n t as ever, re q u irin g a lig n m e n t w it h local in n o v a tio n , s u p p o r t f o r m u ltip le m od e ls o f s ta te e x p e rim e n ta tio n , and assurance t h a t p ro g ­ ress b e n e fits all A m ericans.

ARTICLE INFORMATION Conflict o f In tere s t Disclosures: All a uth ors have co m p le te d and su b m itte d th e ICMJE Form fo r Disclosure o f P otential C on flicts o f In te rest. Dr H wang re p o rte d servin g as D ire cto r o f H ealth Care Policy and S trate gy in th e Executive O ffice o f H ealth and Human Services f o r th e C om m onw ealth o f Massachusetts fro m 2012 t o 2015 and p reviously servin g as fa c u lty fo r th e National Academ y fo r State H ealth Policy's A chie ving Paym ent Reform Technical Assistance. Dr Sharfstein re p o rte d serving as Secretary o f Maryland's D e p a rtm e n t o f H ealth and M ental Hygiene in Maryland fro m 2011 th ro u gh 2 014 and th a t he is cu rre n tly a fe llo w a t th e Centerfo r American Progress, involved in p ro v id in g in p u t on state-based health re fo rm . Mr Roller re po rte d previo u sly servin g as Rhode Island H ealth Insurance Commissioner.

REFERENCES 1. N ational Association o f State B udget O fficers (NASBO). State Expenditure Report: Examining Fiscal 2012-2014 State Spending. W ashington, DC:

NASBO: 2014.

2. Centers fo r Medicare & Medicaid Services (CMS).

State In n o vatio n Models In itiativ e : GeneralIn fo rm a tio n. CMS w ebsite, h ttp ://in n o v a tio n .c m s g o v /in itia tiv e s /s ta te -in n o v a tio n s /. Accessed June 19,2015.

3. Schoenberg M, Heider F, Rosenthal J, Schwartz C, Kaye N; National Association f o r State Health Policy. State Experiences Designing and Im p lem e n tin g Medicaid Delivery System Reform Incentive Payment (DSRIP) Pools. Medicaid and CHIP Payment and Access Commission w ebsite.

h ttp s://w w w .m a cp a c.g o v/w p -co n te n t/u p lo a d s /2015/06/S tate-Experiences-D esigning-DSR IP -Pools.pdf. 2015. Accessed July 1,2015.

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