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Rolling Hills plan in Tennessee could be outline for health reform nationwide

By Craig Becker

For the past 30 years that I have been in the healthcare business, I have said and heard others say, "This is the year for healthcare reform!"

During those 30 years, no one has been able to fix the healthcare system, and I’ve watched it become more and more dysfunctional.

For many reasons, not the least of which are the nation’s economic problems and the election of President Barack Obama, it appears the sun, moon and stars are finally aligned to make healthcare reform a reality. For the past 18 months, a group in Tennessee—called the Rolling Hills Group and headed by R. Clayton McWhorter, a well-known healthcare entrepreneur, and 14 other healthcare and nonhealthcare leaders—has worked to develop a proposal that hopefully will get the attention of those responsible for crafting a reform plan for the nation.

The Rolling Hills Group proposal was created after months of studying what is right and wrong with the current healthcare system, looking at other countries’ healthcare programs, reviewing various other reform proposals, and receiving input and direction from outside experts, including former CMS Administrator Tom Scully and Stephanie Kennan, former senior health policy adviser to Sen. Ron Wyden (D-Ore.).

The Rolling Hills proposal would keep private insurance companies subject to robust regulation, and require hospitals to be much more efficient and focused on ensuring patients receive quality care. The plan also would drive all providers and payers toward a much more patient-centric model, with emphasis placed on evidence-based care. In addition, it would require payment reform, and require recognition of regional and local variations through the establishment of federal health boards.

All individuals would be expected to have credible coverage that would be portable and equal to the federal employee health benefit plan. It would be paid for through changes to the federal tax code and the eventual elimination of disproportionate-share hospital payments, but only after charity care has disappeared. The Rolling Hills Group’s plan has been vetted by the Moran Co. as being actuarially sound and budget neutral for the federal government.

In addition to not requiring more government dollars, the plan calls for changes in the payment and delivery system that would eliminate unnecessary costs, improve quality and safety, and reduce the total cost of healthcare in the U.S. I urge you to read the entire plan, which can be found at rollinghillsgroup.org.

The Rolling Hills Group’s plan includes a 10-year phase-in period. While some view that as a limitation of the proposal, the group did not want to see a recurrence of the pitfalls that occurred with the reform of Tennessee’s Medicaid program, known as TennCare, because of its overnight implementation. Massachusetts experienced a similar problem, as many people gained access to coverage, but the funding and infrastructure to handle the immediate demand on the healthcare system were not in place.

The long phase-in period is necessary because modifications to the healthcare payment and delivery system must be carefully piloted before they are put into place. It also must be confirmed that changes to the tax code would generate adequate revenue to fund the subsidies before the program is opened up to all who would qualify. In addition, time must be allowed for the delivery system to respond to the increasing demand for services that so many newly covered individuals would surely create.

The Moran Co. study concluded that by 2015, the tax code changes yield would cover 99.8% of the $81.6 billion in subsidy costs and, by the middle of 2016, revenue would equal $100 billion. Therefore, the phase-in period realistically could be reduced.

As the Rolling Hills Group proposal has been presented in the past few months, many things have been learned. So far, no one has rejected the plan or said it was heading in the wrong direction. However, some have indicated there are other features of the healthcare system that should be modified to improve patient access and care, including a medical home model—one-stop shopping as it were—where the patient is the basis for the entire operation.

Discussions also have focused on the need to obtain buy-in from all employers, not just those that already provide insurance. There is strong support for a pay-or-play approach from employers providing insurance and from consumers.

While Tennesseans are not naive enough to think this plan will be the one that eventually will be passed by Congress, it is a feasible way of accomplishing universal coverage while making it affordable and more patient-centered. Tennessee also is hopeful it can be a potential pilot state for healthcare reform.

One thing that was learned in this process is there still will likely be many different approaches to delivering healthcare. If it works for a particular region and efficiently provides high-quality care, then it should be encouraged within a national framework.

Perhaps the biggest lesson learned is there is a thirst for change in healthcare—whether it is hospitals, physicians, patients or payers. It has become clear during this process that there must be a different approach to delivering, purchasing and consuming healthcare in the future. It will take sacrifices from all; this cannot just be hospital reform.

Craig Becker is president of the Tennessee Hospital Association.