Public Health Committee

JOINT FAVORABLE REPORT

Bill No.:

SB-444

Title:

AN ACT AUTHORIZING THE HEALTH CARE CABINET TO RECOMMEND METHODS TO STUDY AND REPORT ON TOTAL STATE-WIDE HEALTH CARE SPENDING.

Vote Date:

3/24/2017

Vote Action:

Joint Favorable

PH Date:

2/17/2017

File No.:

SPONSORS OF BILL:

Sen. Looney

Sen. Fasano

REASONS FOR BILL: This bill requires the state's health care cabinet to advise the governor on matters relating to total statewide health care spending, including methods to collect, analyze, and report health care spending data. By law, the cabinet is within the office of the lieutenant governor and advises the governor on the development of an integrated health care system for Connecticut.

RESPONSE FROM ADMINISTRATION/AGENCY:

Sen. Len Fasano: SB 444 represents a recommendation by Bailit Health. This bill allows the Health Care Cabinet to use data gathered by the Attorney General's office for reporting on total health care spending In the state, establishing cost growth targets, and analyzing and reporting on the states progress towards meeting those targets including how various cost containment stratergies are, or are not, succeeding in helping us bend the health care cost curve. Massachusetts has used this strategy to greatly increase the transparency of its health care market and develop data driven polices that can then be tested for their efficacy. This bill will help the legislature to understand how much is spent on health care, where the money is spent, so that a sound value-based health care policy can be developed for the state.

Kevin Lembo, State Comptroller: Rapid growth in healthcare spending is a major issue in Connecticut. Connecticut currently ranks 4th in per capita spending. A health care cost growth target will focus the attention of stakeholders on cost containment and identify the key drivers of the health care cost.

NATURE AND SOURCES OF SUPPORT:

Connecticut Hospital Association: Connecticut Hospitals currently provide high quality care for all, regardless of their ability to pay. The hospitals are constantly trying to find innovative solutions to coordinate better care and achieve health equity. For the last year, the Health Care Cabinet has undertaken a review of different ways to control healthcare costs. After significant study and analysis, the Health Care Cabinet developed seven recommendations, one of which was for the Cabinet to create a Health Care Cabinet Working Group to recommend how to define and best implement a healthcare cost growth target. This recommendation would result in the creation of a multi-stakeholder work group that includes hospitals, and would require studying the methodology used by other states that have adopted or implemented a state-level cost growth target, including their relative public and private reimbursement environments. CHA believe that we should first fix the deficient reimbursement environment in Connecticut, as well as address the negative impact on hospitals of the hospital tax, before we can implement a healthcare cost growth target.

We support the work, and the collaborative culture, of the Health Care Cabinet as it analyzes and addresses a multitude of healthcare issues, including the feasibility of enacting a healthcare cost growth target.

Universal Health Care Foundation of Connecticut: SB 444 is one of the most important bills coming out of the Public Health Committee this year. 25 to 40 percent of state expenditures are related to health care cost. Health care premiums, out of pocket cost and drug cost have been rising faster than the median Connecticut income. Connecticut should establish a cost growth rate target that is affordable for consumers, employers, taxpayers and is fair to hospitals of other providers. When looking at a cost growth target the Health Care Work Group should consider: (1) Study the methodology of Massachusetts and other states that have adopted or implemented a state-level cost growth target, including their relative public and private reimbursement environment; (2) Identify what data various Connecticut agencies have, and what data are needed to define baseline spending and assess state, payer and provider performance relative to the target; (3) Recommend a state entity that should assume responsibility for computing state, payer and provider performance relative to the target; (4) Define the minimum number of provider-attributed lives for a provider to have its performance assessed relative to the cost growth target; (5) Identify what external economic indicator should be used to define the cost growth target, with consideration given to the Prospective Gross State Product and the Consumer Price Index for All Urban Consumers (CPI-U) (6) Recommend an implementation timeline for the cost growth target that spans several years' time and defines the time period during which performance relative to the cost growth target should be reported publicly without penalties or sanctions for meeting or exceeding the target. The recommendation should specify the timing for setting each year's cost growth target; (7) Recommend how the results of the cost growth target are reported publicly, and what steps payers and providers must take to explain their performance if they exceeded the target (8) Recommend the frequency with which the cost growth target should be assessed for its effectiveness.

NATURE AND SOURCES OF OPPOSITION: NONE

Reported by: Walter L. Morton IV

Date: 3/31/2017