Virginia Health and Human Resources Secretary Bill Hazel and McDonnell at the announcement of the council in August. (Photo from the Office of Gov. McDonnell)
Just one day after Virginia's successful challenge to the federal health law, a panel appointed by Republican Gov. Robert McDonnell on Tuesday urged the state to move swiftly to meet the law's requirements.
The panel, headed by Health and Human Services Secretary Bill Hazel, recommended the state move quickly to create a Virginia-run marketplace where individuals and small businesses could shop for insurance, find ways to boost the number of doctors practicing in the state and create an "innovation center" to test ways to improve care for people with chronic diseases.
In their report panel members said the state's "overall health system performance is actually quite mediocre." State officials need to find ways to improve care that go beyond the new law, the panel said.
Virginia also should consider requiring Medicaid recipients to pay more for some medical services, expand telemedicine efforts and find ways to foster a team-based approach to medical care that could give more authority to nurses and other health professionals, the panel said.
The report comes amid uncertainty nationwide over the fate of the federal law, as courts weigh its constitutionality and Republicans in Congress and many statehouses fight it. Governors – even those opposed to the law like McDonnell, a Republican – are balancing their concerns about the law with need to plan ahead. States must prepare for some of the biggest provisions, which don't take effect until 2014, including expanding state Medicaid programs to cover millions more people nationwide and creating new marketplaces, called exchanges.
Because Virginia opposes the health law in court, "it's easy to assume we are not interested in health reform, but we very much are," said Hazel. But he said the state wants "a Virginia-based" set of efforts that reflect the state’s values, such as smaller government, "that we can work with no matter what happens with the federal bill."
In its 85-page report, the Advisory Council to the chairman of the Virginia Health Reform Initiative outlines some of the problems facing the state, including a shortage of doctors, rapidly rising health insurance premiums that are outpacing income growth and growing faster than the national average, and middle-of-the-road quality rankings.
"Virginia's overall quality of care is average, with strengths in cardiac care, hospital care generally and home health," the report said, yet it ranks 41st in the nation in breast cancer death rates and 35th in infant mortality. Nearly one million Virginians lack health insurance and only 37 percent of firms with fewer than 50 workers offer their workers insurance, compared to 48 percent 10 years ago.
Fixing those problems – and preparing for the health law – must begin now and face "no unnecessary delay," the panel concluded, voting in the late afternoon at a meeting in Charlottesville, the third meeting of the group.
The 23-member panel includes representatives from the hospital and insurance industries, as well as doctors, academics, elected officials and a small business owner.
"With double digit increases every year, we’re putting the small employer out of the health insurance business," said panel member Joe Wilson, owner of PermaTreat Pest Control in Fredericksburg. The recommendations are a start toward solving some of the problems, he said, but there are no “simple solutions or silver bullets."
The panel recommended that Virginia run its own health insurance exchange and open it to employers with up to 50 workers. While the legislature will design the exchange, the panel recommended that it be "market oriented" and allow a large number of insurers to participate. States have much leeway in how they design their exchanges. Massachusetts, for example, allows only insurers that meet certain requirements to sell on its exchange. Other states are expected to allow any insurer to sell on the exchange.
Wilson said the exchange will "definitely help" small employers. But larger firms, such as his 107-employee business, would still be negotiating directly with insurers. No one knows how that will play out, but he fears that if the coverage in the exchange is better than what he can purchase outside of it, it will lead to unhappy employees.
Virginia is among 33 states that have created some kind of entity to deal with health law implementation, according to the National Conference of State Legislatures. About a dozen of those groups have issued recommendations and more face end-of-the-year deadlines to do so.
The panel's recommendations come as part of the Virginia Health Reform Initiative, which is a liaison between the governor's office and other agencies in carrying out provisions of the new law.
The panel says the health law could boost the state's economy, but it will also add tens of thousands of people to the Medicaid rolls. In addition to fiscal challenges, the state will need to find more medical providers, the report says.
Already, some areas of the state are facing shortages of physicians. Many doctors leave the state for their training, so the report recommended finding ways to increase medical residency slots in the state and also urged state officials to consider loan forgiveness programs and other efforts to retain doctors. It also recommends allowing nurses wider latitude in the kinds of patient care they are allowed to perform.