TALLAHASSEE, Fla.--The statewide health care system that Florida will formally launch this July is being watched as a possible model for a national program.
'We would like to be able to chart the way for the federal government,' says Governor Lawton Chiles of the program, which he wrote and steered through the state legislature earlier this month.
Under the plan Chiles is to appoint 17 board members to each of 11 regional health care purchasing alliances by July 1. Once they are established, the alliances will begin receiving proposals on services and costs from health care providers within their jurisdictions.
The proposals, which will come from retail pharmacy operators, doctors, laboratories, hospitals, clinics, insurance companies, and other participants in the industry, will provide an inventory of health care services in each region. The information presented to the alliances will provide benchmarks for such services.
According to the proponents of the plan, it will ensure a steady flow of customers to low-cost providers, and lead to reduced overall expenditures due to the volume of business that they are expected to generate.
The state-chartered regional cooperatives could also help employers negotiate with providers to obtain the best care at the lowest prices for their employees. The demand for coverage could help insurance companies determine which plans should be offered in each region.
Recipients of Medicaid will be placed in a separate pool. The distinction was defended by a spokesman for the state's agency for health care administration, which helped develop the plan. 'We have a two-tier system now,' he says. 'People with more money can buy better coverage.'
The biggest beneficiaries of the plan could be the state's 2.5 million uninsured residents, many of whom make too much money to qualify for Medicaid but too little to afford insurance. 'These people are the working poor,' says the spokesman.
'Some of them work two or three part-time jobs, and still can't afford coverage. This should provide access to basic coverage at an affordable rate.'
Chiles doesn't expect immediate savings from the plan. 'But once it's in place,' he says, 'I think there will be people getting health care who never had a chance to get it before, and there will be small businesses that will be able to cover people that they were never able to cover before.'
Insurance reforms are being developed in conjunction with the alliance program.
'When this takes effect, the only things that insurance companies will be able to use to determine rates are age, gender, location, tobacco use and family composition--which can reflect susceptibility to diseases,' says the agency spokesman. 'However, people can't be refused coverage if they are in the alliance.'
Primary and preventive care will be stressed under the program. 'Family doctors are the big winners,' says the spokesman. 'If there are any losers, they'll be the high-tech specialists.'
Florida hopes that the program will stem cost-shifting, which the spokesman says drives up health care costs significantly. 'When someone can't pay now, the cost of the services is moved to someone else, who gets stuck with the bill,' says the agency spokesman. 'That's why you have $25 Tylenol in the emergency room.
'This program makes health care providers responsible for the care that they give. It also eliminates the potential for abuse. Cost-shifting opens the door to profiteering. Unscrupulous operators won't be able to keep up their scams if they have to go through the public scrutiny of presenting proposals to the alliances.'
Proponents say that the legislation will lead to efficiencies throughout Florida that reflect those realized at the Orlando Regional Medical Center, whose plan served as a model for portions of the state program. Doctors there review records of peers to determine which treatments are most effective for which conditions.
'They were able to bring down the length of the hospital stays and the cost per patient in just one year,' says the agency spokesman. 'As a result, they can treat more patients now in less time and for less money than they did a year ago. We want to extend that kind of efficiency throughout the state.'
For the purposes of health care reform, the legislation divides Florida into 11 regions to accommodate variations within the nation's fourth most populous state. 'What's a problem in Orlando might not be one in Miami,' the spokesman explains.
Having regional alliances also helps equalize the competitive position of small, local health care providers and nationwide operators, especially in quality of service. Businesses with less than $5 million in net worth are to be granted further protections to ensure their participation in the program.
Employers with fewer than 50 workers are the core of Florida's commercial base, and part of the reason for the state's surging medical costs. Small employers, many catering to tourists, account for about 95% of the state's businesses. Many rely on part-time workers, and don't provide them with medical plans.
Another factor that is pushing up health care costs in the state is the high population of immigrants and senior citizens, groups that tend to have limited incomes and more medical problems.
As a result of such factors, Florida's spending on health care soared to $38 billion last year from $9.8 billion in 1980. The state has no income tax to defray these costs, so it was forced to adopt a plan that is more comprehensive than those that are already being tried in Hawaii, Oregon, Vermont and Minnesota.
'Rising medical costs are eating up all of our growth revenues,' the agency spokesman says. 'We had to try something drastic.'
The alliances should become operational in January after they have sifted through the different proposals. How quickly the program will yield benefits could be determined in part by developments in Washington.
'We'll have to see what President Clinton has to offer,' says the spokesman. 'We're watching him, and Washington is watching us.'
