PROVIDENCE – In the next few weeks, HealthRIght, a nonprofit advocacy group for health care reform, will introduce a bold Rhode Island-centric plan for state self-insurance – a single-purchaser plan, not a single-payer plan.

The plan would establish, in phases, a state self-insurance model, allowing the state to become a self-insurer, much as many large corporations currently do.

The state would then act as one large “group purchaser” – leveraging its power in the marketplace to negotiate improved cost containment and, as a result, more predictability of costs for businesses.

The money from individual premiums, employer payroll taxes and federal programs would be pooled into a state-run Health Care Trust Fund. This new fund would contract with third-party administrators, envisioned as a new role for current health insurers.

The state’s Office of the Health Insurance Commissioner would still oversee the affordability of the plans and the solvency of the Health Care Trust Fund, according to HealthRIght's plan. 

In turn, the plan would work with the state’s exchange, HealthSourceRI, to invite more and more groups to purchase insurance through the marketplace – larger businesses, municipalities, and public employees – leading ultimately to all insurance purchases to be made through the exchange, according to HealthRIght

The program will be under girded by nine principles of delivery-service reform – including patient-center care delivered by provider teams, an evidence-based approach that promotes the triple aim, and the integration of care delivery across a continuum of care and with non-medical community resources.

An integral part of the plan calls for the creation of a permanent, coordinated statewide health-planning infrastructure, one with teeth so that recommendations can be enforced through contracting decisions.

Moving beyond the Affordable Care Act
ConvergenceRI sat down recently with Betsy Stubblefield Loucks, executive director of HealthRIght, to talk about the organization’s new plan. The wide-ranging conversation covered details about how the proposed single-purchaser plan would be able to achieve a financially viable health care system that reversed ever-increasing cost curve for businesses and consumers. It also explored a broader context in which to look at the changing dynamics of health care, community engagement and innovation in the market place.

ConvergenceRI: How is the single-purchaser system different from the single-payer system?
LOUCKS: The difference is in the role of the state. In the single-payer system, the state pays the provider; in the single-purchaser system, the state purchases the service, and uses its negotiating power to purchase better services.

I think that’s one reason why there will be a lot of support for this idea. Most business owners don’t want more government. They do want government to do a better job managing how health insurance is done.

ConvergenceRI: Rhode Island has already embarked on a health care reform evolution, with about 200,000 residents currently receiving primary care through a patient-centered medical home, and plans to expand that to more than 500,000 in the next few years – half of the state. Is HealthRIght’s single-purchaser system supportive of that evolution?
LOUCKS: I think that the single-purchaser system is very supportive of that kind of delivery system reform. HealthRIght has outlined nine principles for delivery system reform, and the patient-centered medical home certainly embraces those principles.

This past fall, we worked closely with the leadership of the R.I. Chronic Care Sustainability Initiative to get their feedback on our principles, and they found full agreement.

The single-purchaser piece is about how everyone gets coverage – how everyone gets to the walk through the door, and how that is paid for.

But there’s also the question: how do you design what happens to [patients] after that?

PCMH is a huge part. The other components are how do you look down the road and plan for what the state needs, to make sure you have the infrastructure to support that. How do you look at the whole of [the health care system] and make sure that it is promoting population health?

Our entry point is the cost of payment, redesigning the whole system, to shrink the balloon [of rising costs].

The difference between [HealthRIght’s plan] and Vermont’s [single-payer plan] is that Vermont has not articulated how their changes are going to deliver reduced costs. Massachusetts recognized that a little too late, and now they’re trying to curb costs.

If we can learn from what Vermont has done, and what Massachusetts has done, and take the expertise and experience that is rich here in Rhode Island, we can be successful.

Rhode Island tends to look elsewhere for that expertise. We always tend to hire consultants outside of the state, instead of recognizing all the talent that we have sitting right here – Rhode Island-grown and -raised people who really know the system.

ConvergenceRI: Why do you think there is so much resistance to changes in health care?
LOUCKS: Resistance has to do with a lot of things. As Ted [Almon, co-chair of HealthRIght] will say, this kind of change requires that people who make money from the current system won’t make the same money anymore. Resistance to change really comes down to that.

There are entire industries that are [invested in] keeping the health care system being the way it is. If we want to change that system, everything that depends on that system is going to have to change. That’s the nature of change; that’s why people resist it.

I think that in order to make change happen, we need to be talking about the vision – what the changes could bring, because that’s attractive, what will emerge. Instead of talking about shutting something down, [we need to] talk about new opportunities.

Then, if there are enough people who would benefit from those new opportunities, and that new vision, that’s when change will happen.

ConvergenceRI: What’s the game plan for HealthRIght’s proposal? How would it be established in Rhode Island? How would it work?
LOUCKS: Let me begin by doing something you’re not supposed to do: to give a negative sentence to the news media, saying what we’re not. [What we’re doing] is not a single-payer system. The reason that it’s not a single-payer system is that there is not a lot of faith that the government can successfully operate something like this. It’s not a core competency of the government to run insurance companies.

What the government can do well is to collect money and to give it away. So, in our system, the government would collect all that money and put it into one pot, the Health Care Trust Fund. Then, that money would be given to the best bidder, to the best applicant, to administer the plan, to estimate the risk, to pay the providers.

We would be taking what government does best, and marry that to what industry does best, and elevate the role of the consumer in all of this.

That’s why the market principles haven’t worked in health care before, because the consumers have no ability to influence the market.

ConvergenceRI: How would HealthRIght’s plan enable consumers to become more engaged, or empowered, to be able to leverage their market power?
LOUCKS: We need to elevate the consumer’s ability to negotiate and make decisions about what products are available on the market. [Where] they are making choices about the plans that they want, directly, where it’s not their boss making the choice, where it’s not the firm making the decision for them, where it’s not insurance company making the decision for the individual.

In our model, there are multiple plans. Consumers would get to review a set of plans and pick one. They’re essentially voting. So, if the plans are not popular, third-party administrators will take them away and change it.

On [Rhode Island’s health benefits exchange], for an individual, there are a number of plans to choose from; last year there was one plan. That’s how it elevates the consumers’ negotiation power.

Also, it elevates their stake in the whole thing, because they are making the decision about the size of the premium they’re paying, the copayment, the deductible, the whole package.

ConvergenceRI: How will the money be paid out through the Health Care Trust Fund? Who are the decision-makers?
LOUCKS: The other way that the consumer is elevated in this, the consumer would be much more involved in the decision-making bodies that oversee the trust fund.

HealthRIght has a design for a better-coordinated statewide health planning council. The governance structure we have for that would be similar to what we see for the governing body for the exchange, for the decisions around who gets what money.

Right now, in Rhode Island, much of the decision-making authority around health care is concentrated in the Executive Office of Health and Human Services and Office of the Health Insurance Commissioner. We’re talking about a governing structure that is quite different from what we have now. It builds on that, but it is quite different

ConvergenceRI: Can you elaborate?
LOUCKS: We would have consumers as ex-officio members of the health planning commission charged with statewide coordinated health planning. The health planning would become the basis of coverage plans, looking at Rhode Island as a state, [determining] what are the health needs of our communities, what the infrastructure needs, and how do we pay for that.

The commission would figure out what is needed – and what are the services that are needed to support that plan.

ConvergenceRI: What about the recent finding that there was a projected abundance of hospital beds? How would that be addressed under HealthRIght’s proposed plan?
LOUCKS: The statewide health planning commission – what we are calling the Health Improvement Planning Commission, instead of delivering that number into a vacuum, where no one needs to do anything about that number, the commission would define the number – and return it to the hospitals – and say: here’s the problem, you need to solve it, and you need to solve it in this timeline. And the commission would have the authority to do that.

Convergence RI: In the recent interview with Chris Koller, the former R.I. Health Insurance Commissioner, when asked what question he would want candidates running for governor in 2014 to answer, he suggested this. How do you see Rhode Island’s hospitals? Are they an engine for economic growth and employment, or a source of community health? [It is a question that all the candidates running for governor ducked answering.]
LOUCKS: That’s a great question. I think it gets at a larger issue. On one hand, hospitals have to operate in a market-driven economy, where they are competing in a field that is defined by market principles.

When you’re delivering something such as health care, which should be governed by moral principles and not economic principles, how do they navigate that?

I don’t know the answer. But I think the answer has to do with the understanding of the principles. Do we really believe in the market as the organizing principle? Or do we believe in people’s health?

At the end of the day, the market is going to decide what the hospital is going to do. The hospital board has to respond to market principles. So, the role of government is to manage that playing field, and the government has not been doing that very well.

ConvergenceRI: As part of HealthRIght’s vision, you articulate nine principles, the very first one is promoting health care that is patient-centric. That’s a terms that gets thrown around a lot. Could you define, from your perspective, what patient-centric means?
LOUCKS: First, let me qualify that this reform effort as being different from the big HMO push in the 1990s, where people felt the insurers were making the decisions about care. They still are.

What advocates of patient-centric care are really saying, is, at the end of the day, it has to be up to me, [the consumer], and not what’s least expensive or most expensive. I think that’s how we would measure outcomes of this change, how satisfied patients are with what the outcomes are.

ConvergenceRI: How are you planning to engage with the community – outside of the traditional flow of information? How are you going to engage with the business community?
LOUCKS: I think the business community, because they want predictability in their health care costs, will be supportive. Lots of small business owners would be totally happy not to be responsible for managing health care costs anymore, period. Planning for health care insurance is completely out of the core competency of any business that is not a health insurance company.

So, I think that the business community will get behind this [proposal]. I also think that in Rhode Island, you have all these creative small businesses, will find the proposal attractive. We’re talking about health care reform that is really different.

ConvergenceRI: Have you had ongoing discussions about your plan with Christy Ferguson, executive director at HealthSourceRI, and with Dr. Kathleen Hittner at OHIC.
LOUCKS: Yes, we have had discussions, and they certainly have a lot of questions. There is certainly a lot of work to be done in the managing the details of the solutions [to health care reform]. I think that HealthRIght has gone to a further level, in terms of details. We have thought a lot about these questions. But there are more details to be worked out.

The fact that Dr. Hittner and Christy Ferguson are interested in continuing the dialogue, and staying up-to-date with the plan, is great. Christy Ferguson is one of the founders of HealthRIght. She’s no longer involved, but the principles that are a major part of our plan are ones that she helped to identify.

ConvergenceRI: How does HealthRIght’s plan fit in with Dr. Michael Fine’s plan to create a Primary Care Trust with neighborhood health centers?
LOUCKS: I think that the Primary Care Trust has a different starting point, but I think they could be complementary.

Our approach is about changing the playing field, from the structural and policy end. Dr. Fine’s approach is more bottom up – let’s set up these primary care centers that will change the system. I actually think that both [approaches are] good. There are a lot of shared benefits. HealthRIght certainly supports the principals behind the Primary Care Trust.

ConvergenceRI: And, how does HealthRIght’s plan fit in with the State Health Innovation Plan being proposed?
LOUCKS: I think that all of these are important components of the [health care] puzzle.
We need all of us.

ConvergenceRI: What are the cultural changes – as well as the economic and political changes – that health care reform brings to the forefront?
LOUCKS: HealthRIght’s version of health care reform can represent a different way of making decisions. [In the past,] the system has been standing on its head, much like a triangle trying to balance on its point. 

What HealthRIght is talking about doing is putting the community – and by that, we mean community-controlled structures – much higher in the decision-making, if not at the top.

We have seen [in Providence and in Rhode Island] so many examples of successful community redevelopment managed by the community, as opposed to their elected officials or the large corporations.

We are, for the first time, in terms of health care, actually talking about reforms being led by the community.

ConvergenceRI: Is that, in part, because there has been a change in the often male-dominated decision-making process?
LOUCKS: It’s a waste of time to say if something is male or female; can’t it just be ours?

Right now, there is upwelling of feeling, “Darnit, I’m just going to do it myself, and do it my way. I’m going to lead this, and my community will support this if it’s a good idea.

I think we can look at Providence, at some of the amazing things that have been born here. If it’s a good idea, people will come. Maybe that’s what health care reform needs.

What HealthRIght is doing is a great experiment. We’re putting everything out there [for conversation], new plan for health care reform in Rhode Island, a plan that is Rhode Island-designed and Rhode Island-owned.

We’re going to see if people want this. If we’re able to successfully communicate this idea, we will have people come out of the woodwork and support it.

ConvergenceRI: Let the conversation begin.