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Prepared by the North Dakota Legislative Council staff for the Budget Committee on Health Care July 1999

ACCESS, QUALITY, AND COST OF HEALTH CARE WITHIN THE STATE - BACKGROUND MEMORANDUM

House Concurrent Resolution No. 3070 (attached as Appendix A) provides for a Legislative Council study of health care in this state relative to access, quality, and cost to determine essential health care services, critical providers, access sites, and geographic, demographic, and economic issues relating to health care including health care insurance. The resolution cites as reasons for the study:

1. The Legislative Assembly is continually faced with funding issues relating to public employee health benefits and the appropriate care and funding for the Medicaid population and the public at large.
2. The health care delivery system may include overlap and duplication of health care services.
3. Continual increases in health care insurance premiums create an economic burden upon the citizens of the state.
4. The Health Council is responsible for planning and overseeing the State Department of Health and the future of health care in this state and the State Department of Health has the data management and research capabilities to support studies of health care.

House Concurrent Resolution No. 3070 also provides that the Health Council is to conduct public hearings throughout the state to elicit the public's perception and needs regarding what health care the public is willing to support and report their findings to the Legislative Council committee conducting this study.

PRIOR STUDIES

1997-98 Insurance and Health Care Committee

During the 1997-98 interim, the Legislative Council's Insurance and Health Care Committee studied the development of a strategic planning process for the future of public health within the state. The committee recommended Senate Bill No. 2045 which repealed four chapters of the North Dakota Century Code regarding public health and created a new chapter that consolidated existing public health law, unified the powers and duties of local public health units, and required statewide participation in some type of public health unit. Senate Bill No. 2045 was passed by the 1999 Legislative Assembly.

The Insurance and Health Care Committee also studied the impact of managed care on the future viability of the health care delivery system in rural North Dakota. The committee did not make any recommendations as a result of this study.

1995-96 Insurance and Health Care Committee

During the 1995-96 interim, the Legislative Council's Insurance and Health Care Committee studied the certificate of need process and other means of planning and decisionmaking in relation to the growth of the health care industry in North Dakota. In regard to the study, the committee made no recommendations regarding certificate of need legislation.

The Insurance and Health Care Committee also studied the feasibility and desirability of implementing recommendations of the North Dakota Health Task Force for improving the health status of North Dakotans, monitoring the rate of health care cost increases, reviewing the impact of newly enacted programs to improve the health status of North Dakotans, and addressing unmet medical needs in rural areas. The committee did not recommend any legislation as a result of the study but did urge the State Health Council to continue studying the implementation of the Health Task Force recommendations for improving the health status of North Dakotans.

1993-94 Health and Communications Committee

During the 1993-94 interim, the Legislative Council's Health and Communications Committee studied the feasibility and desirability of allowing all North Dakota residents to participate in the Public Employees Retirement System uniform group insurance program. The committee also studied the feasibility and desirability of pooling all sources of funding for health care benefits in conjunction with the North Dakota Health Task Force's study of the control of costs and the redistribution of dollars toward improved access to services through a health care reimbursement system. The committee recommended 1995 Senate Bill No. 2065 to expand the uniform group insurance program administered by the Public Employees Retirement System to allow voluntary participation for persons who met the medical underwriting requirements of the program. The bill was not passed by the 1995 Legislative Assembly. The committee also recommended House Bill No. 1050 which contained numerous health care reform items, including health care cooperatives, health care provider cooperatives, a health care commission as a permanent subcommittee of the Health Council, a cost and quality review program, and other health care reform provisions. House Bill No. 1050 was passed by the 1995 Legislative Assembly.

1999 LEGISLATION

The 1999 Legislative Assembly passed House Concurrent Resolution No. 3046 which provides for a study of the challenges facing the delivery of health care in the state, including the concerns relating to reimbursement of hospitals for medical services, technological innovation, and possible regionalization of services. The study was prioritized by the Legislative Council and has also been assigned to the Budget Committee on Health Care. This committee may want to consider addressing House Concurrent Resolution No. 3070 which provides for the study of health care as it relates to access, quality, and cost and House Concurrent Resolution No. 3046 which provides for the study of the challenges facing delivery of health care as a single health care study.

MEDICAID FUNDING

The following table shows the non-long-term care-related Medicaid funding for the 1995-97 through the 1999-2001 bienniums:

	General Fund	Other Funds	Total
1995-97 (actual)	$59,428,350	$170,281,772	$229,710,122
1997-99 (estimated)	$67,171,387	$179,845,634	$247,017,021
1999-2001 (appropriated)	$73,322,054	$192,485,751	$265,807,805

Attached as Appendix B is a detailed Medicaid funding comparison, by service type, showing the actual 1995-97 expenditures, 1997-99 appropriations, 1997-99 projected expenditures, and 1999-2001 appropriations.

INSURANCE RATE INCREASES

The following table shows the monthly premium for health benefits for state employees for the 1993-95 through the 1999-2001 bienniums:

	Monthly Premium	Percentage Change
1993-95	$254
1995-97	$265	4.33
1997-99	$301	13.58
1999-2001	$350	16.28

Attached as Appendix C is a table provided by Blue Cross Blue Shield of North Dakota showing the average rate increases for groups, individuals, and Medicare supplements for 1991 through July 1999.

ACCESS, QUALITY, AND COST OF HEALTH CARE STUDY PLAN

The following is a study plan the committee may want to consider in its study of access, quality, and cost of health care in the state:

1. Receive information from interested organizations, entities, and individuals regarding the access, quality, and cost of health care within North Dakota.
2. Receive reports from the State Health Council regarding its holding of public hearings throughout the state to elicit the public's perception and needs regarding what health care the public is willing to support.
3. Receive information from the University of North Dakota School of Medicine and Health Sciences regarding concurrent initiatives of the School of Medicine and Health Sciences relating to access, quality, and cost of health care within the state.
4. Receive information from Blue Cross Blue Shield of North Dakota regarding current trends in health care insurance premiums, health care utilization, and health care facility reimbursements.
5. Receive information from the University of North Dakota School of Medicine and Health Sciences, the State Department of Health, and other interested organizations regarding the duplication and overlap of health care delivery systems within the state.
6. Receive information from the Health Care Data Committee on the various reimbursement rates and methodologies provided by insurance companies, Medicaid, Medicare, and other health care payers.
7. Develop recommendations to be provided to the Legislative Council and to the 2001 Legislative Assembly regarding the access, quality, and cost of health care within the state and consider any legislation needed to implement the recommendations.

ATTACH:3

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