Drug makers claim high prices are necessary to support new drug development and innovation, but research shows that public investment in drug research and development combined with large industry profits leaves manufacturers room to lower prices while continuing to innovate.
Public funding is not unique to vaccines though. The drug industry relies heavily on public funding for all forms of drug development. Taxpayer-funded research for each of the 356 drugs approved by the US Food and Drug Administration in the last decade totals $230 billion. Despite this level of public investment in drug development, manufacturers face few restrictions on what they can charge for their drugs in the United States despite taxpayers’ investments.
As a result, drug prices are on average 2.5-times higher in the United States than comparable countries, even though those countries also contribute considerably to research and development (R&D) costs. High drug prices in the US market have generated substantial profits for the pharmaceutical industry. Between 2008 and 2018, the profitability of pharmaceutical companies was almost double that of other large, public companies.
Despite the significant amount of taxpayer funding, pharmaceutical industry officials argue that high drug prices reflect the cost of R&D and the risk associated with developing a new drug. However, high US drug prices exceed what is necessary to fund R&D. For example, drug manufacturers Amgen, Biogen, Pfizer, and Teva generated more than double their global R&D budgets from excessive US prices, and three companies covered or nearly covered all of their research spending through high US prices on their top-selling products alone:
- AbbVie’s Humira (an immunosuppressant);
- Biogen’s Tecfidera (treats multiple sclerosis); and
- Teva’s Copaxone (an immunomodulator that treats multiple sclerosis).
Two of these drugs – Humira and Tecfidera – appear on the Institute for Clinical and Economic Review’s 2020 list of drugs that have prices increases unsupported by new clinical evidence.
With little action on drug prices from the federal government, states are considering new ways to control drug spending, and lawmakers have filed more than 200 bills this session, including bills with the potential for real impact on prices. Five states have introduced the National Academy for State Health Policy’s (NASHP) model legislation to establish international reference rates to bring prices in line with Canadian rates, which could result in savings ranging from 60 to 85 percent. Three states have introduced NASHP’s model legislation that fines pharmaceutical manufacturers whose drug price increases are unsupported by new clinical evidence – including Humira and Tecfidera cited above – based on the Institute for Clinical and Economic Review’s research.
As states ramp up their efforts to address excessive drug prices, the industry continues to argue that lower prices would harm innovation. Trail-blazing states can be reassured, however, that there is room for manufacturers to lower prices while still maintaining their profit margins and preserving their capacity for innovation.
The National Academy for State Health Policy (NASHP), a non-profit, nonpartisan forum of policymakers, is issuing this request for proposal (RFP) to identify future contractor(s) to create an online searchable database that shares data from a tool we developed. Proposals are due by 5 p.m. (ET) Tuesday, March 30, 2021.
Through its Center for State Health Care System Costs (the Center), NASHP has developed a hospital cost tool to analyze a hospital’s costs versus its prices. The tool is an Excel workbook that requires manual data entry from a hospital’s annual Medicare Cost Report (MCR) to identify its costs for providing hospital services, the largest portion of health care spending. Formulas are embedded in the tool to calculate several hospital financial metrics. Entering the data can be very time consuming and prone to data-input errors when used by individuals who are unfamiliar with the MCR.
In September 2020, NASHP began working with Vivian Ho, director of the Center for Health and Biosciences at the Baker Institute at Rice University, to auto-populate the MCR data from the national Healthcare Cost Report Information System (HCRIS) using the tool’s formulas. Ho and her team have successfully used Strata software to link NASHP’s tool with HCRIS, creating a data set of about 40 key points from the tool’s calculations. The data set resides in an Excel format, with 10 tabs (each representing a year of data from 2011 – 2020) each containing the 40 data points for each of the approximately 6,500 hospitals nationwide that submit an MCR. The data points include:
- Net income
- Profit margin
- Cost-to-charge ratio
- Uncompensated care costs
- Payer mix and profit/loss from Medicare, Medicaid, and commercial payers
- Break-even financial points
- Comparison to Rand 3.0, and
- Hospital pricing as a multiple of Medicare
NASHP has used the data set to prepare reports, Microsoft PowerPoint presentations, and deeper analyses for states and employer health plans that allow for benchmarking hospitals by bed size, state, national, and other measures. The work is intensive and requires a level of data expertise that not all state policymakers either have access to or the resources for. As a result, to date only a few people are working with the data. However, NASHP intends to make analysis from this data available to all state policymakers who want it.
Next Steps: Share an Online National Database of Hospital Costs
NASHP is interested in sharing (and regularly updating) the data set it created with Rice University on NASHP’s website to make it is accessible to states. To ensure the online database is useful to states and other health care purchasers, it should be searchable and include interactive features that allow users to create customized comparison charts, etc. Further, using the most recent data available (by a certain month, to be determined, in 2021), NASHP wants to create standardized reports for each state and Washington, DC that provide information through charts and graphs on hospital cost trends in their states that include national benchmarks.
While NASHP will continue to work with Rice University to update the data set using its evolving tool and the strata code already developed, the online data set needs to easily allow such updates. NASHP is seeking to contract with one or more entities that can advise NASHP on the best way to present this large data set online and make it as useful as possible to its core audience of state policymakers. NASHP is seeking expertise in organizing and presenting complex data sets online that can be manipulated by users with differing needs without making changes to the original data set. Please consider that NASHP wants flexibility built into the online data set to allow for quarterly updates, which is the frequency that the HCRIS data base is updated. Also, over time NASHP will likely expand the tool with additional data points as states need more information and/or as the MCR evolves. It also anticipates adding information from future resources, e.g., Rand 4.0. NASHP is also seeking help to develop and create easy-to-understand state reports with graphs, charts, and other visual representations of the data to offer a snapshot of hospital costs for each state. NASHP recognizes that the skills needed for this project may require contracting with two different entities – one with expertise in creating large online data sets and another with the graphics knowledge to create informative, visual reports. We are open to contracting with one or multiple parties to complete the work.
To achieve these goals, NASHP is seeking proposals from entities with expertise in creating online searchable online databases that can be routinely updated and/or entities with expertise in developing graphics from complex data. It is NASHP’s intention to begin this work in the late spring or early summer of 2021 so that the online database and individual reports will be available early in 2022 (or before, if possible.) NASHP welcomes interested entities to submit proposals related to the following anticipated deliverables and questions noted below.
- Develop an online, searchable database from the data set that NASHP now has from the HCRIS database using the strata code developed in partnership with Rice University. It must include:
- Accessible display of large data set that includes approximately 40 data points for about 6,500 hospitals over a 10-year-plus period of time (2011 and beyond);
- A search tool that allows users to query the database to access specific data points and to customize analytic reports based on their needs, which may include:
- Access to a single hospital’s cost information across all 40 data points throughout multiple years to understand a specific hospital’s cost trends;
- Access to multiple hospitals in a specific location (city, state, multiple state region, and/or national) to compare single or multiple cost data points; and
- A search that allows users to have options for viewing the data.
- Provide an overview of the data set that includes:
- A brief, written introduction of the resource that includes examples of how it can be used;
- A clear, concise instructions for using the resource; and
- A brief recorded training for users to view.
- Design informative charts, graphs, and other visuals to share critical data points and trends from the NASHP database to be used in state reports and presentations.
- Create standard reports using the data set – both national reports and individualized state reports –with graphics. NASHP will collaborate on the commonly requested information that should be included in the reports.
Request for Proposal
NASHP is seeking proposals from potential contractors with expertise, capabilities, and availability to do the work of presenting our data set online. In reviewing responses to this RFP, NASHP hopes to understand respondents’ experience with large data sets, their ability to create accessible graphics, and learn about their successful work with states. NASHP is also looking for information that will assist it in balancing respondents’ relevant experience with proposed budgets and timelines to complete the type of work we contemplate undertaking.
Please note if your proposal is responding to both areas or work/sets of deliverables (creating the online database and developing graphic reports) or if it is just focused on one of the areas of work and identify which one. Proposals responding to this this RFP will be accepted through 5 p.m. (ET), Tuesday, March 30, 2021.
All proposals should include the following:
- Organization and/or individual name and location(s);
- Description of the organization/company and explanation of the type of services provided, please note your audiences/recipients of your services;
- Please describe the experience you/your organization has with the work NASHP is seeking to do, including:
- Creating searchable, online databases that can be used by individuals with various backgrounds, including those with limited statistical experience (up to two pages), and
- Designing graphic-based reports that share critical information in a digestible manner (up to two pages)
- Describe your/your organization’s approach to the work by briefly explaining how either or both sets of the deliverables will be accomplished, as well as the proposed communication plan with NASHP. Please note the strengths and weaknesses of your approach and how you will assure quality work. (Up to three pages per set of deliverables – the online database and/or the graphical reports).
- Describe the people who would work on this project and a summary of their experience.
- Please provide the timeline you/your organization would need to accomplish the work and finish all deliverables and note how soon you/your organization would be available to do the work (up to two pages).
- Please provide the proposed detailed budget for the work and note if you/your organization would be the sole contractor or if there would be a subcontractor used as well.
- Please disclose any possible conflicts of interest.
- Please provide disclosure of complaints, current or pending actions, legal or otherwise.
*Examples of similar work can be included as an appendix to the proposal.
Proposals will be evaluated based on the respondent’s demonstrated experience with this type of work, the organization’s capacity to take on this assignment, the proposed workplan, and proposed cost. Note that the final award of this contract is contingent upon NASHP securing adequate funding for this initiative.
Point of Contact
Respondents can send questions and responses to this RFP to Maureen Hensley-Quinn at firstname.lastname@example.org.
Q&As about NASHP’s RFP
Will this new online database will be a stand-alone, cloud-based web solution?
The database will most likely need to be housed on a stand-alone, cloud-based solution separate from the NASHP website. However, the user-friendly interface should align with the look and feel of our website.
How many general users will be accessing the system – just searching the database? How many will be administrators – with permission to update/edit the data?
We are seeking a contractor that can take our database content and create a user-friendly interface so that the public can access the information as needed. We expect a small number of NASHP staff will need permissions to update and edit the data on a fairly regular base, e.g., quarterly or annually.
Will general users need to log in to use the database or will it be open for anyone to use?
It will be open.
Will the reports need to be downloaded? If so, what format(s) are needed (ex. PDF, JPEG, etc.)? Will the data for each report also need to be downloaded? If so, what format(s) (ex. CSV, Excel, etc.)?
NASHP is seeking one or two contractors to develop:
1) The user-friendly interface for the large excel database we have created so that the public can access the information from that database. It would be ideal to have an option to download the data accessed from this online database in excel format.
2) Point in time individual state reports with charts and graphs to highlight key data elements for that state.
NASHP is open for contracting with one organization to do both parts of this work, but we are also open to separating the work into two different components and contracting with two different entities.
Is there an existing developer that you work with who will also be bidding?
We know the deadline to submit our proposal is March 30, 2021. After that, when do you anticipate making a decision? When do you estimate that work will begin? When do you want the project to be completed/go live?
NASHP will begin considering all proposals after the submission deadline and will notify the successful bidder as soon as possible, likely by the end of April/early May. As noted in the RFP, we hope to launch the work in “late spring or early summer of 2021 so that the online database and individual reports will be available early in 2022 (or before, if possible.)”
What type of hosting/on-going maintenance will you be needing post-launch?
Ideally, NASHP will host the online interface and database as it does our website, but we are open to advice and input from the successful bidder on the best way to do so. We don’t expect ongoing maintenance will be needed, but we are open to advice and feedback from bidders on that as well.
What is the budget for the initial project development? Budget for long-term support?
NASHP has not specified an established dollar-value range for this contract and will consider price as well as a respondent’s ability to complete quality work within our preferred timeline of spring 2021 until winter 2021.
Would the contractor need to ingest the data NASHP and Rice University has prepared (the Excel tool data), or would the contractor ingest that data directly from HCRIS and merge with additional data produced by Rice University?
The contractor will use the large excel file that NASHP put together with Rice University as the calculations from HCRIS database have already been made.
Would the contractor need to interface or make use of the NASHP/Rice Stata code or would the contractor be building a separate system not linked to this existing code?
It is our expectation that the contractor will be creating an online, user-friendly interface so that users can easily access the critical cost data points within NASHP’s existing large, excel file.
Would we expect to make all deliverables accessible to the public or provide differential access to certain users?
The goal is to make all deliverables accessible to the public.
Are there any constraints on the platform and programming language used by the contractor? For example, are there any constraints on whether the contractor can use cloud computing to work with and host the data and reports?
Ideally this online database will be housed on NASHP’s website. However, we are open to input and feedback about how best to make that happen – whether it live our website’s server or be stored via a cloud-based solution.
The RFP states that “Also, over time NASHP will likely expand the tool with additional datapoints as states need more information and/or as the MCR evolves. It also anticipates adding information from future resources, e.g., Rand4.0.” How does NASHP plan to implement future changes after go-live. Although most tools would provide flexibility to update the input data and refresh existing reports, some changes may require an operations and maintenance support. Should we assume additional support after go-live date or would the continued updates of the evolving Rice University’s tool be scoped under a different maintenance and support contract if needed?
At this point, NASHP seeking a contractor that use flexible tools that our staff would be able to maintain. However, if the database needs significant updates, we would seek assistance through a different contract.
Significant state health policy changes are on the horizon as a result of Tuesday’s elections, which ushered in new governors and political changes in state legislatures across the country. Seven governorships (IL, ME, MI, NV, NM, KS, and WI) will switch parties and be steered by Democrats who all campaigned on health policy proposals. The election also resulted in political shifts in state legislatures, with Democrats now controlling both the executive and legislative branches in Colorado, Illinois, Maine, Nevada, New Mexico, and New York. Here is an overview of state health policy initiatives that could emerge in 2019.
Kansas and Wisconsin, which had rejected the Affordable Care Act’s (ACA) Medicaid expansion, will now have Democratic governors who strongly support expansion, but they could face legislative resistance. In 2017, the Republican-controlled House and Senate in Kansas passed a Medicaid expansion bill, but lacked the votes to override Republican Gov. Sam Brownback’s veto. While Wisconsin’s legislature already covers childless adults with incomes up to 100 percent of the federal poverty level in Medicaid, it is unclear if the legislature, still controlled by Republicans, will support expansion. In Georgia’s race, where final votes were still being counted, Democrat Stacey Abrams made Medicaid expansion a central campaign issue, but if elected she would need the support of a Republican-controlled legislature.
In Maine, where a 2017 referendum approved Medicaid expansion, but its implementation was blocked by Republican Gov. Paul LePage, newly-elected Democratic Janet Mills will assure that it is carried out with support from the state’s newly-elected Democratic House and Senate. In Idaho, Nebraska, and Utah, voters followed Maine’s lead and supported ballot measures to expand Medicaid, which will provide coverage to an estimated 300,000 individuals in these states. Unlike what occurred in Maine, Idaho’s newly-elected Republican Gov. Brad Little indicated before the election that he would not block implementation of expansion if voters passed the initiative.
In Nebraska, the re-elected Republican governor strongly opposes expansion, but during his campaign signaled the issue was up to the voters. Utah has submitted a waiver to federal officials to implement a partial Medicaid expansion that was approved by the state legislature, but with the passage of the ballot initiative full expansion will be implemented unless blocked by Gov. Gary Herbert, who has expressed opposition. Voters in Montana did not approve continuation of the state’s existing Medicaid expansion through a tobacco tax, and so the state legislature will need to decide before July 2019 whether to provide funding to continue the expansion.
Ohio’s new Republican Gov. Mike DeWine pledges to continue the Medicaid expansion there, but indicated he will impose “reasonable work requirements” on newly-eligible adults. Recently, under Gov. Rick Snyder, Michigan submitted a waiver request to implement work requirements for the expansion population, but Governor-elect Gretchen Whitmer has expressed opposition to Medicaid work requirements. Wisconsin also recently received federal approval to impose Medicaid work requirements on the childless adult population the state currently covers, and it is unclear if Governor-elect Tony Evers would seek to reverse these requirements.
Potential Comprehensive Health Coverage Reforms
Beyond Medicaid expansion, a number of newly-elected governors proposed comprehensive health coverage reforms. In New Mexico, Governor–elect Michelle Lujan Grisham, a former secretary of the state’s Department of Health, supports a Medicaid buy-in option. She also supports the New Mexico Health Security Act, a proposal to provide universal, publicly-supported health care based on a Medicare model through which commercial insurers provides supplemental coverage. In Illinois, Governor-elect J.B. Pritzker has called for implementing a Medicaid buy-in plan called “Illinois Cares” following an actuarial analysis to determine premium costs and cost sharing. Minnesota Governor-elect Tim Walz supports a public option modeled on MinnesotaCare, the state’s Basic Health Program. In Connecticut, Governor-elect Ned Lamont has proposed offering a Medicaid buy-in plan on the state’s exchange.
Maine’s Janet Mills calls for a public option – a Small Business Access Plan that includes self-employed individuals – that aggregates publicly-funded health plans and maximizes their buying power. In Colorado, Governor-elect Jared Polis wants to partner with other states to create a regional consortium with a common payer system to reduce costs, enhance coverage, and improve care quality.
Plans to Address Health System Costs
Polis in Colorado also proposed one of the most comprehensive state plans of the election season to address health care costs. He plans to target health care prices, noting that hospital consolidation or regions with only one hospital result in what he calls abuses of power in insurer–provider negotiations. He seeks more transparency in hospital pricing and stronger insurance rate review. His proposal could include creating a single geographic rating rule that would limit pricing differentials across the state, as well as examining the potential for global budgets to incentivize innovation, efficiency, and a focus on the social determinants of health. He also supports alternative payment approaches, including bundled payments and local models like community purchasing groups to level the playing field and ensure patients’ interests come before a hospital’s profit margin. Polis also wants to increase support for the state’s all-payer claims database (APCD) and use data to identify areas for cost savings.
Minnesota Governor-elect Tim Walz pledges to establish the One Minnesota Coalition to reduce health care costs and increase access. He also highlights the state’s medical research community and identifies opportunities to improve prevention strategies to reduce costs. In Connecticut, Governor-elect Ned Lamont identifies hospital consolidation as a cost driver and will seek legislation to address the issue and increase competition. He seeks a reasonable cap on facility fees, an end to surprise billing by facilities, and would require providers to publish plain-language disclosures of unexpected costs. Lamont also wants to reorient the state employee health care system around value-based care, require greater transparency from the state’s health care vendors, and implement innovations in preventive and primary care, such as on-site clinics that can improve employee health and productivity. Nevada’s Governor-elect Steve Sisolak plans to create a Patient Protection Commission to address health care prices and report recommendations addressing cost and access within 100 days.
Reinsurance and Proposals to Related to Individual Market Coverage
Newly-elected governors Whitmer of Michigan, Polis of Colorado, and Lamont of Connecticut all support a reinsurance program to lower rates in the individual insurance market. To improve affordability and access to individual health insurance, Lamont supports an extended open enrollment period for the state’s health insurance exchange, Access HealthCT. He plans to seek legislation to limit short-term plans to six months and require them to cover pre-existing conditions. Lamont, like Mills in Maine, vows to continue consumer protections in the ACA in the face of any federal roll-backs. In Nevada, Sisolak seeks to expand insurance options for the middle class who are not eligible for subsidies, and may consider a reinsurance plan for insurance companies that participate in rural markets. Maine’s Mills also supports well-regulated association health plans.
Reducing Prescription Drug Costs
Rising pharmaceutical costs is another issue that may receive more attention from a new slate of governors. A number of governors-elect indicated support for Canadian importation programs, maximizing purchasing power, alternative payment models, increased transparency, and other innovative plans to better control drug costs.
- Importing drugs from Canada: Democratic governors-elect Polis and Evers have specific plans to end prescription drug price gouging, which both include importing drugs from Canada. Whitmer and Mills also highlighted Vermont’s recent drug importation legislation as a possible solution to curb rising drug prices in Michigan and Maine, respectively.
- Increasing purchasing power: Four Democratic governors-elect — Evers in Wisconsin, Sisolak in Nevada, Michelle Lujan-Grisham in New Mexico and Mills in Maine — have expressed interest in bolstering their states’ purchasing power. Evers plans to partner with other states and require state agencies to work together to maximize Wisconsin’s bargaining. Sisolak aims to create Silver State Scripts, a network of insurance purchasers that would leverage its collective purchasing power for cheaper drugs. In Maine, Mills plans to explore pooling the purchasing power of public health plans to negotiate better deals. Similarly, Lujan-Grisham wants to harness New Mexico’s combined purchasing power of Medicaid and public employee and retiree health plans to drive down costs.
- Holding pharmaceutical companies accountable: Many governors are eager to hold pharmaceutical companies accountable for the rising costs of prescription drugs. In Wisconsin, Evers’ pharmacy cost plan includes establishing a drug price review board and empowering a consumer watchdog to review pharmaceutical drug price increases. In Connecticut, Lamont wants manufacturers to report and justify price increases so the state can block unnecessary price hikes. Whitmer plans to implement transparency standards in Michigan modeled after existing laws in California, Nevada, Oregon and Vermont. Polis plans to improve support for Colorado’s APCD and require pharmaceutical companies to disclose pricing and justify any increases that outpace inflation. Ohio Republican Governor-elect DeWine also supports more transparency in drug pricing to address costs. Mills in Maine wants to hold pharmacy benefit managers to strict financial scrutiny.
- Payment reform: A handful of governors-elect expressed plans to implement new payment models for prescription drugs. Evers wants to explore pay-for-performance and incentive-based pharmacy models in Wisconsin, while Lamont has expressed interest in value-based pricing models and a subscription model for Connecticut, similar to a plan recently proposed in Louisiana, in which the state pays a flat fee for access to certain drugs.
- Other plans to tackle drug costs: Whitmer plans to repeal state Sen. Bill Schuette’s Drug Industry Immunity Law, which makes Michigan the only state in the country that gives pharmaceutical companies immunity from fraud charges. In Connecticut, Lamont is interested in implementing utilization management measures to better control drug spending. He wants to explore a model similar to New York’s Medicaid Drug Spending Cap, which allows the state to address excessive price increases and seek more reasonable rates.
Health Care Workforce
In New Mexico, Lujan Grisham supports new strategies to address health care workforce shortages. Polis is calling for more clinics and telehealth in rural Colorado, expanding providers’ scope of practice, licensing reciprocity to address workforce shortages, and possible expansion of the state’s health services corps. In Nevada, Sisolak has also vowed to address the severe shortage of medical professionals in the state by providing more vocational training and reforming Medicaid reimbursements to help retain primary care physicians. Whitmer has also taken on health care workforce issues, including addressing nursing shortages and expanding telemedicine. Other new governors from both parties have expressed support for increasing access to telemedicine to address provider shortages in rural areas, including those in Florida, Nevada, Oklahoma, and Tennessee.
Social Determinants of Health
Whitmer’s comprehensive proposals are framed as “Healthy Michigan, Healthy Economy” and address public health and the social determinants that drive costs, including proposals to address food insecurity, invest in outdoor recreation, raise the age to purchase tobacco to 21, and launch a “Get Fit Michigan” campaign. Lamont of Connecticut wants to invest in public health and the social determinants of health by incorporating interventions in housing, education, poverty, and the environment. In Ohio, DeWine calls for expanded wellness initiatives to improve health outcomes, including requiring Medicaid managed care plans to provide health education and promote prevention initiatives. Tennessee’s governor-elect plans to reduce preventable disease by providing patient education resources to encourage healthy lifestyles.
Addressing the Opioid Epidemic
Most candidates addressed the opioid crisis and highlighted initiatives to better address mental health issues. Among opioid proposals, Polis of Colorado supports more focus on the epidemic and better integration of physical and behavioral health care. Lamont of Connecticut plans to strengthen the state’s efforts to address the opioid crisis by appointing a cabinet-level position to coordinate a multi-agency response. In Ohio, DeWine proposes a 12-point comprehensive plan and advocates for a multi-faceted approach involving law enforcement, community outreach, and education. Michigan’s Whitmer seeks to expand treatment services, invest in treatment courts, and hold physicians and drug companies accountable.
Clearly, 2019 promises to be a year of lively state health policy debate and action across the nation. Along with the strategies outlined here, there will be new proposals from governors who may take a more market-driven approach to policy and who may seek to take advantage of new Trump Administration authorities to restructure health care and provide different options to consumers. The National Academy for State Health Policy will work with all states and continue to report on their progress in advancing health reform proposals.
Below is a full list of the Conference speaker presentations.
- Sandra Robinson
- Daniel Cohen
- Kevin Cranston
- Kristina Larson
- Jacqueline Clymore
- Heather Hauck
- Joseph Kerwin
- Pete Liggett
- David Neff
- Michael Wofford
- Karen Robinson
Thursday Morning Plenary: Understanding the Health Care Cost Conundrum
Session 3: May the (Work) Force Be with You
Session 4: Cha-Ching! Lowering Rx Costs
- Greg Poulsen
- David Seltz
- Erin Taylor
Twelve governors flagged health care workforce needs as a key priority in their 2018 State of the State Addresses, an increase from only eight in 2017. States across the country are experiencing shortages of health care professionals, with the gap projected to increase in the coming years as America’s population continues to age. These workforce shortages can be more acute in rural areas and in specific fields (behavioral health, oral health, and primary care), and can affect access to care, cost of care, and state delivery system reform efforts. To address critical health care workforce shortages, policymakers are working across state agencies, aligning resources, data, and expertise to better address the problem.
States have a number of resources, typically dispersed across multiple agencies, which can be used to address healthcare workforce, including:
- Every four years the governor’s office in each state submits their Work Force Innovation and Opportunity Act (WIOA) state plan, which sets the state’s workforce priorities; some states (for instance, Montana) have opted to include healthcare as a focus area. To support these priority areas, governors can allocate up to 15 percent of state WIOA formula funds to statewide workforce development initiatives.
- State departments of labor often administer programs, such as employment services and training and skill building programs for adults, dislocated workers, and youth.
- State departments of education often administer vocational rehabilitation services programs, which provide employment, training, and support services to individuals with disabilities, as well as adult education programs. State universities, community colleges, and/or departments of education can develop and administer career pipeline or pathway programs, which introduce students to health professions or provide adults with career training opportunities. Medical and nursing schools across the country serve as Area Health Education Centers (AHECs) to provide resources and training for health careers to their communities.
- State departments of health in most states manage their state loan repayment programs, including any federal matching funds, and the Primary Care Offices are responsible for submitting applications for Health Professional Shortage Area (HSPAs) designations and resources.
- Medicaid often contributes to state graduate medical education (GME) funding. Medicaid can also incorporate workforce initiatives into 1115 Demonstration waivers.
A Closer Look at Indiana
To avoid silos, states, often through governors’ initiatives, are bringing together agencies such as health and human services, labor, and education (including state universities) to maximize available resources and ensure a coordinated approach. In one leading state, Indiana’s then-Governor Mike Pence established the Indiana Governor’s Health Workforce Council. The Council brings together a diverse group of stakeholders, including state agencies, legislators, state universities, professional associations, and employers, to identify and coordinate on the state’s healthcare workforce needs and solutions. The workgroup has prioritized several areas, including:
- Pre-nursing certificate pathway. In response to recommendations and findings from the Council’s Education, Pipeline, and Training Taskforce, Ivy Tech Community College established a pre-nursing certificate pathway for certified nursing aides (CNAs) to make it easier for them to become licensed practical nurses (LPNs) or registered nurses (RNs).
- Community health worker (CHW) certification and reimbursement. The Council has convened a Community Health Worker Workgroup, which is working to develop a statewide definition and certification requirements. The Council has also been collaborating with Medicaid to develop a reimbursement methodology for CHWs.
- Telehealth. The Council’s Mental and Behavioral Health Workforce Taskforce also put forward recommendations that led to the adoption of House Enrolled Act 1337, which allows for the delivery of some mental health and addiction treatment services through telehealth.
Cross-agency partnerships provide a foundation for states to implement workforce development programs and reforms, such as those in Indiana. As part of a cooperative agreement with the HRSA, NASHP is researching state partnerships across the country, learning how they have used diverse governance models and policy levers to address state healthcare work force needs. Look for a series of state case studies and other NASHP resources that explore these issues. NASHP’s 31st Annual State Health Policy Conference, taking place on Aug. 15-17, 2018, will also feature sessions on state strategies to address health care workforce challenges. Register here.
Stay tuned to NASHP’s website and sign up for the weekly e-newsletter for updates and information on building your state’s health care workforce.
Thursday, August 16th
10:00am – 11:30am
Transitioning from youth to adulthood requires increased responsibility for many areas of life, including managing one’s health. This can be particularly challenging for children with a range of social and health care needs, particularly children with special health care needs. Policymakers from several states, including Georgia and Wisconsin, discuss innovative approaches to support young adults’ transitions to adult health care services and programs through managed care, quality improvement, family engagement, care coordination, and interagency collaboration and cooperation.
This session is supported by the Lucile Packard Foundation for Children’s Health
ModeratorsLori Abramson, Director-Georgia Families 360, Georgia Department of Community Health
Lori Abramson, LCSW is Director of the Georgia Families 360° program at the Georgia Department of Community Health. She ensures that children in foster care, adoption assistance, and youth in the juvenile justice system receive medical, dental, and behadvioral health care without barriers. Lori has 38 years’ experience in clinical practice, advocacy, collaboration building, and the managed care environment. Lori’s professional focus is about leveraging that experience on behalf of Georgia’s children and families.
Donna Bradbury, Associate Commissioner, NYS Office of Mental Health
Donna Bradbury directs the Division of Integrated Community Services for Children and Families at the Office of Mental Health. She oversees all community-based children’s mental health programs in New York State. She is currently leading the effort to transition children’s behavioral health services into Medicaid managed care as part of the larger Medicaid Redesign project.
Prior to state service, Donna worked for twelve years for the Rensselaer County Department of Mental Health. She delivered clinical services to children and their families, served as a consultant to Family Court as well as county-operated human service departments and schools, ran a specialized treatment program which successfully prevented institutional placement for many youth, and assisted in the creation and implementation of several interagency initiatives that resulted in children and their families having easier access to better quality services.
SpeakersBecky Burns, Statewide Coordinator, Wisconsin Children and Youth with Special Health Care Needs Program
Becky’s career centers on supporting children and families whose lives have been affected by unanticipated journeys through the world of disability services. She treasures the opportunities to work with these families whose resilience and growth continues to astound her. With a Master’s of Science in Social Work, she has used her education along with her personal experience of being raised in a family with a child who has a disability to influence her work with families. She has worked in one capacity or another for the state of WI for over 18 years.
Gordon Lee, Health Program Administrator, KY Office for Children with Special Health Care Needs
Peggy McManus, President, The National Alliance to Advance Adolescent Health
Peggy McManus is President of The National Alliance to Advance Adolescent Health and Co-Director of Got Transition. With Dr. White, she led the revision of the Six Core Elements of Health Care Transition, developed new transition quality improvement and consumer feedback measurement tools, published systematic reviews on transition outcomes and measures, and published extensively on transition quality improvement, payment options, state Title V transition efforts, and the status of transition preparation in the US.
Do you really know what’s driving up health care costs in the United States? Take this true or false quiz to separate fact from fiction.
It’s common knowledge that health care spending in the United States is much higher than in other developed countries, and our out-sized spending doesn’t even help us live longer. A new Journal of the American Medical Association article, which compares health care costs in America with 10 other countries, is required reading for state policy leaders who are looking for levers to reduce health care spending. Take this quiz for a reminder about what’s really behind spiraling health care spending.
The United States spends nearly twice more of its GDP on health care than does Australia, Canada, Denmark, and Japan. True or false?
True. America spends 17.8 percent of its GDP on health care services, compared to the four countries that spend between 9.6 to 10.5 percent of their GDP on health care.
America’s costs are higher because we go to the doctor more often. True or false?
False. Americans see doctors at about the same rate as in other countries.
America’s costs are higher because we have more specialists. True or false?
False. We have about the same number of specialists, per population, as other countries.
Health care in America costs more because our doctors order more tests. True or false?
True. American doctors order more tests and procedures than other countries. America ordered the highest number of CT scans and the second-highest number of MRIs per 1,000 population among the countries surveyed.
These medical tests and procedures cost more in America than in other countries. True or false?
True. An MRI costs $1,150 on average in the United States, compared to about $140 in Switzerland, and a CT scan costs $896 in the United States, compared to $97 in Canada.
These additional medical tests result in better health outcomes. True or false?
False. Despite all that spending, our life expectancy is the lowest and infant mortality is the highest among the countries surveyed, especially among poor and non-white populations.
In the United States, high-cost procedures, such as knee replacements, cataract surgeries, angioplasty, and coronary-bypass grafts, are performed more often than in developed countries. True or false?
True. Not only were these procedures performed more frequently in America, their price tag was much higher. And, some of these procedures inevitably led to costly complications that health plans, Medicaid, and Medicare had to pay for. These extra tests and procedures did not improve life expectancy or reduce infant mortality.
In the United States, people are hospitalized more frequently, which drives up costs. True or false?
False. America has about the same number of hospital beds, discharge rates, and hospitalizations per population as the other countries. It spent 19 percent of its total health care expenditures on inpatient care, which was the second-lowest among the 11 countries in the study.
America spends much more on outpatient care than do other countries. True or false?
True. Most of these high-cost tests and procedures are performed on an outpatient basis. As a result, America spent 42 percent of its health care expenditures on outpatient care, compared to France, Germany, and The Netherlands, which spent less than 23 percent.
Americans spend about the same on prescription drugs as those in other developed countries. True or false?
False. Americans spend about $1,443 annually per person because medication costs more here than abroad. Need some examples? One Lyrica pill costs $6.04 in the United States and 63 cents in Canada. One capsule of the hepatitis C drug Harvoni, invented in the United States, costs $1,090 here and $798 in Canada.
Administrative and provider costs are higher in the United States, which contributes to soaring health care costs. True or false?
True. Administrative costs of managing health systems and services, which include handling insurance billing, accounted for 8 percent of US health care costs, compared to 1 to 3 percent in the other countries. US salaries for physicians and nurses were higher, averaging about $218,173 annually for a US generalist physician, compared to a doctor’s average salary of $86,607 in Sweden and $154,126 in Germany.
Bottom line, researchers found that high provider, administrative, pharmaceutical, and medical device prices drove up health care costs in the United States. “As patients, physicians, policy makers, and legislators actively debate the future of the US health system, data such as these are needed to inform policy decisions,” they concluded.