States ponder 2004 outlook

Healthcare Financial Management, Jan, 2004

Every year since 199T, the Health Policy Tracking Services has conducted a survey of state legislators, legislative staff, and executive agencies to anticipate the issues, priorities, and initiatives that may be addressed in the upcoming sessions.

This year, the following issues were among those identified by 49 states as the top priorities for the upcoming legislative sessions. (a) Access to health insurance. The problem of the uninsured was cited as a top priority by 43 states. With small employer premiums skyrocketing at double-digit rates, individual spending increasing through higher cost-sharing mechanisms, and the number of uninsured continuing to grow, state legislators will continue to seek ways to make health insurance coverage more accessible and affordable in 2004. Issues that may be addressed in the 2004 sessions include lower-cost health insurance policies targeting small employers, medical savings accounts, purchasing alliances, tax credits or deductions, high-risk pools, state premium assistance programs, employer-based reform measures, and single-payer reform measures.

Cost control measures concerning prescriptions.

Pharmaceutical issues will remain a priority in 2004 as states continue to face budget shortfalls. Given that pharmaceuticals consume a large part of states' Medicaid budgets, lawmakers will likely seek to expand mechanisms for limiting state pharmaceutical expenditures. Forty-two states indicated that they may consider pharmaceutical cost-control measures, including preferred drug lists, prescription drug copayments, prior authorization programs, pharmacy payment rates, number of prescriptions per individuals, and copayments for prescriptions. Cost reduction through interstate and intrastate bulk purchasing and state pharmaceutical assistance programs may also be on the states' 2004 agendas.

Health workforce shortages. The issue of workforce shortages (with an emphasis on nurses) was cited as a concern by 38 states, with more than half of states citing nurse staffing patterns in acute care facilities as a priority.

Malpractice tort reform, medical erros, and patient safety. Thirty states regarded malpractice reform as a priority, and more than half of states identified medical errors reporting requirements as a major concern, indicating that they plan to consider requirements for quality assurance programs.

Health promotion and wellness. Increasing media attention and alarming figures on the rising numbers of obese and overweight Americans have motivated state lawmakers to make health promotion and wellness a priority in 2004. Thirty-four states are likely to consider nutrition and obesity legislation. The focus on school-aged children also will continue, with as many as 29 states likely to explore legislative solutions to improve school lunch nutrition, including restrictions on school vending machines.

Medicaid. Finding costs savings in the FY04-05 Medicaid budgets will be a priority, especially given that 38 states are anticipating a Medicaid budget shortfall for FY05. More than half of the states indicate they may submit or alter existing Medicaid waivers as a means to reduce Medicaid costs. States also may consider reducing provider payments and reducing or freezing eligibility requirements.

Long-term care. As legislators continue to seek ways to meet the needs of baby-boom population, nursing home quality and safety are receiving significantly increased attention. Other long-term care priorities on state agendas include nursing home payment rates, assisted living regulations, and home- and community-based care.

Mental illness. Concern about the cost implications of providing services for individuals who are mentally ill has caused mental-health and substance-abuse issues to become a priority for states in recent years. Because the lack of health insurance coverage among the mentally ill weighs heavily on state general fund expenses, 32 states indicated that they may seek to enact mental health parity legislation. Also, 33 states indicated that they would address children's mental health issues to ensure thai children receive adequate mental health services.

These and other issues will continue to pose challenges to states throughout the coming year. Each state will find its own solutions, and each will have an opportunity to observe and gain insights from the solutions of the others. Stay tuned! It should be an interesting year.

(a.) Survey responses were received from all states, with the exception of Mississippi.

This report was prepared for hfm by the National Conference of State Legislatures' Health Policy Tracking Service (HPTS).

For more information about HPTS, go to www.hpts.org/info. To receive the entire survey results, please contact Laura Miller at laura.miller@ncsl.org.