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F I S C A L I M P A C T R E P O R T
SPONSOR Foley
ORIGINAL DATE
LAST UPDATED
03/03/07
HB HM 60
SHORT TITLE Innovative Health Care Initiative Review
SB
ANALYST Hanika Ortiz
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)
FY07
FY08
FY09 3 Year
Total Cost
Recurring
or Non-Rec
Fund
Affected
Total
Significant
Recurring General
Fund /
Various
(Parenthesis ( ) Indicate Expenditure Decreases)
SOURCES OF INFORMATION
LFC Files
Responses Received From
Department of Health (DOH)
SUMMARY
Synopsis of Bill
House Memorial 60 requests the Legislative Health and Human Services Committee to consider
a coordinated, comprehensive review of innovative health care reform initiatives.
The memorial provides the following comments:
•
Health care expenditures continue to impact state and federal budgets as well as the cost of
goods and services.
•
Every individual carries a responsibility for that individual's health care management through
wellness and prevention measures.
•
Chronic problems such as obesity, hypertension, diabetes and depression are often
preventable or at least treatable at an early stage.
•
Wellness and prevention programs can lead to lifestyle behavior changes that are key to
decreasing health care costs.
•
Use of tobacco products continues to impact health care costs adversely while tobacco
settlement proceeds are used on initiatives other than tobacco research and cessation
programs.
•
Employers and employees continue to pay rising insurance premiums, often to offset
uncompensated care costs and lower public program reimbursement levels.
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House Memorial 60 – Page
2
•
Tax incentives can provide initiatives for employers, employees and individuals to obtain
appropriate insurance for broad or specialized coverage as well as to increase coverage and
thus spread the risk among larger groups of insured individuals.
•
The number of health care profession graduates from New Mexico colleges and universities
has not kept pace with the attrition of health care professionals or with the demands of a
growing population.
•
Primary care clinics throughout the state provide an invaluable service for patients with
limited or no access or coverage in rural and underserved areas.
•
Consumer-driven, market-based health care reform efforts provide initiatives that can be
more readily implemented and tested than public programs requiring extensive legislative or
rulemaking procedures.
•
Information technology and telecommunications offer an ability to streamline billing; claims
processing; reimbursement; medical records storage and retrieval; and electronic
prescriptions, databases and registries; as well as health care delivery and interfaces to remote
and underserved areas.
•
The joint state-federal Medicaid program continues to take a disproportionate amount of state
and federal budget expenditures without a corresponding improvement in the health care
profile of covered individuals.
FISCAL IMPLICATIONS
The United States spends more than twice as much on health care as the average of other
developed nations, all of which boast universal coverage. Confronted by the rising costs and
capabilities of modern medicine, other nations have chosen national health insurance (NHI). The
creation of an NHI program would cover every American for all necessary medical care and save
at least $200 billion annually by eliminating the high overhead and profits of the private,
investor-owned insurance industry and reducing spending for marketing and other satellite
services. (JAMA August 13, 2003).
The broad based effort as described in the memorial will require the expertise of various State
departments including DOH, HPC, ALTSD, HSD, TRD, HED, CYFD, PRC/RMD, DFA, IAD;
and, require input from RLD, private health care service delivery providers and consumers. The
memorial does not provide, direct or identify an appropriation for these efforts.
SIGNIFICANT ISSUES
DOH provided the following comments about the issues raised in the memorial:
In NM, in 2003, an estimated 414,000 New Mexicans (22%) did not have health insurance; 70
percent of the uninsured were working people; and only 50 percent of small employers (under 50
employees) offered employer sponsored insurance plans.
HM 60 will include wellness and prevention measures and initiatives in its priorities for health
care reform review. Wellness programs generally focus on the primary prevention of chronic
diseases that result from tobacco use, physical inactivity, suboptimal diet, or stress. Worksite
wellness programs have been shown to increase levels of fitness and reduce risk factors for
coronary heart disease. Research validates that health promotion programs can improve health,
save money and even produce a return on investment. HM 60 will also focus on early diagnosis
and treatment of chronic diseases, which is a fundamental clinical and public health principle for
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House Memorial 60 – Page
3
reducing morbidity and mortality.
HM 60 also addresses the shortage of health professionals, especially in urban and rural areas.
Of the 33 counties in the State, 28 are classified as Health Physician Shortage Area (HPSA) or
Moderate HPSA. Shortages also exist in dental, nursing and other health professions.
HM 60 also recognizes the significant role primary care clinics play in meeting the health care
needs of New Mexicans. In many communities, primary care clinics represent the only access to
health care services for the uninsured. In FY06, primary care clinics funded by the DOH
reported over 780,000 primary care patient visits.
HM 60 also recognizes the importance of reviewing activities that will increase consistency of
patient information, health care claims and reimbursement leading to an integration of health
care information.
PERFORMANCE IMPLICATIONS
The legislative health and human services committee is being requested to provide for an
appropriate forum to address the following issues:
•
wellness and prevention measures and initiatives;
•
early diagnosis and treatment of chronic diseases;
•
tax incentives to assist more employers and individuals in purchasing insurance;
•
expansion of medical school, nursing school and other health care profession schools to
increase the number of graduates entering the health care work force;
•
funding for primary health care clinics that provide primary and preventive care to
uninsured persons and in underserved areas;
•
market-based reforms that provide consumers with choices that meet their respective
needs;
•
development of information technology resources that increases consistency of
information, claims and reimbursement among payers, providers and patients;
•
Medicaid reforms that recognize the cost-effectiveness of programs for women and
children while ensuring that the most vulnerable persons, the elderly and disabled,
receive assistance through innovative and effective programs.
In addition, the legislative health and human services committee and the tobacco settlement
revenue oversight committee will also be required to conduct a study of tobacco-related illnesses
and efforts to reduce tobacco use, particularly among the youth.
TECHNICAL ISSUES
The memorial is unclear as to what kind of “forum" the committee is required to provide; what is
the target date for reporting findings and recommendations; and, what entity is the committee
expected to report to.
ALTERNATIVES
In 2006, the Governor's Health Coverage Committee was formed and tasked with studying
health care reform in New Mexico. As a result of this Committee's work, there was an RFP with
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House Memorial 60 – Page
4
a contract awarded to Mathmatica to study three health care models; the Health Securities Act,
New Mexico Health Choices, and an expansion of the current system.
The Tobacco Use Prevention and Control (TUPAC) Program is currently implementing the CDC
Best Practices for effective tobacco prevention and control in order to reduce tobacco use.
AHO/csd