Minnesota Adopts Massive Health-Care Reform Law

Article excerpt

Faced with a crisis in the nation's health-care system, the federal government's response has been a mix of tongue-clucking, platitudes, and blame-shifting. It all adds up to lots of talk but no action.

Meanwhile, the states--which have been called the laboratories of democracy--are taking up the challenge. Hawaii was the first to do so. Eighteen years ago, it began requiring employers to pay for their employees' medical insurance, and in 1990 it instituted a state insurance program to take care of the small number of people who remained uninsured for one reason or another.

The latest states to act are Minnesota and Vermont (see the accompanying story for a description of Vermont's new laws).

LAW ADDRESSES ABUSES: Just weeks ago, Minnesota passed a comprehensive law that addresses many of the shortcomings and abuses that plague the health-care system. These include: excessive cost, which has been rising much faster than the inflation rate; lack of affordable insurance for small businesses; and a large number of uninsured and underinsured persons who are ineligible for Medicaid. These number approximately 500,000 out of a total population of 4.5 million, said Kathleen Mettner, supervisor of the state's Children Health Plan.

The law, signed by Gov. Arne Carlson (R.) in late April, was fashioned by a "gang of seven" representatives in the legislature, including Brad Stanius, a pharmacist-lawmaker from the Twin Cities metropolitan area. Stanius did not vote for the final bill, however, because of his concerns over finding the segment of the program that targets low-income (but not indigent) residents. The law imposes a 2% tax on gross revenues of health-care providers--including drug wholesalers, hospitals, and physicians--and taxes cigarettes at the rate of 5 cents per pack.

The gross-revenues tax originally was to apply to retail pharmacies, but the Minnesota Pharmacists Association was able to persuade the legislature that it was not appropriate, said William Bond, MPhA executive director. At the last minute, the tax was diverted onto the wholesalers--a move also opposed by MPhA. The law also places a 2% levy on drugs mailed or delivered to Minnesota residents from another state--the "use tax."

The tax on drug wholesalers, having come under criticism as unfair, will be looked at by a group of state officials and the board of pharmacy. "If the commissioner (of health) determines that these taxes are not effective or equitable,....the commissioner shall recommend alternative methods of taxing prescription drugs," the law says.

The drug wholesaler tax is an issue for pharmacies to watch. Marie Nguyen, Pharm. D., in the Department of Human Services' professional services section, said it's her feeling that the wholesalers might pass on the tax to the retailers.

'SINGLE PAYER' REJECTED: The new law rejects the "single payer" approach to health-care reform, such as Canada has in place. Instead, it retains the traditional forms of funding and delivery, including a large private, nongovernmental sector. However, it imposes on the system new controls and a leaning toward managed care. How the managed care bias will affect pharmacy remains to be seen.

To achieve its ends, the law sets up a large superstructure consisting of a 25-member health-care commission. Members must be drawn from the insurance and hospital industries, and must represent employers, consumers, unions, doctors, and nurses. There's no mention of pharmacists in the stature, but the governor may appoint one, and MPhA will try to persuade him and the lieutenant governor, Joanell Drystad, to do so. The largest group on the commission will be consumers,. with five members.

Heading the entire group is a commissioner of health, who is directed to set an annual limit on the growth of public and private health-care spending "that will slow the current rate of growth by at least 10% per year." The commissioner is also charged with monitoring the quality of health care, conducting consumer-satisfaction surveys, and developing uniform billing/claims forms by January 1993. …