Washington State Health Services Act: Implementing Comprehensive Health Care Reform

By Jacobson, Peter D. | Health Care Financing Review, Spring 1995 | Go to article overview

Washington State Health Services Act: Implementing Comprehensive Health Care Reform


Jacobson, Peter D., Health Care Financing Review


INTRODUCTION

State legislators face difficult policy choices in seeking to control rapidly escalating health care spending while simultaneously expanding access to needed care for the poor and the uninsured. While these goals are not mutually exclusive, they are certainly difficult to balance given the realities of State budgets and Federal Medicaid coverage mandates.

As the recent debate over the Clinton Administration's proposed Health Security Act demonstrates, there is very little consensus on exactly what form the health care financing and delivery system should take in the future. Although there is widespread agreement about the problems and consequences of maintaining current health care policy, consensus solutions have remained frustratingly elusive.

In 1993, the Washington State legislature enacted the HSA (E2SSB 5304) to guarantee universal access to health care for all Washington residents, with caps on premiums as one of the primary cost-control mechanisms. Enactment of the HSA culminated a lengthy process of commission studies and public debate that provided a structure, managed competition, for substantial reform of Washington's health care system. In retrospect, that process, as difficult as it may have seemed at the time, might well have been the easy part. Many of the key design decisions, including defining the uniform benefits package and the role of health purchasing alliances, were delegated to the newly created Health Services Commission (HSC). The success of this complex legislation, therefore, is largely dependent on the implementation details the HSC and other State agencies add to the legislative structure.

This article reports the results of a case study of the enactment and implementation of the HSA. In conducting this case study, project staff reviewed available documents, both published and unpublished, that describe or assess the legislative and regulatory processes. This material included published health services research findings, authorizing State legislation, and other State reports related to program design, operation, or evaluation. Extensive in-person interviews were conducted with key individuals. The persons interviewed included:

* Key State policy makers from both the executive and legislative branches. * Representatives of the State medical and hospital associations. * Insurers and health providers. * Business, labor, and community leaders.

In general, these interviews sought to obtain the parties' perspectives concerning:

* Factors contributing to the enactment of the HSA. * Key issues that must be addressed in designing and implementing the legislation. * Factors that officials from other States should consider when assessing the feasibility and desirability of implementing similar initiatives in their own jurisdictions.

The interviews were conducted at an early stage in the implementation process. Where possible, updated implementation details are included, but this article does not describe the sequential decision making process. Instead, this study provides information about the issues and challenges other States can expect to encounter in implementing comprehensive health care reform through managed competition. For example, a State interested in managed competition can benefit from understanding the political context in Washington State, what is required before a similar initiative can be implemented (including data needs), and what the anticipated response from consumers, insurers, and providers is likely to be.

Before discussing HSA implementation, this article first reviews the Washington health care environment and some of the important programs leading to the HSA. The article then summarizes the HSA's major provisions. After discussing the political context in which the HSA was debated, the article provides a description of important design and implementation decisions that were considered. The article concludes with a discussion of the lessons that other States can apply in considering a similar approach. …

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