May 1995

Committees on Health Policy—What's Next?

by Corena Peña Andorfer, Consultant for Health Policy

Although the state is abuzz with the possibility of the federal government financing Medicaid through block grants, any discussion of health policy in Michigan must include a look at what’s happening in the House and Senate committees on Health Policy. Both are chaired by Republicans, but the two committees are at very different places in their policy making.

Rep. John Jamian (R-Bloomfield Hills), chair of the House Committee on Health Policy, has already identified several issues on which he plans to introduce legislation and that he will bring before the committee. Sen. Dale Shugars (R-Kalamazoo), chair of the Senate Committee on Health Policy and Senior Citizens, indicates that his committee is still in the information-gathering stage and has not yet focused on specific issues. What follows is a discussion of what you can expect from the committees in the next few months based on interviews conducted with the committee chairs.

Rep. John Jamian

Last year Representative Jamian chaired a Republican task force on health care reform. In a series of hearings held throughout Michigan, the task force heard testimony on issues related to health care. Jamian indicates that his agenda is based, in large part, on certain issues that emerged on those hearings.

Managed Care and Patient Rights

One of the key issues for Jamian is managed care and patient rights. "When HMOs tell physicians to control costs and save money by putting a cap on utilization, I can accept it. But I have to wonder what the cost is to the patient’s health, especially when HMOs are receiving record profits. Instead of giving all of that money back to the physicians, why aren’t they putting that money back into the HMO for patient care?" He added that "there are implications in underutilization and overutilization."

Jamian indicated that this problem is of particular concern to those with acute medical problems because of their need for specialized and costly medical care. Although health maintenance organizations have appeals processes to ensure patient access, Jamian is concerned that it is not sufficient. He notes that the problem stems, in part, from what he perceives as inadequate peer review. "Does the MD specialist in oncology have the right to challenge the decision of a utilization review nurse in an HMO? RNs are telling specialists what they can and can’t do."

In addition to reassessing utilization review, Jamian indicated that he will likely include a bill that would require enrollees of managed care to sign off on their list of benefits. He wants complete disclosure to potential enrollees of managed care so they understand what they can expect from their health care coverage. He also indicated that he is not opposed to legislation that would make some information about providers available to the public so that they can make an educated decision about selecting a managed care plan.

Jamian stressed that, in general, he opposes any willing provider legislation. He argues, however, that there must be a mechanism for patients with acute illnesses to get the services they need.

In addition to working on legislation, Jamian has convened a pain management task force to look at this issue. He has also held one hearing in Oakland County and expects to have a schedule of additional hearings available soon.

Certificate of Need

Another issue that Jamian plans to have the committee address is legislation on Certificate of Need (CON). He has already held hearings and convened a work group on the issue and plans to introduce legislation before the House adjourns for summer recess. According to Jamian, "CON does not work. It protects certain interests whether they are effective or not and prohibits doctors from opening up competing outpatient surgical suites that could prove more cost effective." He adds that "the big problem is that the largest purchasers of health care in the state want to make sure CON meets their standards so they can control the system, but we need less regulation."

Jamian also wants to change the requirements for the distribution of funds from the Hospital Financing Authority. "I am concerned that it finances unnecessary hospital projects. For example, a hospital applies to CON for a cafeteria for physicians because doctors can’t eat in a regular cafeteria. The hospital finances it through the Hospital Financing Authority. This means that the citizens of Michigan are subsidizing it. These funds should be restricted for direct patient care services."

Jamian is also concerned about the effect that the Hospital Financing Authority has on competition, which he believes is necessary if health care costs are to be contained. "When money is loaned to Michigan hospitals at cheaper than market rates this discourages outside health care providers from entering the state. It’s not a level playing field."

Sen. Dale Shugars

Senator Shugars and the Senate Committee for Health Policy recently completed a series of hearings on health care. From Lansing to St. Ignace the committee heard testimony from a wide range of individuals. Health care providers and consumers offered their view. For Shugars this input is an important first step for his committee, "This is a textbook case in political science. We are letting the people tell us the issues that we need to confront."

Task Force

Now that the last of the meetings is complete, Shugars indicated that the next step is to convene a task force of health care providers and consumers to attempt to identify solutions to the areas of concerns voiced by those who testified. Once the task force issues its report (probably sometime in the fall), the committee will look for those issues that it believes it will be able to translate into legislation.

Although Shugars did not want to identify any specific issues that he thought might surface, he indicated that any solution must encourage individual responsibility. He maintained that without such emphasis, any proposed change would not be effective.

Finally, Shugars stressed that Michigan has to wait for the federal government to decide on its stand on health care before the state can take on any issues in a substantive way.