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Universal Coverage: Beyond The Patchwork

A new Maryland health insurance initiative, relying on the School's expert advice, offers one solution to a desperate national problem

By Tom Waldron

Huddled around a Baltimore conference table covered with reports and statistics, a dozen health policy experts hash through the tricky final details of an insurance proposal.

Three faculty members from the School are key voices during the intense five-hour session as the group searches for consensus on question after question.

If the state of Maryland launches a new health insurance program, how many of the state's half-million uninsured will enroll in the first year? How many will be below the poverty line, how many in the middle class? Will they be in their healthy twenties, or their declining fifties?

For much of the last year, marathon meetings like this one have commanded the time and energy of several School faculty and a handful of students who have been struggling with hundreds of such questions as they confront a complicated and vexing problem: how to provide universal health care coverage in the state of Maryland.

There's nothing theoretical about the work.

The group's recommendations, hammered out with colleagues from the University of Maryland Law School, Georgetown University, and other nonprofit groups, form the basis of legislation that the Initiative hopes will be introduced in the Maryland General Assembly. On the table is a proposed billion-dollar health insurance program — financed by existing government funds, enrollees, a tobacco tax, and possibly employers — that aims to provide coverage for every Marylander who now lacks insurance.

In the seven years since Bill and Hillary Clinton's national health plan failed miserably, Congress has largely steered clear of proposals to help the nation's estimated 44 million uninsured. Tired of waiting, several states have recently launched their own reforms and some, among them Massachusetts and Maine, have flirted with universal coverage.

Should it pass, the ambitious reform package would likely take Maryland — now ranked only 26th among the states in the percentage of its residents who have insurance — to the top of the list nationally.

Making that happen may require a wholesale change in the way policy makers and the public think about health care, says Laura Morlock, PhD, a professor of Health Policy and Management who helped develop the plan.

"In the United States, access to education is considered not only a right but an obligation," Morlock says. "But we have not had the same thinking about health care."

At best, supporters say, it will take a couple of years for the legislature to approve the full plan. But after three years of painstaking groundwork, leaders of the effort believe their organization — a coalition of thousands of grassroots groups advised by top policy experts —- represents the best hope of upending the status quo to achieve landmark reform of Maryland's patchwork health system.

One thing is absolutely clear. "We have set a train in motion that something will happen," says Vincent DeMarco (a 1979 Hopkins Arts and Sciences graduate), the executive director of the coalition pushing the legislation. "Who knows what it will be. But something will happen."

Experts estimate that half a million Marylanders are not covered by health insurance.

One of them is Sharon Little.

The 48-year-old resident of West Baltimore makes a modest living caring for elderly people in their homes — putting her squarely in the "gray area" of health care. She doesn't qualify for Medicaid, the state and federally funded insurance program. And she can't come close to affording a private policy. So, for years she has gone without coverage.

In 1998, Little discovered the harsh consequences as she began suffering with persistent vaginal bleeding. Some days it was so severe that she would nearly pass out. But Little didn't consider surgery an option. "I just could not afford it," she says.

Little finally found help at the Shepherd's Clinic, a Baltimore facility in a former bank building that relies on contributions and volunteer physicians and nurses to provide primary and secondary care for the uninsured. The clinic (founded by William H. M. Finney MD, MPH '90) arranged for her surgery at Baltimore's Union Memorial Hospital.

"If I hadn't been led to that clinic, I don't know what I would have done," Little says.

Peter L. Beilenson, MPH '90, the health commissioner in Baltimore, was all too familiar with stories like Little's, many of which he concluded could be traced to a lack of insurance coverage. So in 1998, Beilenson called a meeting of health care advocates to discuss the problem. Three years later, that initial gathering has blossomed into a well-funded, grassroots organization with an ambitious agenda that relied in large measure on advice from School faculty.

Known as the Maryland Citizens' Health Initiative, the group held public meetings around the state to hear directly from the uninsured. Its advisory panel of experts met with "stakeholders" to discuss financial and administrative concerns. And the experts thrashed through the nitty-gritty of health insurance during a series of closed-door meetings. "Every time we think we have an issue solved, it just metamorphoses," says Professor Jonathan P. Weiner, DrPH '81, another of the Health Policy and Management faculty members involved. "You could have hundreds of people working on this and it wouldn't be enough."

What emerged this fall is a proposal for a quasi-public entity, the Maryland Healthcare Trust, that would offer insurance to anyone in the state who is not currently covered.

A key plank of the proposal would make Maryland the first state to require all residents to obtain health coverage. Without that requirement, the trust could end up enrolling a disproportionate number of Marylanders with serious health problems, eventually bankrupting the plan. The health care trust would provide a comprehensive set of insurance benefits, as well as such extras as dental care and hearing aids, with modest co-pays and no deductibles.

Adhering to the "build-it-and-they-will-come" philosophy, the planners hope Marylanders will flock to what is expected to be an affordable and efficient health insurer. "Our vision is to cover, at first, only the uninsured," Weiner says. "But that eventually it will be so good that others will want to come in."

But the Hopkins team is also the first to acknowledge that the program will need fine-tuning.

"It is very unlikely we will get it entirely right, because there are so many variables," says Morlock, who helped design the benefits package. Outlining a new plan is one thing. Paying for it is much trickier. The new insurance fund will have an annual price tag of about $800 million in its early years, and eventually about $1.4 billion if the group reaches its goal of enrolling 90 percent of the state's uninsured.

The coalition is proposing a wide-ranging financing package that relies on an increase in the state tobacco tax, federal matching funds, and premiums assessed on a sliding scale. Another source would be about $150 million in government and other funds that now go to non-profit groups providing care for the uninsured.

The Initiative also hopes to tap into nearly half a billion dollars in payments that now go to hospitals to cover their costs for caring for the uninsured. In Maryland's unique rate-setting system, all consumers and insurance companies pay charges that are inflated to account for these costs. Theoretically, if all Marylanders had health insurance, hospitals would no longer need to be compensated for their uninsured patients, freeing that money to subsidize the new health care trust.

The current system of hospital subsidies "makes no sense from a public health perspective," Weiner says. "Why not use that money to provide some preventive medicine?"

Finally, many of the Initiative's leaders support the imposition of a new payroll tax on businesses that do not provide health insurance for their employees. 

While there is widespread agreement that Maryland must address its uninsured problem, there will also be widespread opposition to many of the plan's key planks.

For example, increasing any taxes, even on cigarettes, has proven to be difficult time and again in Annapolis. Some conservative and libertarian-minded legislators, meanwhile, will surely be hostile to the group's groundbreaking proposal to require all Marylanders to obtain insurance. Why should a healthy, young 20-something with no spouse or children be forced to pay for insurance he doesn't want? And the idea of tapping into the hospitals' uncompensated care payments is, according to one of the Initiative's advisers, "a very delicate issue."

Hospitals will be reluctant to change the current financing system, and some lawmakers may object to a proposal that would essentially transfer revenue generated by artificially inflated premiums charged of some Marylanders into a fund to subsidize rates for others.

Weiner has no illusions about the difficulty of selling the ambitious proposal. "If you ask the middle class if they want universal insurance funded, they say, 'fine,'" Weiner says. "But if you go ask them to give up a little of theirs, no way! Part of the issue is getting people to make room on the bus."

The push for universal health care in Maryland began three and a half years ago in a second-floor conference room in the Baltimore Health Department's modest downtown headquarters. After more than five years as Baltimore's health commissioner, Beilenson had grown tired of dealing piecemeal with the city's thorny health care problems. Frustrated, the city health commissioner convened a meeting with about a dozen "progressive, good-guy folks" to think big.

"The entire system is so inequitable and we were applying band-aids all over the place. We needed more comprehensive, true reform," he says. "The only way to do that was to make sure everyone had adequate, affordable coverage." 

A lanky marathon runner, Beilenson watched in amazement as the idea took hold. Dozens of people attended the second brainstorming session, and the group kept growing.

Early in 1999, Beilenson turned to DeMarco, a veteran organizer, to run the Initiative. A lawyer by training, DeMarco has won high-profile Maryland State House battles to secure passage of gun control laws and a 30-cent increase in the state tax on a pack of cigarettes. On both the gun control and tax issues, the genial but politically savvy DeMarco used the same general strategy: develop grassroots support and force politicians to take a stand while they run for office. Then hold them to their pledges once the legislative debate begins.

Working out of a cramped second-floor office in Baltimore's Charles Village neighborhood, DeMarco is attempting the same thing with universal health care, only on a bigger scale.

DeMarco and Beilenson secured grants from a dozen foundations totaling more than $1.1 million, an unheard-of amount for a non-profit campaign. Volunteers and paid staff fanned out across Maryland and secured support for universal health insurance — at least in general terms — from a staggering collection of more than 2,100 organizations, ranging from the tiny Frostburg Homemakers Club in Allegany County to the politically powerful state AFL-CIO.

By the middle of 2000, with grassroots support assured, the group was ready to begin drafting a concrete proposal. DeMarco and Beilenson's first stop was to see Dean Alfred Sommer, whose faculty had played an important role in DeMarco's earlier legislative victories on gun control and the cigarette tax. Says Beilenson, "Coming from the preeminent public health school in the world gives [the proposal] more credibility."

Donald M. Steinwachs, PhD, chairman of the Department of Health Policy and Management, assembled a faculty team with expertise in financing, health care delivery, administration, and politics.

Morlock and assistant professor Hugh Waters, PhD, worked on the benefits package, crafting a plan with comprehensive but still relatively affordable benefits. Weiner worked with associate professor Thomas R. Oliver, PhD, on the administrative end of the proposed system. Oliver helped draw up a structure for the governing board and looked at how the new health care trust would interact with existing health insurers. Weiner concentrated on such issues as reimbursement rates for providers, cost-containment, and delivery of services to patients. Professor David S. Salkever, PhD, concentrated on financing — looking, for example, at how to tap into the money now used to pay for hospital costs for the uninsured. Faculty from the University of Maryland and Georgetown, as well as advocates from nonprofit health groups, also took part.

The School's faculty say they are pleased to play a role in attempting to reform Maryland's health care system. "It's very exciting for me; this is what I work for," Waters says. "It's exciting in the sense of making some changes in Maryland, and being able to contribute to the national debate."

Among the world's 28 industrialized countries, only three do not have national health insurance: Mexico, Turkey, and the United States. Yet America spends far more on health care than any other country and still has worse health statistics in some areas.

"Talking about basic things like access to care and health outcomes, we don't compare favorably," says Waters, who has worked on public health projects in several developing countries. "It's an area of major concern for any thoughtful person." Many experts predict that the U.S. will eventually adopt a single-payer system, merging all current health plans into one overseen by the government, something akin to the federal Medicare program for the elderly.

Early on, Beilenson and his group figured Maryland could lead the way by providing universal insurance through a first-of-its-kind, single-payer system within the state's borders. The coalition even hired a national consulting firm, which produced a predictably favorable report suggesting that such a system would save the state more than $200 million a year in insurance costs.

But building the necessary support for such a proposal proved impracticable. Several left-leaning groups, including politically powerful trade and teacher unions, wanted no part of a single-payer system. While it sounded good in the abstract, union leaders concluded it would either cost their members money or mean a reduction in their own health benefits. "They said, 'Yeah it's a good idea, but don't force me off my plan,'" DeMarco says.

Perhaps even more important, organizers concluded that with George W. Bush in the White House, the federal government would not approve waivers necessary to create a single-payer system in Maryland. "I'll be the first to say that single payer is the most equitable, effective way of providing health insurance," Beilenson says. "I love tilting at windmills, but it's just not politically practical now."

In December 2000, the coalition announced it would not be advocating a single-payer plan. Rather, it would attempt to add on to the current system — a collection of private plans and government programs such as Medicare and Medicaid.

The decision generated criticism, from both the left and the right. Business groups remain convinced that the coalition's ultimate goal is a single-payer system, which could force them to go into a government system that could prove more expensive. 

On the other side, single-payer advocates, both in and outside the School, were outraged when the idea was scrapped. While they acknowledge that a move to universal coverage in Maryland would provide relief to the uninsured here, inequities would remain. Some Marylanders, for example, would likely still end up paying too much for coverage, while others would be stuck with low-end benefits packages provided by penny-pinching employers.

Some argued it was better to do nothing and let the current system collapse of its own weight — clearing the way for public acceptance of single-payer. Critics accused Beilenson of being a "turncoat," and sent angry letters to Dean Sommer arguing that the School should not lend its name to a campaign for anything less than a true single-payer system.

David Levine, MD, ScD '72, MPH '69, was among the letter writers. Months later, the Hopkins Medicine internist with a joint appointment at Public Health says that the coalition's effort is "all to the good," but adds, "While this would bring improvement, it won't be sufficient." Improving the current patchwork system will delay what he says is an inevitable move to single-payer. "We may as well bite the bullet and do it now. It will be harder to do later."

Sommer, MD, MHS '73, politely accepted the complaints, yet continues to support the reform effort. "They have taken the highest moral ground," Sommer says of the critics. "But I believe it's more important to have universal health care. Half a loaf is better than no loaf at all."

While the coalition's formal State House lobbying has yet to begin, businesses and insurance companies have been plotting a counterattack for months. They have their own well-financed coalition, Marylanders for Responsible Health Care Solutions, which is poised to oppose any dramatic changes in the state's insurance system.

Bryson Popham, a veteran insurance industry lobbyist who is directing the group, says his clients fear they have a lot to lose —- at least down the road — with a move to universal health coverage. They suspect a single-payer plan, funded by a tax on employers, remains the ultimate goal.

And that, he says, is anathema.

"One of our central principles is that we believe in incremental reform," Popham says. "Reform the system we have rather than toss out the entire system, which is what they would do."

The Initiative comes along at a time when the state is already struggling to pay its health care bills. The reimbursement rates for providers in Maryland's Medicaid program are generally considered to be inadequate, and the state has not provided full funding for costly areas such as mental health treatment. (Bowing to that reality, the Initiative tinkered this fall with its insurance proposal to free up as much as $100 million to increase the current Medicaid reimbursements.)

At a Sept. 7 press conference at the School, the Initiative launched the debate, beginning its campaign to educate the public and lawmakers about the benefits of universal coverage. Some of the School's faculty will eventually provide expert testimony to the legislature on the health insurance proposal, but will remain relatively impartial and objective. "We'll try to play the policy analyst as best we can," says Weiner. The coalition's long-range plan hinges on making universal health care a key issue in Maryland's 2002 gubernatorial and legislative races. If the group can get pledges of support from enough winning candidates — particularly from the next governor — DeMarco hopes to have a strong chance of success in Annapolis in 2003.

The bottom line, Oliver suggests, is that only a new political approach will force dramatic change. "Maryland thinks of itself as very progressive," he says. "But Maryland has never gotten anywhere close to universal coverage."