Continued: Governor, legislators haggle over health care system changes

Gov. Tim Pawlenty told legislators Monday that he is concerned that legislation now before a conference committee to revamp Minnesota's health care system might actually drive up costs instead of cutting them.

"He wasn't very specific about what he wanted, and we're going to have to meet with him again to get a little more clarity about that," said Sen. Linda Berglin, DFL-Minneapolis, one of the architects of the proposed changes.

Pawlenty said little about the substance of the meeting, characterizing it as discussion of mostly technical concerns.

Health care costs continue to rise at "unsustainable" levels, he said. The Legislature's proposal, he said, would raise those costs further by expanding eligibility for state health programs. He said Minnesota still has "what is arguably the most generous human services system in the country."

One of the biggest divides between the governor and the DFL-controlled Legislature remains use of the Health Care Access Fund. To help balance a projected budget deficit, Pawlenty would use $250 million of that fund -- about half of its current balance -- to finance state-funded health care programs that normally come from state tax revenue. DFLers say tapping the fund for that use amounts to a raid on the fund.

In their meeting Monday morning, Berglin said, Pawlenty expressed concern about whether potentially several billion dollars in savings from the proposed changes in the health care system would go back to private businesses to lower health costs further. "Businesses would get most of the savings," Berglin said. "That's exactly what the Senate bill envisions."

The legislation grew out of a governor's task force and a legislative commission that spent last summer and fall crafting a series of proposals designed to curb growing health care costs. Currently, the cost of care is projected to soar from about $30 billion now to $57.4 billion by 2015.

The governor and most of the 10 conferees met at 8 a.m. for about two hours at his office. Berglin said Pawlenty will schedule another meeting soon.

The conference committee, headed by Berglin and Rep. Tom Huntley, DFL-Duluth, met later Monday on reconciling the Senate and House bills and plans to meet again today.

Simplify changes in clinics?

Under both bills, clinics could qualify for higher reimbursement by establishing themselves as "health care homes."

Those clinics would provide comprehensive and coordinated care, especially for patients with chronic conditions such as diabetes and heart disease. An estimated 80 percent of health care costs are spent on people with chronic conditions.

Pawlenty asked the legislators to simplify that concept, apparently after hearing concerns from some health care providers in rural or small, independent clinics who worry that they might not have adequate resources to compete with larger health systems such as Allina and HealthPartners.

He also asked them to figure out ways to finance the changes -- about $40 to $60 million a year -- by not using the state's Health Care Access Fund, which is funded through a 2 percent tax on health care providers.

The governor did not directly address proposals in the bills to expand MinnesotaCare, the insurance program for lower-income Minnesotans, or to enroll people who already qualify but aren't enrolled.

"Originally, he agreed to spending Health Care Access Fund money to enroll people who are eligible for MinnesotaCare, but he seems to have changed his position on that," Berglin said.

Minnesota has the lowest rate of uninsured people of any state, about 7.2 percent. Of those, half are eligible for MinnesotaCare "and getting them enrolled would be a big step toward universal health coverage," she said.

The governor has criticized the cost and scope of both bills before the conference committee, saying he wants legislators to concentrate on lowering the cost of care for those with insurance before expanding state programs to assure that all have insurance.

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