NASHP Conference: From recession comes reform’

In searching for a bright spot in the budget crisis hanging over states in 2002, Portland, ME-based National Academy for State Health Policy (NASHP) executive director Trish Riley says that economic recessions "breed state reforms that fuel federal reforms."

Ms. Riley made her observation as she opened the plenary session on the first day of this year’s 15th annual state health policy conference Aug. 5 in Philadelphia. Addressing the conference theme, "Necessity is the mother of invention. . . . State health policy meeting the budget challenge," Riley reviewed the economic statistics that describe states in crisis and cautioned that recovery is 12 to 18 months away, and then only if there is not the second recession that some economists think will come.

The current deficit hits states harder than did the one in 1990-91, she said. The shortfall in the 1990s was 6.8% of the budget and saw 36 states cut budgets. This year, the deficit represents 8% of the budget and 45 states have cut their budgets.

Ms. Riley said that federal tax reforms will hurt states and delay recovery. A phase-out of the estate tax will cost states $75 billion over 10 years, while the economic stimulus package will cost states $15 billion over three years.

In addition, she reported, tobacco settlement revenue is declining by 1.5% a year, and that decline is expected to continue so that states will receive 20% less than projected in 2010.

But Ms. Riley also looked at earlier recessions and the positive state initiatives that came out of them. From the recession in the 1970s came Hawaii’s insurance mandate and Medicaid’s home- and community-based service waivers. The recession of the ’80s
saw state reforms, creation of health plans for children, state rate-setting, and statewide Medicaid managed care programs. And the 1990s brought insurance reforms, creative use of waivers, and purchasing cooperatives.

"The question we have to look at now is what the next reforms will be after the 2002 recession," she said.

"It feels like there’s no more magic bullets," Ms. Riley added.

A glimpse into a possible answer to that question was offered by keynote speaker Reed Tuckson, senior vice president of Minnesota’s United Health Group. Working from the Institute of Medicine’s (IOM) March 2001 report Crossing the Quality Chasm, Mr. Tuckson said a 10-year strategy is needed to close the major gap that now exists between the care that people receive and the care that they should receive. 

He reviewed the problems with today’s health care system cited in the report.

First, there is a need for both medical and nonmedical services to be integrated and coordinated to address chronic diseases and the aging population. Second, the system is complex and unable to translate new knowledge into practical application. Third, the system is fragmented and poorly coordinated and lacks even a rudimentary clinical information capability. And finally, there is an absence of coordinated planning and strategic vision.

In Crossing the Quality Chasm (available to be read on-line at, the IOM outlined six aims for improvement to be carried out through 10 new rules to guide patient-clinician relationships in the 21st century.

And the group called on Congress to create a $1 billion innovation fund to help subsidize promising projects and communicate the need for rapid and significant change throughout the health system.

Technology plays central role

One of the key elements cited by the report authors and stressed by Mr. Tuckson in his address was the central role information technology must play in any redesign of the nation’s health care system if there is to be a substantial improvement in quality of care.

"The committee recommends," the report said, "that Congress, the executive branch, leaders of health care organizations, public and private purchasers, and health informatics associations and vendors should make a renewed national commitment to building an information infrastructure to support health care delivery, clinical and health services research, and clinical education."

Mr. Tuckson said that it is important that people receive the information they need to make their own health care choices and called for patients to be coached in evidence-based decision making. He pointed out how automatic teller machine networks allow people to withdraw money from their bank accounts anywhere in the world and asked, "Who decided that banking was good to fix this way, but not health care?"

Moving beyond the divide

He acknowledged that there would be privacy concerns, but called on state attorneys general and others to look for ways to provide for a free interchange of health care information rather than erecting barriers.

"We need to move beyond the public/private divide," Mr. Tuckson declared. "We have to partner with the people who have data so we can provide the comprehensive services people need."

The IOM’s Aims and Rules

In its March 2001 report Crossing the Quality Chasm, the Institute of Medicine in Washington, DC, lists the following aims for a new health system and rules for patient-clinician relationships.


  1. Care should be safe, and patients should not be harmed by care intended to help them.
  2. Care should be effective, based on sound scientific knowledge.
  3. Care should be patient-centered, respectful, and responsive to individual preferences, needs, and values.
  4. Care should be timely, with unnecessary waits and potentially harmful delays reduced.
  5. Care should be efficient, not wasteful of equipment, supplies, ideas, or energy.
  6. Care should be equitable and not vary in quality because of patient characteristics such as ethnicity or geographic location.


  1. Care should be based on continuous healing relationships.
  2. Care should be customized-based on patient needs and values.
  3. Control should reside with patients, who are given the necessary information and opportunity to exercise the degree of control they choose over health care decisions that affect them.
  4. Knowledge and information should be shared with patients.
  5. Clinical decisions should be evidence-based.
  6. The care system should be safe.
  7. The health system should be more transparent.
  8. The health system should anticipate patient needs rather than simply react to events.
  9. The health system should not waste resources or patient time.
  10. 1There should be more cooperation among clinicians to ensure an appropriate exchange of information and coordination of care.