Perspective: All Kids Program Is An Important Improvement

In an impressive display of just how much government can accomplish quickly when the powers that be are all on the same page, –Governor Blagojevich announced the All Kids program of universal health insurance for Illinois children on October 16, 2005. Just a few weeks later the General Assembly passed implementing legislation (HB 806) in a matter of two and a half days.

The Governor announced that All Kids would be paid for through savings accomplished by shifting the entire caseload of Medicaid and related programs to a new service delivery model known as "primary care case management" ("PCCM"), effective July 1, 2006. All Kids and PCCM are best understood as separate programs -- they are not really linked other than that the savings realized by PCCM will make is possible for the state to afford All Kids. Under PCCM, all covered families and individuals (including the elderly and disabled), with some exceptions, will choose a doctor to be their main coordinator of care. All other services from specialists or hospitals (again with some exceptions) will have to be authorized by that doctor.

Both All Kids and PCCM are good concepts and have potential to be important improvements to the current system. Both programs, especially PCCM, require thoughtful design of the details in the rulemaking process over the next months and then careful implementation. The success of PCCM, in particular, will depend heavily on smart exceptions in the program, attention to matching people up with doctors, and maximization of recipient choice in doctors. In concept, however, both programs can be clear winners, for these reasons:

All Kids

All Kids enables the covered children to have access to preventive and maintenance care. While uninsured kids can usually get care for emergencies, health insurance means access to a "medical home" and to the type of care that prevents crises. This promotes strong child development and maximizes children’s life chances in many ways.

Thus, All Kids also will save money over time. One of the long-term strategies that is essential to gain a handle on overall health care inflation is to enable children to receive good preventive and maintenance care. Many expensive health issues are minimized or never encountered.

As designed by the Governor and authorized in HB806, All Kids is really for all kids. Children are treated the same, regardless of family income. No child is “too rich” or “too poor”. A sliding scale of affordable premiums and co-payment obligations recognizes family responsibility while keeping the program accessible.

All Kids will result in fewer cases of hospitals providing care to children without reimbursement. Because of this "uncompensated care" for uninsured children under the current system, hospitals have to charge every insured person more money in order to cover their overall costs. The insurance companies charge higher premiums to cover these bills -- an insured family pays over $1000 a year more in premiums than they would otherwise. By paying hospitals for treating children, All Kids reduces pressure on everyone’s insurance premiums.

Yet, as an insurance program, All Kids is not expensive. The per child per month insurance burden is about $80. The overall cost of the program is small (about $25 million in the first year) compared to the overall Medicaid program (at least $8 billion).

All Kids builds smoothly onto KidCare, a program that is already well understood. It has an effective waiting period of up to 12 months to prevent a massive switch to the program of children currently covered by private insurance.

All Kids is a breakthrough in children's health coverage that is important across all income groups. Polling has shown that, regardless of the ebb and flow of public budgets, health care for children is a core national priority for most people. As politicians all over the country neglect this problem and many of them go about figuring out how to provide less health care, Governor Blagojevich has shown important leadership.

Primary Care Case Management (PCCM)

In concept, PCCM promises both better and more efficient care while preserving core principles of choice for covered individuals. The patient chooses the doctor who will be the care coordinator. For patients with chronic illnesses (e.g., asthma, HIV), the specialist for that illness can be the coordinator. If the patient so chooses, the coordinator can be a community clinic or an HMO. PCCM, however, is not HMO-style managed care. All the doctors and other providers will be paid the same way as they are now.

The theory of PCCM is that better patient outcomes and cost savings come from the establishment of a "medical home" and a consistent source of health care management. This produces avoidance of unnecessary or duplicative medical care and services, proper management of chronic conditions, improved primary care, early detection and treatment of health conditions, better prevention, and avoidance of unnecessary hospitalizations and institutionalizations.

PCCM is a care delivery model that has a substantial track record. It is not a new or untested idea. The cost savings and patient outcomes that the Administration projects appear to be reasonably based on the performance of the PCCM model in other states.

PCCM can dramatically improve the connection of patients to a "medical home". These “medical home” aspects of PCCM will benefit from and build on well-child initiatives that the Administration already has underway (see related article in this issue of IWN). These well-child initiatives will increase the number of doctors participating in pediatric care under Medicaid by raising pediatric and dental rates, shortening the payment cycle, and improving the matching up of children with participating doctors willing to be their primary care coordinator.

PCCM must be implemented carefully, because it can have a messy and unproductive outcome if it is not. The Administration appears to have a credible plan for implementation, including open formal and informal access to the process, designation of he Medicaid Advisory Council as a formal public forum, and promises of a "constant improvement" implementation mindset. People concerned with all populations covered by Medicaid must be vigilant during the rulemaking and implementation processes.

Implementing legislation (HB806) easily passed both the Senate and the House with bipartisan majorities, and the Governor will sign All Kids in early in November. What we know of the details of the program is described elsewhere in this issue of Illinois Welfare News. The Department of Healthcare and Family Services (HFS) will work out the details through the rulemaking process, and the program will take effect on July 1, 2006 . HFS is off to a good start and given its good track record in implementing FamilyCare and other recent health care programs, it deserves a "benefit of the doubt" as the process begins.