Minnesota health officials are urging a three-year delay in the state's effort to provide universal healthcare coverage through integrated service networks, which would accept financial risk in return for providing care to defined populations.
Mary Jo O'Brien, commissioner of the Minnesota Health Department, said she wanted to make sure all the administrative rules were in place and questions about funding were answered before the ISNs would begin operating on July 1, 1997.
The 1993 landmark legislation, known as MinnesotaCare, called for the creation of large medical networks that would begin operating on July 1, 1994, but only if new sources of revenue could be found to help pay for the program. The program would include coverage for 400,000 poor and uninsured residents.
The health department has estimated that MinnesotaCare will have a deficit of as much as $250 million for 1996-1997. In addition, still pending is a federal lawsuit filed by a dozen Minnesota labor unions challenging a controversial 2% provider tax, which is levied on the gross revenues of providers (June 28, 1993, p. 32).
Ms. O'Brien made her rec ommendations on the eve of an eight-week-long legislative session that be gan on Feb. 22. Ironically, providers aren't waiting for the Legislature to act. At least 18 ISNs are being formed in the state.
In addition, health reform has spawned a new round of consolidations. Medica, the Twin Cities' third-largest health maintenance organization, recently announced a merger with Healthspan, a large hospital system. HealthPartners, the state's second-largest HMO, also said it would merge with St. Paul (Minn.) Ramsey Medical Center and its physician group.
Besides funding, many other questions remain, such as what providers would be permitted to join ISNs, what benefits ISNs would offer, and what kind of financial strength they would be required to have, she said.
Sources said lawmakers were likely to adopt most of Ms. O'Brien's recommendations amid signs that crime had replaced health reform as a public vote-getter this year.
"There's not a lot of legislative appetite to do anything controversial (before the fall elections)," said Allan Baumgarten, a Twin Cities healthcare consultant. "She's provided them with an out by relying on administrative details," he said.
"There will be a delay, and everyone's accepted that," said Richard G. Korman, assistant general counsel for the Minnesota Hospital Association. "It's good if it will allow the development of many new ISNs."
MinnesotaCare would phase out HMOs and preferred provider organizations, which cover more than half of the state's population. Ms. O'Brien said HMOs and PPOs should continue to operate until 1997 to give providers time to form the new networks.
As part of the transition, a new kind of managed-care organization called community integrated service networks each would begin enrolling as many as 50,000 people on Jan. 1, 1995. They must become full-fledged ISNs by July 1, 1997.