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Public-Private Alliance Targets Health Costs

January 6, 2005
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As the No. 1 employer in the Land of 10,000 Lakes, Minnesota Gov. Tim Pawlenty believes he has found an answer that may pave the way for other states to save billions of dollars: Band together with local large corporations, health plan distributors and labor groups to persuade health care providers to control costs and improve efficiency--and increase the quality of care.

On Nov. 29, Pawlenty announced the goals of the Smart Buy Alliance, a coalition of health care purchasers representing nearly 60 percent of the state’s workforce. The group includes the Minnesota Chamber of Commerce, the Buyers Health Care Action Group, the Minnesota Association of Professional Employees and the Minnesota Business Partnership, an association representing Minnesota’s largest employers.

The alliance seeks to:

• Use certification programs to rank the health care providers by quality of care and reward top performers for improved results.

• Encourage patients to use only best-in-class providers.

• Require and standardize health care cost statements that are sent to consumers.

• Require use of modern technology to handle medical records. This includes making insurance claims 100 percent electronic and tracking clinical results and even patient satisfaction on automated systems.

Pawlenty can’t put a dollar figure on the savings, but he believes it will be "significant." "The U.S. Department of Health and Human Services estimates that adopting better information technology will save our health care system 10 percent a year," Pawlenty says. In 2003, "health care spending was $22 billion. So we’re not talking about a million dollars here and a million dollars there. If this purchasing alliance accomplishes all that we envision, the savings will be in the billions."

Local physicians’ groups, however, are concerned about aspects of the governor’s plan.

"We agree with him on decreasing the administrative burden. If we can standardize forms to request this or that or remove third and fourth parties, the system will work better," says Dr. Michael Gonzalez-Campoy, president of the Minnesota Medical Association. "But we are concerned that (this plan) is cost-shifting. He will cut costs to the system now and in the next two years by preventing people from accessing health care."

Gonzalez-Campoy says the plan "will create a huge health care disparity because the government will close inner-city clinics because they are not performing as well as others in affluent suburban areas.

"And if you prevent people from seeing their doctor, they will start going to the emergency room," he says. "Instead of dealing with things at the office for low costs, it will cost us 20 or 30 times more to take care of them." Ultimately, Gonzalez-Campoy says, the alliance might "destroy some very good programs in the state."

—Sheree R. Curry

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