Institute Forum

Implementing Health Reform September 27, 2010

Complications Expected in Treatment of Health Care System

Getting federal health care reform legislation passed may have been complex. But the work that follows to implement the law is likely to be even tougher, according to speakers at an Institute forum on Sept. 27.

For more:

Audio (Full)

Video: Richard P. Nathan
Nathan’s paper

Video: Deborah Bachrach
Bachrach’s slide presentation

Video: Q&A session

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Former Institute Director Richard P. Nathan talked about how the interplay between politics and policy, and between federal and state governments, will create challenges for health reform implementation at the state and local levels. Health-care consultant Deborah Bachrach, formerly deputy commissioner of health and Medicaid director for New York State, detailed some specific tasks New York officials must undertake to comply with the law, whose requirements go into effect on various dates over the next few years.

Both characterized the implementation process as a critical opportunity that public officials must address immediately.

Nathan questioned whether the law will accomplish its goals of efficiency and cost control, given the wide range of influential constituencies that oppose change in the health-care system.

“The interests that want to protect physicians, hospitals, pharmacies and drug companies have real money. ... There sure is a constituency for not changing things,” Nathan said. “Good government has no constituency.”

He stressed that federal mandates should not treat states as if they are all the same, but consider how national policies will be implemented differently in varying states.

In his talk and in the paper he wrote to accompany his presentation, Nathan offered suggestions for getting implementation completed in what he characterized as “the American way.” They included: maintaining the flexibility to recognize failed reform efforts and to adjust them; looking to the states for creative solutions to problems, rather than dictating all changes from Washington; and borrowing from private enterprise for ideas on encouraging innovation, experimentation and efficiency.

Bachrach dealt more specifically with the implementation work facing New York officials. Because New York sponsors more health insurance programs for its low-income residents than many other states do, it has a leg up on implementation, Bachrach said. Nonetheless, she urged New York legislators to consider immediately the design of legislation that must be in place for reforms that are mandated to be in effect in several years, including whether and how the state will establish its own insurance exchange by 2014. The exchange is akin to a “one-stop shop” for health insurance options, with products and prices to be monitored by the government. If government officials determine the state should run its own exchange, rather than have New Yorkers rely on a separate exchange to be operated by the federal government, then they must decide whether it will be structured as a state agency, a nonprofit, a public authority or something else. It’s important to determine the structure of the exchange soon, she said, because its configuration will affect other decisions that must be made to comply with the health-care law.

State officials must also decide which New Yorkers will be covered by state-run health insurance programs. In some cases, Bachrach said legislators could consider insuring fewer New Yorkers who now receive health insurance benefits, are not required to be covered by the state under the new law, and could have the option of receiving coverage through the federal government in future years. Those individuals include, for example, pregnant women covered under Family Health Plus program and immigrants legally living in the state for fewer than five years who currently receive Medicaid benefits.  

One of the biggest implementation challenges facing New York, Bachrach said, is that the changes must be made at a time when the state has little money — and health care costs make up a massive expenditure.

“States are doing this ... at a point in time when there is no money, and states are facing huge budget gaps,” she said. “New York must tackle cost containment and health reform at the same time.”

Another challenge facing the state, said its former Medicaid director, is the fragmentation of its current public health insurance systems. Implementing the changes required by the new law offers the state the chance to streamline its systems, she said.

“This is a mammoth task and enormous opportunity,” Bachrach said.


The Nelson A. Rockefeller Institute of Government, the public policy research arm of the State University of New York, conducts fiscal and programmatic research on American state and local governments. It works closely with federal, state, and local government agencies nationally and in New York, and draws on the State University’s rich intellectual resources and on networks of public policy academic experts throughout the country.