The budget proposal unveiled by Governor Rell this week, not unexpectedly, calls for significant spending reductions. It would cut $600 million from Medicaid spending over the biennium; another $27 million from SAGA, and $20 million this year from HUSKY, the insurance program for children.

We can all appreciate that in difficult economic times, the state needs to spend less. But difficult economic times are also an opportunity for innovation and creativity, to push the best and the brightest among us to find new and better ways to deliver care for less money, while preserving much-needed services for families and individuals who need them most. 

There are many programs and proposals already under consideration, and others just being developed. Here are 10 ways that the Connecticut Health Policy Project has identified to both save money and improve health care in the state:

1. Implement Primary Care Case Management, (PCCM) statewide for the HUSKY program, a way of running Medicaid without HMOs that allows individuals to pick a primary health care provider who agrees to provide regular health care services and to coordinate all of the patient’s care. Such programs, implemented in other states, attract providers and consumers, are accountable for outcomes, serve as s competition to the HUSKY HMOs. PCCM could save up to $113 million per year for Connecticut, and also invests resources in primary care and care coordination capacity in the HUSKY program – sorely needed infrastructure to reform a broken system.

2. Repeal the 24 percent rate increase given to HUSKY HMOs last summer. Nationally Medicaid managed care plan rate increases have been between 4 and 5% annually. Bringing Connecticut closer to national averages could save $162 million/year

3. Provide coverage for smoking cessation medications and counseling in Medicaid.

4. Re-align state employee health benefit costs. CT pays 16% more than the average for all states (family coverage, 2006), but workers’ share of those costs are 9.2% less than the US average for state employees.

5. Limit HMO administrative costs. Other states have passed legislation limiting medical loss ratios to 75% (insurers may only spend up to 25% of premiums on administration and profit). Maine’s law requiring medical loss ratios of at least 75% resulted in just one insurance company returning $1 million to consumers in 2008. A similar law in New Jersey resulted in $11.6 million returned to policyholders between 1993 and 2006.

6. Pay more for quality care through pay-for-performance and value based purchasing initiatives under all state coverage programs. These programs could be implemented without new resources, by realigning incentives within current health care spending levels.

7. Implement medical homes for every member of a state coverage plan. Medical home practices reduce specialty costs, improve health access and outcomes by strengthening the patient- provider relationship and emphasizing primary care and care management. A medical home program in North Carolina saved $225 million in Medicaid spending

8. Promote and require use of health information technology tools, including electronic medical records, by all providers participating in state coverage programs.

9. Disseminate comparative quality and cost data to consumers to use market forces to improve cost effectiveness of care.

10. Limit prescription costs with provider education campaigns using independent information on relative costs and effectiveness of medications, limit gifts to providers from drug companies, require disclosure of all financial ties between providers and drug companies,  and prohibit data mining, the purchase of consumer prescription records as a marketing tool.

Ellen Andrews is Executive Director of the CT Health Policy Project, a non-profit research and advocacy organization working to expand coverage to affordable, quality health care for all Connecticut residents. The Project provides policymakers with information about options for coverage and provides assistance to consumers struggling to access health care in Connecticut. www.cthealthpolicy.org, www.cthealthconsumer.com