Elizabeth Kilbreth: Balancing Act

Elizabeth Kilbreth, Ph.D., is an Associate Research Professor in the Edmund S. Muskie School of Public Service at the University of Southern Maine. Elizabeth has been conducting research and policy analysis in the area of health policy reform for over fifteen years. Her recent research interests include state and national health policy reform, health care financing and access to care, and health service utilization analysis. Elizabeth’s research interests converge in her SHARE project which assesses the effects of premium requirements and participant cost-sharing on access to care in Massachusetts, Maine, and Vermont, as measured by enrollment patterns and health service use.

We talked to Elizabeth about health care costs, funding mechanisms, and going back to school.

Maine’s health care program name, Dirigo, means “I lead” in Latin. How has Maine been a leader in health reform?

Maine was one of the first states to attempt major health care reform. This most recent round of reform was galvanized by the fact that health care costs are like a miner’s canary. They rose faster in Maine than in any other state in the country during the 1990s. Maine is a poor state and it has the second highest rate of health care spending in the U.S. after Massachusetts.

Why did costs rise so much faster in Maine?

In the 1990s, managed care companies found that they had very little leverage in Maine for negotiating rate reductions or discounts because, as a rural state, virtually all providers were needed to form a statewide network. Thus, providers had little incentive to bargain on prices. In addition, for reasons that are not fully understood, utilization rates for costly services, such as diagnostic imaging, or mental health care treatment, are very high in Maine compared to national averages. A number of large managed care companies that entered the state during the 90s withdrew or were absorbed through national mergers creating a period of turmoil and consolidation in the insurance industry, which only reduced purchasers’ leverage with regard to costs even more.

Seems like a period of massive change.

When the dust settled, there were essentially three insurance companies left and they all immediately worked to recover the losses they had sustained while angling for market share. Premiums in the small group market in particular were going up 25% - 30% a year for several years in a row. People were upset, saying it was out of control. With this public outcry and a new governor, Maine had the perfect combination to put health care policy on the front burner again.

In addition to Maine, you are also examining Vermont and Massachusetts.

Yes, we are focusing on these three states because they presented a wonderful natural experiment. State policy makers start with the assumption that one of the major barriers to appropriate access to care is cost, so they try to subsidize costs for low-income uninsured individuals. All three states have chosen to contract with private insurers, but they are also creating a sliding scale subsidy for the premium payment.

Are states trying to relieve health care costs with more cost-sharing?

Policy-makers have to figure out how to keep their program costs in line, and obviously one way to do that is to either limit benefits or require more cost-sharing. However, increasing cost-sharing can make the program unaffordable for the very population that is being targeted. It takes an enormous amount of resources to insure even a small population. We’ve already seen how difficult it has been to sustain Dirigo. The legislature has been trying to create a new funding mechanism, but this is always politically contentious.

What is the funding debate in Maine?

The original funding mechanism for Dirigo was being challenged in court every year. To avoid this, the legislature created a specific tax on the insurance industry and smaller dedicated taxes on alcoholic beverages and soft drinks. It was amazing that they were able to pass these when the state had a $190 million deficit.  However, opponents with substantial funding from the beverage industry organized a statewide referendum to oppose the new taxes and were successful in getting the new law repealed. DirigoChoice is still operating under the original funding mechanism and, given the economy and declines in state revenue, future steps with regard to the program are unclear.

Have Massachusetts and Vermont also experienced similar obstacles?

Our first round site visits to these states found continued strong political support for the reforms, despite the difficulties the states are facing regarding revenue shortfalls. We will be interested to see how policy-makers in Massachusetts and Vermont balance their support of the reforms with fiscal realities. It is tough to maintain support for these programs when you get pushback from businesses and/or citizens. Our work will feed some concrete information into the policy debate.

Have you always been interested in the experiences of low-income uninsured people?

I’ve had a longstanding interest social and governmental policy related to the safety net.  As an undergraduate student of sociology in Boston, I participated in a sit-in with a group of welfare moms who were demanding larger allowances for clothes for their children.  I found my “street” education as valuable a learning experience as the classroom education.

How did you find yourself segueing to health services research?

My first job, out of college was working in the research department of a staff model HMO in Washington D.C. I got my Ph.D. late in life.  I had already been working in health services research for 10 or 15 years. When my youngest child was 13, I took a leave of absence to get my Ph.D. and I’ve been teaching ever since.

What did your kids think about you going back to school?

For kids, having parents in school represents a role reversal. They think, “School is for kids - what are you doing?”  I enjoyed going back to school and my kids were excited for me.