Are the States Dancing by Themselves?

Milbank State Leadership Network

It takes two to tango. The partners must agree on the music and the steps. After spending this fall meeting with state health policy leaders from across the country, I am not sure state or federal officials know the health policy tune, let alone the dance.

Every fall, the Milbank Memorial Fund convenes the members of its Reforming States Group (RSG)—state teams of executive and legislative branch health policy leaders—in bipartisan, closed-door conversations of no more than 50 people per meeting. The three separate meetings consist of open updates from the states about their health policy priorities, as well as briefings on issues of their choosing. The meetings provide three first-class lessons: in the pluralism of values that exists in the United States; in federalism, the balance of state and federal authority; and in how leadership can move ideas forward.

They also are important pulse checks in what is going on in state health policy at any time. With the change in the federal administration, this year’s meetings—with 112 officials from 42 jurisdictions and three other countries—were particularly telling. The opportunities for state-level health policy flexibility and grand innovation that we heard trumpeted during the summer’s congressional debate are nowhere to be seen. Instead, state health policymakers are making incremental progress despite an unstable state-federal partnership, the sheer scope of current work, and a lack of resources to do it.

Regardless of political affiliation, geographic region, or branch of government, RSG attendees spoke of the high costs of the uncertain federal health policy environment. On the congressional side, every repeal and replace proposal has generated assessments of impact in Medicaid agencies and insurance departments. Local stakeholders in and out of health care consistently look for information, guidance, and direction from the state government. Contingency plans were drawn up, evaluated, and discarded. “You have no idea of the toll of this uncertainty,” one RSG attendee said. “I can only send out so many ‘keep your chin up’ emails to staff.” This toll is continuing—as Congress proposes to repeal the individual mandate as part of its tax bill and has cut off funding for the Children’s Health Insurance Program.

This uncertainty is not limited to Congressional policy. Executive action has contributed to it as well. Elimination of funding for cost-sharing reductions in the individual insurance market, slashed outreach budgets, and shortened open enrollment periods for insurance exchanges have forced insurance commissioners and their regulated insurers into fraught negotiations. Changes in Department of Health and Human Services (HHS) leadership, the absence of a federal policy framework, and broad policy statements about intended new directions for interpreting the goals of Medicaid have left states confused about the status of current and future requests to HHS for waivers of Medicaid rules. “The problem is not the federal staff we are interacting with,” one person said. “They are trying hard to move our requests forward and streamline the approval process but you can tell that often they are not getting clear direction—except in the cases of disaster relief, where they have been very responsive.”

RSG attendees report that they have no time to generate comprehensive new ideas—they are too busy administering the programs they have. A litany of issues also demands immediate responses—even in the uncertain federal environment. Among those issues that surfaced at the meetings were the opioid abuse crisis, health provider consolidation, rural health care, telehealth and scope of practice, water quality, planning with a growing aging population, disaster and epidemic responses, the needs of high-cost Medicaid populations, and the toll of cumbersome state personnel and procurement systems.

In the face of these programmatic responsibilities and immediate needs, and in the absence of a stable federal partnership, hopes of broad state-level innovation to take on fundamental health care challenges—like financing health insurance access for low-income populations, achieving comprehensive provider payment reform, or addressing the social determinants of health—seem, as former Federal Reserve Chair Alan Greenspan once called it, “irrational exuberance.” These are national questions that merit national policies.

Finally, many states are struggling with ongoing budget shortfalls. Officials from energy-dependent states spoke of annual budget reductions of 10% or more in multiple years. Even in states with more diverse economies, there is evidence that health care’s portion of state budgets may be reaching its outer limits. Medicaid officials took no solace in per-capita cost trends consistently below their commercial or Medicare counterparts, when enrollment increases swelled total costs. Appropriators in attendance were sympathetic to the need to spend money upstream and early to prevent more health care costs later, but still had no idea how to finance such investments. “We are too busy fighting fires,” one official said, “to think about buying fire extinguishers, let alone how to prevent the fires.”

Even in these difficult environments, however, state health care officials are testing and implementing significant improvements—if not comprehensive reforms. The RSG meetings uncovered inspiring stories about leadership on issues such as reallocating long-term services and supports from nursing homes to community-based settings, promoting family caregiving, responding to the opioid crisis and hepatitis outbreaks, transforming primary care, improving inpatient care in hospitals, and collaboration between agencies.

However, these successes came in spite of—not because of—changes in the federal policymaking environments. In their Letter to the New Administration, penned a year ago, in which they identified bipartisan population health priorities, the RSG underscored the importance of the state-federal partnership. States cannot do this work of population health improvement by themselves. It is a complicated dance that requires the music of an agreed-to policy framework. States need committed federal partners who do not shirk their duty and obligation to work with them to serve their citizens and achieve a common goal that none can accomplish by themselves: healthy people living long and fulfilling lives in healthy communities.