As Kathleen Sebelius leaves to help Barack Obama reform health care in Washington, here’s a checkup on what happened in Kansas
It’s a Tuesday morning in mid-February, and Topeka couldn’t look much bleaker. A white winter sky weighs on the crumbly prairie town, with its sagging houses and faded fast-food restaurants.
At the Capitol Plaza Hotel, a tall gray bunker a few blocks south of the Statehouse, the Kansas Livestock Association is meeting in one of the banquet rooms. Leather-skinned men in cowboy hats and Wranglers wander the hallway, some of them gathering around a table stacked with “EAT BEEF” ball caps.
Farther down the corridor, in another large banquet room, is a meeting of the dozen or so board members leading the state agency that oversees health care in Kansas.
Once a month, these suckers take time off from real jobs — one is a vice president at a Fortune 500 company, one is a pediatrician, others are medical-center CEOs, two are high-level university administrators, and another is a professor of management at Harvard Business School — to spend butt-numbing hours listening to endless reports on things like what to do about prescription drugs for mentally ill people, how to spend the federal stimulus money that will be coming any day now, and whether Kansas should tax its nursing homes.
This is what Kathleen Sebelius’ attempt at health-care reform looks like. The Kansas governor wanted to create a cabinet-level position and appoint someone to lead the way, but the state House of Representatives rejected that idea. Instead, the Legislature created a new state agency called the Kansas Health Policy Authority to “coordinate a statewide health policy agenda.” It was, by most accounts, a compromise that thrilled neither side.
The board members meeting here today have been appointed by state House and Senate leaders. They run an agency that’s also responsible for buying health insurance for publicly funded programs such as Medicaid and the coverage for state employees. It also tracks all sorts of health-care information, ostensibly so lawmakers can make better policies.
Last year, after months of research and meetings with people across the state, the KHPA presented the Legislature with 21 ideas for improving the state’s health-care system.
The Legislature rejected almost all of them.
But the KHPA keeps working, its 266 employees managing Medicaid and researching policy. And the businessmen and businesswomen who sit on its board of directors keep coming to the Capitol Plaza Hotel once a month for these agonizing daylong meetings.
Today, however, they get a special reward. The meeting begins with an 8:30 a.m. visit from the governor.
Sebelius is having a rough couple of days. She’s in a fight with Republicans about a spending bill, and threats not to pay state workers at the end of the week have kicked up a mini media tornado. But when she walks into the room, carrying a black, plastic travel mug and followed by an entourage of reporters and staffers, the governor looks at ease.
It has been a long time since these policy wonks have heard from the woman in charge.
“I want to start by telling you that I know you have to be pretty frustrated,” she begins, now sitting at the head of the table. She tells the board members that she has been a close observer of their work.
“And, over and over again, people don’t pay a lot of attention to what you’ve been saying, and that has to feel like you’re out whistling in the wind sometimes. I do think that, at the end of the day, folks are paying attention. … I just want you to hang in there because you’re creating a template for exactly what we should be doing.”
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Sebelius delivers the pep talk without notes, in the same steely monotone that was so disastrous in her response to George W. Bush’s last State of the Union address. Now, though, it sounds aristocratic and reassuring.
It’s a new day and age, Sebelius says, with a new administration in Washington that’s firmly committed to all the things the KHPA has been talking about. As the national discussion of health-care reform moves forward, she says, “You can feel yourselves to be very prescient.”
She reads them a letter she recently received from the mother of a 7-year-old girl named Erica, who was born with a hole in her heart that required open-heart surgery. The family had insurance through the mother’s employer. After they lost the insurance, they enrolled their three daughters in HealthWave — a state program that covers uninsured children. Thanks to HealthWave, Erica’s mother wrote, Erica was “treated by the best pediatricians, cardiologists and cardiac surgeons at the best hospital, Children’s Mercy…. Thank God we live in a state that believes in health care for our children.” Almost a year after surgery, Erica is “a strong, happy, healthy 8-year-old that never runs out of energy and has just been certified that she can play soccer this year.”
Sebelius holds up a picture of Erica.
“There are a lot of Ericas out there who you don’t ever hear about or hear from. So I wanted to tell you, that’s your valentine,” the governor says.
Federal stimulus money is on the way, she adds, so Kansas will be able to cover 8,000 more children.
“I just really want to thank you for your willingess to be so well-paid on this board.” Everyone laughs. The board members aren’t paid.
Hopefully, she says, more people will pay attention soon, because unless we fix the health-care system, we can’t fix the economy.
Just two weeks after this cold day in February, President Barack Obama will nominate Sebelius to a cabinet position as head of the U.S. Department of Health and Human Services. She’ll lead his health-care reform effort.
If Kansas is a microcosm of what she’ll face in Washington, she’ll likely need her own pep talk.
On March 5, Obama made warring factions sit in the same room.
His White House Forum on Health Reform brought together representatives from insurance companies and activist organizations, CEOs and labor leaders, doctors, nurses, lawmakers and lobbyists, scholars from think tanks and suits from the U.S. Chamber of Commerce.
The president promised that this time would be different. In the past, he said, “we have failed to act because of Washington politics or industry lobbying…. And I know people are afraid we’ll draw the same old lines in the sand and give in to the same entrenched interests and arrive back at the same stalemate that we’ve been stuck in for decades.”
His warning: “The status quo is the one option that’s not on the table.”
Kansas, meanwhile, provides a textbook study on the status quo.
The most obvious evidence? Campaign contributions.
Insurance-company money helps bankroll the state’s senators and representatives. Blue Cross and Blue Shield (which has a $200 million piece of the state’s annual contract to insure its employees) has donated money to all but one of the 10 state senators and to 23 of the 30 state representatives from Johnson and Wyandotte counties. Also generous, if less promiscuous, is Humana. FirstGuard Health Plan and Preferred Health Systems (which has $22 million of the state’s employee plan) occasionally throw some bones, too.
Also taking a deep interest in Kansas politics are international pharmaceutical giants such as Eli Lilly, GlaxoSmithKline, Merck, Novartis, Pfizer and Wyeth, which all make occasional contributions. So do the state’s hospitals.
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HCA (Hospital Corporation of America), which operates nine facilities in Kansas, has a “Good Government Fund” political action committee that routinely writes checks of $200 or $300 to most of the metro’s senators and reps during every election cycle.
By the time a senator has been in office a few years, he (John Vratil of Leawood, Chris Steineger of Kansas City, Kansas) or she (Karin Brownlee of Olathe) might have banked several thousands of dollars from the Kansas Hospital Association PAC, not to be confused with the equally munificent political action committees for the Kansas Medical Society and the Kansas Health Care Association.
Also huge spenders are the Kansas Optometric Association and the Kansas Dental Association, which favor writing $500 checks to senators and $250 checks to reps.
The Pharmaceutical Research and Manufacturers of America occasionally drops a couple hundred, as do Bayer and Cerner. The Kansas Pharmacists Association, the Kansas Association of Nurse Anesthetists, the Kansas Physical Therapy Association and the Kansas Chiropractic Association sometimes kick in, too.
With a few notable exceptions, the cash makes its way to candidates regardless of whether they’re Democrats or Republicans.
Health-care expenditures total more than 16 percent of the U.S. Gross Domestic Product, so it’s not surprising that the industry is so deeply invested in the political process, says state Sen. Jim Barnett, a Republican from Emporia — and a physician. Though Barnett has cashed plenty of the industry’s checks, he has also made health-care reform one of his main issues.
The industry’s various interest groups “are certainly very powerful and influential in the Kansas Legislature,” he says. “And I think we pale in comparison to how influential they are in Congress.”
Money doesn’t always translate into votes. But with all those players scrumming for influence, the status quo endures.
On January 10, 2008, Sebelius held a press conference at Topeka’s Stormont-Vail Regional Health Center. Sitting next to her in front of the cameras and microphones was Barnett, who ran against her for governor in 2006. Sebelius creamed him, winning 58 percent of the vote to his 40 percent.
This was the first time they had appeared together since the election. The reason for the political drama: With a new legislative session starting, the KHPA was presenting its 21 ideas to reform health care. Sebelius and Barnett had come together in a bipartisan show of support for all 21.
Twenty-one sounded like a lot, but these were not radical proposals. No one was suggesting a Canadian-style system of “socialized” medicine.
The most controversial recommendations: a statewide smoking ban and a tobacco tax increase of 50 cents a pack. Messing with tobacco is always controversial, but for public-health officials, it’s simply a no-brainer way of preventing all sorts of expensive diseases.
Most of the KHPA’s other recommendations were seemingly common-sense, bureaucratic ideas: posting health-care cost information on the Internet, collecting physical-fitness information on Kansas students, encouraging cafeterias in schools and state buildings to serve healthier foods. The KHPA also wanted more cancer screenings and dental care for pregnant women on Medicaid. One of the ideas involved a pilot project to see whether small businesses could make good use of wellness programs in the workplace.
Lawmakers rejected most of the ideas.
The most expensive — yet most basic — idea was to help more poor Kansans get health insurance. For families that qualified, the state would have helped pay the premiums on private insurance. This would have cost the state $26 million, paid for by the cigarette tax. The Legislature threw that provision out like a box full of dirty needles.
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Even worse, it put a cruel change of heart into law by repealing the premium assistance for poor families that it had approved the year before.
Worse still, the Legislature lied about covering poor kids.
Senate Bill 541, the legislation approving a meager few of the 21 recommendations, included language to widely expand the State Children’s Health Insurance Program. But the agreement to expand the children’s coverage was a mean PR joke, because the Bush administration had no intention of providing the federal matching funds to make it happen.
State Sen. David Haley, a Democrat from Kansas City, Kansas, wasn’t falling for it.
“I neither lie nor play semantic games,” he said in explaining his “no” vote on the floor. The KHPA, he noted, had been diligent about its 21 recommendations. But this bill “guts these concepts,” he said, “and replaces them with the hollow promise of increasing SCHIP … when everyone in the chamber knows that the Bush administration has constantly vetoed any SCHIP expansion…. Voting for this bill and going back home and telling voters ‘I voted for health-care expansion and access’ is really a lie — a political, semantic, election-year word game.”
This wasn’t just a colossal rejection of reform. It was a waste of a year’s worth of taxpayer-funded work that the Legislature itself had asked for when it created the Health Policy Authority.
“We took almost a full year to develop the plan,” says Marcia Nielsen, the KHPA’s executive director. “We went across the state, had dozens of meetings, talked to over a thousand Kansans. We looked at the best state policies that promoted public health and affordable health care and promoted transforming our medical-care system into one that actually focuses on wellness and not sickness. We invested a fair amount of energy and resources.”
It wasn’t just the work of the KHPA, either. “Several foundations banded together and provided $500,000 to look at several different actuarial models to help us understand how different ways of looking at health insurance would impact the marketplace in Kansas,” Nielsen says. “We engaged over 150 Kansans who participated on advisory councils and also helped craft the plan.”
“There was massive consumer input,” confirms Corrie Edwards, the executive director of the Kansas Health Consumer Coalition, which helped with the effort. “We spent lots of taxpayer money to actuarialize all of these different plans.”
In retrospect, Barnett says, “I thought they were very reasonable proposals for the state.” He speaks quietly, sitting at an uncluttered desk.
Outside Barnett’s first-floor office, the Capitol’s years-long restoration project drags on. A construction wall blocks the dramatic rotunda; scaffolding clings to the exterior’s south facade. The old limestone stairways lead to closed entrances. The only way in for visitors is a tunnel-like entrance on the ground floor of the northeast side. It feels as if the building and all of the ideas debated in it might never be fixed.
The KHPA’s recommendations died, Barnett says, for “many reasons.”
There were the proverbial problems balancing the budget. Few in the Legislature wanted to raise taxes on cigarettes. Some of his colleagues didn’t agree that the government should help poor Kansans pay their insurance premiums — “There was an ideological difference on that,” he says.
The premium-assistance idea was a problem for the insurance industry. “There were some in the insurance industry who felt they were not being allowed to participate,” Barnett says. “Some insurance agents were opposed because they couldn’t sell insurance policies through premium assistance.”
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His experience in the Kansas Legislature, Barnett says, “has taught me that the health-insurance industry has a very strong grip over the legislative process. Pharmaceutical companies are another [interest group]. Medical societies, nursing homes — there’s a very long list. They all want to have a say in the process of legislation, and rightfully so. But if it impedes the progress of reform, then it becomes a very big problem.”
He admits to being frustrated watching good legislation go nowhere. But, he says, Kansas has done other things well.
For instance, he says, Kansas has improved funding for “safety-net clinics,” the free or low-cost clinics that serve poor people who lack insurance. As Barnett puts it, “Kansas always tries to take care of people who are uninsured or underinsured.”
Half an hour after Barnett mentions the state’s laudable support for safety-net clinics, across the street from the Capitol, on the seventh floor of the Docking State Office Building, two spokeswomen from safety-net clinics will make the case that they can’t keep up with demand.
It’s Wednesday, February 25, and safety-net clinics are on the agenda for the House Health and Human Services Committee, which meets weekdays at 1:30.
The 19 lawmakers who have been assigned to this committee sit crammed around a U-shaped table.
Six of them are from the Kansas City area: Republicans Scott Schwab and Arlen Siegfreid of Olathe and Jill Quigley of Lenexa; Democrats Dolores Furtado of Overland Park, Cindy Neighbor of Shawnee and Mike Slattery of Mission.
The audience — lobbyists, staffers, the press, anyone scheduled to testify — sits in rows of chairs facing the legislators. The room is legendary for its lack of ventilation.
Cathy Harding, the executive director of the Kansas Association for the Medically Underserved — an umbrella organization that includes 38 safety-net clinics — begins her testimony by noting that everyone has warned her about the stifling heat in the room. She won’t take it personally, she says, if lawmakers fall asleep during her testimony.
She proceeds through several pages of charts and graphs, data correlated in various ways — by county, by age group, by income levels, by risk factors. Though Harding has many bullet points, here’s the one that really matters: “The current safety net does not have the capacity to serve all needy Kansans.”
Up next is Tina Payne, the executive director of the Health Ministries Clinic in Newton. What her testimony lacks in charts and graphs, she makes up for with barely contained desperation. Last year, she says, Health Ministries took care of 2,353 patients — double the number from 2006.
“One would think that, at a certain point, we would start seeing a tapering off in the number of new patients,” she says. After all, only 18,000 people live in Newton, only 34,000 in all of Harvey County. “It seems only reasonable that … a saturation point would be reached,” she says, “where all the underserved had, at some point, sought services at Health Ministries Clinic. Apparently, that theory is wrong.”
Instead, new patients just keep showing up.
Harding and Payne aren’t exactly begging the legislators to continue their funding for the next year — groveling would be unseemly. Rather, they’re diplomatically reminding the legislators about the crucial role of the clinics.
The legislators seem friendly and receptive. They know that by funding safety-net clinics, they’re giving uninsured Kansans someplace to go.
But wait a minute. Sure, funding safety-net clinics is the right thing to do. But it shifts the burden away from private insurance companies and onto charities — and the government.
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So what about all of those lawmakers who have “ideological differences” with the government helping poor people pay their insurance premiums?
“I do find it interesting that they would rather give a handout to the safety-net clinics,” says Quigley, the Lenexa Republican on the House Health and Human Services Committee (and a former nurse who works as an outreach coordinator at Southwest Boulevard Family Health Care — a safety-net clinic).
Helping people pay for insurance would decrease the burden on safety-net clinics. And on Kansas.
Everyone knows that, too. Edwards, of the Kansas Health Consumer Coalition, mentions a March 3 hearing before the state Senate Public Health and Welfare Committee on the topic of “medical debt” — what happens when someone’s finances are wiped out by a health problem.
“Even the average consumer knows that if we gave everybody some kind of baseline health-care coverage, it would save the rest of us money and save the state money,” Edwards says. “I’m saying some type of guaranteed coverage for all.”
But that would take real reform.
Nothing close to reform has happened this year.
After last year’s lessons, the KHPA had only one real goal for this year: passing the statewide smoking ban. It died in a House committee.
But the KHPA keeps working. It still has the state’s Medicaid and other public-health expenses and issues to manage. So every month, its board of directors sits through another one of those brutal daylong meetings at the Capitol Plaza Hotel.
One of those directors is E.J. “Ned” Holland. As head of human resources at Embarq, and in former positions at Sprint and Payless Cashways, Holland estimates that he has bought “several billions of dollars worth of health care” for more than 250,000 employees, spouses and dependents in all 50 states. A man of strong opinions, Holland has testified before Congress on ways to cure the health-care nightmare that’s crippling not just big corporations like his but also the economy of the entire country.
He calls what’s happening with the KHPA “a noble experiment.”
Holland, a well-known Democrat, was appointed to the KHPA’s board by Senate Majority Leader Stephen Morris, a Republican from Hugoton. Both agreed that health-care reform was nonpartisan.
But at the beginning of this year, when House Republicans put out an initial draft of their “2009 Legislative Agenda,” it listed only one item on health care: “To reduce government waste in health care by repealing the bureaucratic and expensive Kansas Health Policy Authority.”
Less-hostile Republicans have prevailed this session. But there’s been enough griping that Nielsen and her staff are under pressure to show that the state is getting its money’s worth from the KHPA — even as legislators ignore much of the work they’ve made the agency do.
That’s one reason that Holland found himself testifying, on March 31, before the Senate Public Health and Welfare Committee. The senators were deciding whether to approve him for another term on the KHPA’s board of directors.
In another claustrophobic meeting room in the Capitol, senators prodded Holland about his views on the KHPA’s 21 ideas — recommendations he called “fairly aggressive” but “not outlandish.” Reform works in small steps, he said, because “Americans are raging incrementalists.”
Republican Jeff Colyer of Overland Park (like Barnett, Colyer is a physician) pointed out that Embarq eliminated health coverage for retirees, who then filed a class-action lawsuit against the company in December 2007.
“Why should we have you advocating what our health policy should be on universal care,” he wanted to know, “if you’re dropping coverage for people?”
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Holland treaded carefully. The retired employees were eligible for Medicare, he said, so they still had access to health care.
Colyer and Holland went a few more rounds. The health-care strain on Embarq, Holland said, “puts us in with about 85 percent of the country.”
The fact that the system doesn’t work for Fortune 500 companies any better than it does for Kansas families isn’t such a radical observation anymore.
“The assumption that we can solve health care on the backs of the employment relationship is being shown to be ineffective in Detroit this morning,” Holland said, referring to General Motors’ trouble paying for its retirees’ health care. “We’ve just got to find another way to do it, Senator.”
Colyer wouldn’t let up.
“I’ve read that some of those patients [Embarq’s retirees] had to come up with $200, $300, $400 a month to pay for supplemental insurance. They were much sicker, much older, on a very fixed income, had been retired for 20 to 30 years in some instances. What do you say to people?”
“I tell them they need to write their United States senator and United States congressman about health-care reform. The system doesn’t work well for those folks, Senator. You know as well or better than I do.”
Before the exam was over, Sen. Laura Kelly, a Democrat from Topeka, had one thing to say: “This is the best health-care debate we’ve had since I got here. These are the kinds of questions that should be asked on a federal level.”
Holland had brought this excellent debate to the senators. But perhaps he had said things that too many of them didn’t want to hear.
By the end of the week, he would withdraw his name from consideration for another term on the KHPA board.
Between Tuesday’s committee meeting and Friday (when the full Senate was scheduled to vote on whether to reconfirm KHPA board members), after behind-the-scenes political machinations, Holland was out.
He’ll continue to serve until someone else is appointed to fill his chair at the KHPA board’s tedious monthly meetings.
Sebelius, meanwhile, spent the week far from Kansas, at her own confirmation hearings in Washington.
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