Cost Drivers Progress Since the 2024 Session

On November 5, Donald Trump was elected to become the 47th president of the United States. To pay for continued tax decreases, he has promised massive cuts in federal spending. It would be wise to assume that the federal health dollars New Mexico depends on – through programs like Medicare and Medicaid -- will be on the chopping block.

This makes it all the more important for New Mexico to develop systemic health cost solutions.  This makes investment in the Cost Drivers Project more urgent than ever.   The Health Security Campaign and leaders on the Legislative Health and Human Services Committee are determined that the $440,000 appropriated for the Health Cost Drivers Project be spent on contracting with the right experts who will provide information that helps LHHS develop New Mexico appropriate solutions that address the causes of runaway health costs.

All countries that have guaranteed universal coverage – even those with small populations – have developed policies that not only result in lower per capita spending but also produce better health outcomes than the United States. In the uniquely complex U.S. system of public and private payers — featuring thousands of health plans, each with its own cost-sharing requirements and coverage limitations — physicians and other health care providers spend enormous amounts of time and effort billing insurers.

-  “Portrait of the Failing US Health System: Comparing Performance in 10 Nations,” The Commonwealth Fund, September 2024, David Blumental, Evan D. Gumas and Arnavshah 

We are excited to report that the Legislative Health and Human Services Committee (LHHSC) has been communicating with experts who will work with the committee and stakeholders on ways to make hospitals financially sustainable and improve patient care. 

They are also exploring solutions to other key issues such as how to simplify the administrative complexity of multiple payment and accountability systems that impact cost and are frustrating to health professionals and patients. 

Finally, they are exploring how ways that New Mexico can reduce drug costs.

Both the University of New Mexico and New Mexico State will be involved to ensure that solutions will be based on NM data and information. 

Health Security Campaign Executive Director Mary Feldblum, Ph.D., an economist and social scientist, has been working closely with Rep. Eleanor Chavez and Rep. Liz Thomson, to help identify qualified consultants and how to address specific topics.

Legislative Health and Human Services Committee held a hearing the afternoon ofon November 21 on Health Care Cost Drivers.  An exciting and diverse panel diverse experts addressed some key systemic causes of rising health care costs.   

Donna Kinzer (Kinzer Consultants) a Santa Fe-based consultant and former Executive Director of, Maryland Health Services Cost Review Commission,.  She spoke about the successful Maryland global budgets program and mentioned lessons learned from their experience.

Dr. Miriam Laugesen (Columbia University) and Dr. Michael Gusmano (Lehigh University) discussed the need to reduce our costly and complex payment and accountability systems.  The two have extensive background and experience with state and international approaches that are simpler, and less costly, and have more positive health outcomes.

Dorothy Moller (DMoller Consultants) primarily focused on the failure of managed care strategies to lower costs.  She presented a variety of alternative policies that provide better outcomes. 

Dr., Gabe Sanchez, UNM Department of Political Science and Director of the Center for Social Policy, presented the results of a recent New Mexico survey demonstrating that health care costs are a primary concern of our residents.  This confirms other national polls showing that as health costs continue to outpace inflation, Americans are even more concerned about medical costs than they are about the price of eggs. .  (It is not just the price of eggs.)  The Center will be able to provide the project with critical New Mexico information.  Cis currently they are working on a survey that will explore how much time health professionals and other staff spendto justify payments (billing). billing.

Suzan Regan, Senior Program Manager of UNM’s Bureau of Business and Economic Research and Dr. Kramer Winingham, Program Director of New Mexico State’s Arrowhead Center.  They explained why it is so important for the state to collect health care expenditure data. that It will inform policy makers and others what we are spending on health care and how that data can be used to drive policy solutions that will control rising health care costs and ensure quality of care.

In the works is still another project that will address explore how our state can lower drug prices (such as join an existing multi-state consortium or create our own drug purchasing board).

Consolidation Oversight Progress Since the 2024 Session

The Office of the Superintendent of Insurance has been working with the executive branch, health care stakeholders, and attorney Jane Wishner to draft a consolidation oversight bill to be introduced in the 2025 legislative session.

Between June and October, OSI held open public meetings in various locations and online on key topics that need to be addressed in a New Mexico health care consolidations bill. The Superintendent of Insurance also convened focus groups of stakeholders including consumer advocates, providers, insurers, and hospitals.

The Health Security for New Mexicans connected many advocates and providers to this process. Our Executive Director Mary Feldblum participated in all of the open public meetings and attended the consumer advocates focus groups.

Superintendent Alice Kane described these meetings as “an eye opener.” She described the many issues of concern voiced by community members and doctors. These include: lack of any notice about changes in ownership or control, discovering that certain services were no longer offered, referral requirements that forced patients to use physicians outside the local area, as well as the increasing need to travel outside the area. She also mentioned that there was reluctance on the part of doctors and others to be public about their concerns due to fear of retribution.

On October 10, the legislative Courts, Corrections and Justice Committee dedicated an entire day to discussing the corporate takeover of our medical services. 

Sen. Katy Duhigg (D-Albuquerque), the senate sponsor of the proposed consolidations oversight bill, opened the morning session with the following warning.

"There is something unique in the history of health care that is taking place right now. Private equity and giant corporations are playing a rapidly growing role in our health care system in ways that have enormous consequences for patients and health professionals."

Duhigg, house co-sponsor Rep. Reena Sczceypanski (D-Santa Fe, Majority Leader), Kane and Wisher explained the need for this legislation and describe important provisions it would include to ensure strong oversight over future consolidations.

During the afternoon session, three academic experts presented an array of evidence regarding the negative impact of private equity firm acquisitions on health care costs and access to quality care.

Troy Clark, the President and CEO of the NM Hospital Association was given ample opportunity to comment on the presentations. His overall message: while important, oversight needs to be “measured.” In other words, corporate oversight must be limited in ways so that it does not discourage this outside much needed investment in our health care services. 

2024 Legislative Wrap-Up

In the 2024 legislative session, the Health Security Campaign and its champions Rep. Eleanor Chavez and Rep. Liz Thompson secured $440,000 to hire consultants to develop New Mexico solutions to the key causes of skyrocketing health care costs. This initiative is known as the Health Cost Drivers Project.

The 2024 legislative session also saw the passage of SB 15 – the Health Care Consolidation Oversight Act. Governor Lujan Grisham initiated this legislation in response to widespread concern about the increasing corporate control of hospitals and other health care services in New Mexico – particularly by private equity firms.

The Health Security Campaign actively supported SB 15. Corporate control over our health care is one of the drivers of rising health costs identified by the Health Cost Drivers Project.  Extensive research correlates corporate takeover of hospitals with higher costs, cuts to staff and services, and a variety of adverse patient outcomes.

While SB 15 created a temporary review process of health care entity mergers and acquisitions, the governor directed the Superintendent of Insurance to be in charge of developing a comprehensive piece of legislation to be introduced in 2025.  

Though oversight of future health care consolidations is necessary, it is not sufficient. The Health Security Campaign has consistently pointed out why so many of our hospitals and medical practices are such vulnerable targets.  Financial sustainability has to be addressed.  The Cost Drivers Project contains various solutions, including a system that guarantees revenue to pay for hospital budgets, a major solution that addresses the heart of this problem.  

Thus, it is critical to keep in mind that while we support oversight of future consolidations, the bill:

•      will not address hospitals and medical practices currently owned or managed by out-of-state-entities (such as Memorial Health Center in Las Cruces or RMCH in Gallup)

•      will not protect staff and patients who want to report problems that are impacting patient care

•      will not address who sits on hospitals boards that includes local decision-making power

•      will not address corporate rules that tell those who are licensed to practice medicine how to care for their patients

•      will not make hospitals financially sustainable and able to provide needed essential services, especially in rural areas 

This is why it is so important for you to contact your legislators and tell them how critical it is for the state to invest in the Cost Drivers Project.

Health Cost Drivers Funding in the Forecast

Right now, thanks to Rep. Eleanor Chavez, there is a very good chance that funding for what we call the “Health Cost Drivers Project” will be included in this year’s budget!  

What are the Health Cost Drivers?

Health cost drivers are the systemic reasons why health care prices are spiraling. They include increasing hospital and drug expenses, our complex administrative requirements – 30% of which are related to billing and payment – and confusing IT systems that are not compatible. Cost Drivers Chart

Why it's Urgent to Address Key Health Cost Drivers

Rising health care costs impact premiums, out-of-pocket costs, employers’ ability to afford health care coverage, and state funding of needed health programs and services. These state programs include increasing the supply of physicians and other health professionals, expanding behavioral health services, and subsidizing those who cannot afford health insurance. 

Health care spending will continue to rise if we stay on our current trajectory. All of us will be effected if this situation is not addressed. This includes the serious problem that state funding of much-needed programs will become unsustainable.  Quotes about Rising Costs

Health Cost Drivers Project Update

Since 2021, the Superintendent of Insurance and the Legislative Health and Human Services (LHHSC) have contracted experts to explore how to address selected cost drivers with a focus on how possible solutions might play out.  

Reports so far have provided vital information that serves as a springboard for designing New Mexico-appropriate policies to control health care costs. Based on these reports, next steps should include:

·       Developing a global budgets program that provides financial stability for hospitals and lowers costs.

·       Joining the existing Washington/Oregon drug purchasing consortium that already includes Nevada, Illinois and Connecticut.

·       Tightening oversight on corporate mergers and takeovers that impact the practice of medicine and increase costs.

·       Restricting prior authorization requirements that add administrative costs and interfere with care.

2023 Reports:

·       NORC Global Budgets Report,

·       NORC Administrative Costs Report

·       Drug Consortium Interim Report

The legislature needs to fund Legislative Health and Human Services Committee so it can act on these reports and explore more systemic solutions to rising health care costs

Fund the Design

We need support for a design process led by the Legislative Health & Human Services Committee

The 2023 legislative session begins on January 17, and we will be seeking funding so the Legislative Health and Human Services Committee can continue the critical work needed to design our own homegrown New Mexico Health Security Plan. This committee has the expertise to oversee this project, and it is the best option for the process to move forward. But it needs support from your legislators.

Please contact your legislators and ask them to support funding for the design process. At a time when our state budget is flush, investing now to develop a systemic health care solution will help ensure the future health of our state. We always appreciate when supporters let us know they reached out to legislators.

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Interested in learning more about the legislative session?

Join us on January 7 from 10:30 AM to noon for a strategy meeting via Zoom.

Register now.

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Recap

In 2021, the Superintendent of Insurance received funding to begin the Health Security Plan design process, hiring consultants who focused on solutions to rising health care costs – such as hospital global budgets and simpler provider payment and accountability systems. 

In 2022, funding for the design process was increased. Aside from posting a request for proposals on hospital global budgets, the superintendent has not been working on our other recommended issues that impact rising costs. His focus has been on access: making sure more New Mexicans have access to public or private health insurance.

We hear a lot about health care access, but health care costs are another big piece of the puzzle. In fact, we are faced with a bleak health care future if we don’t develop systemic solutions to escalating health care costs. 

Enabling more New Mexicans to have access to health insurance, while important, will NOT solve the problems of increasing premiums, additional out-of-pocket costs, rising drug prices, growing numbers of hospitals experiencing financial stress, and an administratively complex health care system that frustrates health professionals and patients alike. It is more important than ever that we create the Health Security Plan, which will provide secure coverage for most New Mexicans and reduce the administrative burdens that other countries with universal coverage do not have. Not surprisingly, these countries also have lower health care costs. 

The cost problems in health care are interconnected and cannot be solved in isolation. Continued exploration of integrated solutions, with provider and patient input, is urgently needed so the pieces of this complex jigsaw puzzle can be fit together within a sustainable system.

Making the Papers: Our Latest Op-Ed

Our recent op-ed has been published from Las Vegas to Roswell!

Read on …

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Health Security – How to Slow Rising Health Care Costs!

by Mary Feldblum, Executive Director, Health Security for New Mexicans Campaign

It’s depressing. Health costs are rising – impacting patients, employers, and providers. What can be done?

The Health Security for New Mexicans Campaign, a diverse coalition of 170 organizations and thousands of New Mexicans, has developed a homegrown solution. The Health Security Act would enable New Mexico to create its own health plan, guaranteeing comprehensive coverage and provider choice (no more networks) for most residents.

Three independent studies concluded that this plan would dramatically slow health care cost increases, and this is due to more than the advantage of large enrollment numbers. There are countries that guarantee health coverage, spend far less than the United States, and have better health results. How do they do it?

• Standardized health professional payment systems. (Instead of 20 different fees for the same procedure.)

• Set budgets (global budgets) for hospitals, providing a secure revenue source. (No more pages of inexplicable charges. No surprise bills.)

• A program that negotiates drug prices.

• IT systems that provide a patient’s medical history wherever they receive care.

• One set of comprehensive covered services.

Surely, addressing these areas is critical to solving our health crisis.

What is New Mexico doing?

The Health Security Act, which sets out guidelines for the Plan, does not provide details about how the Plan will work. In 2021, the legislature appropriated funding to the Office of Superintendent of Insurance (OSI) to oversee the design of the Health Security Plan.

In 2022, $790,000 was allocated to OSI to continue this work.

In May, Sen. Ortiz y Pino and Rep. Hochman-Vigil shared with Insurance Superintendent Russell Toal a list of six topics that we and our sponsors identified as critical to addressing rising costs. They seemed acceptable to Toal. They included conducting a cost analysis of the privatized Medicaid managed care program, gathering annual NM health expenditure data to evaluate the cost impact of any new policies, and developing:

• a global budgets program for hospitals

• a standardized payment system for health professionals

• a program that lowers drug costs

• an inter-operational IT system

Based on statements by Toal and Human Services Secretary David Scrase, the administration is focusing on helping more New Mexicans sign up for coverage through Medicaid and beWellnm.

While important, covering more people will not address the systemic problems of why costs (and premiums) are rising. It will not result in simplifying a complex system that frustrates providers and patients alike. Moreover, focusing on current health care access issues should not preclude simultaneously moving ahead with long-term systemic solutions.

Last year, OSI did an excellent job of hiring experts whose reports included options that should be pursued during this second year of design.

Unfortunately, there has been almost no discernable action on five of the six priority topics. (A request for proposals for a global budgeting study was released on September 30.)

New Mexico cannot afford to continue patching up a flawed system. Interim solutions are important, but costs will continue to rise unless we establish policies that enable us to take control of an out-of-control system.

The design process provides an opportunity for New Mexico to come up with a coordinated solution that will work for our state and our residents.

Please ask your state representative and senator to support the Health Security Plan design process!

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Versions of this op-ed have appeared in the Roswell Daily Record, the Santa Fe New Mexican, and the Las Vegas Optic, as well as the Corrales Comment and The Paper.

While the op-ed was published before the elections, the message remains: We need our state senators and our reelected and newly elected state representatives to stand up for Health Security and the continuation of the design process. The 2023 legislative session is just two months away!

Design Process Update: Concerning News

The Superintendent of Insurance has been responsible for managing the Health Security Plan design process since 2021. While his office did an excellent job last year, there has been no discernable action yet on this year’s priority topics, even with much more money allocated to the design process and with funding set aside to hire staff for this project.

It’s now September. It appears that the Superintendent has too many other obligations to devote the necessary effort to this.

The bottom line: A new board is needed to take over the design process.

It is time for the legislature to create a board of experts that will be able to explore and assess various options, with the help of consultants, and make recommendations to the legislature concerning the solutions and approaches that have the greatest benefit for New Mexicans and the highest chance of success.

Introducing legislation to create such a board will be proposed at the Legislative Health & Human Services Committee meeting on September 15. Scroll down for more information.

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Register Now! Health Security Webinar, Sept. 13

Campaign member organization Retake Our Democracy will be holding a webinar on Health Security on Tuesday, September 13, 6:00-7:30 PM. This event will feature Campaign executive director Mary Feldblum and key legislative allies Sen. Jerry Ortiz y Pino and Rep. Dayan Hochman-Vigil.

For more information, visit Retake Our Democracy's Actions & Events page. To register, click here. You must register in order to attend.

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Legislative Health & Human Services Committee Meeting, Sept. 15 in Gallup

The Campaign has been invited to present on the current status of the Health Security Plan design process to the interim Legislative Health and Human Services Committee at its three-day meeting in Gallup. Our executive director is now scheduled to speak at 11:30 AM on Thursday, September 15. The full agenda can be found here.

This is a crucial opportunity to make it clear to committee members why systemic health care reform is vital for the health of our residents and our state. Simply plugging the holes in our system is not going to solve the serious crisis we face. At this meeting, we can help the committee understand how important it is to continue the design process of our own New Mexico health plan, as well as correct some misinformation that is circulating about the design process being "just another study" and the plan itself being unworkable.

This is also a critical meeting for us because we are seeking the committee’s endorsement of 2023 legislation to create a board of experts that, with public input, will be authorized to continue putting together the key pieces of the Health Security Plan design jigsaw puzzle. With no progress being made on the design process by the Office of Superintendent of Insurance so far this year, getting this legislation passed will be vitally important.

What You Can Do & Upcoming Events

What You Can Do Right Now

Speak up at candidate meetings. It's an election year! If you attend candidate get-togethers, fundraisers, or forums, don't forget to express your support for Health Security—with a short explanation about why you think it is important—and urge the candidate to publicly support it as well.

Set up meetings with groups and local organizations in your community. If a group of people in your community or an organization you belong to would like to find out more about this exciting phase of the Health Security journey, email us to set up a meeting or presentation. We need to keep spreading the word!

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Upcoming Event #1: Health Security Webinar, Sept. 13

Campaign member organization Retake Our Democracy will be holding a webinar on Health Security on Tuesday, September 13, 6:00-7:30 PM. This event will feature Campaign executive director Mary Feldblum and key legislative allies Sen. Jerry Ortiz y Pino and Rep. Dayan Hochman-Vigil.

For more information, visit Retake Our Democracy's Actions & Events page. To register, click here. You must register in order to attend.

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Upcoming Event #2: Legislative Health and Human Services Committee Meeting, Sept. 15

We have been invited to present on the current status of the Health Security Plan design process to the interim Legislative Health and Human Services Committee at its September 15 meeting in Gallup.

Between legislative sessions, the interim Legislative Health and Human Service Committee goes on the road. Here, they are meeting in Albuquerque in July.

This is a crucial opportunity to make it clear to committee members why systemic health care reform is vital for the health of our residents and our state. Simply plugging the holes in our system is not going to solve the serious crisis we face. At this meeting, we can help the committee understand how important it is to continue the design process of our own New Mexico health plan.

This is also a critical meeting for us because we are seeking the committee’s endorsement of 2023 legislation to create a special board that, with public input, will be authorized to continue putting together the key pieces of the Health Security Plan design jigsaw puzzle.

Sign up for our email alerts for updates on this and other events and happenings.

Designing a Health Care System That Works

There are so many ways to do this!

Taking a look at the Commonwealth Fund’s International Health Care System Profiles makes it abundantly clear; there is no one way to structure a universal health care system.

Here in New Mexico, we’re busy figuring out the many details for our own state-based plan, using the 2019 Health Security Act as a guide. It’s like a jigsaw puzzle, with many pieces that all need to work together.

When solving this puzzle, certain pieces are more important to address first. The following three were chosen for the first year of this design process:

1. Federal laws and waiver requirements, to ensure that federal funding continues and recipients do not lose benefits

2. Global budgets for hospitals, to provide guaranteed revenue for health care facilities, many of which are financially stressed

3. Standardized payment systems for health care professionals, to enable providers to spend more time on patient care and to reduce health care system costs

Six pieces of the system are being addressed this year:

1. Global budget working group, to build on last year’s research on this issue

2. All-payer rate system, to look at setting up a system that sets uniform reimbursement rates for health care professionals

3. Prescription drug affordability, to explore how to develop a prescription drug program that lowers prices for patients

4. Medicaid expenditure data, to understand the cost of the Medicaid managed care program, which covers 900,000 New Mexico residents

5. Inter-operational IT system, to explore how to create an inter-operational IT system that applies to all New Mexico insurers and health care providers

6. State health expenditure data, to find out how much we are actually spending on health care in our state and exactly what we are spending it on

We’ve created a new webpage dedicated to the Health Security Plan design process. Bookmark it today to stay up to date!

What's Happening with Health Security Design?

Year 2: What’s Going on Now

Earlier this year, the legislature allocated even more funding to continue the Health Security Plan design process. We’ve been working with our lead legislative sponsors—Sen. Jerry Ortiz y Pino and Rep. Dayan Hochman-Vigil—on what the priorities should be for this year.

In coordination with the Superintendent of Insurance, six topics have been selected. These topics address vital parts of the current system and solutions that are integral to the Health Security Plan. We’ll be excited to see what the consultants produce!

The first two selected topics build on last year’s research:

1. Global Budget Working Group—This topic builds on the global budgets research from last year. (View our summary here.) Global budgets provide guaranteed revenue for hospitals, which will particularly help our struggling rural hospitals and the communities that depend on them. This task force will bring together key stakeholders to establish priorities and research options for a hospital global budgeting program.

2. All-Payer Rate System—This topic builds on the recommendations from last year’s expert consultant on health care professional payment systems (to find out more, read the full report or view the slide deck). An all-payer payment system sets uniform reimbursement rates that apply to all health care professionals within a specialty and may apply to both private insurance companies and public programs like Medicaid. Such a system greatly reduces billing complexity and increases transparency.

The remaining four topics address other key aspects of our health care system:

3. Prescription Drug Affordability—This topic will focus on how to develop a prescription drug program that lowers prices for patients.

4. Medicaid—This topic will focus on understanding the cost of the Medicaid managed care program, which covers 900,000 New Mexico residents. To address issues around Medicaid (and its impact on the state budget), it is imperative to have an accurate picture of its true costs. As last year’s expert consultant on federal waivers mentioned in their report, Connecticut decided years ago to drop its Medicaid managed care program and have the state administer it instead because of rising costs.

5. Inter-Operational IT System—This topic will focus on how to create an inter-operational IT system that applies to all New Mexico payers (private insurance and public programs) and providers of health care services. This system would also include patient medical information (with privacy and security concerns addressed), so that no matter where you go to receive health care in New Mexico, providers have your medical history.

6. State Health Expenditure Data—This topic will focus on collecting full New Mexico health care expenditure data so we know what we are actually spending on health care in our state. This data will serve as a baseline for future years and should be collected annually going forward. All efforts to increase the effectiveness, stability, and sustainability of our health care system will benefit from having this data available.

Year 1: Research Results

With funding from the 2021 state legislature, the Office of Superintendent of Insurance contracted with several consultants last year to begin to explore possible solutions to two critical and challenging pieces of our health care system. Their research and recommendations focused on global budgets for hospitals and standardized payment systems for health care professionals.

The consultants also looked at federal laws that will affect the structure of our own health plan in New Mexico, along with federal waiver requirements to ensure that federal funding continues and recipients do not lose benefits.

The reports from these consultants contain a lot of excellent information, but we know it’s not easy to find the time to read over 100 pages of report text! Thus far, we’ve put together summaries of two of the three topics initially covered. Take a look!

• Year 1: Global Budgets for Hospitals

• Year 1: Federal Legal Landscape & Waivers

The full reports can be found here.

A Multi-Year Process

Designing our own health plan that guarantees coverage for most New Mexicans will take time. It is important to get it right. We see this process as putting together solutions (such as global budgets) in phases. We can design the Plan piece by piece—as long as the ultimate goal and structure are always kept in mind—so we are not waiting to act until every part of the design is complete. There is no reason why we should delay in strengthening struggling hospitals, addressing escalating drug prices, and simplifying a system that discourages providers from wanting to practice medicine in our state.

As the design process continues this year, we will keep you posted about what is happening and how you can participate.

If a group of people in your community or an organization you belong to would like to find out more about this new and exciting phase, contact us at hsnmc.contact@gmail.com to set up a meeting or presentation.

Solving the Puzzle: Putting the Pieces Together through the Design Process

Imagine if you paid for an airplane ticket and then got separate and inscrutable bills from the airline, the pilot, the copilot, and the flight attendants. That’s how the healthcare market works. In no other industry do prices for a product vary by a factor of ten depending on where it is purchased.

 — Elizabeth Rosenthal, MD, in An American Sickness: How Healthcare Became Big Business and How You Can Take It Back, 2017

So much of the focus on health care is centered on access issues. While it is very important to provide opportunities for New Mexicans to receive health coverage—either through public or private programs—there is another issue that must be addressed: the wasteful, costly and administratively complex pricing of health care services.

We need to think of our health care system as a jigsaw puzzle. Each piece is connected to other pieces. The puzzle cannot be solved without figuring out how the pieces are connected to each other.

Thus, just gaining access to health insurance will not address hospital costs, pharmaceutical drug prices, the frustrating (and costly) administrative burden on health care professionals, or increasing patient out-of-pocket responsibilities, which may prevent people from getting the care they need.

Our state needs to come up with a coordinated solution to address both access and cost. The jigsaw puzzle needs to be solved.

For over two decades, the Health Security for New Mexicans Campaign, currently a coalition of 170 diverse organizations and thousands of individuals, has been working on a homegrown systemic New Mexico solution. We have reached out to all areas of the state, seeking feedback on a simple idea: let’s set up our own health plan that automatically covers most New Mexicans, offers comprehensive services and freedom of choice of provider, and is overseen by a geographically representative citizens’ board (like a co-op). Private insurance may play a supplemental role, as it does in many European countries (and as is the case with traditional Medicare).

The Health Security proposal requires a major paradigm shift, one that combines and coordinates the key elements—the different puzzle pieces—of our health care system.

According to three independent New Mexico studies (the most recent in 2020), the Health Security approach will slow the rate of increase of health care costs, ensure coverage for all state residents, and simplify what has become a complex and administratively burdensome system that frustrates health professionals and patients alike.

In 2021, the New Mexico Legislature provided funding to develop the details of the proposed Health Security Plan. This funding enabled the Office of Superintendent of Insurance to hire consultants to engage in key research areas during the initial year of the design process.

While the 2019 Health Security Act provides important guidelines for creating the Health Security Plan, there are many details that still need to be fleshed out, including enrollment, hospital and health professional payment systems, appeals systems, IT/medical records, accountability systems, and more. Decisions will have to be made about these details before the plan can begin offering coverage. Once designed, a fiscal analysis can then be conducted on the plan as designed— not as projected.

If New Mexico is to develop a systemic solution to our health care crisis, it is important to understand how these different key elements impact each other. Unlike a jigsaw puzzle, however, these critical components of our health system require gathering information about state and international experiences, learning from them and then deciding what would work for our state, keeping in mind how each piece fits together and impacts access and cost.

During the 2022 legislative session, the superintendent of insurance presented very promising results on the three critical research topics selected.

Topic 1. Investigation of federal waivers and agreements that provided key information regarding prospective plan enrollment numbers.

Initial results: The report describes various approaches to receiving federal waivers or agreements, focusing on Medicaid and Medicare, the two largest programs in New Mexico, while ensuring the protection of recipient entitlements.

Topic 2. Exploration of provider payment system methodologies that focused on whether it is possible to standardize our complex multi-layered payment system, as many European countries have done.

Initial results: The report describes various options to develop such a coordinated system so providers and health facilities do not have to deal with multiple different charges for the same service.

Topic 3. Research on the feasibility of creating a global budget program for hospitals, a payment system in which hospitals receive a predictable, sustainable revenue stream instead of depending on an unpredictable, complicated charges system. (Maryland’s global budget program has been very successful.)

Initial results: Two reports, written by separate consultants, concluded that New Mexico could greatly benefit from such a system, whose creation can be funded by the Centers for Medicare and Medicaid Services.

In sum, the reports describe possible paths to take that will address both access and cost issues.

But more research is required.

Recently, the legislature increased the funding for this coordinated approach. The appropriation will enable the superintendent to follow up with the suggestions made in the initial reports and to investigate two additional critical topics: how to address rising drug prices and how to create a workable inter-operational IT system so that no matter which plan you have, the provider you go to will have your complete medical history.

While the design project clearly is a multi-year effort, the research on some of these pieces in the health care puzzle can lead to more immediate solutions.

For example, a hospital (and clinic) task force could be created this year to figure out how a global budget system could work in New Mexico, with the goal of applying for startup funds from the Centers for Medicare and Medicaid Services. It would be possible to create a second task force to explore the creation of a program to negotiate drug prices that could benefit all New Mexicans.

Thus, the Health Security Plan design process will enable New Mexico to phase in key pieces of the puzzle like hospital and drug costs, keeping in mind how these programs would impact the other jigsaw pieces of the health care system and how they would align with the systemic reform the Health Security approach will ultimately bring.

New Mexico has been given an extraordinary opportunity to carefully design a workable solution to our health care crisis, one that is appropriate for our large, mostly rural state with its small population.

Health Security Funding Secured!

Health Security Funding Approved by Governor!

The legislature met in a special session last week, and the governor signed SB 1—a revised version of the regular sessions "junior" budget bill—on Friday.

$790,000 is now available to continue the Health Security Plan design process!

This funding will enable the Superintendent of Insurance to move forward with this important project—to expand needed research topics, hire consultants, and ensure adequate staff to oversee the process.

What's Next

With funding to continue the design process finally secured, we're back to focusing on what's next:

• Working with the Superintendent of Insurance and our legislative sponsors to determine priorities for this phase of the Health Security Plan design process.

• Reviewing and reporting on the consultants' findings from the initial phase of research on the Health Security Plan. All the reports are now available on the Office of Superintendent of Insurance's website, along with a recorded roundtable discussion with the consultants.

• Continuing our series of informational Zoom sessions.

• Making sure New Mexicans are informed about the design process and have input into the creation of our homegrown plan.

We're excited to get started on year two of Health Security Plan design!