Getting Organized—How States Are Preparing to Implement National Health Reform

The federal Affordable Care Act is national in scope, but the task of implementing it will fall heavily on the states. States are responsible for implementing a significant Medicaid expansion, creating new health insurance exchanges, and enforcing new market rules for insurance. How they go about this will determine the success of the federal law and its potential to improve overall health system performance.

The complexity and scope of the reforms necessitate a comprehensive approach to make the most of opportunities to improve health system performance. This will require a great deal of planning and organizing—work that most states have already begun. At the same time, state budgets are in their worst shape since World War II, constraining the financial and staff resources available for reform. Under these challenging circumstances, states will need to develop a clear vision to guide their work, coordinate their many tasks so that everyone is working toward the same goals, and engage a broad range of stakeholders so that each state's choices reflect the realities of its own health system and the values and preferences of its residents.

Executive Leadership and Coordination

One of the first steps governors are taking to implement national health reform is to identify the state leaders who will guide the process. Many governors have already formed health reform cabinets or task forces that report directly to them. At least 16 governors have created these implementation teams and outlined their responsibilities through executive orders or press releases (Figure 1). Others have assigned responsibility for federal reform implementation to a state agency (e.g., Virginia and Nevada) or existing state health reform council (e.g., West Virginia, Delaware, and Oregon).1

The most common organizational design for health reform implementation is a cross-agency model that includes leadership from the governor's office and multiple state departments. States have used this approach before, for example to improve the management of children's issues across health, education, and social service programs. However, health reform requires more agencies to be involved and in new combinations, including budget and planning, taxation and revenue, administration and personnel, retirement systems, insurance, corrections, public health, social services, and health and human services related to aging, behavioral health, developmental disabilities, Medicaid, and other state health benefit programs.

Among the 13 health reform implementation teams that governors have established through executive order, the membership of all but three is restricted to state staff. Connecticut, Delaware, and Maryland include legislators on their health reform implementation teams, and Connecticut and Delaware also include other stakeholders, such as business leaders and health care provider representatives. Many states are creating separate, multi-stakeholder advisory groups alongside their staff implementation teams, including a few established through executive orders (e.g., in New York and Pennsylvania).

Several responsibilities are common to most of the implementation teams. In particular, they are expected to:

• articulate a clear purpose and operations plan for reform implementation;
• oversee planning, development, and implementation of reforms;
• identify ways to build on existing infrastructure and programs, or to create a new entity within state government to house governance and oversight functions;
• ensure appropriate coordination and collaboration across state agencies; and
• engage stakeholders to get their support and insight for implementing reforms.

Adding to the organizational challenges of implementation, at least 24 governors will be new to their offices in January 2011 and, if any of the incumbents who are up for reelection lose in an additional 13 states, the number of new governors will be even higher. Transition planning in these states will be critically important to ensure that any work on reform implementation is not lost in the change.

Strategic and Operational Planning

The next step in reform implementation—and the current focus for most state implementation teams—is to develop a strategic plan that reflects the priorities of the governor and state legislature and captures the state's goals for health reform. To help states get started, the National Academy for State Health Policy has recommended 10 priorities for successful health reform implementation (Figure 2). The National Governor's Association, National Conference of State Legislatures, and other organizations are also assisting states with strategic planning.

Once a state's strategic plan is in place, its health reform implementation team can develop an operational plan to implement state statutory and regulatory changes; applications to the federal government for grants; possible administrative reorganization, such as the creation of an entity to develop the exchanges; implementation tasks; and mechanisms for engaging stakeholders and communicating with the public.

Based on its operational plan, each state will need to determine what resources it needs to implement reform. State budgets are in bad shape—shortfalls across all states are expected to exceed $136 billion over the next several years—and staff capacity is also limited in many states as a result of budget-related hiring freezes, early retirements, and furloughs. States will have to carefully match their resources to the new demands of national reform, and get organized to pursue new federal funding opportunities created in the reform law, including dozens of grant opportunities, demonstration projects, and in some cases enhanced Medicaid match and other payments for specific delivery system reforms.

Public Trust and Support

One of the ongoing challenges of national health reform will be for state implementation teams to secure and sustain public trust for the reform process. The political controversy that surrounded the enactment of the health reform law continues today. Twenty-one state attorneys general and/or governors have filed lawsuits to repeal the legislation and it is a hot-button issue in many campaigns leading up to the November 2010 midterm election.2 Of the 21 states opposing reform, only Virginia has announced an implementation strategy.

States are eliciting public input on health reform in different ways. Some have delayed the public discussion about reform implementation until after the November election. In some states, including Colorado, leaders see communication and education (including countering common misconceptions about what's in the reform law) as critical to its success. States are engaging consumers and other groups in town hall meetings and other venues across the state. Many states, including Virginia, are creating multi-stakeholder advisory groups that include state officials, legislators, business leaders, health care providers, and consumers to elicit ideas, expertise that state government lacks, and buy-in for reform.

State policymakers will need to make their own calculations about the best ways to engage the public in shaping health reform—but this step cannot be skipped. Stakeholders have a great deal to offer in helping states design their approaches to implementation. The many demands of reform and limited staff make engaging stakeholders particularly challenging, but ultimately each state's residents must trust that their government will use the resources at their disposal as necessary, just as their leaders should be accountable for improving overall health system performance.

Notes

1. Some state legislatures have initiated health reform implementation activities in conjunction with or separate from executive actions. For example, in Mississippi, the first steps originated in the legislative branch, which established a committee to study health insurance exchange implementation.

 2. The 21 states are: Alabama, Arizona, Colorado, Florida, Georgia, Hawaii, Idaho, Indiana, Louisiana, Michigan, MIssissippi, Nebraska, Nevada, North Dakota, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Virginia, and Washington.