Minnesota Governor Tim Pawlenty announced reforms to the state employees' health benefits plan yesterday that have implications for hospitals, doctors and other providers in the state -- and, arguably, throughout the country.

The proposal basically does three things:

1. It creates a website that will provide information to state employees and dependents about the cost of care from different providers.  I expect the state will most likely purchase access to a privately owned website like http://www.medcarecompare.com/.
2. It will provide access to Microsoft's new HealthVault product (http://www.healthvault.com/), allowing people to have online access to their medical records -- provided their provider has populated HealthVault with this information or, more likely (but still not probable), that person has manually uploaded the information into HealthVault.
3. Replace the state's current Flexible Spending Account with a debit card that can be used to pay health care expenses.

It is our opinion that this initiative provides some momentum towards the widespread use of Microsoft's HealthVault, but is otherwise simply another mild step towards consumer-driven health care. 

A progressive health care system may want to consider investing in the information system links necessary to automatically populate HealthVault; this could be a significant patient loyalty motivator if people want access to this information and they know they'll get it whenever they use a certain clinic or hospital.  If some health systems do this, and there are enough people who care about online access to their medical records, then a tipping point could be reached where many health care providers and people want this capability.

Aside from HealthVault, the governor's initiative reflects the consumer-driven philosophy but does little to move the state in that direction.  We have long felt that the Medcare Compare approach to giving people information about costs is valuable to people covered by HSAs and other high deductible health plans.  However, the Minnesota state employees' health plan does not use HSAs nor does it have particularly high deductibles; it is unclear why a state employee would bother to do research on the cost of different options.  Another problem with telling people the price for individual treatments, diagnostics and lab tests is that it does not necessarily help estimate the overall cost of care -- going to a low cost physician who orders lots of inexpensive tests or doesn't provide all that the patient wants may be much more costly than going to a more expensive physician who orders only a few tests and meets the patients needs.

The governor's contention that the debit card is a big improvement over the paperwork associated with Flexible Savings Accounts rings true to us.  However, these funds are more likely to be used for eyeglasses, dental care and over-the-counter drugs than what most hospitals and physicians provide.  One long-term benefit of wider use of debit cards may be the potential they have for providing benefits to Medicaid and the uninsured -- some of the more innovative ideas about how to reform government health coverage is to replace third party reimbursement for routine and predictable health care with direct financial assistance, facilitated by debit cards just like these!

Bottom line: not a major development, another small step towards consumer-driven, consider linking your EHR to HealthVault, and keep an eye out for the wider use of debit cards!

--David Allen