here for PDF format
here for participants' responses to this interview.
Dr. Sanne Magnan,
Commissioner, MN Dept. of Health
Civic Caucus, 8301
Creekside Circle #920, Bloomington, MN 55437
October 1, 2010
Verne Johnson (Chair, phone); David Broden, Janis Clay, Marianne Curry,
Bill Frenzel, Paul Gilje, Jim Hetland (phone), Jan Hively, Sallie Kemper,
Dan Loritz, Joe Mansky, Tim McDonald, Wayne Popham (phone), Clarence
Shallbetter, Bob White
of Magnan's comments:
When Dr. Magnan became Commissioner of Health, Governor Pawlenty listed
three goals for the build a public health infrastructure; and work for
health reform. In her three years in the position Magnan has made progress
on all three-particularly health reform.
has a poor health care value equation, spending too much to achieve too
little in terms of health outcomes. Growing costs in health care for
Minnesotans is putting a strain on the state budget, and will crowd out
all other spending priorities unless addressed.
2008 the Minnesota Legislature passed and Governor Pawlenty signed into
law a series of health reforms that will help improve prevention of
chronic illness, encourage innovation in care, reform payment methods and
implement a quality and value measurement system. These last two
components will enable consumers and insurers to make choices of care
providers based upon quality and cost, allowing transparency for better
health care results for less money. This structural reform will facilitate
care redesign and begin redesign of payment and spur innovation for better
Context of the meeting-As
Minnesota faces a structural imbalance in the state budget, the growing
cost of health care is seen as the biggest source of rising state
expenditures. It will be essential to find ways both to slow the growth of
inflation in costs, help people be healthy and to help people get better
care, not just more care that is uncoordinated, inefficient and not
patient-centered. Commissioner Sanne Magnan will speak about efforts the
state is making on these fronts.
Welcome and introductions-Dr.
Sanne Magnan, a physician and PhD, was appointed Commissioner of Health by
Governor Pawlenty in 2007. She heads the Minnesota Department of Health,
the state's lead public health agency.
to being appointed commissioner, Dr. Magnan served as president of the
Institute for Clinical Systems Improvement (ICSI) in
A board-certified general internist, she serves as a staff physician at
the Tuberculosis Clinic at St. Paul-Ramsey County Department of Public
Health and as clinical assistant professor of medicine at the
She has also been vice president and medical director of consumer health
at Blue Cross and Blue Shield of Minnesota and a physician at Lino Lakes
Correctional Facility. She has served on several boards, including that of
Minnesota Community Measurement. In 2004 and 2008 Minnesota Physician
named her one of 100 Influential Health Care Leaders in
holds a medical degree and a doctorate in medicinal chemistry from the
She earned her bachelor's degree in pharmacy from the
She is married and has two daughters.
Comments and discussion-During
Magnan's visit with the Civic Caucus, the following points were raised:
think this is great," the commissioner opened, about the conversational
format of the Civic Caucus. "What I would propose is making this more a
dialogue than a presentation."
Magnan's tenure as commissioner
opened by telling the group of the conversation she had with Governor
Pawlenty prior to her taking on the job of commissioner. She had asked him
what success would look like. He told her:
Minnesotans would be protected against
any public health threats
The department would build public health
The commissioner would advocate for
is pleased with her department's results but acknowledges that there is
more work to be done. Preventative measures and plans have been put in
place. Strategies for improving the public's health have been developed.
And, in 2008
passed comprehensive health reform, which was titled Minnesota's
Vision: A Better State of Health. (See:
http://tinyurl.com/3vf7kl.) "Minnesota has done things that were later
included in the federal health reform legislation," she said, such as
administrative simplification and health care homes (medical homes). "We
have been working on reforms that seek to achieve many common goals, and
we continue to share our experience and expertise with national experts.
We believe that answers to the redesign of our health system will be found
in innovative states such as
Legislation usually does not articulate goals per se, but goals can
develop from the law. "In our state, stakeholders adopted the Triple Aim
of improving population health, improving the consumer/patient experience,
and improving affordability." Magnan said that working on the three aims
or goals simultaneously is a challenge, but necessary if we want to
achieve the health reform we desire.
United States has a poor value equation in health care
cited the words of Marmor, Oberlander and White from the
issue of Annals of Internal Medicine: "We spend too much for what we
get." If you look at an international comparison of health care systems
among Australia, Canada, Germany, the Netherlands, New Zealand, the UK,
and the US...the United States spends the most-by far-and gets the least
in positive outcomes.
described a visit to
Germany, where health care spending per GDP is 10 percent (the US spending
as a share of GDP is 17 percent). Yet, Germany's outcomes are better. The
Germans have a payroll deduction that goes into a centralized pool, and
the government distributes those monies among 154 statutory health
insurance funds. The funds compete over how to deliver care for the money
distributed. If the funds are unable to meet healthcare needs with the
allocated Euros they can go to members to get more money-but there is an
incentive not to do that.
concept goes back into the 1800s, and builds upon their idea of
solidarity-amongst all ages, genders, and class. They also have a strong
primary care sector, which helps with preventative care. Prevention,
including a healthy lifestyle, is a huge factor in their success. For
example, they have very walkable and bikeable cities with significant mass
transit, and they have more access to fresh fruits and vegetables -
environments that help to fight obesity.
care costs are rising in Minnesota-faster than any other large sector of
the economy. It is projected that by 2018, if left unchecked, the state
will double what is spent now on health care. The pressure is building on
both ends. Costs are inflating faster than economic growth, and there is
an upward trend in the number of people uninsured and the number reliant
on state programs.
Meanwhile the population is aging. Magnan shared information from the
state's economist Tom Stinson and the state's demographer Tom Gillaspy.
"We are entering a watershed period for an aging population, trending
toward more than half of population growth being seniors aged 65 and up."
By 2015 'empty nesters' will outnumber married couples with children. By
2020 older singles aged 55 and up will be 57 percent of all singles living
alone, and the labor force will be growing at a record-low rate. The
state's economist Stinson and Gillaspy like to ask: So when did we know
that the people born before 1946 would be turning age 62? Have we been
planning enough for the age wave? "No," Magnan said.
other areas of state budget
state health care costs continue to grow at the projected annual rate of
8.5 percent, in contrast to projected growth in revenue of 3.9 percent,
there will not be money available to fund growth in costs of education or
other areas of the state budget. See the Budget Trends Study Committee
report from 2009:
about 20 percent of what constitutes a population's overall health comes
from health care itself. The other 80 percent are what people often call
the "social determinants" of health that are much more influential than,
for example, going to see a doctor for checkups. The things that are more
predictive of population health are behaviors (tobacco, physical activity,
nutrition, alcohol, etc.), socioeconomic factors (education level, job
status, affordable housing, etc.) and the environment.
forget that this 80 percent is what's most important-what I call
'upstream.' So we end up focusing on emergency or 'sick' care, which will
consume more resources."
still ranks among the top in health outcomes, Magnan said, but the
determinants are changing-bringing the state's overall rank among the
states from third to sixth. "While we're doing well in outcomes, those
things upstream-children in poverty, educational achievement or failure,
personal behaviors-that so strongly determine outcomes are changing. We
need to invest in our children," in order to improve conditions that
impact long-term outcomes for generations to come as well as current
populations. We also need to address disparities, e.g., among populations
of color, American Indians and people in poverty.
Minnesota's 2008 health care reform law
2008 the Legislature passed and Governor Pawlenty signed into law
significant health care reforms. The legislation built on the work of a
Health Care Transformation Task Force convened by the Governor and
Legislature, and a Health Care Access Commission convened by the
summary of the reforms may be found on the State's website at:
http://tinyurl.com/3vf7kl. Briefly, components of the reform package
Health Improvement Program (SHIP)
is prevention-oriented, seeking to decrease the number of people that are
obese or overweight, or who use or are exposed to tobacco. The program
targets four settings - schools, worksites, communities and health care -
to provide a comprehensive approach. The program is not implemented
directly by the state, but by local communities and tribal nations. For
example, in schools, SHIP interventions work to change the meals provided
by schools and vending machine offerings, as well as to encourage safe
ways to walk or bike to school-"getting down to the nitty-gritty about
what students are eating in school, about their physical activities."
broadly, "this is about changing the environment in which we live," Magnan
told the group. Changes in behavior take time to grow, she emphasized, and
SHIP needs to continue to invest in changing policies, systems and
environments over the next 10 years to fully realize its impact. But
change has happened already. For example, 28 college campuses are already
working on smoke-free policies, and over 180 schools are creating safe
ways for kids to walk to school.
Certification has begun for "health care homes." A health care home is not
a place, but an approach to primary care, allowing providers, patients and
families to work in partnership to improve the health and quality of life.
Certified health care homes strive to better coordinate primary care for
people with complex or chronic conditions. Health care homes support
primary care, which in turn can improve health outcomes and work to
contain or reduce health care costs.
reform and quality measurement
The legislation supports measurements of the quality and total costs of
health care by providers, so that they may be compared to those of other
providers The provider peer grouping system will group providers based on
value - both risk-adjusted quality and cost - and will make it possible
for consumers, providers, purchasers and policymakers to make more
informed decisions about health care.
Measurements of performance by providers will allow for payments based on
quality and cost. "We will be the first state in the nation to do that
systematically across an entire state, and to incentivize this."
Minnesota will be able to show who is doing better, for less. This
information will become available in the coming months.
has to redesign care and payment
me expand a little bit more on the provider peer grouping. We need to
change the conversation, and the provider peer grouping (PPG) will do
that. Based on other data, we believe that PPG will show that there is not
a direct relationship between cost and quality. In health care it is not
necessarily true that more service is better, or more cost is better. PPG
will be a tool allowing us to show, with hard data, where outcomes are
better, and who is better at producing those better outcomes for less. It
will spur quality improvement and models to reward patients for using
higher value, lower cost providers. The law requires that one year after
PPG is released, the state's employee health plan, local units of
government and private health plans develop products that incent consumers
to use higher-value care.
Understanding the way health care providers are paid is key to
understanding why costs have increased so rapidly. The way we reward
providers today is by paying for patient visits, tests, hospitalizations,
procedures, etc. But we don't reward providers for keeping people healthy
and out of the hospital or for coordinating care. Furthermore, our system
is not necessarily attuned to the needs and desires of patients. For
example, when you ask, the majority of people say that at the end of life
they want to die at home, but 75 percent die in a hospital or institution.
have a specialty-oriented reimbursement system. It is not rewarding
primary care, Magnan said. "We need to set up an incentive so it's not
that 'more is better,' or 'more expensive is better.'" The emphasis should
be on quality outcomes and encouraging a strong primary care base.
Purchasers are working to change this. For example, the Legislature
instructed the Department of Human Services to decrease payments to
specialists by 13 percent, but held primary-care physicians'
needs to be redesigned from a patient's viewpoint. For one primary care
office's redesign, when a patient calls the front appointment desk, the
receptionist asks not what appointment does the patient want, but what the
patient needs. Often patients' needs may be met without an appointment.
And we need to pay providers differently. Instead of only paying a
provider for patient visits, tests, procedures, and hospitalizations, new
models are being explored, e.g., global payments for certain diagnoses or
for total care, and we will hold the provider accountable for outcomes and
is one approach towards bolstering primary care in
Minnesota, which is an important goal. Fewer doctors are going into
primary care since the payments for primary care have been so much lower
than payments to specialists. But research shows that where primary care
is more prominent in the overall scheme of health care, costs are lower
and patients are very satisfied with their care. So it is abundantly
clear that primary care providers are a high value and should be rewarded.
participant asked Magnan how the state would gather "outcomes" data? The
state is fortunate to have Minnesota Community Measurement, she replied,
and they have been gathering data that has been reported on a voluntary
basis. Now with the 2008 legislation, this data must be reported, so there
will be data on all primary care providers and hospitals in
Minnesota, Magnan said.
now we reward sick care, we don't reward health. We need to redesign care
and redesign payment so that keeping people healthy and out of hospitals
is not only the right thing to do but is also what is rewarded." That is a
major lever to induce reform for structuring clinics and hospitals and
making appropriate investments in costly equipment.
response to questions about what one specific thing would address rising
health care costs, Magnan said, "It would be nice if there were one simple
answer to fixing health care costs. There is not just one answer-there are
priorities for how we move forward however." The redesign of care, the
alignment of payment incentives, prevention efforts and getting
improvements "upstream" are going to be very important. Other issues such
as long term care will need to be addressed as well.
Electronic health records
Sixty-six percent of
Minnesota clinics have electronic health records installed and either some
or all of the clinic staff and providers are using it. Electronic health
records will not necessarily save costs by themselves as simply a
documentation tool, Magnan emphasized-but they must be used to provide
better information to improve care, to increase coordination of care and
reduce complications of care, which should decrease health care costs.
said that the state is seeking guidance from the Federal government on
implementation of the health care reform law enacted in
Washington earlier this year. The Minnesota Legislative Commission on
Health Care Access has developed work groups on health insurance
exchanges, payment reform, small group insurance markets, and work force
and the New Normal"
changing demographics and changing economics, there are significant
challenges in health care. "Tom Stinson talks about needing to change the
social compact-we need to change what people give, and get. This will be a
fundamental change in how people live and act." Stinson and Gillaspy talk
and the New Normal." We will need to discover what that "new normal" is
in health and health care.
Vision for a Better State of Health includes better care, better health
for a population and lower costs.
prides itself on being a model for the nation, and this package of our
state health care reforms is significant because it addresses the
structure of our health system itself.
closed by saying that the state will continue to focus on a few key areas,
including prevention (the leading preventable causes of death of tobacco,
obesity, and alcohol) and the redesign of care and payment systems that
use competitive peer grouping and reward primary care
you, Commissioner Magnan,
for taking time today to discuss this important issue.