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Gregoire signs legislation consolidating Health Care Authority, Medicaid

For Immediate Release: June 7, 2011

Gov. Chris Gregoire today signed House Bill 1738, which combines the state’s two largest health care purchasers, Medicaid and the Health Care Authority, on July 1. The consolidation is a major step to make the state’s health care programs more effective and efficient. The governor called for the merger last year in the executive order “Implementing Health Reform the Washington Way.”

Under the legislation, Medicaid — the state’s largest medical assistance program for low-income residents — will be moved from the Department of Social and Health Services and merged into the HCA, which handles state employee and retiree health care benefits, as well as the Basic Health Plan. The governor said the consolidated agency’s mission is to promote evidence-based medicine, realign incentives to improve care and cut health care costs.

“With the state spending $5 billion each year on health care, we must continue taking bold action to reform the system,” Gregoire said. “Consolidating the Health Care Authority and the state’s Medicaid program will cut costs for taxpayers and improve the quality of care for patients. This is health care reform for Washingtonians by Washingtonians.”

The HCA will continue implementing cost-saving strategies identified by the governor’s Blue Ribbon Health Care Commission, including:
• Using evidence-based medicine to ensure patients receive health care that works.
• Expanding chronic care management to better serve the 5 percent of patients responsible for 50 percent of the state’s health care costs.
• Promoting good health and preventive health care.
• Making better use of health information technology to streamline communications between providers and patients.
• Increasing transparency so that consumers can make better decisions about their own health care.

These strategies have already led to significant savings for taxpayers:
• Per-capita inflation in the state’s Medicaid program was held to 2.6 percent, while the national average was 4.2 percent.
• Prescription drug costs have been slashed by 23 percent, despite a 5.1 percent increase in caseload. This has saved taxpayers $100 million a year.
• Evidence-based care techniques have saved $30 million a year.

Doug Porter, who has served as HCA administrator and state Medicaid director during the past year, will remain as HCA director under the new law.

“The governor has kept Washington and the Health Care Authority in the forefront of states that are determined to improve health care programs and reform health care spending, and that same leadership will capably guide us through this transition,” Porter said.

Medicaid serves 1.2 million clients and the HCA manages health care benefits for approximately 340,000 state employees and government retirees.

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