MINNESOTA TAKES CONTROVERSIAL STEPS TO REFORM HEALTH CARE

Abstract

When Minnesota legislators last spring passed health legislation that included a tax on health care providers, many physicians thought the state had gone too far. As the state begins to implement the law, however (physicians will begin paying the tax in 1994), those same physicians are realizing that their troubles may have just begun.

The tax is only one part of a larger health reform package that promises to change the way Minnesota physicians practice. Under the law, for example, the state will assign physicians to some patients. The law also requires the state to develop practice parameters and controls on technology...

Beginning in 1994, physicians will pay a 2% income tax on their gross revenues. The tax, which will not be levied on Medicare or Medicaid services or on physicians employed by managed care providers, will help pay for health insurance for the state's approximately 400,000 uninsured.

Many physicians opposed the legislation because it will cut into their pay...

And to achieve its goal of reducing health care costs by 10% a year for five years, the state will develop and implement practice parameters in an attempt to avoid ineffective treatment.