Thursday, October 05, 2006

Points on all the discussion in CT about health insurance for everyone

Universal Health Care – there is lots of attention here in CT in the media, by politicians, and from advocacy groups such as the Universal Health Care Foundation on the desire to bring universal health care to CT.

Some of the issues being raised are:
"Oh my there are to many people uninsured” and
“The health care system in the US is broke”

Instead of dealing with the real problem thia type of attention often results in new legislation to mandate this or that and these types of “solutions” end up just making the problem worse. The real issue we face here in CT is the factors driving the cost of medical treatment!

Research into efforts here in the US and in other countries finds – no examples of a government run system that is working effectively today – yet alone one that could provide the kind of quick access to all sorts and types of medical treatment people in the US have come to expect.

What one finds in government run systems. which always operate with limited funds, is they:
Put limits on the number of people who can enroll
Pay providers way below the level needed to run their business
Result in long waits for the services of specialists.
Delay the introduction of new methods of treatments, especially for prescriptions.

Because of all this I do not believe people in CT, when they come to understand, will want such an approach!

There are other ideas in CT and in various states from advocates to require companies of a certain size to comply with X or Y. These proposals are often called Fair Share. Maryland for example, passed Fair Share legislation [found later to be against the law], which was focused on solving the uninsured issue. Analysis however, indicated it would not have lowered the number of uninsured by much. e.g. 99% of Maryland’s uninsured do not work at WalMart

The question then becomes – What could be done? In thinking about this it is important to keep in mind the current cost problem is the result of many factors and consequently there is no single solution. When one looks around the US, at what is working, one finds:

It is very important to focus on cost. Programs that provide help to lower income people are more important than working on access for all, which is not the problem.

State mandates are a big contributor to cost, directly and indirectly, thus efforts to reduce these and create so called mandate lite plans in the individual and small group market is important. Eliminating mandates does not take coverage away from people as some advocates proclaim. Why? The marketplace will offer plans with the coverage people want. Plus there will be options for people to buy additional coverage e.g. maternity if someone believes it is important.

Big companies and company coalitions such as the LeapFrog Group are now focusing on the quality of medical treatment results and moving away from the current system which pays for a treatment activity without regard to the result. Programs in various areas of the US such as Pay for Performance and Bridges to Excellence are achieving results and will also help deal with the cost of medical insurance here in CT

Here in CT legislators need to work on implementing public policies to encourage not mandate personal responsibility for having medical insurance. This would be much more effective than all the talk about just giving access to coverage.

Note: Studies have found somewhere in the range of 50% to 75% of the funds in programs implemented to expand public health care coverage go to those who dropped private coverage to enroll in the new public program.

An important part of what really needs to be done here in CT is for the General Assembly to set up Public and Private partnership programs for coverage focused on lower income individuals such as:

The waiver program to take some State Children’s Health Insurance Program dollars, called Husky here in CT, and provide them to employers so Mom or Dad can afford to put their kids on the firms plan.

Preparing now so the federal refundable tax credit program, e.g. $1,000 for single coverage to help lower income folks, can be implemented as soon as it is approved.

Some additional facts, which everyone should know:

In 2005 general inflation contributed 27% of the cost increase in medical insurance premiums – 43% came from higher levels of utilization – price increases, greater than inflation, resulted in the remaining 30%. There are various forces, which influence each of these.

In 2005 – 86 cents of each medical insurance premium dollar went to pay form medical treatment – 5 cents is for things such as provider support, marketing, investments in technology – 6 cents went for things such as claims administration and regulations – 3 cents went for health plan profits.

An analysis of the 346,000 considered to be uninsured here in CT tells us – 116,000 are eligible for public programs e.g. Husky – 111,000 have an income over $50,000 e.g. able to purchase coverage – 49,000 are uninsured for a short time e.g. between jobs. Thus, the number of those really uninsured in CT is 70,000

The private sector did not create the uninsured issue – things such as the inefficient medical treatment system, individual behaviors and lifestyle choices, and the cost of state required coverage did. States therefore have a very big responsibility to work on fixing things, which contribute to the cost problem. Working on mandating everyone be covered will only result in more cost.

BTW – There is no track record of success in states that mandated individuals have certain insurance coverage. For example, states which mandated auto coverage still have about 15% of drivers that are not insured.

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