The moderator of this session, Helen Darling, President of
the National Business Group on Health, began by suggesting that we can’t just
put more people into the system without fixing it. If we try that “we’ll have
twice the mess we have now. . . We
need to provide universal access and fix the system simultaneously,” she stressed.
In addition, she pointed out “The largest employers in every
jurisdiction in this country are public employers. We have to ask, where are
they in this picture?” This is a question that is rarely asked.
Darling then introduced the panelists: Francois de Brantes,
National Coordinator of Bridges to Excellence and Michael Widmer, President of
the Massachusetts Taxpayers Foundation. De Brantes began by saying that when we think of health care
reform, we tend to think first, about universal coverage. “Employers I have
talked to agree that we need universal coverage. But once you have access, you
have to ask: ‘Access to what?’”
If we don’t change the system, de Brantes said, we will be
providing “access to mediocrity.”
Currently, he added, “our delivery system does not deliver what we are
paying for.”
He
noted that by calling for reforms that have included “managed care,”
“transparency,” “consumer-directed health plans,” “health information
technology” “value-driven benefit designs,” and “pay for performance,"
“employers—particularly large employers—have led health care
reform."
At the same time, he acknowledged, reform in these areas has
only begun. For example, when it comes to “pay-for-performance’ de Brantes
indicated that we need to pay providers not just for “process” (i.e. for doing
certain things like giving aspirin to heart-attack victims), but for results.
Providers should be paid more if outcomes are better.
Here he is quite right. It is not at all clear that P4P, as
currently designed, is leading to better results for patients. In fact, this
applies to most of the initiatives promoted by large employers. Some, such as
“managed care” led to lower costs for employers for a few years. But, by and
large, employers did not insist that insurers “manage” care with an eye to
getting better quality care for fewer dollars. Instead, employers were mainly
concerned with paying less—even if that meant that some patients would be
denied necessary treatment. As a result,
most for-profit insurers did not compete on both price and quality—they
competed on price alone.
“Health Information Technology” is another very good idea. But it
requires funding. At this point no one has offered to provide the billions
needed to “wire” our health care system. Over the long run, employers, insurers
and the government would realize significant savings if health care providers
used electronic medical records to avoid redundant tests, medication mix-ups
and unnecessary treatments. But none of
the payers have stepped forward with sufficient funding, and as a result, when
it comes to health care IT, we are years behind countries like Canada and
Singapore.
Michael Widmer, President of the Massachusetts Taxpayer
Foundation followed deBrantes, calling the Massachusetts plan “a major accomplishment” but noting that ‘making it work’ is ‘still a
tall order.’”
Then he turned to “how it happened.” “It was a top priority for the leadership of the state.
Governor Romney, getting ready to run for the presidential nomination, saw it
as something he wanted to achieve. Senator Kennedy also was very helpful. There was a very unusual alliance of
political leaders.”
In addition, he observed, “it always helps to have a couple
of threats.” The federal government had made it clear that Massachusetts was going to lose a large amount of money if it didn’t do something. Meanwhile,
advocates had put out a proposal for a major payroll tax on employers as part
of health care reform.
But Massachusetts also had a head-start on universal coverage. “Massachusetts
is unusual in having a very high level of employer insurance,” Widmer pointed
out. “Then there is the other major fiscal advantage we have—we had a pool of
money for uncompensated care that had a billion dollars in it. That pool is not
present in other states. This allowed us to do what we have done [so far]
without new taxes.”
Widmer closed by talking about the implementation: “I would
have to give it an ‘A’”, he said. But in fact, there is a large
hole in the Massachusetts program. Because the Commonwealth allows insurers to charge older patients
premiums that are twice as high as premiums for younger patients (for exactly
the same coverage) many older middle class citizens are not able to afford
insurance. They’re not poor enough to receive subsidies from the state, but
they are not rich enough to afford sky-high premiums. The state’s solution is
to “exempt” them from the mandate that every individual in the state must sign
up for health insurance.
In response to a question from
the audience, Widmer acknowledged that roughly 60,000 people would be
“exempted” from the mandate—and many of them would be elderly people. In other
words, 60,000 people who cannot afford the premiums that Massachusetts is
letting insurers charge, and who don’t qualify for state subsidies, will wind
up without insurance. Yet these are people--many of them retired and between
the ages of 55 and 65, most of them middle-class or lower-middle class-- who
most need insurance. So much for “universal coverage” in Massachusetts. For more information on problems in Manhattan’s
plan, please scroll down to the post titled “If We Mandate Insurance, Should
21-Somethings Pay Less?” On the question of state plans, both in Massachusetts and California, I
would like to hear from readers—particularly, though not solely, from people
who live in these states. (Please scroll down on the left side of the first
page of www.healthcarebeatblog.org
and click on “contact” to send in your
comments. I will post them on the blog.)
Yet even though some 60,000 citizens will be left out of the
Massachusetts plan, Widmer is
right to say that the state has made progress: “We have insured 150,000 to
175,000 individuals who were not insured last year.”
However, Widmer acknowledged there is still an elephant in
the middle of the room: “cost.” Year after year, healthcare costs continue to
rise faster than either per capita income or GDP. Unless we rein in future
health care inflation, no one will be able to afford universal coverage—not the
government, not employers, not most families. (For a full
discussion of healthcare inflation, scroll down to the post titled “Do We
Really Have to Cut Back on Health Care Spending?”)
“We have a tight financial situation in the Commonwealth,” Widmer
added. “We can’t add to the subsidies at 10 percent a year.” Or even at 6 percent a year. Here he made a
key point about state-by-state reform: “What can one state do about rising
cost?”
Widmer is absolutely right. One state doesn’t have the clout
to negotiate significant discounts from drug-makers and device-maker. One state
cannot afford to do the “comparative effectiveness” research that is needed to
decide whether a more expensive product or treatment really is better. Only the federal government is in a position
to do these things. This is why, in the long run, state-by state health care
reform cannot work.
By contrast, if reform comes at the federal level, Medicare is large
enough to have the clout to rein in costs nationwide. For example, Medicare can
refuse to cover the costs of correcting unnecessary hospital errors. Medicare
also can reward hospitals and doctors who offer high quality, efficient care.
Finally, if Congress allowed Medicare to negotiate with drug makers and device makers,
it could get the steep discounts that the VA (which is allowed to negotiate)
now receives.
