The perfect prescription for health care reform may make us really feel sick
Author: Miller Hudson - March 8, 2013 - Updated: March 8, 2013
The occasional bleating noises that have emerged from the offices of health care providers since the 2009 adoption of the Affordable Care Act (ACA) are about to swell into a full-throated chorus of high decibel wailings and lamentations. Within a few weeks insurors will be filing their premium schedules with state Insurance Commissions for the medical plans they are required to offer on health care exchanges. These insurors will no longer be allowed to exclude pre-existing conditions, establish annual or lifetime benefit limits, nor can they require co-pays for many preventive procedures. This may sound terrific in concept, but don’t expect these provisions to be delivered on the cheap. Most informed observers predict a sticker shock that will prove nothing short of traumatic.
Last month’s Columbia Journalism Review suggests that the American press has a unique opportunity for professional redemption as it reports on the roll out of Obamacare. CJR opines that, “The Affordable Care Act is a big deal, and it’s complicated. Readers and viewers need our help to see it clearly, both for their own situations and that of the nation. Here’s our chance.” Implicit is an admission that the media failed to explain what was actually at stake during the Congressional health care debate, opting instead to report on the political prizefight between the White House and recalcitrant Republicans. For most Colorado families, employers and health care providers Obamacare re-mains a large, seamless, ticking black box of unknown content. Your intrepid investigator will seize the cudgel of curiosity on your behalf and provide periodic updates from the operating room.
Although the Colorado Health Exchange, soon to be re-branded as “Connect for Health Colorado,” has been meeting publicly for nearly a year, constructing a multi-billion dollar on-line marketplace for health insurance purchasers, they rarely attract more than 50 observers and never anyone from the mainstream media. Upon closer scrutiny those in attendance break about evenly between lobbyists for health care providers and advocates for a myriad of consumer non-profits. Both appear primarily concerned with protecting their access to the choicest cuts from the fatted calf that is American medicine. For more than half a century an informal conspiracy has successfully cornered one in every six dollars of American GDP, well on the way towards trapping one in five by 2020, for the exclusive prosperity of the health care industry.
Steven Brill’s special report in the current issue of TIME, “Why Medical Bills are Killing Us,” describes these schemes in excruciating detail. He concludes his lengthy essay by noting that, “We’ve created a secure, prosperous island in an economy that is suffering under the weight of the riches those on the island extract. And, we’ve allowed those on the island and their lobbyists and allies to control the (public) debate, diverting us from what… is the obvious and only issue: ‘All the prices are too damned high.’” It is no accident that the highest paid salespeople in the United States are the peddlers of pharmaceuticals and medical equipment — corporate profit margins for their employers routinely range between 250 and 1000 percent. Nor is it a coincidence that the highest paid non-profit administrators in the United States can be found in our hospitals. This is price-fixing collusion masquerading as market economics.
For starters, who looks forward to purchasing more medical services? Aside from plastic surgeries, what portion of medical costs constitutes discretionary expenditures? And, when critical services are required, who really wants the low cost provider? If I ever need a cardiac bypass, I’ll be looking for the surgeon with a 99 percent survival rate, the cost be damned — thank you very much! In an emergency, (think broken bones or cardiac arrests) who can or would be willing to comparison shop by calling through the yellow pages for a better deal? Brill estimates that 30 percent of total health care spending in the U. S. is wasted on unconscionable profit margins. That’s a whopping $750 billion annually. Every other advanced economy on the planet has opted for some version of a single payer strategy that allows patients to push back against the profiteers.
While Obamacare shuffles the deck in terms of who pays for what and when, it does very little to contain the prices we are expected to pay. As Brill and others have noted, our current ‘fee for service’ regimen has unleashed an avalanche of costly lab tests, MRI screenings and billable procedures of dubious worth. In the near term, as noted earlier, it appears likely these expenses will jump dramatically as all parties scurry to preserve their existing profit margins.
A longer term solution may be the opportunity each state is afforded to entirely restructure its health care delivery system. The Vermont Legislature has already approved a conversion of its Green Mountain Care to a single payer system in 2017, as permitted under the Affordable Care Act. Another approach is gestating right here in Colorado under the sponsorship of Senator Irene Aguilar, a career M.D. with Denver’s community health clinics. Perhaps the only positive result of the ill-fated Romer for Mayor campaign was the selection of this thoughtful and able physician to fill Romer’s Senate vacancy. Now elected in her own right, she is proposing a Constitutional Amendment for the 2014 ballot that would establish a statewide Health Care Co-operative covering every Colorado resident. (Not to be confused with the health care cooperative plan being organized by the Rocky Mountain Farmers Union.)
This past Saturday about 75 supporters gathered in Denver to commence the process of organizing a grassroots advocacy network for this proposal. Without getting lost in the details, her plan, which weighs in at 15 pages as compared with a thousand for the ACA, would be funded through a mandatory 6 percent employer and 3 percent employee payroll tax that replaces the current system of individual insurance premiums. These revenues (estimated at $16 billion) would be pooled with $20 billion in Medicaid moneys to provide universal health care coverage for all state residents. At first blush, a 9 percent payroll tax sounds enormous, but, when compared against the current cost of medical insurance, it would substantially reduce the expense for employers that still provide health coverage. The Co-op would also apply to serve as a Medicare Advantage provider, in all likelihood attracting even further billions into its program. Members (all Colorado residents) would elect a governing board, a not inconsequential responsibility as the Co-op’s budget would dwarf that of state government (by a factor of three or four). Nothing in this plan prevents individuals from purchasing personal or supplemental medical insurance if they wish, but the statewide payroll tax automatically finances universal membership for all residents. The Co-op will then contract with exist-ing providers to offer medical services.
Yes, this proposal introduces a backdoor route to a single payer system for Colorado. But, if the ACA proves a wobbly replacement for the existing arrangements, escalating everyone’s medical premiums without significantly expanding coverage, the Co-op proposal may arrive at just the right moment. Of course, there are churlish cynics who believe Obamacare was intentionally designed to fail. When it does, reformers will be able to place blame for the resulting mess on greedy insurors and launch a plan B in the form of Medicare for all.
Currently medical expenses precipitate 70 percent of personal bankruptcies, and two-thirds of these occur in families that are carrying health insurance — just not enough, they discover. One day, perhaps Obamacare will be remembered as no more than the necessary stepping-stone that was required to transition American health care to a single payer solution.
Miller Hudson writes about topical subjects for The Colorado Statesman. He has served in the state Legislature, been president of a trade organization, and remains active in city affairs.