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Sunday, July 05, 2009
More Questions Than Answers
By Winthrop Quigley
Copyright © 2009 Albuquerque Journal Journal Staff Writer
Congress is one month into its summerlong sprint to overhaul the American health care system. Other than a goal of health care coverage for all at a lower cost, no one really knows where the finish line is.
New Mexico's health industry executives, practitioners and policy thinkers have seen in-depth health reform debate in the past decade and have struggled with most of the issues and arguments consuming Washington. They give Congress credit for good intentions. But the debate has focused almost entirely on how to pay the bill while expanding coverage, and health care is much more than that, they say.
"Accessing health care and reforming insurance are not going to make people healthy," said Leigh Caswell, a public health specialist and coordinator of the Bernalillo County Community Health Council. "The pathway to a healthy birth-weight baby includes prenatal care, but it also includes healthy food, parental education, a good home. There are a lot of pieces that go into health."
"Ninety percent of the discussion seems to be on financing," said Jerry McLaughlin, a physician in Hobbs and president of the New Mexico Medical Society. "Only about 10 percent of the attention is being given to service delivery and quality of service."
And, so far, all the reform efforts seem to "nibble around the edges in terms of addressing cost," said David Roddy, executive director of the New Mexico Primary Care Association, which represents many of the clinics that serve rural communities and low-income populations. "Somebody has to address the level and intensity of care people are going to get."
Ron Stern, Lovelace Health System CEO, asked: "Where is the supply of young nurses? We need more physicians. If we assume that 49 million currently uninsured people now have access to care, where will those providers be, and how do we get them into rural communities?"
Roddy said 60,000 more primary care providers would be needed nationally to service those newly insured people.
Congress has close to a dozen serious proposals coming from various committees and political alliances of its members. One from the Senate Committee on Health, Education, Labor and Pensions, known as HELP, gained special notoriety. It proposed that individuals and families could buy coverage through insurance exchanges instead of obtaining employer-provided coverage. The government would subsidize the cost for qualifying buyers.
The Congressional Budget Office estimated that only 16 million more people would have health care coverage under that plan and that it would raise the federal deficit by $1 trillion between 2010 and 2019.
Ideas for paying the bill have also generated some heat. The most hotly debated payment idea would tax employer-paid health insurance benefits. Those benefits are not taxed today.
A U.S.-run plan
The most controversial plan would set up some kind of government-run health coverage option to compete with insurance companies, but few details have emerged about how such a plan would be created or how it would work. Sen. Jeff Bingaman, D-N.M., said he favors the federal government starting a nonprofit company that behaves exactly like a health insurance company. It would compete for customers, negotiate payment with providers and pay its own way by charging premiums.
A version of the proposal leaked by a HELP subcommittee Bingaman chairs said the public plan would be run by the federal Health and Human Services Department. The government would fund it by paying for the first three months of claims made by the people it insures.
"The so-called public option would not have to generate a profit for shareholders," Bingaman said. "That would hopefully result in their ability to offer more competitive prices for coverage."
New Mexico's senior senator argued that the government has been pretty efficient in administering some programs such as Medicare. "Similar efficiencies could be achieved here, at least administrative efficiencies," he said.
Whether you buy that depends on how you feel the government has done with Medicare and other programs and how you view profit in health care. Federal studies suggest Medicare is heading for huge trouble.
Government actuaries estimate Medicare will run out of money to pay for hospital care in 2017, and some Medicare beneficiaries will face premium increases of 8 percent in 2010 and 15 percent in 2011. Unless Congress intervenes (which it has repeatedly over the years), the law will automatically cut physicians' Medicare payments by 21 percent this year. Medicare loses an estimated $60 billion a year to fraud.
"What we know is that one of the ways government plays in health care is by setting prices that are very low," said Jim Hinton, CEO of Presbyterian Healthcare Services. "What that has caused is this horrible sort of market adjustment where the commercial plans have to pay providers more because the government pays providers less."
Cutting Medicare
New federal budget proposals envision cutting spending on existing Medicare programs by hundreds of billions of dollars, said Allen Sánchez, CEO of St. Joseph Community Health. "Ultimately the cuts trickle down to hospitals and providers," he said. "They're robbing Peter to pay Paul."
Stern said Medicare typically reimburses hospitals about 7 percent less than they charge, and rules slated to be in effect by 2012 require payments 13 percent less than charges. "For inner city hospitals and academic centers, these cuts can be devastating," Stern said.
Medicare reimbursements are based on formulas that pay New Mexico providers less than their colleagues in places like Miami and New York. The rationale is that it should cost less to practice here, even though New Mexico has to compete nationally for physicians and nurses, and has to pay what everyone else pays when it comes to pharmaceuticals and medical equipment.
The government does not "have a track record of paying what is necessary for meeting the expenses of a medical practice," McLaughlin said.
"The bigger concern (with a public plan) is that it won't ever be a level playing field," Hinton said. "As long as the plan is run by the feds, it can make up shortfalls by going to the Treasury and having Treasury subsidize the plan."
The problem with for-profit health care is that keeping people healthy depends on so many things that nobody gets paid adequately to do, Caswell said.
"It's difficult to make the case to a (health care) institution that if they have preventive care it's going to save them money, because they are charging insurance companies," she said. "They're looking more at what services are going to keep the institution afloat. That's done by providing a lot of specialty care. It's not done by keeping people away. It's not done with long, education-filled primary care physician visits."
The clinics Roddy represents get a lot of federal financial help, and the experience has been good. "They are able to invest in quality and get some type of return," he said. "The HMOs that came about when I was a kid said they would invest in health maintenance. They stopped that real quick because they couldn't get any return on that investment."
Government role essential
Carter Bundy, AFSCME political and legislative director for New Mexico and a veteran of state-level health reform task forces, said a public government plan that competes with private insurance will help fix free-market failures that afflict health care.
Unlike virtually all other purchases, people cannot easily stop buying from an insurance company they don't like, the amount of health care they consume doesn't depend on its price, consumers don't usually have a choice as to the health insurance they buy, and insurance companies' profits are not closely linked to how well they serve patients, Bundy said.
"There is no reason to think that people with pre-existing conditions, complicated conditions, are going to get all they need from private insurance," he said. "A public option is the best way to keep them honest. I completely agree that everyone needs to play by the same rules. We do not at this point support going to a single-payer system that excludes private insurance."
The New Mexico Nurses Association does favor a single-payer system, said Carolyn Roberts, its executive director. The association "feels there should be a basic plan that would provide preventive care, chronic disease management and hospitalization," she said. "It needs not to exclude people with pre-existing conditions, it needs to cover everyone, and it needs to be nonprofit. We feel health care is a right for every single person."
Roberts acknowledged such a plan would require more taxation, "but we are already paying about $2,000 per person per year to cover the uninsured, either through insurance premiums or taxes. I don't think it would take a huge increase in our taxes to cover everyone."
Expanding coverage
Just about everyone agrees that everyone ought to have some sort of coverage.
"I love the idea of everybody being covered," McLaughlin said. "When a patient walks into my office or the emergency room, I'd like to know their visit is paid for, and that whatever I advise them to do to maintain or improve their health, there is some mechanism in place to pay for it."
"I do believe that getting more people into the insurance system, some kind of insured access to health care, does lower the unit cost for everybody," Hinton said.
"If we had a good five years of coverage for people who aren't covered now, it would seem logical that people's health would improve and costs would decrease," Sánchez said.
National efforts don't seem to address some key issues. Experts have long known that identical care can cost significantly more in one place than another. "You don't have to make much of a dent in those areas to find a whole lot of more rational use of the health care system," Hinton said. There does not appear to be much thought about that issue in Congress.
Congress has had little to say about how to improve care, though President Barack Obama has praised the effectiveness of medical teams, like those at the Mayo Clinic. Teams are "a great idea," McLaughlin said. "But something under 50 percent of physicians offices in this country are solo practitioners, so when he talks about team care and particularly when he talks about being paid for team care, generalities don't help us and they make people nervous."
Then there is the small matter of paying the bill. That part, Stern said, should be pretty straightforward.
"As a society, let's agree health care is a priority," he said. "Let's pick a (spending) number, then go out and tax accordingly. If it's a national priority, we need to acknowledge that it's going to cost more and find the funds."
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