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Sunday, July 19, 2009
Local Experts Look at Proposed Overhaul
By Winthrop Quigley
Copyright © 2009 Albuquerque Journal Journal Staff Writer
Thousands of pages of legislation spawned by House and Senate committees last week have some New Mexico health care experts thinking Congress is confusing health care reform with coverage reform.
Businesses are worried about new taxes, health care providers wonder if they'll be paid adequately, and community clinics are thrilled with new federal support for better access to health care for under-served populations.
Meanwhile, some complain the proposed reforms don't go far enough and that the system should be chucked in favor of single payer system, completely eliminating private insurance. Writing for the Journal's op-ed page Friday, University of New Mexico professor and physician Howard Waitzkin said a complete government takeover of health care payment would simplify administration and reduce costs dramatically.
Experts interviewed by the Journal unanimously backed the goal of getting health care coverage to virtually all Americans. They cautioned that the proposals they were commenting on might bear little resemblance to legislation that might pass.
In addition to questions about how to pay for an overhaul of the system, some were troubled by what they see as inadequate focus on improving quality of care or increasing the size of the health care work force enough to treat roughly 40 million more people who would receive coverage under the legislation.
They also warned that much of what is needed to truly reform health care — things like payment systems that encourage providers to improve care and lower cost — are missing from the legislation.
"We have to remember that insurance reform is not health reform," said Beverlee McClure, president of the Association of Commerce and Industry. "Making sure there is access to high quality health care is as important as health insurance."
Congress can't just "tinker with insurance and expect to make gains," said New Mexico Health Secretary Alfredo Vigil.
Ann O. Wehr, a physician and CEO of Molina Healthcare of New Mexico, said that merely extending coverage to more people doesn't restrain the unsustainable growth in health care costs.
"Providers, whether they're hospitals or doctors or other types of providers, are rewarded for the volume of services rather than the outcome of those services," she said. That means their financial incentive is to provide more service, whether it is appropriate or not.
Charlie Alfero, CEO of Hidalgo Medical Services, found lots to like about the bills, including new funding for community clinics and for health system infrastructure, and help for medical and nursing students. But, he said the United States needs to reform what it pays for as much as how it pays for care.
"In other countries, they afford universal coverage because they are less expensive, and they are less expensive because they ration the most expensive end of the health care system," Alfero said. "In this country, our payment system rations primary care and prevention because it doesn't pay for that adequately. In other countries a cardiologist makes 50 percent more than a primary care provider, not five times the primary care provider, like in this country."
Congress is "not getting to the core of the problem," said New Mexico Mutual Group CEO Norm Becker, who leads the Greater Albuquerque Chamber of Commerce health care subcommittee. "The core of the problem is utilization (of services). If we don't tackle the tough stuff, which is utilization and the quality of health care, just getting more people into the system will slow inflation temporarily, but it will pick right up again."
"They have not done anything to address the rising cost of health care, which is the primary source of health insurance premium inflation," said Lori Flint, immediate past president of the New Mexico Association of Health Underwriters.
New Mexico Hospital Association president Jeff Dye said the bills appear to increase demand for health care services without increasing the health care work force enough to meet it. "That's a big problem," Dye said. "We don't have an adequate workforce to take care of demand right now."
Public option
The single biggest change offered in the legislation is establishment of some sort of government-run alternative to commercial insurance. Lawmakers have said the so-called public plan would compete fairly with private companies and would live off of premiums and not taxpayer subsidies.
The committees also propose to subsidize the cost of coverage for people who can't afford a plan, require individuals to obtain health insurance and require businesses to offer it to employees.
Alfero says a public plan option "is critical" if the nation is to reduce its uninsured population.
But the House public plan would peg payment to Medicare rates, which Ron Stern, Lovelace Health System CEO, said are already too low. "There needs to be some method of negotiation between payers and providers that is better than what is in place today with Medicare," Stern said.
Physicians have objected to Medicare rates for years, and the formula that sets physician rates is expected to generate a 20 percent cut to doctors in January, said New Mexico Medical Society president Jerry McLaughlin, an obstetrician in Hobbs.
"If that isn't fixed, the public plan's payment for doctors is going to be as inadequate and problematic as the Medicare plan has been," he said.
Presbyterian Healthcare Services CEO Jim Hinton said government could regulate insurance companies to improve their behavior without establishing a competing plan of its own.
"If the government wants to say you can't turn people away based on pre-existing conditions, and you couple that with an individual mandate, you begin to take some of these real and perceived abuses out of the private insurance system," Hinton said. "Why not give that a shot before the government steps in to create a plan that has to be funded down the road by taxpayers?"
Wehr sees a potentially fatal conflict of interest, since the government would regulate the competitors to its own public plan.
The Congressional Budget Office has tentatively estimated the House bill could add more than $1 trillion to the federal deficit over the next nine years. Others put that number closer to $1.5 trillion, and the Senate version's tab has not yet been estimated.
McClure said businesses can expect higher costs from the public plan and from mandates that they provide coverage. "It's really going to hurt small businesses in New Mexico," she said. "It's going to have the unintended consequence of killing those businesses."
One suggestion is to impose an 8 percent payroll tax on companies of a certain size that don't provide health benefits. Some proposals envision new taxes on the wealthy and on insurance companies to pay for universal coverage.
Flint said a tax on insurance companies will backfire. "That doesn't help address the cost of health care and insurance at all," she said. "If you shift the cost to insurance companies, those costs are going to get shifted to consumers" through higher premiums.
"If the program is not financially sustainable for the long term, it doesn't do people enrolled in the program any good if they're only enrolled for the short term," Flint said.
Alfero said a lot of money is available in the system if only it were better spent. He cited statistics showing that despite spending more than any other country on health care, the health status of Americans doesn't compare favorably. "If we live in the world's most expensive health care system without great outcomes, there is plenty of money in the system to improve outcomes," he said.
"The money's there," said Health Secretary Vigil. "We're on the verge, in the next few months, of economic growth and expansion and prosperity. This is the perfect time to hitch a ride on the pendulum while it swings in the right direction."
Community health center systems like Alfero's Hidalgo Medical Services and First Choice stand to benefit from proposed legislation. Kathy Ganz, First Choice clinical compliance officer, said the bills would provide $40 billion more money for community clinics.
Hospitals may not fare so well, Dye said. Congress is talking about reducing disproportionate share payments, which compensate hospitals for serving the uninsured. Hospitals may not be paid to care for patients who are readmitted to the hospital under certain conditions.
Hospitals in low-cost states like New Mexico could fare even worse, Dye said. To add new dollars from federal payers in New Mexico under current payment structures would mean taking money away from high-cost states because Congress wants spending to be budget-neutral. High cost states include New York and Florida, which have larger congressional delegations and many more voters than New Mexico does.
"Low-cost hospitals in low-cost states ought to get some add-ons and not penalize other hospitals in other states," Dye said.
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