Health Matter

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In 1991, less than one percent of Americans felt that health care was an important issue. Just two years later, President Clinton urged Congress to help him fix a health care system that “is badly broken” (Collins 78). Is the health care system badly broken? The health care reform debate has captured the attention of all Americans. What brought health care reform into the public spotlight? Although our medical care in this country is of the highest quality, our access to that care is waning due to higher and higher costs. Our health care system needs fundamental reform. Currently, there are dozens of reform packages in Congress, yet three packages offer significant recommendations toward health care reform: President Clinton’s Health Security Act, Representative Jim Cooper’s Managed Competition Act, and Senator John Chaffee’s Health Equity and Reform Access Today Act. The final health care reform package must include the choice aspects of all three of these proposals.

One aspect which must be included in health care reform is the elimination of insurance bias. Too many Americans are uninsured because of pre-existing conditions. Insurance providers should no longer be allowed to cover only the healthiest persons. Never again should an employer feel the need to fire a worker because of an illness which raises health insurance premiums. There are two important steps toward eliminating insurance bias. The first step is making portability of insurance a reality. Right now in this country, 28% of working Americans are unable to change jobs because they would lose their coverage and be denied coverage with another company due to pre-existing conditions (U.S. Health 56). For example, Marcia and Mark Callendar both had good jobs with good benefits. They thought their family was well-protected by the insurance provided by Mark’s employer. Then their son, Matthew, got sick. Mark lost his job, and the Callendars lost their insurance. When they tried to apply for coverage through Marcia’s job, they were turned down because of Matthew’s pre-existing condition. Matthew finally qualified for coverage through disability, but Mark had to take a lower-paying job to be eligible for coverage (Health Security 6). Hence, increasing portability of policies is fundamental to reform. No longer should an individual lose health insurance coverage with the loss of employment. Secondly, insurance providers must stop cherry-picking individuals. People should not be denied health care coverage because they have been sick. Denial of insurance coverage only forces these patients to use expensive emergency room services rather than obtaining regular treatment. The costs are just passed on to the insured patients in the form of higher prices (U.S. Health 18). Insuring the sick may cause the healthy person’s premiums to go up, but everyone will benefit from the assurance that medical coverage will always be available.

The publication of performance data by hospitals and doctors must be included in the final reform package. Performance data provides Americans with valuable information regarding the capability of these facilities and physicians to perform certain procedures. Already, patients are “shopping” for health care. Consumer preferences have remarkably influenced obstetrics care. Many hospitals now provide “homey” birthing rooms, and a small percentage offer birthing tubs. Consumerism is emerging as a powerful force in health care. Therefore, publishing performance data would allow patients to be more educated consumers.

Standardized benefits are a necessary component of health care reform. A standard package of basic health benefits must be offered. If packages are not standardized, they become more difficult to compare. The three reform package authors agree that a standard benefits offering is necessary. However, they do not agree on the number and kind of benefits to be offered. The administration’s benefits package, for example, is too generous. While none of the plans suggest a substantial lowering of benefits from what we now enjoy, “bean counters at the Treasury see what they termed politically-risky over promising by the administration” (Thomas, Clift, and Hager 28). Their package provides non-Medicare enrollees with hospital service, health-professional services, primary and preventative care, prescription drugs, and limited mental and substance abuse care. It also includes durable medical equipment, eyeglasses, and hospice care for the terminally ill. It contains a new Medicaid home and community-based program raises the Medicaid asset limit from $200 to $12,000 and provides for a personal needs allowance of $70 monthly instead of the current $30. It also includes eye and dental coverage for children (Fry). The enormity of benefits seems to be an attempt to please everyone. This much coverage is too expensive and unnecessary. Alain Enthoven, a Stanford University health economist and member of the Jackson Hole Group, finds that “most insurance plans currently are too generous because they do not impose enough financial incentives on individuals to use less care” (qtd. in Roberts and Clyde 104). For example, an individual having minor occasional knee pain is given a choice between living with the occasional pain and having an operation that costs $10,000. If the insurance plan covers the cost of the surgery, the individual is more likely to have the surgery. As a result, a relatively unnecessary and expensive procedure might be performed. Studies have shown that as much as 25 percent of health care costs are due to unnecessary services. Eliminating only one-third of all unnecessary treatments could save approximately $66 billion annually (U.S. Health 37). It stands to reason that if health care providers must pay for these unnecessary and costly procedures, eventually the cost will be passed on to consumers in the form of higher premiums.

On the other hand, Representative Cooper’s benefits package is more fiscally conservative. His plan suggests a basic health care package including medically appropriate treatment and effective preventive services. Persons wishing to purchase more coverage may do so. Still, the basic package would be the minimum coverage that a provider could offer (Cooper, Stenholm, and Breaux 1202). This would make minimum coverage more affordable and thereby accessible to all Americans, requiring fewer subsidies for the poor. It is important to remember that all three plans grant federal subsidies to the poor (“Comparison”). Thus, it would seem to be more fiscally responsible to begin by offering a basic health care package and gradually improving upon it as the funding for subsidies becomes available.

Health alliances are a necessary mechanism of health care reform. The purpose of alliances is to serve as aggressive advocates for small firms and individuals demanding better service and lower prices for participants (U.S. Health 2). Therefore, to accomplish health care reform, some form of health alliance structure is needed (Easterbrook 26). However, the administration’s enormous government-managed alliances must be slimmed down to be effective. As presently proposed, roughly three-quarters of the population would be compelled to use them to obtain coverage (Dentzer, “Harry”). The American people abhor bureaucratic red tape and inefficiency in government. In fact, in a December issue of U.S. News and World Report, Michael Barone wrote, “polls showed a lowering of support for Clinton’s plan because of the public distrust for the efficacy of government” (36). Obviously, Americans do not want another government agency administering their health care. Also, a tremendous number of large alliances would be required to service so many people. When interviewed by the Tulsa Business Journal, H. Michael Schiffer, former assistant vice president of CIGNA Corporation predicted “The creation of huge health care purchasing alliances as proposed in President Bill Clinton’s health care reform plan could potentially destroy America’s health care system.” He also claimed that the problem is the enormity of their size that in turn leads to “The main complaint about insurance companies [which] is poor service” (qtd. in Brown). Clinton’s alliances will be even larger than most current health insurance providers making prompt, efficient service impossible.

In contrast, Representative Cooper’s purchasing alliances offer a more acceptable mechanism for health care reform. Health Provider Purchasing Cooperatives (HPPC) is not government agencies but regulatory bodies governed by their members. An HPPC services individuals and small companies ranging from 100 to 500 employees (Payne 38). Larger companies that already enjoy purchasing clout are not eligible for HPPC servicing. This restriction would dramatically reduce the number of alliances as well as their size. Also, smaller alliances would result in more expedient service. California began utilizing an HPPC last year, and it now boasts 2,300 small business customers. Health Insurance of Green Bay operates the alliance with only 70 employees. Because it is state-sanctioned and regulated, the state determines guidelines for efficiency but contracts out the daily operations to a private firm. One such regulation demanded by California is that 4 out of 5 phone calls must be answered in 15 seconds (Dentzer, “Harry”). Thus far, the HPPC system has far exceeded this standard.

Health care reform must contain economically-secure methods of funding. This country has an inclination to provide for its people regardless of cost. This tendency has contributed to our tremendous national debt. In fact, former Senator Paul Tsongas believes that there wouldn’t be any discussion about health care if it weren’t for the deficit. He predicts, “The rising costs will eventually bankrupt the federal government.” Therefore, it is imperative that health care should not become just another government entitlement increasing the deficit. In a summary of the Congressional Budget Office’s report, director Robert Reischauer states, the C.B.O. concludes that the Health Security Act would establish both a federal entitlement to health benefits and a system of mandatory payments to finance those benefits. The C.B.O. also believes that the financial transactions of the health alliances should be included in the federal government’s accounts and the premium payments should be shown as governmental receipts rather than offsets to spending. (6)
Obviously, the administration’s financing as proposed in the Health security Act would establish another federal entitlement program similar to Social Security, and it would have the same potential to raise the national debt.

Further, the administration’s estimates regarding deficit reduction are economically unsound. The Clinton Administration estimates that their current proposal would reduce the national deficit by about $60 billion before the year 2000. Conversely, Reischauer predicted in his analysis summary to Congress that the deficit would increase by more than $70 billion between 1995 and 2000. This is a difference of more than $130 billion (4). He called the administration’s plan a “tax and spend extravaganza which would add 25% to the federal budget by 1998” (Duffy, Johnson, and Thompson 23). Obviously, the administration has been using rose-colored calculators because their numbers just don’t add up. Deficit reduction figures are not the only discrepancy. Figures relating to funding health care are no less inconsistent.

The first funding discrepancy in the administration’s proposal is the estimated revenue from an increased tax on tobacco products. In truth, many non-smokers would have to begin to puff for the administration’s numbers to work. In fact, Senator Warren Rudman ran the numbers on his home computer. He discovered that the estimated funds will be available if the cost of cigarettes is raised to $4 a package and 80% of the American people smoke (qtd. in Tsongas). Obviously, 80% of America does not currently smoke. Taxes on tobacco products should be included in financing health reform, but it is important to use realistic figures.

Secondly, employer mandates will not be as fiscally successful as indicated by the administration. Employer mandates, the key to paying for President Clinton’s universal coverage, will cost employers $70 billion a year in new spending (U.S. Health 55). In effect, Clinton requires employers to cover their workers through high insurance premiums which cross-subsidize coverage for the poor and unemployed (Dentzer, “Will”). This 17% increase in premium costs will require the federal government to spend $35 billion more than estimated to subsidize small businesses over the next five years. In addition, the premium hike will force employers to spend 14% more than Clinton estimated. Economist John Sheils predicts that by 1998 subsidies will total $75 billion. Considering that the current cost of uncompensated health care in this country is $16 billion, “You’re spending $5 to save $1,” says Sheils (qtd. in Duffy, Johnson, and Thompson 22).

Instead, health care reform must embrace individual mandates. Unlike the Clintons, Representative Cooper and Senator Chaffee oppose employer mandates. Instead, Senator Chaffee’s plan would require all Americans to purchase health insurance in the same way that all drivers must carry liability insurance (Dentzer, “Sizing” 34). Chaffee’s individual mandates place the responsibility of obtaining coverage on the individual where it belongs. An employer should be held no more responsible for financing an employee’s health care than for determining his lifestyle. Even though one smoker who gets lung cancer will cost the system $29,000 a year (U.S. Health 34), should an employer have the responsibility to get an employee to stop smoking? If individuals continue to have some financial responsibility for the cost of their health care, perhaps they will eat better, exercise more, and take advantage of preventive care.

Individual mandates would also prevent rising health care cost-shifting. Cost-shifting will occur unless all Americans are insured. Currently, some 37 million Americans lack health insurance coverage, depriving them of ready access to appropriate care and creating an extra burden on the entire system. Often, problems of the uninsured that could have been avoided through the use of preventative services become more costly due to a lack of timely care (U.S. Health 55). Usually, the uninsured are forced to seek medical care through the hospital emergency room which is costly and inefficient. The cost of caring for the uninsured is generally shifted to those who pay the bills. To prevent uncompensated care from driving medical and insurance costs up, all Americans must be insured.

It is vital to this country’s economic security that voters become educated about health care. Health care reform will most likely be enacted this year. For those in Congress who face re-election, the opinions of their constituents regarding health care will most definitely influence their position. Americans must no longer behave like spoiled children. The wants of Americans must be changed to the needs of America. The final reform should not only contain provisions for quality health care for all Americans, but also financially sound methods to fund it. The administration’s Health Security Act will not work without fundamental changes. President and Mrs. Clinton must be willing to compromise. Aspects of Representative Cooper’s Managed Competition Act and Senator Chaffee’s Health Equity and Access Reform Today Act are essential to a reformed health care system.

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