Happy New Year! As we welcome in 2012, we should also be prepared to hold on tightly as this year will likely be full of change.
Later this year, we should have a historic decision about the two questions facing the Supreme Court of the United States regarding ObamaCare: 1) Can Congress require individuals to purchase of health insurance? And 2) Can the federal government force states to expand their Medicaid program?
If the Court upholds the Patient Protection and Affordable Care Act and its provisions, it will trigger a whole series of events and policies which must be implemented pursuant to the 2,700+ page legislation. One of those state triggers which must be implemented are state health insurance exchanges. These exchanges will allow individuals and small employers to purchase health insurance coverage.
The manner in which these exchanges are established and maintained is also of importance. Several states such as Massachusetts and California have adopted a “restricted” exchange model. In other words, bureaucrats select which health insurance policies that individuals and small businesses can purchase. The dominate other model is a market-based approach which allows individuals and small business to select from all health insurance products in a particular state. A third model which is cropping up in several states is one that creates a private sector health exchange with little or no state government assistance.
If a state decides not to set up some form of health insurance exchange, the federal government will step in and set one up for the state. I am always fearful when the feds step in … so my bias would be for a health insurance exchange which offers more choices, not less; allows state flexibility, not rigid federal red tape; and offer 21st century policies which encourage health and wellness over providing more of the same 20th century coverage which just covers “sick care.”
As to the second question before the Court on expanding Medicaid eligibility, the economic downturn has put states in a budgetary tight spot. While ObamaCare will pick up some of the funds necessary to expand the Medicaid program, the states will be asked to pick up more and more of those costs over the years.
This fundamental funding shift from the feds to the states will cause state governments to make tough new cuts to education, public safety, transportation and other government services. Expanding state based Medicaid programs will simply put states in the awkward position of having to raise taxes to cover the Medicaid expansion or cut other worthy programs. You see, unlike the federal government, states’ actually have to balance their budgets. And, state governments from Georgia to Oregon have already trimmed most of the fat in state based programs. Therefore, if the Supreme Court rules that Congress can mandate that states expand their Medicaid rolls, then states will have to raise taxes in order to pay for and implement their “share” of ObamaCare.
But what happens if the Supreme Court rules that Congress and the President exceeded their constitutional boundaries in adopted federal health reform?
With or without ObamaCare, there is still a need to reform our healthcare system. At the Center for Health Transformation, we believe we should move away from the current fee-for-service model which pays for individual medical transactions. We should embrace a 21st-century model encourages patients to be engaged in their own health care and creates incentives for doctors and hospitals when individuals stay or get well.
We should also extend to individuals the same rights which companies, both large and small, have regarding the tax deductibility of health insurance premiums. Creating a dynamic, robust individual insurance marketplace where health insurance products are widely available, which provide incentives for wellness and prevention and which focus on outcomes is vitally necessary. We should advance consumer-directed healthcare plans. To empower patients with their own healthcare, we should reform the tax code to encourage more Americans to set up health savings accounts (HSAs). HSAs would allow consumers to pay for routine medical care, like regular maintenance on a car, and then, use lost cost, high-deductible insurance plans for major medical expenses. That’s directly opposite of ObamaCare implemented which taxes and restricts health savings accounts, dealing a blow to consumer-driven health care.
Lastly, we should look at ways to create a totally new system of how we decide medical malpractice claims. Under the current system, providers rarely disclose medical errors because of the fear of being sued. Therefore, process engineering aimed at correcting medical errors are more difficult to implement.
And then there’s the issue of defensive medicine. A Jackson Healthcare/Gallup poll of physicians last year found that $1 in $4 spent on healthcare is dedicated to unnecessary tests, procedures and drugs that doctors order to prevent being sued. As long as doctors are forced to play defense, healthcare costs will continue to escalate and drive up costs for all of us. Creating a new innovative health justice model to properly compensate legitimate injuries while preventing bogus lawsuits is a very important priority.
Happy New Year and hold on tight … 2012 is likely to be a wild ride.