IN THIS ISSUE:
? President Bush Celebrates Health Savings Accounts
? Association Health Plans – Is a Compromise Possible?
? Uninsured Getting More Political Attention
? Rethinking Maryland’s Health Care Future
? Health Care Establishment Assembles to Fend Off Innovation
? Galen Institute to Host Briefing on Consumer Choice
President Bush Celebrates Health Savings Accounts
The President of the United States has become the number one salesman and marketer for Health Savings Accounts (HSAs). Grace-Marie Turner and I were honored to be among about 100 people to join President Bush in highlighting several employers and consumers who have already benefited from HSA products. He called for malpractice reform, tax credits for low-income Americans, and more community health centers. But the meat of his talk was on Health Savings Accounts. He stressed that HSAs will begin to educate consumers about the true costs of care and restore the patient-physician relationship — “We need a consumer-driven health care system. And we need better information about health care prices. And a consumer driven health care system with better information will help control the cost of health care. That’s the rationale of the health savings accounts.” He went on to list some of the benefits of HSAs – “First, many American families who choose HSAs will pay less overall for their health care?. Secondly, HSAs will encourage people to spend wisely for their routine medical expenses?. Third, HSAs will encourage people to save for their health care needs both now and in the future?. Fourth? there is an incentive to take care of their bodies and live healthier lives?. Fifth, HSAs will make it easier for some people who are now uninsured to purchase health insurance?” The president introduced several consumers who were illustrations of these various points. He went on to call for deductibility of HSA premiums and the establishment of Association Health Plans.
Association Health Plans – Is a Compromise Possible?
Speaking of Association Health Plans, “USA Today” is frustrated that such a simple idea as small businesses joining together to gain better insurance rates has become so controversial. The paper agrees that it isn’t a panacea, “but (AHPs) would address an important problem: the steep costs small businesses must pay to offer medical coverage?. Yet even this small, common-sense reform has touched off fierce opposition from powerful groups ranging from Blue Cross and Blue Shield to state health commissioners.” The article points out that AHPs passed the House, but were held up in the Senate last year, but thinks the “pop from Bush’s (State of the Union) speech and a commitment by Senate Majority Leader Bill Frist, R-Tenn., to take up the matter as part of a broader health care package may brighten the outlook.”
Uninsured Getting More Political Attention
Writing in “AMNews,” Joel Finkelstein reports, “Now more than ever, the problem of the uninsured must be addressed without delay. That is the unified message being delivered by politicians, special interest groups, voters and academics across America.” He cites the President’s State of the Union address, and quotes AMA President Donald Palmisano as saying, “The AMA is encouraged by President Bush’s attention to the plight of the uninsured. We applaud the president’s conclusion that ‘a government-run health care system is the wrong prescription’ for America.” The article goes on to mention the Democrats’ opposition and the recent Institute of Medicine study that “the only satisfactory answer is universal coverage.” The article also cites a recent survey done by Democratic pollster Stanley Greenberg for the American Hospital Association that ranks health care as tied with terrorism for the number two issue on the minds of voters. The economy is number one.
Rethinking Maryland’s Health Care Future
Maryland is one of the states wrestling with these issues. There are two competing proposals for mandatory universal coverage – one Republican and the other Democrat. The Maryland Public Policy Institute asked me to write a paper on what Maryland should be doing in health reform, and I decided a pox on both their houses was in order — “Covering the uninsured with more of the same insurance policies available in the state does nothing to correct what is wrong – and expensive – with those policies.” Maryland is one of the most highly regulated states in the country. It has the most mandates of any state, it has a Health Care Commission that has created a regime in which two insurers control 88% of the small group market, it has an “all-payer” hospital rate control system, and one of the most restrictive Certificate of Need programs in the country. It is the wealthiest state in the country, but has a worse record than most of its neighbors in assuring coverage. All of these regulations serve to drive out competition and keep the local health care establishment fat and happy. Even Medical Savings Accounts were never allowed in the state, and it is unlikely the Health Care Commission will ever allow small employers to get their hands on an HSA. My recommendation is to blow it all up. Get rid of all these regulations and allow competition and innovation back into the state.
Health Care Establishment Assembles to Fend Off Innovation
Speaking of the health care establishment, the World Health Congress was in town last week. It was surely the greatest assembly of vested interests ever put under a single roof. UPI was surprised that “an informal survey showed (that the audience) was almost half Republican.” But Republicans are every bit as good at passing mandates and telling people how to live as the Democrats are. But, thankfully, Milton Friedman was there standing up for individual freedom. In speaking of HSAs, he said, “I predict you will see a very rapid expansion in the use of catastrophic insurance.” He repeated his long-standing criticism of third-party payment, according to the UPI story, which reports, “‘We don’t expect that our auto insurer will pay for our gasoline,’ Friedman quipped, saying the current U.S. healthcare system is ‘a recipe for disaster.’ He suggested U.S. workers would be better off if employers gave them higher wages and let them pay for their own healthcare coverage.” The article goes on to quote George Halvorson, CEO of Kaiser Foundation Health Plans, as dismissing HSAs, because someone with cancer will “blow right through that deductible,” having little effect on the cost of healthcare. The article also cites him as saying, “The low-income? probably would not have the $1,000 deductible and end up with no coverage, resulting in visits to the emergency room that end up being paid by the taxpayers.” Dr. Herbert Pardes, CEO of New York Presbyterian Hospital agrees, saying, “If faced with formidable costs, many delay care, often showing up in emergency rooms.” The article goes on, “He warned that HSAs will appeal mostly to healthier individuals who could threaten the group health insurance market if they pull out in significant numbers.”
Also, clips of Dr. Friedman may be found at: http://www.worldcongress.com/advance_video_clips.html
Galen Institute to Host Hill Briefing on Consumer Choice
Yes, I know — it is hard to believe these guys get paid the Big Bucks with this level of analysis. It reminds me of the old Bob Dylan line – “You know something’s happening here, but you don’t know what it is, do you, Mr. Jones?” We will be bringing together the leading vendors of consumer driven health care for a Capitol Hill briefing on February 11, to explain what is happening to anyone who cares to listen. Included will be representatives of Aetna, Fortis, Definity Health, Destiny Health and Vivius, who will talk about their year-end 2003 enrollment numbers, utilization effects, retention, selection, and what they anticipate in 2004. Senator Larry Craig (R-ID) will be on hand with introductory remarks, and I will moderate. The briefing will be from 2:00 – 4:00 pm in 563 Dirksen. Please RSVP to Tara Persico at firstname.lastname@example.org or 703-299-9205 if you would like to attend, and check our web site for more information — http://www.galen.org.
Please send all comments/questions directly to me at email@example.com.
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