Care, Not Coverage

Maybe our focus on insurance is wrong.

By Ian Morrison

We should cover the uninsured. You hear that a lot. We have been saying it for 40 years. Hasn’t happened.

Even in the roaring ’90s when the economy was rocking and rolling, when really rich Americans earned a lot and paid a lot in taxes, when we had a popular Democratic president and when we had a government surplus, we did not cover the uninsured. Maybe we don’t want to. Maybe it is just too expensive now. Maybe we can’t be bothered, what with Iraq and the war on terrorism and global warming and all.

Nevertheless, you are going to hear a lot about covering the uninsured in 2007. It is becoming fashionable again. Politicians, from governors to mayors to maybe even presidential candidates, are going to speechify about covering the uninsured. Some may even go further than that and pass some legislation through their elected bodies.

Massachusetts offers an interesting state-level experiment in which everyone, both employer and individual, is compelled to participate. In Massachusetts, health care insurance is both a right and an obligation: You have the right to expect health insurance coverage, but you have an obligation to pay something for it. (Note that it doesn’t seem providers have to sacrifice anything–they just get more insured patients.)

We will all watch Massachusetts very closely, but can we learn from the experiment and apply it elsewhere? As I point out to my Boston buddies, we have more uninsured in California than they have people in Massachusetts, so the problem is of a different scale in California or Texas.

California Coverage

Speaking of California, the residents of that state have a wave of initiatives coming at them over the next couple of years. They have universal coverage in San Francisco. (Actually it is not coverage, because according to the mayor it is not insurance, because insurance would be challenged on ERISA pre-emption grounds and challenging ERISA is like challenging big tobacco: You don’t go there. So it may look like insurance–you pay a premium and you get covered services–but it is not insurance, OK?)

At least in San Francisco the bureaucrats have run the numbers past actuaries and come up with a very rich benefits package for only $201 per month. How can they do it? They’re presuming that all providers will spontaneously accept Medicaid rates. Other plans have been floated in California, including everything from single-payer alternatives to employee mandates (the so-called SB2 ballot initiative that was shot down recently, but may well resurface).

Again in California, Kaiser Permanente has developed an ambitious and logical proposal to cover the state’s uninsured by requiring all taxpayers to participate in some form of coverage. Those who are ineligible for existing public and private programs or cannot afford them (below 300 percent of the federal poverty level) would be funded through a mix of payroll and provider taxes at a total additional cost of $7.5 billion.

And Gov. Arnold Schwarzenegger has declared that universal health care coverage is his top priority. The governor’s plan is to be commended for the “shared sacrifice” that it requires. Government (especially the federal government) has to give some, and state taxpayers have to give some. Businesses with more than 10 employees have to “pay or play” (provide insurance or pay into a state pool). Other individuals, including those who work for small businesses, have to buy at least a catastrophic coverage plan. And most interestingly, providers are taxed (4 percent for hospitals and 2 percent for doctors) in recognition that their uncompensated care burden would be reduced by expanded coverage and improved Medicaid reimbursement. All oxen are gored in the process, which is a good thing.

This and all plans say very little about how health care will become more affordable or how costs will be contained in the long run. But overall, it represents an emerging consensus that health care is both a right and an obligation. You have the right to expect some access to health care, and you have the obligation to participate in paying for it. It’s easy to say, but the hard part is figuring out who pays for what.

Focusing on Care

We can expect more proposals as politicians see an opportunity to focus on an issue that has political traction, even though the potential solutions are complex, messy and difficult to communicate–and end up costing payers, employers, providers, patients or taxpayers much more. That’s why we may find that all these schemes go nowhere, and the number of uninsured continues to rise, particularly if we see double-digit increases in the cost of care (the single biggest driver of the uninsured) or, even worse, a downturn in the economy. Because if you cannot cover the uninsured when you are at full employment and a budget surplus, as in 1999, when can you?

Maybe we need to change the focus from coverage to care. For example, giving people an insurance card helps only if a provider accepts both them and the card. Try, for example, finding an OB/GYN in California if you are on Medi-Cal. We might be better off training a whole cadre of nurse practitioners to create universal prenatal and well-baby care as a government-funded service, like K-12 education. People can always buy additional insurance if they want more than the basic program.

A further benefit of focusing on care delivery, not coverage, would be reducing the absolutely staggering costs of administering the eligibility requirements for complex, means-tested programs involving moms and kids in poverty. My favorite statistic is that there are 1,900 people employed in Los Angeles County who do nothing but fill out Medi-Cal eligibility forms for county residents at a union-mandated productivity target of two such forms per day! We should give these employees white coats and have them go to schools to immunize kids and teach them about the perils of a fast-food diet. Oh, and if we extended the universal care system to all kids, eligibility would be easy; if you are a kid, you get care: no coverage, no forms, no questions.

Ian Morrison is an author, consultant and futurist based in Menlo Park, California. He is also a regular contributor to H&HN OnLine. This article 1st appeared on March 6, 2007 in HHN Magazine online site.