Next big player in rethinking health care: government

We have spent much time exploring what is wrong with today’s health care system and what needs to be done by its participants (providers, insurers, employers and patients). This article will address the remaining very important system participants – elected and appointed government officials.
To the officials: Your role is critical. To a significant degree you regulate health care and health insurance. You enact laws that make it easier or more difficult for health care participants to do business in a responsible fashion.
You have, up to now, enacted laws and regulations that have added untold millions of dollars to the costs of providers’ (particularly hospitals) and health insurers’ businesses. These take the forms of premium, property and other taxes (even on nonprofit insurers), mandated coverage, subsidies, Medicare and Medicaid shortfall coverage, inoculation program funding, specialized childhood coverage funding, prescription-drug program funding, testing in schools, ambulance coverage (one of many that used to be provided by your organization using tax revenue), and more.
Many of these costs used to be covered by the state and federal governments. These are nothing less than hidden taxes that have been shifted from the government to insurers and providers. If we removed all of the foregoing from health-insurance premiums, rates would decrease by as much as one-third. So officials, your role is critical.
Every civilized nation should make quality health care available to every man, woman and child lawfully in that country regardless of ability to pay. Health care is a fundamental human right, and yes, I believe it should be regulated. It’s too important not to be.
Moreover, health care is the largest single industry of the Rhode Island economy, and it deserves respectful and informed attention. The past Lifespan/CNE attempt at a merger is an example. Regardless of whether you were for or against it, the participants at least deserved a prompt and thoroughly thought-out decision. It got neither and it dragged on for years, bleeding both organizations unnecessarily.
Likewise, our health care system is begging for a statewide strategic health plan – something that can be relied on in future planning by health care participants and that the General Assembly can use when considering the hundreds of health care bills that come before it each spring.
While our legislators spend substantial time on bridge tolls, marijuana dispensing, naming the state’s insect, gambling spats and the traditional June/July rush of important bills through to enactment or defeat without time for appropriate consideration, health care in this state languishes from lack of focused and expert attention. There are, of course, some officials who have rolled up their sleeves and tried with great effort to address the issues. Lt. Gov. Elizabeth H. Roberts and Secretary of the Executive Office of Health and Human Services Steven M. Costantino come immediately to mind.
And so, officials, please consider:
• It is critically important to understand the issues. They are complex, and knee-jerk or instinctive reactions are not helpful, nor are new mandates. We have to draw boundaries here, and some things must be outside of coverage, even if desirable. Officials must understand that it is the number and expensiveness of covered health care services rendered that is driving the unaffordability of health insurance. Every new mandate increases that cost. And within claims expense, it is the increase in the use of services that is overwhelmingly the principal cause of the increases.
• Health care providers and insurers can no longer be convenient sources of stealth tax revenue. They have to pass such costs on, so all that the hidden taxes do is secretly make health care more and more expensive and shift the blame for such increases to the insurers.
• Health care, as your largest economic engine, needs to partner with government to create a strategic statewide health plan that forms the basis for future growth and cutbacks (it’s not all growth). Notice I did not say health care plan. The bottom line is health, and not necessarily health care. So it’s broader than just reforming health care delivery, as important as that is.
• Jobs, while terribly important, are not the be all and end all of strategic planning. The opening of a new hospital facility costing $10 million and employing 300 more people is not necessarily a cause for celebration. Who pays for that and those salaries, and do they provide commensurate value? For example, the governor could put a dent in unemployment in Rhode Island by adding another 30,000 state employees, but would that add commensurate value worth the increased taxes that residents would have to pay? Assuredly not. Sixty-five percent of health care costs are salaries and benefits of employees. To significantly impact the cost of health care, we must over time reduce jobs (or make them more productive) and provide care more efficiently.
• Insurers must be approached and utilized in an entirely different way. Governments today tend to paint insurers with a black-hat brush. That’s not helpful here. Insurers recognize that the status quo is inappropriate, and are perhaps the most eager participants in the system to work toward systemic change. Government must use insurers’ resources and expertise for long-term strategic success. • Hospitals are facing a terrible time. Community hospitals are finding it almost impossible to operate independently. Larger systems have economies of scale and other advantages such as the ability to raise capital for changes of business models and infrastructure, but they too are at serious risk. Medicare and Medicaid, which constitute more than 50 percent of a hospital’s income, are continuing to pay hospitals less and less. Right now, they pay at a rate of about 75 percent of hospitals’ costs to provide such care. Hospital systems face additional daunting challenges to change their business models to take on financial risk and integrated care, and must spend hundreds of millions of dollars on long-festering technology and infrastructure needs. Inpatient censuses are dropping significantly each year, which while good for overall health care costs, are devastating to hospitals’ bottom lines.
• Physicians, particularly primary care doctors, face incredible challenges of changed business models and technology. The day of the solo practitioner is fast fading. How do we retain the best of the old physician care system and yet advance delivery reform? How do we create and maintain a strong primary care physician base for Rhode Island that is adequately paid and supported?
• It has been thoroughly demonstrated that more (either in quantity or cost) care is not necessarily better care. We need officials to understand this, and to require in their legislation and regulations a more thoughtful, coordinated type of care.
• Lastly, the work of the Rhode Island Quality Institute must be supported and maintained. The institute needs assured long-term funding to assist physicians in their technology adoption, use and training needs, and to sustain and lever CurrentCare, the statewide health-information exchange. That is a critical foundation for reform, and will dramatically reduce medical error, waste and increase speed to result. To their credit, all of the Rhode Island health insurers (Blue Cross, United, Tufts and Neighborhood) have recognized this and should be commended for their financial and other support to the institute. Beyond that, the institute should be funded by state general tax revenue, because it will serve the entire state, but officials have not seen fit to do that due to the perceived unpopularity of adding to taxes. It takes some vision and courage to understand that this is the exception to the rule.
And to the electors, please hold your elected officials accountable. During election season, ask them what they have done to foster health care delivery reform. If for example they mention adding a mandate or an additional tax or other charge to providers or insurers, or just as bad, nothing, use your vote to get rid of them. Likewise, if they demonstrate that they have worked thoughtfully with other officials toward a statewide plan of coordinated care and delivery reform, keep them.
This is a new social compact, and it must be kept if we are to be as great as we should be. We all must be watchful and vigilant to make this happen. •


Jim Purcell served as chief operating officer and CEO of Blue Cross & Blue Shield of Rhode Island for 11 years. This is the fifth of a six-part package of op-eds he’ll offer on health care delivery and reform.

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