Nobody’s trying to limit costs

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Health care overhauls won’t make treatment more affordable

None of the health care reform proposals being considered by Congress will actually stop the spiraling cost of health care.
The proposals do not save money — in fact, the most popular one will increase health care spending by about $236 billion a year, according to the Congressional Budget Office.
Health care economists have raised the alarm that each of the current proposals that add people to health insurance roles, while cutting government costs, only increase cost shifting in health care — a problem that the country will have to solve in the long run.
“Very few people are happy with any of the proposals, with the possible exception of Wal-Mart,” said Steve Berkshire, professor of health care administration at Central Michigan University. “They see it as a way to save money — public opinion has forced them to provide insurance to more and more people, so they think the public option could help them in the long run.”
While nearly every group — from business to health care providers — believes reform is essential, few believe that Congress is headed in the right direction.
Small business groups say that the current popular proposal — to mandate employer sponsored coverage, tax employer premiums and reduce the government share of Medicare and Medicaid — isn’t viable for most small companies. But Berkshire said they are being alarmists.
“They say that every time we raise the minimum wage, and before this current downturn, it was never true,” he said. “People aren’t going to close their doors if they are forced to provide insurance coverage.”
But still — the current plans leave people with insurance holding the bag for most of the costs.
“If the government pays for it, health care is going to eat up 18, 19, 20 percent of the GDP,” Berkshire said. “And if they cut back on reimbursement rates, doctors and hospitals are going to shift the costs to insurance companies. If you have an HMO that negotiates a good rate — the costs get shifted to fewer and fewer people.”
That’s the point of a letter that the National Association for the Self-Employed, the National Federation of Independent Businesses and the National Small Business Association sent to Congress last week.
“Health care is one of the fastest growing and most unpredictable costs,” they wrote. “Since 1999, health insurance costs for small business have increased 113 percent. In spite of the increases, the ever-escalating cost does not correlate with increased health care benefits.”
Their suggestions: to institute insurance market reforms to increase access, expand choice and spur competition for private insurance. The groups also want more efficient approaches for purchasing insurance and to eliminate wasteful spending in the health care system.
“It is critical to emphasize that not just any reform will do,” the letter said. “We are dedicated to bringing the kind of reform that small businesses need — and will support reforms that improve rather than worsen the current situation for our nation’s employers.”
Small businesses could be harmed by the suggested legislation, but some groups say Colorado could see more job creation — not less. The Colorado Public Interest Research Group suggests that health care reform could create 40,589 jobs, and yield stronger economic growth over the long term.
But some believe the answer to the health care cost spiral lies in personal responsibility and a change in corporate climates.
“We need to address prevention,” said Margaret Sabin, CEO of Penrose-St. Francis Health Center. “Nothing addresses wellness. And that’s the first step in curbing costs.”
Sabin said that as diabetes and obesity have reached epidemic levels, health care costs have seen a corresponding increase.
“About 99 percent of type two diabetes is preventable,” she said. “And about 80 percent of disease as a whole is preventable. The savings that could come from wellness, from prevention, are huge.”
Employers face $12.7 billion in annual medical expenses because of obesity alone, she said. Changing corporate culture — and bringing some personal responsibility — will see huge costs savings.
But those issues aren’t being discussed, Berkshire said. In fact, the voices that raise the cost issue are being ignored.
“The plans just add more people to the insurance rolls in plans like Medicare or Medicaid, without providing more money,” he said. “Governors are afraid that this is going to turn into another unfunded mandate — where are they going to come up with the money to add people to Medicaid?”
Even under current proposals, not everyone will have health insurance, he said. By 2015, there will still be between 15 million and 20 million people who have no coverage at all.
“The proposals add between 25 and 30 million people to health insurance,” he said. “They don’t add everyone, and they add people at a huge cost. This cost shift — the underlying problem — will have to be addressed eventually, and before costs get so out of control we can’t compete as a nation.”