Beware pitfalls on road to health-care reform : Robert W. Hillman, Dr. David Lee, Dr. Joseph Fox, Dr. Randy Howard
At a recent meeting of top Indiana health insurance -care executives and physicians representing some of the largest physician group practices in Indiana, a somewhat surprising consensus emerged: While all gathered strongly support health insurance -care reform that extends affordable coverage to all, a majority were opposed to proposals that would create a new government plan option to “compete” with commercial insurance plans.
A government insurance option means that more than 70 percent of provider payments would be based on Medicare fee-for-service levels, which are typically at least 30 percent and as much as 80 percent less than private sector payment rates for hospitals and for physician care. Payment at these levels would give the government plan an unfair and insurmountable advantage in the market, allowing them to easily undercut prices in the private sector.
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To compensate for the lower government reimbursements, providers would have no choice but to shift costs to those with commercial insurance. According to a Milliman study released earlier this year, this cost-shifting, which has long occurred as a result of low payment rates for Medicare and Medicaid, results in $1,788 being added on to employers’ family premiums each year.
Thus, under a government plan option we would likely witness the unraveling of the employer-based health insurance system as the cost shift described above would be exacerbated and force those with private coverage to switch to the lower-cost government plan. The Lewin Group estimates more than 100 million people — two-thirds of the privately insured population in this country — would shift to the government plan almost overnight.
The results would be drastic: The financial challenges would lead to a reduction in the number of bright young people who want to practice medicine, put a strain on many current health-care services that are much needed, especially primary care, and shift the health-care system to a government-driven program that would ultimately drive out commercial insurance plans and usher in a system of “socialized” medicine.
Furthermore, a government plan would be less responsive to local market differences and consumer needs. It would shift the decision-making from Indiana to Washington, creating a “one-size-fits-all” approach that precludes state flexibility and results in consumer and provider frustration.
Finally, a new government plan would be less innovative than the private sector and would undermine efforts to improve our delivery system. Many current partnerships that improve care and create efficiencies in our system would be lost.
Reform must focus on appropriate use of the resources currently available, improving the health and wellness of our society, and a reduction in the amount of unnecessary and inappropriate regulation placed upon the health-care system, which drives up the cost of care while doing nothing to improve the quality of care.
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