Why Rush Health Reform? Let's Fix Insurance First

It may well be more prudent to make smaller changes now and build upon them.

By SHARE

By Bernadine Healy, M.D.

President Obama was caught off guard recently when asked how he would react if Malia, Sasha, or Michelle needed medical care not covered by the public health insurance plan he favors. It was a telling and awkward moment; he paused, then indicated he'd seek out whatever care he felt was best for his family. He recalled his grandmother's hip fracture and facing the question of whether surgery would be appropriate for an elderly woman ill with a serious cancer. Pinning or replacing a shattered hip restores mobility and relieves unbearable pain. His response—to get her hip surgery even if it meant paying out of his own pocket—was deeply personal, neither blue nor red.

Obama's quintessentially human moment offered an important insight: Decisions about the prudent use of medical resources are not always clear cut and must take into account deeply personal needs and considerations. A "public option," designed to discipline private insurers to keep costs down by standardizing care, would not be bound by the empathy Obama showed or even by the decision of his grandmother's doctors. Since most Americans don't have the means to reach into their own pockets, the fact that personal choice has been a bedrock of our insurance system bears remembering as the White House pushes to ram health-reform legislation through Congress before the August recess. It's easy to lose sight of these sensitivities when the scope of reform is so expansive—overhauling the delivery of care and the payment system, penalizing doctors for certain hospital admissions among the elderly, piling on an array of new taxes, creating a health choices commissioner to oversee the medical benefits of the entire nation, all at a 10-year price tag of $1 trillion or more.

[Consider why doctors take issue with Obama's plan.]

Better, perhaps, to slow down. Take a breath. As engineers will tell you, a giant, complex problem is often better solved by breaking it down into smaller and more easily tackled parts that build into a whole.

This could work for health reform, where relatively conservative changes just to the insurance system could reduce costs while dramatically increasing coverage and build a platform upon which to add future remedies. As more details seep from the thousands of pages of legislation being penned in Congress, it seems clear that insisting on the comprehensive package—and now—may be counterproductive. The House "blue dog" Democrats made their views clear to Speaker Nancy Pelosi in a July 9 letter saying that legislation had to be available to the public well before any vote. "Too short of a review period is unacceptable," they wrote, "and only undermines Congress's ability to pass responsible healthcare reform that works for all Americans."

Here's a two-part proposal for what we might try instead:

Mandate catastrophic medical insurance for everyone, and turn no one away. The astronomical costs of modern healthcare make insurance essential, but it doesn't have to cover every service. Over the past decade or so, catastrophic coverage policies have grown in favor among millions of Americans seeking coverage for major health expenses that exceed $2,000 to $5,000; these inexpensive basic plans allow you to spend that deductible as you see fit and also give access to discounted prices for primary care. Because insurers can negotiate deals with doctors and other providers that the individual cannot, a visit for preventive services or a minor ailment needn't cost more than the price of a good haircut.

According to Amir Mostafaie, a consumer health insurance expert at the online broker eHealthInsurance, which offers plans from 180 insurers in virtually every state, a 25-year-old single male can get catastrophic coverage for premiums of $500 a year; a 35-year-old, for $1,000 to $1,500. A visit to the doctor might run $25 to $30. More than half of the 46 million uninsured are under age 36 and mostly in good health, and a catastrophic policy would most likely cost them less than their cellphone service. For this approach to work, health insurance would have to be available to everyone, without exclusions or penalties for prior illnesses—already part of most thinking on health reform. Only age would be considered, meaning that the young would be able to pay less than the over-50 group.

Such a relatively simple shift would address the fear that a major illness would mean financial ruin, as well as the practice of using emergency rooms to access care. Some of the Medicaid payments now made to hospitals for "charity" care could be redirected toward government subsidies, available on a sliding scale, to pay for health insurance for those who lack the income to buy it on their own.

[Read how crafty health insurers are denying care.]

A bonus effect of high-deductible health insurance is that it forces people to think about the cost of care. If a woman can find a mammogram for $50 instead of $150 and save the difference, she clearly has an incentive to shop around. Over time, the competition will bring prices down.

Create a health insurance exchange that makes prices transparent. We need a marketplace like the one President Obama supports, where people can compare benefit plans of all types, apples to apples, and choose what's best for them. It might be a creation of the federal government, headed by a new health choices commissioner. It could be a state effort, since insurance is regulated by the states. Or it could be a private-sector online exchange like eHealthInsurance. With insurance companies listing a full range of policies and competing head-to-head for customers, individuals who have been disadvantaged because they are not part of a large employer group should see premium costs fall and services rise.

Equally important, the insurance exchange could publicize information that consumers can't get now: what treatments actually cost and the range of prices insurers pay for a given service. One reason healthcare spending is so high is that the prices negotiated are largely secret, and for years, patients and doctors have been shielded by insurance from knowing the costs of the therapies they have used. Consider: Should the veterans hospitals and Medicaid get deeply discounted prices for what they purchase with tax dollars when taxpayers themselves are kept in the dark about the discount and frozen out of it?

There's no question that health reform needs to happen. But the changes contemplated will reverberate widely and in potentially radical and deeply felt ways, as the president has acknowledged. There is wisdom in moving ahead cautiously, in steps that might seem small but that would have major and measurable impact.

Related: 7 Ways Health Reform Will Affect You