Editor’s note: This commentary is by Rep. Thomas F. Koch, R/D, who represents Barre Town in the Vermont House of Representatives. This column is a reprint of his May 4, 2014, “Scribblings,” an occasional newsletter from the Legislature.
Over the years, I’ve had plenty to say about the problems with our health care system and the wrong turns that Vermont has taken on the road toward fixing our health care delivery system. And make no mistake — there are plenty of problems, and many of the actions we have taken have made the problem worse, not better. So some people have asked me a fair question: “What would you do?” Let me begin by stating three things that I consider fundamental principles.
First, patient choice is an essential part of any system that will work well. Involving patients intimately in decisions relating to their own care generates a willingness to participate and an acceptance of responsibility for outcomes.
Second, the purpose of insurance is to spread risk. Some people will experience insurable events; some will not. Those who do not will end up paying for those who do. But the protection is there for all who are in the insured group. And the larger the group is, the more the risk can be spread. In fact, since only a minority of people will experience insurable events in any given period, the more people who are in an average (i.e., not specially selected) group, the less each will have to pay for coverage.
Third, we need to recognize the difference between insurance and pre-paid health care. Insurance covers unanticipated or especially large expenditures. Auto insurance covers the cost of crashes, thefts, and unusual events such as towing after a breakdown; it does not cover oil changes or mechanical breakdown. Homeowners’ insurance covers fire, theft, and a number of other unanticipated events, even if they are the homeowners’ fault; but it does not cover a new roof when the old shingles wear out, periodic painting, or even some unusual occurrences such as a flood. Health insurance as we have come to know it, however, covers nearly every conceivable procedure that is non-experimental, and when we have to pay even a deductible or a co-pay, we complain about the fact that our health insurance doesn’t cover enough! So let me be clear: we have dug ourselves a very deep hole by expecting too much from our health insurance. Once we expect the insurance company to pay for everything, we start to demand everything; after all, we’ve “paid for it,” so why shouldn’t we use it? It’s human nature. We need to return gradually to a traditional concept of insurance — one in which insurance stands as a safeguard against bankruptcy in the event of large medical bills.
Before I really answer the question, “What would you do?” let me discuss briefly what I consider either right or given with our current system. Let me state what everyone should recognize: the Affordable Care Act (or “ACA”) is the law of the land, it is not going to be repealed any time soon, and some parts of it are based on sound principles.
The ability of a person under the age of 26 to continue as an insured on his or her parents’ health care policy is going to remain with us simply because it is popular. Economically, it does not make much sense; it is perceived as a “free lunch,” but of course, there is no such thing. If Junior gets sick and the costs of his illness are paid by his parents’ insurer, that experience will be reflected in next year’s premium calculations. But the provision is popular, and it is not going to be repealed.
I support the idea of an exchange. We can purchase airline tickets, and rent hotel rooms and automobiles through Expedia, Hotwire and Travelocity (which compete, by the way.) The concept of purchasing health care insurance online is not a radical idea. But it should be voluntary; it should not be the only way one can purchase insurance. Just as one can purchase airline tickets through a travel agent, so should one be able to choose between using an agent, purchasing directly from an insurer, or using an online exchange. And of course, it should never have gone live until it was ready!
I have also come, reluctantly, to accept the idea of the individual mandate — a requirement that everyone have health insurance. Making someone buy a product he or she does not want to buy goes against every instinct I have. But the alternative is either to deny care to an ill or injured person who is uninsured and otherwise unable to pay for necessary care, or to give free or government-paid care for that person. American society will find the denial of care unacceptable, and I sure don’t like the idea of picking up the tab for those who choose not to pay for protection for themselves. Furthermore, since the Supreme Court has found the individual mandate constitutional, I do believe that the requirement that everyone have health insurance is with us to stay.
One obvious aspect of health care reform that has been steadfastly ignored is tort reform. There’s not a hint of it in the ACA. Anyone want to guess why?
That, of course, raises the question — what if a person can’t afford to purchase a health insurance policy? And here, the Affordable Care Act is also on the right track. I have long said that if the reason someone does not have insurance is that the person can’t afford it, the answer is to give that person financial assistance. There is no need to set up a separate, government-run system such as Medicaid; all we need to do is help “financially challenged” people purchase private insurance. I would prefer to issue “health care vouchers” that could be spent on any form of health care; another option is tax credits. The ACA, with its convoluted interaction between the exchange and the IRS, is a mess, but subsidizing the purchase of health insurance for those who are unable to pay the full price is a sound concept.
So at last, what would I do, having recognized the reality of the health care world as I’ve described above? Here are some suggestions, a few of which, admittedly, would require action on the federal level.
First and foremost, I would increase consumer/patient choice. In Vermont, we have gone in precisely the wrong direction. We have created a single set of coverages, and the only difference among policies available through the exchange is the amount of co-pays and deductibles, and the size of the premium. While mandating some coverages, such as those for mental illness, can be justified, Vermont has gone overboard and mandated coverage for far too many procedures. I do not believe, for example, that people in their 50s and early 60s should be required to have pregnancy coverage!
Mandates are often justified on the basis that spreading the risk of any given mandated coverage is necessary because of the relatively small “pool” of insureds in a state as small as Vermont. When we consider that Vermont has only about 625,000 residents, and that about 150,000 adults and children are on Medicaid, about 100,000 are on Medicare, and a number of Vermonters have military or other federal insurance, the Vermont pool of insured is small indeed. The answer is not, however, to mandate that everyone in the small pool carry every conceivable form of coverage. That just raises the cost for everyone, which is a major reason why health insurance in Vermont is so expensive when compared to many other states. The answer, rather, is to increase the size of the pool. That can be done by allowing Vermonters to purchase their insurance across state lines, a solution that has been proposed many times and rejected by those in control of the system just as many times. By going its own way, Vermont has isolated itself and guaranteed that its pool is one of the very smallest in the nation.
The ACA actually allows exchanges to be set up on a regional basis, and as a minimum, it makes sense to me for Vermont, New Hampshire and Maine to cooperate, set up a Northern New England exchange, and allow a resident of any of these states to purchase any policy available in any of these three states.
I would allow people to purchase just a major medical or “high deductible” policy that would cover preventive care and expenses in excess of a deductible that a person could choose in accordance with the person’s “risk tolerance.” The risk tolerance would have to be realistic, based on one’s ability to pay the uninsured portion. In connection with such a policy, I would encourage a tax-favored health savings account, which presently exists in federal law, but which is held in contempt by anti-choice advocates, who claim that HSAs are “just for the rich and healthy.” HSAs, in fact, provide a source of payment for uninsured medical bills, allow a person to keep any funds not used to pay bills, and encourage a person who owns an HSA to be thoughtful about seeking medical care which might be expensive but unnecessary. It is not surprising that the growth of health care costs has slowed in recent years at the same time that the popularity of HASs has virtually exploded.
One reform that I think is appropriate is the banning of direct-to-consumer drug advertising, meaning all of those drug ads we see on television, most of which contain a short promotion for the product, a lengthy recitation of possible side effects, and a conclusion that suggest that you ask your doctor if the advertised product is “right for you.” This type of advertising does exactly what it is intended to do — create demand for a certain product. But what doctors have experienced is that many patients come into the office convinced that the drug they heard about is, indeed, “right” for them, and they virtually insist that the doctor write the prescription. These, of course, are patented drugs, giving their manufacturer a monopoly, which raises the price and, therefore, the overall cost of the health system. I believe the best way to promote the benefit and proper use of drugs is to inform the doctors themselves and forget the TV advertising. Unfortunately, banning such advertising would take action on the federal level, and I haven’t seen any enthusiasm for doing that on the part of any member of Congress, Republican, Democrat or independent. Might campaign money be having some influence?
Another suggestion is to create a series of “drop-in, urgent care clinics,” perhaps run by physician assistants under the supervision of an M.D. The idea would be to care for a lower level of medical problems, such as the Saturday night sore throat, or minor injuries, in a setting other than the emergency room. WalMart and CVS Pharmacy have had success with such clinics in other states, and it makes sense to have lower level emergencies treated in a less expensive setting than major emergencies for which the emergency room is appropriate.
One obvious aspect of health care reform that has been steadfastly ignored is tort reform. There’s not a hint of it in the ACA. Anyone want to guess why? In reality, it is not the cost of a few large verdicts that increases the cost of health care, but the defensive medicine that is practiced so that a practitioner does not end up being sued as a result of a less-than-hoped-for result. Not too many people would deny that a patient who needed to have his left leg amputated but had the right leg amputated by mistake should receive substantial compensation. But when a person has had shoulder surgery that is very successful according to accepted standards, but does not return the shoulder to 100 percent function, there is no reason to sue the surgeon, but it happens. We need screening procedures to eliminate frivolous lawsuits at an early stage. We need to encourage “safe apology” procedures when care is actually sub-standard and errors are made, so that a provider can acknowledge error, offer fair compensation, correct procedures to eliminate future errors of the same nature, and not have their apologies and acknowledgements of error used against them if a lawsuit does ensue. Arbitrary caps on damages for pain and suffering are not necessary, but punitive damages should be allowed only in case of intentional injury, which would mean almost never. With these reforms, defensive medicine — and the costs thereof — could be greatly reduced.
Finally, here is one suggestion that I believe is completely untested, and perhaps it is not practical, but it’s worth considering. We know that a certain group of patients who are severely and chronically ill are the most expensive patients to care for. Suppose we were to treat them as a societal responsibility? Suppose that group were to have their health care paid for through a program such as Medicare, thereby removing them from the private insurance pool? That would drop the cost of premiums for private insurance dramatically. Of course, it would also increase costs elsewhere, most likely in a form of taxes. And defining the group of “severely and chronically ill” who would be covered by such a program would be difficult, but surely not impossible. Would it work? I’m not sure, but I think it’s worth considering.
These ideas are submitted as a means of thinking what we might do when the folly of the course that Vermont is on becomes apparent even in the halls and committee rooms of the Statehouse. We have embarked upon a course that is driven by ideology, not health care, and certainly not by economics. The Green Mountain Care Board has not settled on the final benefit package to be covered under the “single payer” plan, the administration has failed to present a financing plan for their grand scheme, the Jan. 1, 2017, start date for Green Mountain Care has suddenly become “not a fixed date,” and it is apparent that the wheels are coming off the grand Vermont experiment. It is not too soon to be thinking about alternatives.
