New Op Ed from State President Dave Steil

Health Care for All PA President Dave Steil has written an OpED in the Bucks County Times that can be read here.

Affordable alternative

Better care at a lower cost

Health care, its delivery, quality, coverage and cost is the most perplexing and challenging issue facing the business community today. There is nothing more important to a business in the management of its operations than knowing the cost of each component of those operations.

When it comes to health care protection for employees, however, those costs are difficult to understand and to control, especially for small business owners who wear many hats and must deal with day to day challenges while still finding time to ensure that the long term plan is also in place. As a small business owner, my struggle to find a balance between those responsibilities is ever present.

Since World War II health care has principally fallen upon the shoulders of business. That means that it was discretionary for business owners to provide or not provide health care to employees. Frequently, that meant a hard working individual had to depend on the employer’s health care plan being a major beneficial component of the business cost and competitive structure. When the plan failed to be beneficial, the employer was free to drop employee health care. As costs rose and competitive conditions changed, many business owners did just that. Often it was imperative for the business to remain viable.

With the passage of the Affordable Care Act (ACA) in 2010, businesses are, for the first time, required to provide health care to their employees. Businesses smaller than 50 employees are exempt but their individual employees must now buy insurance to cover themselves and their families.The total impact of these changes to the health care system is not yet known to business owners, but are much feared.

More and more business owners are asking the question, why is health care still our responsibility? Why do we continue to perpetuate a seventy year old system that is costly and leaves many hard working people without health protection of any kind? Business owners know their products and services. They are not schooled in health care administration. But, if we accept that question then we must ask, if not business, then who?

There are in reality only two answers to that question. Either every person must provide for his or her own health care protection or it must become a core function of government, just as is education. In fact government already provides close to 50 percent of all health care, through Medicare, Medicaid, Military (including VA) and government employees.

Many will reject this option without ever looking at the facts. That is regrettable and intellectually dishonest. In fact, now there is now solid data to support the concept of a State of Pennsylvania managed health care system that would cover all Pennsylvania citizens for most health care related needs.

An economic impact study (EIS) just released by Health Care 4 All PA, a Pennsylvania non-profit corporation, clearly demonstrates that health care can be provided to all citizens at much lower cost than is already being paid by business and individuals. Known as the Pennsylvania Health Care Plan (PHCP), administered by the state, it would provide comprehensive health protection by removing the significant costs associated with insurance based and directed coverage. The cost of the plan would be paid for by personal income and payroll taxes, but at a lower rate than is already being paid for health services.

For businesses there are many added benefits directly reducing the costs of doing business:

• Lower direct costs than the cost of the insurance based system Reduced Workers Compensation costs 
• Reduced cost of general liability insurance 
• Elimination of costs to administer the insurance plan by the business 
• Equal ability to compete for employees in the job market 
• Increased ability to compete in the international marketplace 
• Elimination of legacy costs for providing retiree health care 
• Less confrontational collective bargaining 
• Clear and identifiable costs for budgeting purposes 

Legislation to adopt the PHCP presents an historic opportunity to overcome the complexities and uncertainty of the Affordable Care Act and to put Pennsylvania in the forefront of advanced and enlightened health care. Nothing else that we could accomplish would create a business climate as economically attractive as the PHCP.

This is not just a health care management plan, but a major job creation engine. If the business community rally’s behind this proposal it will happen, because we, collectively, carry a powerful voice.

David Steil, Lower Makefield, is a small business owner and a former member of the state House of Representatives.

**Related Posts**

Tom Tangretti Posts a Letter to the Editor in the Pittsburgh Post-Gazette on Single Payer

Dave Steil on Kate Loving Shenk's Radio Show

Surpeme Court Decision on Gene Patenting Can Affect Drug Prices

In a surprising decision the Supreme Court unanimously (with the opinion written by Justice Clarence Thomas) ruled that human genes cannot be patented by companies that discover them to solely profit off of the research.  This is one of the things that keep name brand drug prices high.  

Jonas Salk, inventor of the polio vaccine, was once asked by CBS anchor Edward R. Murrow who owned the patent.  He said "The people I would say. Could you patent the sun?"  There was plenty of scientific progress when greedy corporations did not drive the process. The great polio scare of the 1950's was contained successfully as a result.

**Related Posts**

An Explanation of Washington Post Graphs on the Cost of Procedures

New Time Magazine Article on Healthcare Costs with Stewart Discussion

Evergreening

Bending the Health Care Cost Curve

On One Hand . . .

A Friday report from the Medicare Board of Trustees shows that there was a slowdown in the growth of Medicare costs in 2012. The Medicare trust fund is now projected to last until 2026, two years longer than previously estimated. Medicare spending is now growing at the historically low rate of 1.7% per year. Of course, a decline in the rate of growth doesn't mean the problem is solved. Costs are still going up. But at least they are heading in the right direction. The report attributes the decline in costs to a combination of the current recession, which is causing people to cut back on health care, and the Affordable Care Act (ACA).

Dr. Ezekiel Emanuel, one of the authors of the ACA, points out that there are two types of cost control embedded in the ACA, payment reductions and what he calls “structural and incentive changes.” The two primary payment reductions affecting Medicare are:

• Reduced payments for Medicare Advantage. Medicare Advantage allows seniors to purchase private insurance in lieu of traditional Medicare. It costs the government 14% more than Medicare even though it doesn't produce any better outcomes. That 14% is presumably being pocketed by the private insurance companies, and the government is taking it back.
• Reduced payments to Medicare providers, i.e., hospitals, home care agencies, etc. Emanuel says these organizations have profited from increased productivity in recent decades, but have not passed these savings on to the consumer. Therefore, Medicare is paying them less.

In short, the ACA made $716 million in automatic cuts to the Medicare program in 2012.  This chart shows that these two payment reductions account for the bulk of these Medicare cuts. They are the primary reason for the slowdown in the growth of Medicare spending.

The structural and incentive changes include things like bundled payments, where Medicare pays a fixed rate for an episode of care rather than fee-for-service, and Medicare's Independent Payment Advisory Board, which can make specific treatment recommendations in order to reduce excess cost growth. Most of these changes are several years away.

These cost controls are an important positive changes, since they have reduced costs without eliminating benefits to Medicare recipients. However, they're only a fraction of the amount that could be saved if the country were to move to a single payer system. First of all, they only affect Medicare, which insures 17% of Americans. Secondly, they are relatively modest cuts when you consider the excess profits currently being taken by hospitals and insurance companies.

The bottom line is that these data seem to show that the ACA is working in controlling Medicare costs, but it is only a modest first step compared to what we could and should be doing.

On the Other Hand . . .

Elisabeth Rosenthal has a long article in the Sunday New York Times about the high cost of medical care in the U. S., similar to the February Time feature by Steven Brill. Her article focuses on colonoscopies, presumably because it is a vivid metaphor for what the for-profit health care system is doing to all of us. However, her chart shows several common medical costs in which the average U. S. price tag is as much as 25 times higher than the price in other countries.

The sub-heading of the article says, “Colonoscopies explain why U. S. leads the world in health expenditures,” but they do no such thing. Merely listing the costs of medical procedures does not explain why those costs are so much higher in this country. Most of Rosenthal's argument is a tautology: Prices are high because prices are high. The closest she comes to offering an explanation is buried in the nineteenth paragraph:

A major factor behind the high costs is that the United States, unique among industrialized nations, does not generally regulate or intervene in medical pricing, aside from setting payment rates for Medicare and Medicaid, the government programs for older people and the poor. Many other countries deliver health care on a private fee-for-service basis, as does much of the American health care system, but they set rates as if health care were a public utility or negotiate fees with providers and insurers nationwide, for example.

Of course, she manages to make this point without mentioning the poisonous words “single payer,” which all the other countries cited in her article have. But the Medicare data show us what could happen if the government were to take a more active role in combating greed in the health care system.

You may also be interested in reading:

A New Time Magazine Article on Health Care Costs with Stewart Discussion

An Explanation of Washington Post Graphs on the Cost of Procedures

Medicaid Expansion Update

Legalized Bribery