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States Show How Not To Fix Health Care

Published Friday, October 2, 2009 7:00 am

http://www.investors.com/NewsAndAnalysis/Article.aspx?id=507689

 

States Show How Not To Fix Health Care

 

By KERRI HOUSTON TOLOCZKO
Posted 10/01/2009 07:04 PM ET

 

Since the debate over the government takeover of medical care exploded onto the national stage, advocates of market-based, patient-centered reforms have pointed to the failed government health care systems of Canada and the U.K. as examples of what America should not replicate.

And rightfully so. Democrat proposals have duplicated many components of these systems, creating frighteningly similar base lines here to these unsuccessful foreign models of "universal" coverage.

Yet we don't need to peer over borders and across oceans to find government health care that does not work; indeed, we have examples here in our United States.

Hawaii, Oregon, Massachusetts, Tennessee and Maine have all created some version of government takeover or administration of health care, and all are a mess.

Hawaii's Prepaid Healthcare Act and its coverage mandates have left Hawaiians with fewer coverage choices, higher costs and nearly double the number of uninsured. Recent budget cuts resulted in discontinuation of its coverage for children.

Oregon's state-controlled care includes an official list that dictates what treatments will be covered based on annual budget constraints. If your disease is above the treatment line, you are covered. Below the line you're not.

However, patients being denied treatment often receive an additional note in their denial letters the system telling them it will pay for "physician aid in dying." Oregon won't help you live, but it will help you die.

In the three years since the Massachusetts "universal" coverage plan was launched, the state still has thousands of uninsured, costs have exploded to unsustainable levels, and waiting lists for treatments have appeared.

Tennessee's "TennCare" program, an attempt to expand coverage to low-income uninsured, included dead people, escaped felons and NBA stars. It drove doctors and insurers out of the state, and has been on the brink of insolvency several times.

Tennessee's Democrat governor, Phil Bredesen, recently went to Washington, D.C., to explain to Congress that government health care does not lower cost.

But perhaps the worst and closest example of why a federal takeover of health care won't work comes from Maine.

The name of Maine's government-run universal health care plan "Dirigo Health" is derived from the state's motto "to lead." Fitting, as this failed attempt at government health care has led its people right off a cliff.

Maine's universal coverage plan is most similar to the plans circulating on Capitol Hill. It was proposed in May 2003 by Democrat Gov. John Baldacci and passed a scant four weeks later. Much like the $787 billion federal "stimulus" plan that passed Congress in February of this year, nobody read the Dirigo plan either.

While greasing the pipeline for quick passage of Dirigo Health, the governor assured that all of Maine's 128,000 uninsured would be covered by 2009, the bureaucracy would be streamlined and health costs lowered, and the plan would fund itself based on system savings with no tax increases a similar claim to what President Obama has said about a new federal plan.

Six years after it was passed, it has insured only 3% roughly 3,400 of the 128,000 promised.

By 2007, the system was so broke that it closed to new enrollees. It still has not reopened and has also cut and capped benefits. The "streamlined" bureaucracy has cost the state's taxpayers $17 million in administrative costs to cover 9,600 people, leading one to wonder if there are more bureaucrats in the system than enrollees.

Systemwide insurance costs have increased 74% since Dirigo was passed, and the governor and legislature have tried unsuccessfully to raise taxes to fund the system.

Dirigo's more "efficient" bureaucracy started out with an aggregator agency for health records and a cost administration agency, but it now includes numerous councils to study this, that and anything else bureaucrats can conceive.

These agencies also dictate to providers how much they can spend on new technologies and diagnostic machines even though these costs are borne by physicians and hospitals and not the state.

Dirigo has failed because it lacks market forces, ignores the nature of the uninsured and was more interested in bloating its bureaucracy than providing care to patients.

These states could have fixed the broken pieces of the system by implementing market-based, patient-centered reforms that bring people into the private insurance market, thus lowering costs and increasing access.

Instead, they layered enormous bureaucracies over patients and physicians, and separated them both from each other and from quality care.

Government intrusion is not reform. Congress must use the failures of state-run health care as cautionary tales of change to avoid. It's time to start pushing for real reforms that increase access and portability and, above all, protect the primacy of the doctor-patient relationship.

Houston Toloczko is senior vice president for policy at the Institute for Liberty and director of its Center for Health Security and Access.

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