Whole Foods co-founder and CEO John Mackey contributed a very compelling commentary on healthcare reform to the Aug. 12 Wall Street Journal.
He offers eight reform ideas that differ from the plan currently being considered in Washington in that they would foster less government control and enable greater individual responsibility.
This exemplifies a point I made in a recent blog that just because other entities don’t share the Obama administration’s precise reform philosophies doesn’t mean they are against reform altogether.
There are an abundance of ideas out there, some good and some not so good, but for some to deem them unworthy simply by virtue of being different is rather shortsighted.
In any event, one of Mr. Mackey’s reform ideas is to, in some respects, deregulate the health insurance industry, namely by allowing smaller and more regionalized health insurers to do business across state lines. Besides spurring the type of competition the Obama plan so greatly values, this would also allow insurers to decrease the administrative investment necessary to comply with 50 different sets of regulations in 50 different states.
Making this happen would likely require a federal preemption law that sets regulations that effectively supersede existing state insurance regulations, presenting problems for those folks who believe strongly in “states rights.”
Of course, it wouldn’t be that simple in other dimensions, either.
There are any number of secondary issues that would have to be addressed. First, states have put great faith in their individual laws for such things as basic coverage or privacy. For example, some states currently forbid the use of behavioral health and/or substance abuse information in electronic health records, while others don’t.
One state may require insurers to pay for a certain treatment or procedure, another may not. And so on.
In addition, health insurance is more complex than home or auto insurance where coverage amounts are absolute: A home or car can be reimbursed at either market value or original purchase price; home and auto repairs go to bid and are covered once a deductible is met. There is no definite price for health, and we’ve seen that there is little or no consistency in price structure or costs for healthcare procedures.
Also, any plan wanting to expand coverage into new regions would have to create or “rent” provider networks; non-networked physicians have no pricing contracts or reimbursement schedules with health plans. That means they can charge whatever they want with consumers responsible for paying the bill – and many of the bankruptcies reported due to healthcare costs likely stem from things like a $72,000 spinal fusion charged by a doctor in New Jersey, in spite of Medicare’s reimbursement rate for that procedure being less than $2,000.
So, while deregulation and cross-state competition may seem like a good idea on the surface, many insurers would have a whole other set of inefficiencies to contend with.
But, like many reform ideas, perhaps it can all be worked out – with time and with great concern for unintended consequences.
- David St.Clair,
CEO, MEDecision, Wayne, Pa.
Comment on Sept. 18 online story: “Survey: ‘Connected health’ could cut healthcare costs by 40 percent”
I have been long shouting that the best thing to come out of the first days of our president has been the healthcare IT push though the ARRA. And it appears that I am not alone in my opinion that the careful application of technology to our medical care could not only bring us up to the rest of the planet, but save enough that the draconian measures may not be necessary.
I am really hoping that we give this a chance to happen. Two important points in my opinion:
The health IT standards effort has been ongoing since before the bill was signed. The team leading the charge is doing an amazing (very non-governmental) job of coming up with a way to coordinate all of the disparate standards.
The point about defensive medicine rings true with the healthcare professionals I know. They are not so much worried about the financial costs as the damage to their ability to practice medicine.
The study seems to indicate what I have long held that the legal settlements are just the tip of the iceberg – the real costs come not only in the ordering of “just to be sure” studies (which are gigantic), but in the unwillingness to practice shared medicine where one professional backs up another with the resulting much better health.
But this “tort reform” thing has probably gotten too political to respond to reason – on either side.
The study answers the question I have thought was central to the health debate but was so far unanswered – where are the costs? We seem intent on saving money by not paying and raising money by taxing without ever discovering what the real costs are. This “cut out fraud and abuse” just did not ring true – either as the behavior of talented, well-trained professionals or as the main and only source of cost savings.
Wow, do I hope our lawmakers get copies of this.
- Tom Mariner,
New York
