Wednesday, June 11, 2003

State healthcare plan moves forward

Published in the Current and the American Journal

The governor’s healthcare plan is now out of committee and looks likely to pass the full Legislature later this week.

It is a plan the head of Maine Medical Center says is worth a shot, while the head of the Greater Portland Chambers of Commerce says the insurance piece of it is unworkable.

“I believe that the governor’s initiative is admirable, bold, courageous, necessary,” said Vincent Conti, president and CEO of Maine Medical Center, the state’s largest hospital.

The governor’s overall plan, called “Dirigo Health,” is in two parts: controlling health care costs through regulation and an insurance plan, confusingly called “Dirigo Health Insurance,” which would create a subsidized pool to being insuring some of the 180,000 Mainers who now do not have health insurance.

Following intensive work and deal-making between lawmakers, healthcare providers, insurance companies and businesses, a deal worked out Monday night tweaks the insurance portion of the plan to save what some believe may be the more important part: healthcare cost containment.

In particular, the deal includes a safety net in case the insurance plan doesn’t work: After three years, the state will have to report on whether numbers of uninsured people are dropping and whether insurance premiums are going down because people are using their insurance to go to the doctor before they get critically ill. If the plan isn’t working, the state will have to propose major revisions that will work.

Conti of Maine Medical Center has his doubts about the insurance piece of the plan, but is supporting the governor’s package because of its broader reform goals. He said the health care system in Maine, “if not in crisis now, is pretty much heading toward a train wreck.”

With an aging population in Maine needing more healthcare, demand is growing, at the same time advances in medical technology are making health care more expensive, Conti said.

The governor’s plan would ask hospitals to hold down their per-patient costs and would improve the existing healthcare planning system in the state, removing political pressures from decisions on where new facilities will be built. Decisions would be based on which facilities could offer the best clinical outcomes because of proven expertise.

The state would augment an existing database now run by the Maine Health Management Coalition, compiling statistics on healthcare costs and treatment
outcomes, to give the public more information about how much modern medicine costs.

The second part, the health insurance plan, is intended to fix the healthcare payment system, in which 180,000 Mainers do not have health insurance. Because they lack coverage, they tend to wait until they are very ill and then go to what Conti calls “the single most expensive place in the universe” to get healthcare: the emergency room.

They can’t pay their bills, and the money must come from somewhere else. This cost-shifting is made worse because Medicaid and Medicare payments pay just 80 percent of the actual cost of care provided to their patients.

All of the unpaid money must be made up from the only remaining source: privately insured people and their insurance companies.

That drives up the cost of healthcare bills to private insurers, which in turn ups premiums for insurance coverage. Fewer people can afford insurance, and so more become uninsured, raising the specter of a vicious spiral in which, eventually, nobody will be able to afford health insurance.

Dirigo Health Insurance would be a state-assembled pool of uninsured people who would have access to – and some state funding to pay for – a state-designed health insurance plan provided by the private insurance company that bids the lowest in a state-run auction.

The plan has come under criticism because it would require employers and employees to purchase health insurance at or close to market rates, which are too high for many to bear.

Godfrey Wood, president and CEO of the Greater Portland Chambers of Commerce, has proposed moving forward with the healthcare system reform piece of the plan right away, and working through the summer to fine-tune the insurance segment.

Wood said more than half of the funding for the governor’s plan would come from individuals and employers, who are not now paying anything toward health insurance premiums, leaving workers and families uninsured.

He said “very few” businesses would sign onto the Dirigo Health Insurance plan because it wouldn’t be much cheaper than existing health insurance.

“It’s a very rich plan at a very inexpensive price,” projections he does not think are realistic. “Individuals can’t afford it now. Businesses can’t afford it,” Wood said.

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