A Nation of Republics Tries to Implement Health Care Reforms

A  Nation of Republics Tries to Implement National Health Care

Weighing in on the furor over the insurance exchange enrollment fiasco, if anyone thought this would go without a hitch they must have been under the influence of some mood altering substance. Here is a high level view of the enrollment problems, how the insurance commissioners play a part, as well as the courts and legislative shenanigans.

First the highlights:  

1.    Kudos to Governor Beshear of Kentucky for getting across the starting line with the most on-time enrollments of the 16 states that opted to control their own insurance exchange destiny. This is especially noteworthy for his state is the only one in the southern contingent which was willing to participate. Way to lead the charge of the light brigade Governor! 
2.   Congratulations to Governor Inslee of Washington and Richard Onizuka, who runs the highly regarded Washington State Health Care Authority, for exceeding the federal target for enrollments for its state already, and this despite receiving a fraction of the money for developing its exchange that neighbor Oregon did. 
3.    Congrats to New York for quadrupling capacity shortly after it assessed site activity, which has made its enrollment go smoothly and is a perfect example of how successful project management works, you plan, launch, assess, and make adjustments

Best reporting on the exchange rollout goes to The New York Times, but best reporting on the overall insurance mandates is awarded to the Wall Street Journal, for its easy to find, well organized masthead for health care.

Now the low lights:

1. Oregon should be ashamed for taking $226,472,074 in Level 2 federal grants for its exchange “innovation model” and failing to enroll even one person. Given the sparsely populated state Oregon has no enrollment crush like the thirty-two state federal exchange, so one wonders how it could fail at such a grand scale. If this were a private sector enterprise heads would roll and a possible shareholder law suit would follow for malfeasance. 
2.    Federally run health insurance exchanges also are cited for a poor launch as they still don’t have a functioning system. From a project management perspective, their scope was huge and they had too many different contractors. But, since they were dealing with different states, there were probably compromises to make regarding software platforms as many states probably had limited funds to make any type of conversion, although the government did provide millions in grants for the job. The federal plan had fifty different contractors, but the one which was most puzzling was the lawyer from California, who seemed to be out of the loop. I can understand having someone from California, the most populous state offering an exchange involved, but he seems to have been a bit detached from the beltway and this didn’t help. A delayed web site launch but with an active telephone and hard copy enrollment would have been a better way to go here. Gadgets and gizmos are only neat if they actually work. 
3.   California continues to be ineffective in getting enrollments for the insurance exchange, though 125,000 have created accounts. California has not been able to show which providers are enrolled in the exchange plans which has stymied the enrollment aspect. Zero, zip, nada, for those actually enrolled on the exchange as of October 4, 2013, according to the New York Times.

As for the outrage over the policy cancellations from private sector insurance companies, this is nothing new people, and was to be expected when a sweeping change like this was implemented. When Washington State came out with some mandates for minimum coverage levels for individual policies in the nineties, Principle Financial Group decided to cease offering individual health insurance policies in the state. This is a normal business practice, not a conspiracy theory. President Obama does not have control over these privately run insurers, nor the state insurance commissioners.

Insurance contracts are governed by the McCarran-Ferguson Act of 1945, which stipulates that the business of insurance is exempted from most federal regulation. Hence the establishment of state elected insurance commissioners who oversee policy approval, consumer protections and reporting for insurance contracts. And FYI, this is a big income source for each state as they all make money on the premium tax for any insurer doing business in their state. Insurance Commissioners and their departments earn more money for the state than what they consume in administration. Ergo the states are never going to cede control of this piggy bank to the federal government.

Is it any wonder that our fifty-state, multitude of insurance contracts discrepancies, and non-integrated network are cumbersome to administer? No other industrialized country has such an expensive and ineffective way to administer health care. Our health care administration costs are three times as much as European countries and this cannot be laid at the foot of government, as the private sector controls nearly half of health care in the country and the administration charges are three times what the Centers for Medicare and Medicaid are. So why do we tolerate such an inefficient system, because too many parties are making money. If we really want to make a difference in health care, why not look at some of the overcharging? We have bigger fish to fry and here is my shortlist:

1.       Americans are charged 50% more than European countries for the same pharmaceuticals [1]

2.     . Americans pay several times more for orthopedic devices than other countries

3.      Americans undergo unnecessary medical procedures that do more harm than good at a greater rate than in other industrialized countries

4.      American hospitals are prohibited from disclosing what they paid for cardiac devices, which would be antitrust for any other industry

5.      Dubious companies market “health care services” to the public which are not approved by Medicare or any agency

Wake up and smell the coffee because until we sharpen our pens, lean on our legislators, and address the excess profiteering for dubious clinical benefit in our system we have no chance of realizing cost reductions in this morass.

And this is the healthpolicymaven signing off. Feel free to comment on or share this article.

Roberta  E. Winter is the author of Unraveling U.S. Health Care-A Personal Guide, published by Rowman and Littlefield in July 2013. http://www.amazon.com/Unraveling-U-S-Health-Care-Personal/dp/1442222972

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[1] Nortin M. Hadler, M.D., The Citizen Patient-Reforming Health Care for the Sake of the Patient Not the System, University of North Carolina Press, 2013, p. 181