On Healthcare Reform: Not acting is not an Option

by Kevin Dahill

Our nation is in the midst of a profoundly important discussion about the healthcare system. The often contentious debates at public forums around the country demonstrate how deeply personal the prospect of healthcare reform is to many Americans. But while change may be frightening, it is necessary.

If the rancor and distortions that have characterized the debate succeed in directing the tentative reform negotiations in Washington, change eventually will come anyway, but perhaps with much more dire consequences.

It’s hard to organize against the need for reform: the tens of millions of Americans who lack insurance are acutely aware of the need for change, as are millions more who are insured but can’t afford the out-of-pocket expenses these plans require.  Managed-care customers who face unreasonable denials of care and delays in treatment know this, too, as physicians and hospitals are struggling to provide care when public and private insurer rates don’t cover costs—making it impossible to reinvest in vital infrastructure upgrades.

While some argue that expanding coverage will be too expensive, the failure to address our system’s flaws is already costing too much.

A percentage of everyone’s health premiums funds care for the uninsured.  Substantial portion of state income tax and local property tax revenue goes to medical costs. Uninsured workers, or those denied needed care, are less productive or unable to work at all.

Hospitals, which provide nearly $2 billion a year in charity were in New York alone, struggle to serve the flood of patients in their emergency rooms, who eventually seek care when and where it is most expensive to provide.

If we do not act, all these costs will increase. The aging population will increase demands on our underfunded provider system. Businesses will further struggle to pay their ever-rising insurance premiums, hampering the economy and their competitiveness abroad. Medicare’s trust fund will face insolvency in a decade unless there is action by Congress, and even the Veterans Affairs health system will be strained further.

The challenge is to preserve what  works—continued employer-provided coverage for those who have it, a strong private insurance market, care privately delivered by the physicians and hospitals that patients choose—and improve the shortcomings. Specifically, we need more affordable health insurance options for those who don’t have coverage, investments in technology that can improve care and reduce unnecessary duplication of expenses, and simplification of insurance practices.

One promising reform idea is paying for care through a bundled system. Designed to improve coordination among providers and save money, one payment would be sent to the hospitals for a patient’s in-facility care and all post-acute care, such as rehabilitation services, long-term and homecare and other therapies. The hospital would dispense payment to the other providers involved.

This would require negotiating contracts with a variety of providers, physicians and other care entities, but current federal and state antitrust laws prohibit such collaboration. The law would have to be substantially modified even to allow pilot projects to proceed. But the idea holds promise for improved outcomes and a more efficient delivery system.

More competition within the insurance industry will also help. Both the proposed public plan and the system for regional, not-for-profit healthcare cooperation would deliver choice and value. But a public plan that sets provider reimbursement rates at Medicare levels would not be sustainable for hospitals. Those rates are already below costs to deliver care and subject to cuts every year. And details about co-ops have been scarce so far.

We all have a role to play in reforming this system. The hospital industry has pledged $155 billion in Medicare savings over the next 10 years. Other healthcare sectors, such as the insurance and pharmaceutical industries have promised their own contributions.

Consumers, too, should take a more proactive role in understanding and maintaining their health and the choices they make.

We have the potential to achieve reforms that result in enhanced care and value that is rooted in scientific evidence-based medicine, with greater insurer and provider accountability. The details of reform, and how to pay for them are worthy of a vigorous, thoughtful and hopefully more civil national conversation. But the emotional principle that many American should be able to access affordable, quality care should be beyond debate.

(Kevin Dahill is President and CEO of the Nassau-Suffolk Hospital Council, which represents Long Island’s non-for-profit and public hospitals.)

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