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Health-care proposals don’t solve central issue

Tuesday, September 4 at 1:49 PM

This Speakout has not been edited.

By Francis M. Miller

The Governor’s 208 Blue Ribbon Commission is finally unveiling the five proposals it has been considering to solve Colorado’s health care system problems. As anticipated, this is becoming a false choice between the lesser of evils, since none of the problems solve the central problem, which is rising health care costs which is the driving force preventing the nearly 700,000 Coloradoans who cannot afford to buy health insurance. I suggest that before the Commission asks the citizenry for a tax increase that they take a pause and consider two other efforts that preceded them.

The first is the recent debacle over failed computers in the State.

There were five major computer systems acquired from vendors during the Owens reign which either could not be implemented or did not get the job done once in place. Post-mortem analysis identified that the State rushed to purchase custom solutions before they had adequately defined user requirements or evaluated all the alternatives. Easily done when a committee acting like purchasing agents is in charge instead of architects.

The second consideration requires going back in time nearly 20 years.

When Frederico Peña was elected mayor of Denver, he commissioned a blue ribbon commission to look at Denver Health & Hospitals and providing health care access for the working poor. I served on that committee under the brilliant chairmanship of Rex Morgan, now deceased. As the committee did its work we discovered that hospitals have high fixed costs and that the infrastructure in place should allow additional services to the poor to be provided at the low marginal costs. If you are already staffed, the incremental cost of taking care of someone should only be 25% to 40% of the average cost, we reasoned. But, by concentrating care for the poor in Denver Health and University Hospital, both teaching hospitals, we were doing exactly the opposite.

We were then and are now paying greater than the average of the most efficient hospitals in the metro area.

When our insights were presented to Mayor Pena, it became obvious that he had no intent or ability to affect wide-scale health system change and that the airport and revenue enhancers would be the thrust of his terms. So, we trotted on down to the Legislature and went over our ideas with Ron Strahle, then Speaker of the Colorado House. Strahle was a brilliant man whose experience as an interrogator in WWII, combined with his legal skills was legendary. Strahle put together an Interim Committee of the Legislature that included members of both houses and six citizen experts from the outside. I served on that committee for two years as it took testimony from experts across the nation. It was a slow, deliberate, process that took years, not months.

Unlike the current 208 Commission which is trying to select between what I believe are false choices, the Interim Committee of the Legislature explored the root causes to the problem of access for the uninsured. We concluded that a sincere, but ill-conceived series of public policy programs to increase access to the poor, enacted in the decade preceding us, was fueling hyper-inflation, making affordable health insurance an increasingly unattainable goal for everyone. It was obvious to everyone that we were on a slippery slope and would eventually go over a cliff on the matter.
Our prescription for success was very different from the 208 Commission’s suggestion of a mandate that everyone buy health insurance.

We wanted to set in motion market forces that would reverse the movement towards socialized medicine. We felt there was just enough time to reinstitute the disciplining and countervailing forces of a market-driven health economy. First, we called for and got enacted a health data commission to publish data that revealed the significant differences in costs and quality between hospitals. That Commission, which I served on for over five years was a leader in the U.S. until the insurance and hospital lobby got it defunded in the mid-1990s. The Colorado tree was never able to bear fruit the way it has in Virginia and Pennsylvania, two other states who have perservered.

The second thrust was to create a counter-vailing force in the market that would create health plans that were affordable and rivaled those offered to state employees and major employers. We called it The Alliance and it was incorporated as the first member-owned and governed health care cooperative in the U.S. The big businesses pooled their purchasing might and the smaller businesses were going to piggy-back.

Two years after we incorporated, the Colorado Legislature enacted anti cooperative legislation, backed by special interests and the Alliance is now gone.

A weapon in all of this was to activate the multiple employer provisions of Federal ERISA laws. When ERISA was enacted it not only allowed labor unions and big companies to create their own health plans it allowed small companies to band together. The early MEWAs were often shams because they were not member owned and governed. But, the feds had given regulation over to the states and we believed we could create a level playing field.

The combined effect of these and other initiatives was tantamount to dropping a nuclear bomb on the health care market. It was too much change, too fast and the vested interests rose up in opposition. Not only did the hospitals go after us, but the insurance companies felt threatened. About that time US West and Public Service were being deregulated, going regional or national and their CEOs lost the taste for health care reform. Roy Romer, unlike Dick Lamm had little interest in health care and he chased the holy grail of education reform, which he is quixotically chasing to this day. The special interests got to the Legislature and Strahle and Morgan died, leaving the regiment without leadership. It all went down in flames. A case of a brilliant set of strategies that failed to be executed in the crucible of political reality.

The current 208 Commission is doing one really big thing to avoid that.

They are not trying to over-engineer the situation with an elegant set of strategies that would solve the problems of hyper-inflation in health care. They are using the blunt instrument of forcing people to buy insurance and then forcing the rest of society to subsidize it. Exactly the kind of solution you would expect a committee to come up with.

At this point, I don’t think we have got it. A “dumb and dumber” solution to a complex problem is probably not going to pass muster with the public once they realize not only will they have to pay more taxes to subsidize the poor, but that injecting more steroids into the health care system will cause more inflation, increasing their health insurance premiums.

Colorado has made numerous attempts to solve the access problem as health care has increasingly become a desireable right. Only the most curmudgeon amongst us suggests children, the elderly and the poor should not receive the fruits of medical research and technology. What we have not come to grips with is a delivery system to do that efficiently and uniformly. The current hybrid system that is part public and part market-based is clearly incapable of getting the job done. But, to allow ourselves to become bipolar and rush into the arms of a more socialized system is a finger-in-the-dike solution.

We are not there yet and the schemes of the Blue Ribbon Commission should be wadded up and discarded. The Governor needs to go back to the drawing boards. I have always maintained that every great endeavor is the lengthened shadow of a single man. In this case the Governor should assemble a core team of people with the requisite skills to architect a solution that meshes with federal laws. They should take the governor’s first term to develop requirements and evaluate alternatives. When Ritter is up for re-election the health care reform proposal he backs should be a litmus test as to whether he gets re-elected. If he does, then he can consider it a mandate and move with due deliberate speed to use his bully-pulpit to get it implemented.

I am haunted by the admonition of my father. One favorite is “if you are going to do something half-way, don’t do it at all.”

Francis M. Miller was appointed to two successive terms by Govs. Richard Lamm and Roy Romer as vice chairman of the Colorado Health Data Commission. He served on the Mayoral Committee to Review Denver Health and the Colorado Legislature’s Interim Committee on Health Care Reform. He was president of the Colorado Business Coalition on Health and the founder of the nation’s first health care cooperative, The Alliance.

READER COMMENTS

Sad that we cannot or are reluctant to, or find it difficult to, disengage from the arrogant greed of the for profit insurance company.

Posted by Froward on September 11, 2007 08:31 AM

The truth revealed
“Not only did the hospitals go after us, but the insurance companies felt threatened.”
And
“The special interests got to the Legislature and Strahle and Morgan died, leaving the regiment without leadership. It all went down in flames. A case of a brilliant set of strategies that failed to be executed in the crucible of political reality.”
Part of that reality was a republican controlled legislature. Coupled with special interest groups.
The great opportunity was not forgotten.
If the For profit insurance industry is expelled from Health care, the plans would work for all of us.
It is the greed of insurance carriers that hamstring any efforts to bring real progress to this issue.
Mandatory insurance coverage is exactly what the insurance profit margin demands! Sad that we cannot disengage from that arrogant greed

Posted by Froward on September 11, 2007 08:24 AM