HCCD Report Montana 59801

Participant List:

Tom, M.D., President Clinic
David, Senior Fellow for Health Policy at Think Tank
Frank, M.D., President of Physicians Group of
Cliff , Executive V.P., Health Plan and State Senator
Susan, Director of County Aging Services
Rebecca, Health Policy Consultant
Teresa, RN, Instructor at School of Nursing and State Representative
David, Chief Academic Officer, School of Pharmacy
Steve, Ph.D., Health Economist for University Bureau of Business and Economic Research,
Chris, CEO, Computer Systems Company
Ann, Health Care Consumer
Craig, COO of Hospital
Ellen, County Health Director

Briefly, from your own experience, what do you perceive is the biggest problem in the health system?
Health care is seen as a commodity, instead of a value
Overall, the group agreed that the United States currently lacks a fundamental value and priority to provide health coverage for all individuals. Instead of a system that values health care as a basic human right, we have a complex and inefficient market with piecemeal government interventions that attempt, but fail to decrease the gap between the health care haves and have-nots. As one participant put it, “we have a system that is not defined by relationships but on transactions.” As a result, we have competing demands for the health care dollar and no single entity or well-defined groups in the health care system held accountable for ensuring access, quality or affordability.
Regulatory and administrative complexity
Recognizing that access to health insurance does not solve all problems, the group discussed an array of other problems with our current health care system. Some participants cited regulations and burdensome paperwork as major reasons providers cannot efficiently offer the care and treatment patients need. Just a few examples of the factors that contribute to the complexity of the current system include multiple payers (Medicare, Medicaid/SCHIP, commercial plans), competing and often overlapping regulatory requirements, and the requirement to cost-shift due to low reimbursement rates from public programs.
Misaligned Incentives
Another participant added that we can’t afford what we have and for that, we’re not even getting our money’s worth. We discussed how the “too many hands in the cookie jar” phenomenon is a reason for needless administrative costs, duplicative and otherwise inefficient health care services, and powerful special interests who are the major reason for the lack of political will to change the system.
Several of the group’s participants recently had the opportunity to hear T.R. Reid speak at the Montana Health Care Forum. Mr. Reid highlighted the statistic that 80 percent of Britain’s doctors are primary care physicians and 20 percent are specialists. That statistic is essentially reversed in the United States. The lack of primary care providers in our country is a major symptom of the misaligned incentives in our current health system. The current practice of reimbursing for the volume of services provided, and reimbursing more based on specialty care is highly problematic.
An example of excess administrative costs was highlighted when one participant described an insurance agent in Missoula who makes $300,000 per year for her job; which is essentially enrolling the same people into the same health plans year over year. Her income is generated from the percent of premium she retains from the insurance companies. This percentage has remained the same while the total insurance premium has risen dramatically. The group agreed that while insurance agents should be paid, this level of reimbursement was a wasteful use of valuable health care dollars.
Insurance companies’ reserves and rate increases were also highlighted as an example of misplaced incentives. When an insurance company increases the rates on premiums, they apply that rate increase on administration as well. Compounding those rate increases over a number of years leads to astonishing growth in costs for those health plan premiums and needless revenue increases for largely static administrative functions. An example is Blue Cross and Blue Shield of Montana, which is spending $40 million to build a new office building. A group participant said the health plan was paying the lease on the property at a high rate. However, this health plan feels the need to incur these expenditures due to their reserve fund status.
We concluded this discussion by agreeing that our country’s health care system has enough money to do whatever we want. While some in the group advocated for a government run system, others valued the proprietary nature of our current system. However, we all agreed the incentives need to be better aligned to achieve maximum efficiency and equity.
Have you or your family members ever experienced difficulty paying medical bills? What do you think policy makers can do to address this problem?
One Family’s Story
One participant in our group has faced particularly difficult challenges in obtaining and retaining health coverage. She was gracious enough to share the details of her struggle:
Ann works out of her home and her husband works for a local store. Ann has several health conditions, including asthma, that make her ability to obtain health coverage difficult due to pre-existing condition policies. When she gave birth to her second child, they took a second mortgage on their house to pay the $5,000 cost sharing related to labor and delivery charges. This child last year had open heart surgery. She is now considered “uninsurable.”
In a recent year, Ann was paying $706 per month for an individual insurance policy for herself and her two daughters. Her husband had comprehensive coverage through his employer. The cost of their coverage was 17 percent of their income. They pay 24 percent of their income on mortgage. Recently, her health plan dropped prescription drug coverage and a few other benefits. Her premium dropped to $600 per month but with the additional out of pocket prescription costs, their monthly expenses on health care rose to 24% of their income. They are now paying 50% of their income each month on health care and housing. To worsen the situation, Ann’s husband’s employer is dropping all coverage. Ann and her husband are now in the difficult situation of looking for new jobs just so they can have health benefits. Ann has also asked her doctor what prescriptions she can stop taking. Her doctor has told her she cannot stop taking any of them and advised her to see an allergist and start weekly allergy shots. Unfortunately, she cannot afford an allergist’s visit let alone the shots. Also, the family’s household income is just above Montana’s SCHIP income limit. They are now in a situation where they will soon have to choose between paying health insurance or mortgage.
Ann , when discussing her child, said, “No mother should have to say her child is ‘uninsurable. We provide education to all children but not health care? It just doesn’t make sense to me.” The group agreed that this is a social justice issue that must be addressed by the Obama administration and the incoming Congress.
Aging Population Struggles
A group participant who works with aging services discussed the unique struggles that elderly populations face with their significant health care costs and no ability to make additional money. She discussed how many elderly are going in and out of hospitals, increasing costs to the health care system and indirectly robbing families like Ann’s from affordable care. She highlighted the face that many physicians are not trained to work with geriatric or end of life care. This is compounded by the lack of ability for most geriatric patients to manage their own care.
Health Events as Financial Liabilities in Households
A health economist in the group pointed to research that shows how economic stability of families are most affected by health events. He added that many health care consumers without health insurance do pay their bills and it can be a tremendous burden on their current and future financial well being. He highlighted the unfortunately large industry built around tracking down individuals who owe on health care bills.
Other Stories
Another participant shared a story of a student who was enrolled at the University of Montana for the minimum credits required to maintain health coverage so he could continue his cancer treatment. The county health director shared stories of several dental patients they have seen who had resorted to pulling their own teeth out with pliers. Two participants - a small employer and a director of a non-profit- said the increasing cost of covering their staff is burdensome and potentially will affect business decisions they make in the future. The participant who owns a company and employs nine staff and six contractors said his health care costs are $600 to $800 per employee and $1100 for an employee with three dependents.
Policy Solution
Basic coverage should be provided to every individual. As stated earlier, the group did not spend time defining exactly how this should be done. However, we all agree this country has the financial wherewithal to fund this and eliminate the numbers of uninsured and underinsured. One group member highlighted the irony that last year we were quibbling over (and ultimately failing to find) $40 billion to reauthorize SCHIP and this year we swiftly authorize $700 billion for the health of our countries’ banking institutions.
How can public policy promote healthier lifestyles?
The group agreed with one participant’s suggestion to change the question to “How can public policy promote healthier conditions?” because it is much more than lifestyles.
We started by discussing various Healthy Build Environment models that have been shown to be effective like walking places, multiple venues to participate in exercise, making all activities easy to access, etc. We agreed many of these things are outside of the medical system.
We also discussed the federal public health budget and agreed that more than one penny of every dollar should be spent on public health. The Missoula City/County health director stressed the importance of building on what works. She said that 20 percent of their budget is funded by local taxes. The majority of the remaining funds come from federal grants. Programs such as WIC, Maternal and Child Health, and others have proven successful and should be built upon.
We also discussed the need to improve upon the social awareness and understanding of the aging and elderly. As this population grows, our health care system will be strained even more than it is today. It is essential to sustain and enhance long term care programs, Medicare and Medicaid.