Questioning "Illinois Covered"

Let me start by saying I'm a strong supporter of universal health care. The lack of universal health care is one of the most serious challenges - and serious disgraces - facing our nation.

How big of a problem is it? Well, we all know thanks to the Governor's incessant talking points that 1.4 million Illinoisans lack insurance coverage.

What many folks are unaware of is that health care costs currently eat up 16% of the U.S. Gross Domestic Product (GDP), and federal experts estimate that health care costs will consume 18.4% of the U.S. GDP by 2013.

For comparison, the 29 other developed nations in the OECD (Organisation for Economic Co-Operation and Development) spend an average of 8.3 percent of their GDP on health care. Oh yeah, and they live longer on average too.

Those inefficiencies in health care spending sap other consumer spending and constrain our ability to invest in education, infrastructure, and the other resources America needs to compete in the global economy.

Why Illinois Covered Doesn't Work
Clearly, the problem isn't that we aren't spending enough on health care, which is why I have a problem with "Illinois Covered." Illinois Covered does nothing to address the underlying problems that are driving up the cost of health care in Illinois and across the U.S. Instead, it just throws more money at the problem.

And whether "Illinois Covered" raises taxes through a Gross Receipts Tax, a payroll tax, a cigarette tax, or a tax on people who can't do math (aka gambling), it still represents the largest transfer of public dollars to the already profitable private insurance industry in Illinois history.

It's no wonder the insurance companies support Illinois Covered.

So, if throwing more money at these highly profitable insurance companies isn't the answer, what is?

Well, for starters, let's finish the job that we started on HMO reform a few years ago.

Let's ban insurance companies from basing their compensation for utilization review doctors based on the percentage of claims they deny. Rewarding insurance companies for denying coverage doesn't make sense.

Let's implement the same reforms that we implemented a few years ago to end price-gouging by malpractice insurance companies, requiring them to make their rate-setting data available to other companies, requiring rate increases to be approved by the Dept. of Insurance, giving the Dept. of Insurance the authority to order rebates to the folks they insure when price-gouging is discovered, and making sure that the hearings regarding rate-setting are transparent and open to the public.

For the long-term, let's recognize that health care shouldn't be treated as a commodity, like bubblegum for example. Several years ago Illinois enacted the most sweeping reforms of adoption in the country because it recognized that adoption shouldn't be treated like a commodity. Some of those reforms would be well-applied to health insurance, like limiting executive compensation and ultimately banning for-profit companies from engaging in the health insurance business.

The folks in the health insurance business aren't all bad people, but the health insurance industry has become a rigged racket throughout the years. In days of yore, health insurance worked alot like roulette. Everybody put their money on the table, the ball would spin, and when it dropped randomly, insurance companies would pay out claims to some people and pocket the premiums from the rest.

As any actuary worth a grain of salt will tell you, it no longer works that way. Health insurance companies have amassed so much data on us, they know who the ball is going to drop on. They know, but we don't.

To make matters worse, they've become so efficient at limiting, delaying and denying payouts, that just because your number comes up doesn't mean they're going to pay out, at least not in full or any time soon.

Don't get me wrong, I don't blame the insurance companies or folks who work for them, many of who I believe privately wish we'd adopt a better way. It's not their fault that they're the House and the odds are stacked in their favor, its not their fault that they're making big profits because that's what for-profit companies are supposed to do. We're the ones who've chosen to gamble on health care, we're the ones to blame, and we're te ones who have to fix it.

Health Insurance Companies Aside

All the blame for skyrocketing health care costs doesn't lie with the insurance industry.

Medical Information Systems
With all of the advances in medical diagnostic and care technology, the health care industry lags behind every other economic sector when it comes to the application of information technology. That's pretty stupid when you consider just how important getting the right information and getting it fast is to health care.

The answer is electronic medical records, which would create a seamless web connecting insurance companies, doctors and hospitals, while at the same time protecting patient confidentiality and ensuring information was shared on a need-to-know basis only.

According to none other than Newt Gingrich, Electronic Medical Records have the potential to cut $140 million a year in waste from our health care system. At the urging of State Rep. Julie Hamos, Gov. Blagojevich's "Illinois Covered" proposal included an EMR initiative. However, that EMR initiative was a mere task force, and contained no future funding mechanism for funding EMR. That doesn't go far enough in my book, and I'd recommend that any health care proposal include an EMR funding mechanism. One potential revenue source is to seek a waiver from the federal government to use a portion of the state's Medicaid reimbursement to implement EMR at hospitals that have the highest number of Medicaid patients (perhaps requiring matching funding from hospitals on a sliding scale). The cost savings reaped from implementing EMR at those hospitals could then be used to roll out EMR at additional hospitals, and then doctor's clinics, all the way down the line.

Doctor and Nurse Shortages
High labor costs are part of the reason for skyrocketing health care costs, and a shortage of doctors and nurses is partly to blame. Blagojevich and lawmakers should be commended for investing more in nursing training, because increasing the supply of nurses will eventually bring costs down. However, very little is being done to increase the supply of doctors, and the federal government predicts that the U.S. will face a shortage of 85,000 to 200,000 doctors by 2020 unless action is taken soon.

Contrary to claims by the Illinois State Medical Society, the American Medical Association claims that the doctor shortage in Illinois is no worse than the rest of the nation, with 2.6 doctors per 1,000 residents. That's little comfort though, because according to OECD data, the rest of the developed world averages 3.1 doctors per 1,000 residents. The U.S. also has one less nurse and one less hospital bed per 1,000 patients, according to the OECD.

The answer is for Blagojevich and lawmakers to match their commitment to training more nurses with a commitment to training more doctors. Putting insurance companies in their place - a top reason doctors are leaving the profession and new doctors aren't entering - is part of the answer. But increasing scholarships for current college students to encourage them to pursue an M.D., and eventually rethinking our entire education system from high school through college should also be on the table.

Invest more in Public Health
Illinois spending on public health programs is woefully inadequate. Public health programs bring relatively low-cost prevention, early diagnosis and early treatment to the masses which provide astronomical cost savings to the entire health care system, not to mention the cost savings for employers from reduced employee health costs and sick days which reduce productivity. Illinois should ramp up public health spending - doubling it over the next ten years would be a great start. Before everyone faints from sticker shock, the Governor's FY '07 proposed budget for the Illinois Department of Public Health was $397 million. Increasing that budget $40 million a year over the next ten years is more than within reach.

Some Unsolicited Advice for the Governor
The Governor is in desperate political need of some major face-saving. Yet even his latest "Illinois Covered" proposal, with a scaled back budget and less ambitious launch date, is meeting stiff resistance. Part of that resistance comes from those who are loath to launch a new government mandate whose future costs are nearly impossible to predict, creating future obligations for lawmakers down the road. Contrary to the Governor's thinking, the problem isn't that lawmakers don't care about rising health care costs. They do. But they're also concerned about the state's ability to respond to future needs, and locking the state into big, unforeseeable obligations down the road robs the state of the flexibility to respond to future needs.

My unsolicited advice to the Governor: look at these ideas, and bring everyone in your administration back to the drawing board. Take the lawmakers concerns into account and come up with a new plan that comes at health care from a different angle. That doesn't mean you have to give up on "Illinois Covered", you can hold onto that possibility for the future, promising "not to give up the fight," while still making significant progress for Illinoisans and snatching some victory from the jaws of defeat.