Proposals to reform our healthcare system have come to dominate this presidential election cycle. As Modern Healthcares Guide to Healthcare in the Presidential Campaign (Nov. 26) shows, candidates have advocated cautious plans for expanded access, most of which preserve employer-based coverage. Washington politics in 2007 has crystallized around a controversial proposal to expand access to the State Childrens Health Insurance Program for middle-income families. Youd think the coming political season will all be about expanding access.
You would be wrong.
Examination of public opinion data gathered this fall by Democracy Corps reveals a far different picture of voter concerns. Anger about health costs far exceeds any other domestic policy issue, far more than concern about gasoline prices, the rising tide of home foreclosures and losses of jobs to China or India. Sixty-two percent of likely American voters rated the rising cost of healthcare as a very serious problem, and 46% were worried about the closely related issue of employers cutting back their contributions for employees health insurance.
If the typical voter doesnt view the problem of 47 million uninsured Americans as the most important health policy issue, the reason is that most likely voters already have health coverage. In contrast, the uninsured are disenfranchised, politically or socially marginal or unable to vote because they are not here legally. The largest group of uninsured is young people from age 18 to 26, 40% of whom are not registered to vote.
On the other hand, voters who already have health insurance are hopping mad about what it actually costs them to receive care in the health system. They are angriest about drug expenses, which should not surprise us since more than 40% of out-of-pocket health spending is for drugs. But as employers strip away the massive subsidies buried in their health insurance plans, both by pushing up cost-sharing and encouraging employees to enroll in consumer-directed plans, Americans are realizing that their healthcare is very, very expensive. Withdrawing these subsidies is like bringing a patient out of anesthesia in the middle of an operation.
Rising bad-debt expense is the best signal to hospitals of a nascent consumer revolt. And it isnt merely the uninsured who are slow to pay their bills. Earlier this year, I heard a nationally respected health system chief executive officer tell his board that when he receives a bill from his own institution, it goes on the bottom of the pile to be paid last. Think of what the typical citizen in his community, pressed by rising energy and mortgage expenses, is likely to do with his or her hospital bill.
Interestingly, most Republican reform proposals rely on further withdrawals of employer subsidy and increased consumer awareness of variations in expense as the principal cost-control mechanism. Neoconservative economic dogma holds that with more cost exposure and better health information, consumers will make more conservative use of care a priority, and shop around for the most cost-effective and safest care when they need it. These proposals are almost laughably oblivious to the already high level of consumer anger about health costs.
Democratic health reform proposals, on the other hand, are likely to increase the cost of coverage through health insurance mandates (such as mental health parity, required coverage of preventive care, guaranteed issue and community rating). By requiring that individuals purchase coverage and that employers provide it, Democratic proposals could deepen insurance pools, and, theoretically, lower the cost of covering everyone.
But it requires more than a modest suspension of disbelief that reduced uncompensated-care expenses will offset the cost of these coverage mandates, particularly for the young people who lack coverage. Lawmakers will certainly reduce provider subsidies that are now used to offset uncompensated care to help fund the costs of reform. Then they will leave at least 15 million people uninsured, for which hospitals will still be responsible under the Emergency Medical Treatment and Active Labor Act. When legislators get around to actually drafting health reform legislation, expect them to notice the recently reported record hospital profits and take a large bite out of future hospital payments.
Even though hospital utilization has leveled off and health cost increases have moderated, the absolute cost of healthcare to the user constitutes a huge political risk for the health provider community in this coming health reform debate. What can be done about these concerns?
Lots of things. If voters understand that hospitals and physicians take seriously the elimination of avoidable medical errors, they can connect these efforts to their own safety and the ultimate cost of care. Making more public mention of the huge amount of community service hospitals provide, in education, community outreach, subsidy of struggling community agencies, etc., would be timely. Hospitals do not get even a fraction of the credit they deserve for the billions they have spent on these efforts. Eliminating waste, even at the price of reducing what the field anachronistically calls reimbursement, will pay dividends in reducing the industrys cost profile and convincing lawmakers that hospitals take cost control seriously.
However, treating patients and their families like true customers of the health system will pay even larger dividends. Seemingly mundane promises to treat emergency patients within 30 minutes of presenting and more ambitious promises like the service guarantees pioneered by Geisinger Clinic for cardiac care directly address patient anger about the value of care they receive. Even if costs are high in absolute terms, if people feel they get thoughtful, personal care when they visit our institutions, they are less likely to storm the barricades when prompted by populist political attacks.