AS HEALTH INSURANCE ACCESS EXPANDS, DEBATE PICKS UP OVER RISING COSTS

UHCEF Article of Interest

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STATE HOUSE NEWS SERVICE (cllck here to visit State House News)
Priscilla Yeon

STATE HOUSE, BOSTON, FEB. 27, 2007?..A group of activists and legislators are pushing health care cost control initiatives to slow double-digit inflation rates that have been placing businesses, governments and residents under increasing pressure.

At an event sponsored by the organization Mass-Care, speakers today talked about how a portion of state spending on health care, as well as spending by private companies and residents, pays for ?administrative waste? and ?price gouging.?

Cost control proponents have been making the case that the state?s new health insurance law won?t work, despite the best efforts of many, unless steps are taken to curb escalating health care costs.

?We do have the most expensive health care system in the country,? said Alan Sager, professor in the Boston University School of Public Health, who added that ?there is no cost control today.?

Sager said a significant portion of premiums is directed toward legal malpractice protection, costly administrative work and other unsound financial decisions, including fraud. ?We could eliminate those costs,? said Sager.

According to Mass-Care, an organization that lobbies for a single-payer health care system, the new law ?makes no effort? to control health care costs.

Richard Powers, spokesman for the state agency implementing the new law reform, Connector Authority, said the law established a council, chaired by the secretary of Health and Human Service, that examines quality and cost issues in health care.

Mass-Care said the United States has the most expensive health care system in the world, with $487 per person going toward hospital billing and administration while in Canada each person spends $87 for the same costs.

Sager criticized the Connector Authority?s decision to consider new commercial plans for the uninsured that exclude prescription drug coverage, an idea pushed as a way to negotiate affordable premiums.

?Is that real?? said Sager, who said the state needs to push private insurance carriers to justify their spending.

Powers said negotiations with insurers are ongoing and carrier proposals will be released next week.

?It?s a juggling act that the board is undertaking to balance the affordability of the plans and the benefits they will cover,? said Powers. ?There are very logical arguments on both sides of the issue.?

Peter Hiam, who served as commissioner of insurance from 1978 to 1982 said dramatic health care reforms were not adopted in recent years because decision makers didn?t want to ?distress? health care facilities. He said the solution for a more cost-controlled health care system is not state regulation.

?In the future, I?m convinced, is going to be a single-payer system,? said Hiam.

Legislators who are sponsoring bills to address cost-control measures in the health care system also talked about their bills.

Two Boston Democrats, Sen. Steven Tolman and Rep. Frank Hynes, filed a bill this year that calls for the establishment of a single-payer trust in the state?s health care system. The measure would create a single entity to replace all public and private bureaucracies and guarantee health care for all residents.

Tolman said politicians, including the Congress, should not be afraid to change the industry.

?We have to take control,? he said. ?If we don?t change, we can?t afford it.?

Tolman said substance abuse rates in Massachusetts are among the highest in the country. He alleged that the health care industry is withdrawing its support for prevention and treatment programs and said such behavior is pressuring state government funding.

Tolman, along with Sen. Bruce Tarr (R-Gloucester), is also co-sponsoring a measure that would require all insurance plans to employ the same billing system in dealings with health care providers, from doctor?s offices to large teaching hospitals. The bill aims to cut down on unnecessary, costly administrative paperwork, said Tolman.

Rep. Rachel Kaprielian (D-Watertown) is sponsoring a bill, which mirrors a plan recommended by Gov. Deval Patrick, that gives municipalities the option to purchase their insurance plans through the Group Insurance Commission (GIC), which can sometimes offer less expensive health insurance options.

?It will not be appropriate to every municipality but it could provide a significant difference,? said Kaprielian..

Sen. Patricia Jehlen (D-Somerville) is authoring a bill that would require a certain percentage of premium dollars to be spent on ?actual? health care services. The bill sets limits on overhead expenditures at insurance companies.

According to David Murphy from Sen. Mark Montigny?s office, U.S. consumers spent $251.8 billion on prescription drugs in 2005, nearly $50 billion more than what was paid two years earlier. The cost of prescription drugs has contributed to increasing premiums and overall health system costs, he said.

To address rising drug costs, Montigny is sponsoring a bill that would allow state agencies and private health plans to join hands and become a single buyer to ?bulk purchase? drugs and negotiate for lower prices.

Barbara Roop, co-chair of the Health Care For Massachusetts Campaign, which sought a constitutional amendment to ensure every resident had access to affordable and comprehensive health care, said all legislators? initiatives are valid to tackle cost control.

?Every one of them has some merit and underlies the importance of a system-wide reform to have sustainable health care system,? said Roop.

Marylou Buyse, president and CEO of the Massachusetts Association of Health Plans, said some of the measures legislators are trying to pass will not appropriately address cost control.

?I don?t think it would be helpful at all, I think in fact it would raise cost,? said Buyse.

She said she agrees cost control is an urgent matter but disagrees with some claims made today by legislators and speakers that insurers are driving up the cost of the health care system.

?There?s no simple answer to what is driving the cost, there are a lot of contributors,? said Buyse. ?Cost of care is complex.? She said the use of technology for diagnosis and treatment, increasing demand for services, and defensive medicine are some of the cost drivers.

Asked about a single-payer system, Buyse said countries that have single-payer systems do not have timely access to the same quality of services and technology offered in the United States.

According to Benjamin Day from Mass-Care, all industrialized countries, except of the United States, rely on a single-payer health care system.
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