Tuesday, the Senate Finance Committee will take up the fate of at least one reform proposal. On the eve of that vote, the American Health Insurance Plans (AHIP) released a report prepared by PricewaterhouseCoopers (PwC) demonstrating the bill will wind up costing more than its authors are admitting. Talking heads are exploding in an uproar on both sides as they have been all summer. Some think it’s unfair that AHIP released this report now while others point to the report’s findings as evidence that reform is a bad thing.
The fact is this is a debate and contest between government intervention and free markets. The folks at AHIP exist in a free market where competitive forces and consumer demand drive their behavior. As much as possible, they self-regulate and are under no obligation to the Federal government or President unless mandated. Wherever possible, they attempt to obviate mandates in order to remain in a “free” market and have been successful in keeping government oversight local at the State level. That’s how the system they exist in operates. That’s reality.
If their position seems a little self-serving, that would be because it is. Why should it be otherwise? Is there any another industry in this country that subjugates its interests without putting up a fight? Health plans see themselves as responsible to their interests, those of their shareholders (the public at-large who invest in them), the employers who turn to them for competitive bids and the subscribers who make up their membership. Frankly, what they have done by releasing a report they sponsored is completely consistent with committee-sponsored reports and Congressional Budget Office (CBO) cost estimates. Tit for tat. I happen to think they’re doing us a favor by warning of cost increases. They should know. After all, they set their own prices! Who else are you going to believe when it comes to cost increases?
Republican opponents, however, used the report today to strengthen their argument against reform. Sadly, they are missing the point. We have to reform the way we provide and pay for health care. John McCain knows it, Bob Dole knows it, and Tommy Thompson knows it. Not reforming is not reform. It’s burying your head in the sand and hoping nobody will notice that healthcare is galloping toward 20% of our GNP. Can you say: “bubble-in-the-making”? Come to think of it, now may be the best time to buy health plan stocks!
When Sen. Jay Rockefeller, D-West Virginia says: “The [health insurance] industry stands today as the greatest impediment to real health care reform” I am afraid what he isn’t saying is that to change that would require health insurance “transformation” which is not a political reality in this country. We can no more easily transform insurance than we can transform banking or the auto industry.
Karen Ignagni of AHIP reportedly said: “We don’t see comprehensive cost control in any piece of legislation” and I think she’s correct. True cost control will be the result of reducing the burden of chronic disease in this country (which accounts for more than 80% of our costs) and that means institutionalizing Patient-Centered Medical Homes, Case Management, Disease Management and asking Americans to radically change terribly unhealthy habits. It would mean that more than 60% of us would have to stop being morbidly overweight and that our children would have start exercising again. It also means that we need to seriously explore paying for medical outcomes instead of paying for services which would turn provider’s worlds upside-down (also politically unpopular). All of which amounts to a radical transformation of healthcare financing and health economics and not a simple reform.
In my final analysis of the Not-So-Great Reform Debate of 2009, we will have used sandpaper to make changes that required a jackhammer at a time when nobody had an appetite for either – despite how they voted in ‘08. People want jobs today more than anything. Heck, we’ve even forgotten how the Great Recession began and why.
What Does This Mean For Behavioral Health?
For those of you wondering what reform might mean for mental health and substance use disorder care and coverage, I think it means we better focus on the implementation of Parity in the next three to six months. If we see any kind of reform bill become law, it will only mean more Parity for more people. We have to execute masterfully what we already have on our plates before worrying about adding more.
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