Local comment

From Where I Sit:

The Good, The Bad and The Ugly of Healthcare Reform

CEO Whitman Hospital & Medical Center

“Where you stand depends on where you sit.” This old saying is certainly true when it comes to healthcare reform. During the debate people without health insurance, and those who sympathized with them, wanted dramatic change. Others with good coverage were nervous about the future. Insurance companies saw a huge threat to their business model and small business owners feared more regulation and taxes. The two predominant political parties stood their ideological ground and partisanship reached a new level.

Now that the bill has passed, many people are wondering, “What does this mean to me?” Without a doubt, the bill’s details are complex. Healthcare itself is complex, and most of this bill relates to the extremely complex way we pay for care. To make it even more confusing, the reform phases in over several years so the changes will be ongoing.

Healthcare reform is much easier to grasp if you first understand the goal. The essence of healthcare reform is to make health insurance affordable for most all Americans. Most everything else is about the details of making this idea actually work. For example, many details revolve around regulating insurers so they cannot choose to cover only healthy people. Other details include things such as how hospitals are paid, encouraging the use of computers and developing enough healthcare workers.

Healthcare reform will affect us all sooner or later. Below are some of the major points and potential impacts. Please remember that this is my personal view based on where I sit as the CEO of your hospital. People who sit in other places will undoubtedly have different opinions and I’m sure some will disagree with me.

The Good

In general, anything that covers more people with insurance is good for you, for our community and WHMC. Everyone benefits when more people have insurance. Today everyone pays more in premiums, taxes and/or private payments to help cover the costs of those who cannot pay. In the industry we call this cost-shifting.

Specific reform items designed to expand coverage this year include:

A high-risk insurance pool for people with who are uninsurable today

Insurers prohibited from denying coverage to children because of pre-existing conditions; expands to all persons by 2014

Children allowed to stay on their parents’ insurance plan till age 26

Lifetime dollar limits on coverage ends

Insurers prohibited from cancelling policies except for fraud

Tax credits to help small employers provide coverage to employees

The Medicare prescription gap begins closing and fully closes by 2020.

The Bad

To help pay for all this, Medicare payments will be reduced to hospitals, home health agencies, nursing homes, hospices and other care providers. We do not know exactly the extent of this yet because government agencies need to write implementing instructions. As they say, “The devil is in the details.”

Insurance coverage could have been made more affordable at no cost to the tax payer by expanding some options. These include allowing national competition as long as state-requirements are met and expanding health savings accounts. I’d like to eliminate the rule that makes you spend everything in your health savings account every year. To me, that’s not a savings account. That’s a spending account.

The new law allows states to experiment with pilot programs that offer alternatives to malpractice lawsuits; this is a positive initiative but the legislation could have been more aggressive. Malpractice insurance prices and defensive medicine practices drive up costs for everyone.

While covering most everyone with health insurance is good, I wonder what it may mean for private nonprofit hospitals. If almost everyone has insurance, will there be enough charity work left to justify tax-exempt status for nongovernment, nonprofit hospitals? Since WHMC is owned by a hospital district this will not affect us, but this could create a large restructuring of the hospital industry.

The Ugly

As Americans, our health status is ugly and healthcare reform did too little to actually improve it.

America ranks very low compared to other advanced nations on most key health statistics.

This bill is primarily focused on what happens after we get sick.

It is much better and less costly to prevent when we can and cure when we must.

However, there are a few bright spots in the bill related to prevention and quality improvement.

For example, new health plans will be required to cover some preventive services (although existing plans don’t have to).

The bill also financially rewards hospitals for achieving certain quality measures and penalizes hospitals for high rates of avoidable readmissions.

Wouldn’t it be great to have a health improvement system instead of a healthcare system?

I imagine this would be a two-pronged approach. First, we must find better ways to encourage Americans to adopt healthy lifestyles. Our daily health practices, diet, exercise and smoking choices are bigger determinants of our health than whether or not if we have insurance. Second, we should develop more effective case management systems for persons with chronic diseases and others who use a lot of healthcare services. By partnering with these persons and developing custom interventions with them, we could dramatically improve their health and drive down costs at the same time.

The Bottom Line

From where I sit, most of the healthcare reform bill is good for you, for our community and for WHMC. There are some key issues I wish the bill had addressed and I will keep a close eye on how various parts of it are implemented.

I believe the future of medical care in Whitman County is bright. We are fortunate to have a very dedicated Board of Commissioners and a wonderful hospital and medical staff. I am confident that WHMC will adapt to the changes. Your hospital will not merely survive - rather it will thrive as the reforms are implemented. We will be here in the future to provide you with the best care possible. I believe the reform will help us do that.