On life support

by Phil Talmadge

With my apologies to Winston Churchill, let me say that never before have so many paid so much for so little.

What are we talking about? Health care, of course.

Doctors in this state are often demoralized, some hospitals and clinics, like the Memorial Clinic in Olympia, are closing, insurance premiums for both business and individuals have risen drastically, and service delivery of health care is being suffocated by heavy administrative costs. It is all too difficult at times to get personalized service.

It is time again to address the issue of health care reform in Washington. The importance of this issue is not just humanitarian (even though broadening access to health care must be a major social goal); for those who already have health insurance coverage, the impetus for reform is fiscal -- we cannot afford our present health care system without serious change.


The health care system is not efficient in delivering health care to people because of the heavy administrative costs in the system. Doctors and hospitals seeking payment must wade through a sea of insurance company red tape. Insurance coverages often overlap.

Many more people in Washington and in America have no health insurance at all, and this contributes to rising costs. Today, 15 percent of Washington's population has no health insurance, up from 11 percent just a few years ago. In reality, we all pay for these people because they cannot be turned away from service. Hospitals and doctors increase their rates to pay for "uncompensated" and "charity" care.

For all of the rhetoric against "government-run" health care, the reality is that government is the principal purchaser of health care. Government in America spends two dollars for every dollar spent by the private sector on health care. For example, our state buys health care for state employees and their families; K-12 educational employees and their families; higher educational staff and their families; injured workers through industrial insurance; low-income people through the Basic Health Plan; and the poor and their families through Medicaid. Meanwhile, the private sector covers fewer people every year.

Because in reality we already have a largely government-paid health care system, the Legislature in this legislative session faced an extremely difficult budget issue -- the escalating cost of health insurance premiums. Health care cost inflation has been double-digit in the last few years, dramatically driving up the cost of health insurance for the hundreds of thousands of people for whom the state buys health care or health insurance. The Legislature now faced a huge budget imbalance as a result. It has two bad options to deal with this problem -- significantly increase budget contributions to offset inflation or cut back on coverage. Neither is attractive. The Legislature did both. It cut the Basic Health Plan enrollment. It assumed inflation rates of 16 percent in health care costs for each budget year.

This very same scenario is being played out in the private sector throughout Washington as well. Many employers are cutting back on health care insurance benefits or eliminating them entirely, forcing people to look for whatever health care they can obtain in public or private health insurance programs.

In the early-1990s, Governor Booth Gardner appointed a Health Care Commission, chaired by two of Washington's eminent business CEOs -- the CEO of Wells Fargo Bank and Washington Water Power -- to survey the health care system and health insurance, and to recommend changes. Their outstanding report became Washington's 1993 health care reform law. That law taxed tobacco, alcohol and insurance to subsidize care for almost a quarter million Washington kids and working poor adults. It also protected consumers from managed care profiteering and provided universal access to a decent minimum of health insurance for all Washington residents. The Washington law was actually very similar to a 1973 Nixon Administration proposal. As happened when President Nixon proposed it, just the thought of meaningful government action sent health care costs plummeting. The inflation rate for the State's purchases of health care went from 17 percent in 1990 to -1.1 percent in 1994 before the act was largely repealed.

The opponents of the act spent millions to get this message across about the 1993 law: (1) One size fits all, government run health care; (2) You will pay more and get less; and (3) Some government bureaucrat will choose your doctor, not you.

At the national level, hundreds of millions were spent to have Harry and Louise repeat those views in ads in communities across the nation. The result was the election in 1994 of politicians who rode on a wave of campaign contributions into positions of power bent on stopping health care reform. The story sounds fantastic, even to the most jaded political observer. But if you don't believe it, read David Broder's award-winning book, The System. It's all laid out there, complete with names, dollar amounts and ugly details.

Now that the dust has settled, seven years later, what do we have for a health care system in 2001? (1) One size fits all, insurance company run health care, with your tax dollars footing most of the bill; (2) You pay more and get less; and (3) Some insurance company bureaucrat is choosing your doctor, not you.

As if that weren't bad enough, by every measure, the problems the state set out to solve in the early-1990s are now worse. (1) Medical inflation is back; (2) The number of uninsured is up and rising fast, even according to the Health Insurance Association of America, which estimates one more person loses health insurance in our country every 30 seconds or so (they have a counter on their Web site); and (3) Our medical care infrastructure is being buried under a mountain of red tape, and provider shortages, financial uncertainty and chaotic changes in payment and organization plague our health care system.

CONTROLling costs

Legislators in the last session talked about yet another health care commission to study the problems of our health care system and to make a final report to the Legislature and Governor by December, 2003.

Health care is among America's most "admired" problems, as billions of dollars have been spent on studies and conferences about how our health care system is a mess and its costs are out of control. But we can't wait for three years to study the problem while costs skyrocket.

How about a new thought? Rather than more studies, let's actually do something about the cost of Washington's health care system for a change. Let's not wait until the 2004 session of the Legislature to control health insurance costs and improve the health care system. Let's start talking right now about serious cost containment strategies for health care.

State government needs to focus on how to quickly and directly increase value for the dollars it pays out for health care. First, the Legislature should immediately take steps to improve efficiency and reduce waste in the health care system; we must:

* Reduce duplications in coverage from overlapping government and private health plans, worker compensation and auto insurance;

* Improve administrative efficiency and eliminate paperwork duplication for doctors and hospitals (it may be time to mandate a single claim form for all health insurance plans in the state);

* Unify health care purchasing for the State in a single agency to maximize the state's purchasing power.

Second, there are common sense, long-term solutions for the health care system, which include:

* Intensifying prevention and public health activities such as immunization, anti-tobacco and drug/alcohol abatement efforts (it's far cheaper to prevent disease than to react to its symptoms);

* Prioritization of Medicaid resources toward prevention;

* Expanding access to health care by offering doctors and nurses who agree to practice in underserved parts of our state full scholarships;

* Placing a moratorium on any new mandated coverage in health insurance plans.

Finally, as the largest single purchaser of health care, the state itself can have an enormous impact on cost by aggressively asserting its market power. The state can get a great deal because it buys health insurance for more than a million lives in Washington. The state's Health Care Authority should be allowed to purchase health insurance coverage, at cost, for all local governments, for businesses that choose individually or cooperatively to have the Authority buy coverage for them, and for individuals. The more people in the pool, the better is the deal the state can get.

Why should any citizen of our state have any less coverage than the governor of the State of Washington? For far too long we have ignored the cost of our health system care, at our peril. The issue will not go away. We don't need endless studies. Health insurance costs are too high, and they are driving employers to reduce coverage or eliminate health insurance benefits all together. The problem is not the lack of information, but rather, the lack of leadership -- leadership in the development of a political consensus on health care that serves the best interests of our citizens and helps define the quality of life in our state. It is time for all of us to compel out political leaders to forge that consensus.

Phil Talmadge is a former justice of

the Washington State Supreme Court

and chaired the Senate Health and

Human Services Committee in Olympia.