Wednesday, August 22, 2007

WMC Survey Shows Support for Healthy WI & WHP

Wisconsin Manufacturers and Commerce (WMC), along with the conservative Club for Growth, released a survey yesterday that found 64 percent of respondents believe:
[T]he best way to reform the current private health care system is to cut costs and provide more choices by increasing competition among private insurance companies and by requiring health care providers to be more transparent with their actual costs.
Of course, WMC thinks this means that people oppose a reform plan like Healthy Wisconsin or the Wisconsin Health Plan (WHP); but, in reality, this is essentially what those plans would do, especially the part about increasing competition among private insurance companies (the WHP would also increase the push for transparency via its use of HDHPs).

The alternative that respondents to the WMC/Club for Growth survey were allowed to choose was the following, which was supposed to represent plans like Healthy WI and the WHP:
[T]he best way to reform health care is to replace the current private health insurance system with a new universal insurance system that is run by the Wisconsin state government.
It isn't difficult to see how this survey is part of a broader attempt by conservative critics to frame Healthy WI and the WHP as "government run health care," thereby utilizing the negative connotations associated with that phrase; yet, both plans solidify, as opposed to replace, our system of private payers and private providers.

What's more, most polls -- such as this NY Times/CBS poll from February (see questions 27 and 28) -- are clear that the public widely supports the government involving itself in the health care market to ensure the entire population has adequate coverage; it's the issue of care that most people want to protect from government intrusion.

The more astute conservatives try to link the two by putting forward a rationing argument that claims by controlling coverage, the government would be, in effect, controlling care.

But this argument assumes the government would be able to limit coverage without public oversight. After all, if the government gets to the point where reducing coverage is on the table in an effort to avoid increasing revenue, the public still has a choice -- reduce coverage, increase revenue, or some combination of the two.

Some universal coverage countries, like the UK, have opted to limit coverage in an effort to reign in revenue. But others, like Switzerland, Germany, France, etc., have not.

And figuring out this coverage vs. revenue equation is an ongoing discussion that each country -- or state, in the case of Wisconsin -- should be able to have in a rational, democratic, and open manner, rather than the irrational way that rationing occurs in our current fragmented system (i.e., either your employer offers good coverage or it doesn't).

Further complicating the conservative argument about "government run health care" is the other argument the same commentators put forward about state mandates. The mandates argument is that the government in Wisconsin, and some other states, has been guilty of requiring insurance companies to increase benefits too much, which has driven up the cost of coverage.

So, on the one hand, government would surely reduce coverage and, thereby, interfere in decisions that should be left to the doctor and the patient. Yet, on the other hand, government is increasing doctor-patient options too much by mandating certain amounts of coverage.

It's quite a tangled web, and one that ultimately raises the question: At what point does opposition become merely opposition for opposition's sake?

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UPDATE I: Check out the Brawler's take on the re-hashed "Healthier Choices" plan from the WMC.

The main thrust of WMC's Healthier Choices proposal is allowing for a supposed "diversity" of health care plans, which is essentially a euphemism for keeping the door open to under-insurance and adverse selection, as I discuss in this post.

UPDATE II: Cory Liebmann offers more on the WMC/Club for Growth survey.

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23 Comments:

Blogger Dad29 said...

After all, if the government gets to the point where reducing coverage is on the table in an effort to avoid increasing revenue, the public still has a choice -- reduce coverage, increase revenue, or some combination of the two.

And this differs from the current system....exactly how?

Substitute "employer" for "government" and "management" or "workers" for "public" and...

The difference is clear.

Either 16 Gubernatorial appointees or several thousand other entities, all doing the same thing.

August 22, 2007  
Blogger Seth Zlotocha said...

You should consider reading the entire post before you comment. As I write two paragraphs after the one you highlight:

And figuring out this coverage vs. revenue equation is an ongoing discussion that each country -- or state, in the case of Wisconsin -- should be able to have in a rational, democratic, and open manner, rather than the irrational way that rationing occurs in our current fragmented system (i.e., either your employer offers good coverage or it doesn't).

You may not trust a public entity to provide adequate coverage -- though I'm sure you'd say the coverage offered to state employees is plenty rich, and that coverage is determined by the same board that would dictate benefits under the WHP or Healthy WI -- but polls like the one I cite in the post show that most Americans don't have any problem with it. After all, if your coverage was cut, would you rather lobby your elected representative -- who would've also had her/his coverage cut under the change -- to change it back or would you rather have your only recourse be to find a new job?

August 22, 2007  
Anonymous John P said...

One of my biggest problems with HW is that the 16 member board is UNELECTED and has taxing authority. This board will be managing health care in this state. They will have tremendous influence. The Board does not include any medical providers, other than advisors. I understand that including them could cause conflicts of interest, but I would like to see at least a retired provider on the Board.

My other problem is that this board is not going to be non-partisan. A Dem Governor and Dem senate is not going to appoint and confirm a rep. The reverse is also true.

People are upset regarding all of the provider consolidations being done right now. Aurora is buying up physican practices left and right. Why isnt the HW the same situation in reverse? I mean when providers consolidate this can create an uncompetetive situation. Wouldnt consolidating funding to one funder do the same thing?

I think many of these points need to be addressed before HW is either passed or not passed.

In any event, NW needs to be droped from the budget right now and discussed as a seperate issue.

August 22, 2007  
Blogger Seth Zlotocha said...

I understand that a number of people are opposed to an unelected board directing a health care system (I prefer not to focus the conversation on HW since that's just one way of doing things).

But it's not like people have any real control over the health system they're a part of now; in fact, it's arguable they have less control since now it's through their employer whereas under a public board there would be some representative control over it (that Dem gov and that Dem senate were democratically elected, after all, and there will come a time again when it's a GOP gov and GOP senate in power).

Plus, it's not like a single board would have complete control, even when it comes to taxes. The HW and the WHP both place limits on the payroll assessment that can be levied on employers/employeees, and the only way to change those limits is through additional legislation. If the money in the board's trust fund won't cover benefit expenses, the board must either look into cutting coverage or ask the legislature for more money. It's not like either of those things would happen without public oversight. Ultimately, the board exists and operates at the pleasure of elected representatives, and those elected representatives can alter or elminate the board whenever they like through legislation.

And, what's more, the governor wouldn't have free reign over nominating anyone to the board. Key stakeholders in the state will all have a voice on the board. And I agree with you that it makes sense to add a WI Medical Society member, or some other medical provider, to the board -- that could be done with a relatively minor change to the legislation.

As for payer competition, a plan like HW and the WHP would actual increase competition by putting all eligible payers in direct competition with each other for participants. These payers would all be trying to become the "low cost network" -- which is determined by both cost and quality measures -- because then that means participants could join their plan without paying any additional monthly premiums. If participants opt for a non-low cost network plan, they would need to pay the monthy premium difference between that network and the low cost network. This is the exact way that the state employee plan is currently set-up (you can see the county-by-county list of networks used for the state employee plan here) -- if you choose a Tier 1 plan, you pay less in premiums than if you join a Tier 2 or Tier 3 plan, so the economic incentive is there for participants to choose a Tier 1 plan, which means the competitive incentive is there for plans to become that low cost network.

August 22, 2007  
Blogger Erik Opsal said...

The poller, Public Opinion Strategies, also considers itself a Republican polling firm. Maybe if it was an independent organization we could begin to take it seriously.

August 22, 2007  
Blogger Seth Zlotocha said...

Good point, Erik. At the same time, though, it's worth noting that the research firm that did the polling on Healthy WI for Robson and Erpenbach earlier this summer -- Lake Research Partners -- is a traditional polling group for the Dems.

I would like to see an independent group like Badger Poll ask about Healthy WI or, better yet, health care reform in general.

August 22, 2007  
Anonymous Anonymous said...

Seth,

Both you and Erpenbach are on the same page - you want to talk about health care reform "in general."

The problem is, reform doesn't happen in general, you need the details to achieve anything. Campaigns, on the other hand, can be run in general. And that is really what this is all about.

August 22, 2007  
Blogger Seth Zlotocha said...

Yeah, Anon, the Dems and I are all about avoiding details, which is why three different plans that I'd support have been enrolled as legislative bills over the last two sessions.

And you must not read this blog much if you think I try to avoid discussing the details of health care reform.

My point in saying that the public debate should be broader than Healthy WI is precisely because there are multiple ways of accomplishing the same goal -- controlling costs & providing universal (or near-universal, as was the case with the WHCPP) coverage. I want to avoid Healthy WI becoming a proxy for all reform plans, in large part because the reform plan I prefer the most is the WHP, and you can find a 170+ page report on that plan here. Let me know if it's not detailed enough for you.

August 22, 2007  
Anonymous Anonymous said...

Seth avoids details the way I avoid chocolate. . . .

(mmmmmmm, bites into Hershey bar)

Sorry, back now from that chocolate break. Keep at it, Seth; those of us who actually read this blog, and do so daily, come here for the incredible level of detail on policies (and low level of political propaganda).

It may be not be as yummy as chocolate, but after reading your blog, I'm healthier -- in many ways.:-)

August 22, 2007  
Blogger Seth Zlotocha said...

Thanks, Anon2. I appreciate it.

August 22, 2007  
Blogger Jack Lohman said...

I agree that an unelected board has drawbacks, but the last thing in the world I'd want to see are these members out raising funds to get elected! We've been there and done that; our electoral process is a corrupt system. Perhaps we can have the new ethics board interview and appoint HW board members.

But no matter what we do, it will be better than the alternative of doing nothing and letting corporations take over the system. They have already started that, and if you think asking politicians to improve a system they are also a part of, you haven't seen anything yet. Just ask a CEO who has to answer to the shareholders. Physicians, are you listening?

August 22, 2007  
Anonymous John P said...

I agree with Jack on a number of points, one, is that I do not trust CEO's and Shareholder's either, since their main goal is profit. I also think that we need a better system than we have now. I think it it the degree of Government takeover that I have a problem with. I would hope we could come up with a system that could combine the best of both systems, but if we cannot, then I would rather see medicare for all.

I agree with Jack regarding his issues with elected officials, but those goes beyond the scope of health care reform. That is a bigger problem.

As I mentioned to Jack before and above, I would agree with Medicare for all, as long as it is properly funded, does not limit doctor decsions, waste and fraud are at a minimum, physician and hospital reimbursements actually reflect reality, my taxes do not go through the roof and their is some personal responsibility built in to the system. Meaning that if you engage in an unhealthy life style that is VOLUNTARY, then you must pay more. This would include poor people also. Individuals who do not follow doctors orders regarding, losing weight, etc would also pay more. Paying more could be based on a sliding scale based on ones income level.

It seems to me that the Government today is way to polarized between democrats and republicans. They never seem to agree on anything and each is beholden to their special interest groups. There is fraud going on from both sides of the aisle. This is why I am nervous about a total Government take over.

Look at HW and all of the taking points being done about this. It has turned into a political issue. Their are Senate Dems who have no idea how the plans works, but voted for it because it came from a Dem. I am sure that their are Reps. who also who have not read it and hate it because it came from a dem. This in my opinion is the problem

August 23, 2007  
Anonymous John P said...

In addition, Illegal Aliens should not be covered, other than for basic healthcare when there is an emergency. Illegal aliens should not be allowed to come into this country for free health care, I do not even care if this person has paid taxes. He or she should have to enter the country legally.

August 23, 2007  
Blogger Jack Lohman said...

John, I never thought we'd get this close to agreement. I agree with most of your comments, except that you don't seem to realize that our only choice is between a commercial or government operated system. There is no other player, and I'd prefer the government board funding the private health care providers. Yes, they will curb abuses and people will cry foul. But isn't that what we want? A team that is responsible ultimately to the voters? Rather than a CEO responsible to the shareholders?

I'd also be very happy with a Medicare-for-all system, but there are aspects in HW that are even better than our current Medicare Advantage portion of the system.

August 23, 2007  
Blogger Seth Zlotocha said...

I'm glad to see this discussion continuing -- it's probably one of the more productive (and, not coincidentally, respectful) ones I've seen in the comments section of this blog in awhile. So, thanks for that.

I want to follow up on what Jack said about HW improving on Medicare Advantage. In many ways, HW is structurally the same as Medicare for all, except there would be a much bigger role for private payers in HW since there likely would be stronger economic incentives for participants to opt for one of the private managed care networks over the public FFS plan. While Medicare Advantage only has about 20 percent of the total Medicare pie, I'd expect private payers to have the opposite percentage -- closer to 80 percent -- of the HW pie, if not more.

The funding mechanism is also a bit different between Medicare and HW since the former relies heavily on general taxes in addition to payroll taxes.

But, as Jack alludes to, what would be virtually the same between Medicare for all and HW is the point that largely kicked off this dicussion -- the use of a public entity to determine the benefits offered. This would be true of Medicare for all, HW, the WHP, the Healthy Americans Act, and most other universal coverage plans that utilize community rating. Without this type of public oversight -- either in the form of legislation or an entity of some kind -- what you get are bare-bones plans aimed at the young and healthy while the old and less healthy are pushed into often unaffordable pools through adverse selection. And the real kicker there is that eventually almost everyone who was once young and healthy falls into the category of old and less healthy, if they don't fall into the less healthy category sooner by either becoming sick or having one of their dependents become sick.

That said, I agree with John and others that participants need to have some incentives to maintain their health as much as possible. I feel these types of incentives are best handled through cost-sharing -- deductibles, co-pays, co-insurance, etc. -- as opposed to securing coverage since cost-sharing is what's explicitly tied to utilization. This is precisely why I like the WHP the most out of all the plans -- it makes accessing coverage a level playing field, while simultaneously including significant -- yet fair -- cost-sharing to provide incentives for wellness and avoiding overutilization.

August 23, 2007  
Blogger Jack Lohman said...

Seth, can you briefly describe the differences between HW and WHP?

Also, keep in mind the "co-pay incentives" can backfire, and I think you are all aware of the studies that showed that co-pays tended to keep patients away from the doctor until the disease got more serious and more costly, or simply became untreatable and the patient died. Co-pays also require a bureaucracy that often costs more than the care they avoid.

I'd prefer seeing zero co-pays on the first few doctor visits per year and then have a "patient facilitator nurse" step in and assess potential overutilization and apply co-pays if need be. I'd even accept a "fat tax" of some kind, and higher cigarette taxes. We are already collecting them, but patients who continue to smoke should pay higher co-pays. What they hell, they're going to die sooner anyway. We might just as well get some of their money. :-)

August 23, 2007  
Blogger Seth Zlotocha said...

The biggest difference between HW and the WHP is the use of HDHPs. Lewin highlights the use of HDHPs in its report on the WHP as a major cost-saving component of the plan.

And I understand that greater cost-sharing can reduce the likelihood of receiving necessary care, but not all cost-sharing is created equal. For starters, most preventive procedures wouldn't be applied to the deductible under the WHP, just as they wouldn't under HW.

Secondly, under the WHP, the state would provide each HSA with roughly 40 percent of the funding for the deductible, meaning first-dollar coverage isn't truly out-of-pocket, it's out of the state funded portion of the HSA; however, the incentive to not blow that state-funding remains because it can be carried over by the participant from year to year, thereby building up funds until they are necessary some day.

The HW doesn't offer first-dollar coverage in the same way. Adults in the HW must pay completely out-of-pocket for the first non-preventive procedure they receive up to the $300-$600 deductible. This, to me, means that people would be less likely to get non-preventive care under the HW than they would under the WHP.

And I'm aware of the studies that show cost-sharing can reduce necessary care and, as a result, lead to more expensive procedures in the future. But, importantly, those studies often don't look at plans like the WHP where preventive care is fully covered and there is a pre-funded HSA; plus, those studies are specific to low-income people who would be covered under BadgerCare Plus, not the WHP or HW. And it's important to note there are other studies, such as this one, that show that reasonable cost-sharing through HDHPs can have positive effects on reducing unnecessary overutilization.

In the end, it's not about complete reliance on cost-sharing nor is it about eliminating cost-sharing altogether. It's about finding a comfortable middle ground where participants have incentives to stay as healthy as possible and reduce overutilization without sacrificing their long term health. Jason Furman of the Brookings Institute has a good discussion of how this can be done here.

August 23, 2007  
Blogger Jack Lohman said...

Thanks Seth. I guess my feelings about HSAs hasn't changed; to replace one bureaucracy with another doesn't make sense. If the insurance industry needs the money let's give them a subsidy, but let's not create a system where the patient invaribly suffers.

Get the money out of the political system and we'll fix health care overnight.

August 23, 2007  
Blogger Seth Zlotocha said...

I don't see how the WHP creates any more of a bureaucracy than HW -- the two are pretty much the same structurally, the difference is in the type of plans they employ (and I think we both agree that a centralized bureaucracy would be more efficient and certainly more equitable than the fragmented health care system that exists today).

And I also don't see how HDHPs are a akin to an insurance industry subsidy or how they put more money into the political system.

August 23, 2007  
Blogger Jack Lohman said...

HSAs don't operate without administration costs, and I'm sure that part of their dollars go into insurance company profits. And I'm sure you could also say that because patients get less care there is a corresponding decrease in administrative costs. But they also skim the young and healthy from the pool, which drives up the overall costs for everybody else. That is, until they become old and unhealthy and all of a sudden want into the system they didn't want to support when they didn't need it.

Being an old product developer, I've always felt it less costly to build it right from the beginning rather than have to redesign it in the future and release a new version. We need to do that with healthcare.

The political remark was aimed at our politicians. If they were not taking cash money from the insurance interests we wouldn't be discussing this today. They'd have fixed it years ago, and HSAs likely would not have been a part of the fix.

August 23, 2007  
Blogger Seth Zlotocha said...

HSAs under the WHP wouldn't be owned or operated by the insurance companies -- they'd be owned by the participant and operated by the state.

And there wouldn't be any skimming because everyone would be in the same boat, just like with HW. Riskier people would have the benefit of getting largely subsidized coverage from the less risky population, while the less risky population would benefit from being able to accumulate funds in their HSA for when the day comes that they (or one of their dependents) fall into the riskier category.

You seem to have a very fixed view of what HSAs are, Jack. I appreciate all of the time you have taken spreading the word on health care reform in general and HW in particular, but you should re-consider this apparent unwillingness to consider HSAs or HDHPs in any circumstance.

If you get a chance, talk to David Riemer about the use of HDHPs in the WHP. I'm sure he'd be able to give a much stronger defense of them that I can here.

August 23, 2007  
Blogger Jack Lohman said...

Seth, I don't like high deductible plans by any name. I'd prefer zero deductibles with controls for overuse. Call it socialistic or anything else, but I do not believe health care should be a money game. And I do not believe it should be driven by the free market profiteers. There are some things you do in life because it is just the right thing to do, and appropriate family health care is strongly imbedded in me.

August 23, 2007  
Blogger Seth Zlotocha said...

Fair enough, Jack. But, as I've explained, a plan like the WHP isn't about making health care a money game, giving free reign to profiteers, or harming approriate family care.

August 23, 2007  

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