Coming Around to the WHP

When I initially looked at the Wisconsin Health Plan (WHP) almost a year ago, I saw it as a legitimate attempt at solving the growing health care crisis, but one that simultaneously was based on a flawed structure that relied too heavily on market forces to control costs.

Even then, however, the way the plan wisely blended liberal equity with conservative individuality was clearly a feature that made the WHP the most politically tenable of the three major health care reform proposals to date (here and here are the other two).

More recently, though, I have started to see the merits of the WHP beyond just political expediency. Two recent additions to the Health Care Reading list (in the right-hand column, just under the Lefty Blogs feed) have helped with this.

The first is a report by the American Association of Pediatrics (AAP), which provides an excellent overview of the current structure and use of High Deductible Health Plans (HDHPs) in the US. Most eye-opening are the sections on the funding of individual medical savings accounts associated with HDHPs and the application of the deductible to preventative care.

According to figures cited by the AAP, only 20 percent of HDHPs in the US currently have employer-funded HSAs or HRAs associated with them. That means the other 80 percent rely entirely on the patients to fund the full annual deductible that can range from $2,000 to $10,000 for family plans. Not surprisingly, this set-up has contributed to a rise in unpaid medical bills in the Milwaukee area and elsewhere, which hospital execs directly attributed to high deductibles in a recent Journal Sentinel article.

Also noted in the AAP report is the fact that, as written in federal law, HDHPs can be structured so that preventative care is not applied to the deductible. The benefits of this set-up are clear in that it provides incentives for patients to get the routine care that can catch medical problems early before they develop into more complicated and costly ailments.

Unfortunately, though, the AAP reports that only 30 percent of HDHPs currently provide preventative care separate from the deductible. The other 70 percent force people to pay out-of-pocket for routine care until the entire deductible is met.

Of course, poor funding for individual medical savings accounts and applying preventative care to the high deductible is not the way HDHPs need to be set-up; it's just the way they are being set-up in our existing fragmented health system.

This is too bad since the use of HDHPs does provide some promise. For instance, a study by the Harvard Medical School recently found that HDHPs reduced the number of ER visits for non-critical ailments by 10 percent. And non-critical repeat visits to the ER dropped by 25 percent under HDHPs. Visits for critical ailments were not significantly affected.

Since ER overcrowding is a big problem, particularly for urban hospitals, cutting down on ER visits that really aren't emergencies -- such as those for headaches, nausea, or colds -- is a promisng trend.

But right now the promise of HDHPs is being severely dampened by the way they are being rolled out without necessary financial protections for patients such as even partially-funded individual medical savings accounts or preventative care that isn't applied to the deductible.

The beauty of a plan like the WHP is that it provides those financial protections that patients need -- in the form of a minimum HSA contribution of $500 and fully covered preventative care -- while also allowing and encouraging those patients to be consumers.

Of course, by charting out a middle ground, the WHP risks being attacked by some on the left because it isn't single payer and by some on the right because it involves government regulation of the health care market.

Hopefully enough people on both sides actually read through the plan and see that it is possible -- and quite desirable -- to have the best of both worlds.