Health Care Reform is Coming Back

Not in the 07-09 budget, of course. That ship has sailed (or, at least, it sounds like it's sailing).

But, as expected, legislative Dems are making clear that fundamental health care reform is still in the works. As Senator Erpenbach put it bluntly: "It's not going away."

I hope this time away from the spotlight also prompts the Dems to give the Healthy Wisconsin bill a bit of an overhaul. I'd really like to see them come back with the Wisconsin Health Plan and call it a day, but that doesn't seem to be too likely.

There are, however, a couple of key areas that could be altered in the proposal to improve it and make it more politically palatable.

First, allow for HDHP options. These options could mirror those in the WHP where cost sharing isn't applied to preventive care, the deductible is set at a reasonable annual level, and there's a pre-set level of funding in a HSA to allow for first-dollar coverage.

Managing this alongside comprehensive options could be difficult, particularly if people are allowed to switch between plans during an annual open enrollment period. Nevertheless, it's something that should be explored.

Second, explore new funding mechanisms. This is a big one, but it's also the one that would be most difficult to realize. Clearly the biggest substantive objections to Healthy Wisconsin were related to its funding, particularly mandating that all employers contribute a fixed amount to health care.

The reasoning for this mandate is simply that employer-sponsored health care has developed over years and years in this country, and simply abandoning it in one swoop is difficult. But, as I discuss in more detail here, severing the tie between health care and employment should be a goal that's right up there alongside universal coverage in any reform plan.

Third, get some active state Republicans on board. I realize it's highly unlikely anyone in the GOP leadership will sign on, but Republican support for fundamental health care reform isn't impossible.

After all, former Rep. Curt Gielow was a co-sponsor of the WHP and Rep. Terry Musser was a co-sponsor of the Wisconsin Health Care Partnership Plan. And, on the national level, Sen. Bill Bennett -- one of the most conservative Republicans in Congress -- has jumped on board with Sen. Ron Wyden's sweeping Healthy Americans Act.

And, along the same lines, the support of the business community is also key. Healthy Wisconsin and the WHP have some solid business support, but more always can be done. Wyden's Healthy Americans Act is another example on this front; it has the backing of some key national corporations, most notably the CEO of Safeway.

There are other details that also should be examined, such as including more health professionals on the board that oversees the new system, eliminating the use of special affinity groups, creating a mechanism for new businesses to be phased into the plan, and loosening or eliminating the restrictions on insurance company profits.

Needless to say, let's hope the Dems use this break from pushing health care reform as a working vacation.

The Good and Bad of Cost-Sharing

The Business Journal had an article the other day on hospital profits in the Milwaukee area. Here's the chart that accompanied the article:

Click for larger view.

The focus of the article itself was on the losses experienced by some hospitals, though all systems in the area except for Wheaton Franciscan -- whose losses were mostly attributable to the close of St. Michael's last summer -- did manage to turn a profit in 2006.

Another more nuanced theme in the article look into why profits decreased for most hospitals and systems between 2005 and 2006. To be sure, the only system to experience increased hospital profits across the board in 2006 was Children's Health System, and that's at least partly due to the fact that the board for that system consists of just one hospital.

The article pointed to four primary factors that have driven decreases in hospital profits:

1. Costs associated with hospital expansions
2. Continued poor reimbursement levels from state programs
3. Increased amounts of charity care due to more uninsured patients
4. Bad debt resulting from insurance plans that require significant cost sharing, such as high deductible health plans (HDHPs).

The last point is probably the most politically potent. On the one hand, it's a good reminder that simply making HSAs state tax free -- a major plank of the state GOP health plan -- isn't going to make health care any more affordable and, in fact, can have the reverse effect.

But, on the other hand, news that bad debt is increasing due to an increased use of HDHPs can unfortunately give others the false impression that high deductibles are inherently faulty.

To be sure, it's not the existence of cost-sharing that's the problem. But some key pieces need to be in place for cost-sharing to effectively reduce overutilization, which is its big promise.

For starters, there need to be tangible protections in place to ensure that preventive care isn't applicable to the cost-sharing and that the cost-sharing amounts are affordable for the participant, the latter of which can be done by setting the cost-sharing amount based upon income, ensuring that a significant portion of the high deductible is pre-funded, or, better yet, some combination of the two.

But just as important as these structural points is educating participants on their responsibilities. Much of the focus on educating participants is often on price transparency, which is certainly important, but there also needs to be some concern for simplifying and standardizing policies and procedures so that people know what to expect during the billing process.

According to the Business Journal article, part of the increase in bad debt is due to the simple fact the people don't understand what they're going to owe when they head in for care. This has prompted hospitals to start hiring financial counselors to work with patients when they get to the hospital to discuss payment responsibilities, which is decent, yet reactive, approach.

A proactive response would be to simplify and standardize health plans across the board, which is exactly what the Wisconsin Health Plan (WHP) does for HDHPs. In addition to fully covering preventive care and pre-funding every participant's HSA with a significant portion of the deductible, the WHP would put everyone in the same boat when it comes to cost-sharing, thereby reducing confusion when people go in for care.

Of course, there still would be some variance in coverage options depending upon the health plan that the participant selected, but what wouldn't change is cost-sharing levels -- everyone would know what to expect, which still ensures the personal responsibility desired by the right without sacrificing the necessary protections desired by the left.

Another Shot at Healthy Wisconsin Falls Short

John Torinus took another swing at Healthy Wisconsin in his Journal Sentinel column on Sunday. And, again, he missed the mark.

Torinus tries to use a Lewin Group report to criticize the Healthy Wisconsin plan. He writes:

The payroll tax to fund Healthy Wisconsin has been pegged at 14.5% - 4% from every employee in the state and 10.5% from the employer.

...

Now, 14.5% is a big number, but it's not the whole story.

On page 57 of the final Lewin Report, the initial payroll tax percentages are shown as 11.55% for the employer and 3.95% for the employee. That's 15.5% going in, not 14.5%.

It's true that page 57 of the final Lewin report puts the initial payroll assessment at 15.5 percent to start. But that report deals with the Wisconsin Health Plan (WHP), not Healthy Wisconsin.

This is an acknowledgement that Torinus awkwardly makes a few paragraphs later, and he tries to use it to his advantage by saying that the use of high deductibles in the WHP should really make it less expensive than Healthy Wisconsin; hence, the 14.5 percent assessment projection for Healthy Wisconsin must really be low.

To bolster his point, Torinus cites an insurance broker who makes the obvious point that premiums decrease as the deductible increases.

On the surface, it appears that Torinus has struck gold -- he's managed to use a key piece of evidence for fundamental health care reform against the Healthy Wisconsin proposal. However, if you read that evidence a little more closely, the point virtually crumbles.

The most basic reason that the WHP costs more than Healthy Wisconsin is because it covers more people -- 225,000 more, to be exact. That's a 6 percent difference, which is due to the fact that Healthy Wisconsin incorporates the BadgerCare Plus plan that would increase participation in state health programs, thereby decreasing the number of people who would be eligible for Healthy Wisconsin.

This has an impact on the assessment rate since the WHP would have more low-income participants than the Healthy Wisconsin proposal, at least as they're both currently written.

What's more, while it's true that the premiums for plans under the WHP should be cheaper -- and they probably are -- the fact that the proposal includes funding each participant's HSA with $500, at a total cost of $1.5 billion in the first year, dries up a good chunk of that savings. There are also administrative differences between the two proposals that have an affect on costs.

Here's (page 59) the cost breakdown for the WHP:

Click for larger view.

And here's (page 12) the cost breakdown for the Healthy Wisconsin proposal:

Click for larger view.

Bottom line, David Riemer and the people at the Lewin Group aren't trying to pull a fast one on the public with the Healthy Wisconsin proposal. The numbers make sense, though sometimes it takes a little more than just cherry-picking particular points in the 170-plus page Lewin report to see that.

But it was encouraging to see Torinus continue to speak positively, though in a veiled way, about the WHP. If he -- or, more importantly, the state GOP -- preferred to use that proposal as a starting point for discussions, it would be a big step in the right direction for health care reform in the state.

Getting Health Care Out of the Labor Market

Yesterday, Rick Esenberg took issue with a comment of mine regarding the rationale behind health care rationing in the US today.

Responding to my statement that "either your employer offers good coverage or it doesn't," Rick writes:

That's not quite right. Your employer does not offer good coverage or not based upon her astrological chart or whether she is a naughty or nice. She provides it if she needs to do so in order to attract the type of workers that she needs and can afford.

Of course, Rick's essentially correct that coverage is an employment benefit that's typically considered a facet of compensation, which is generally determined by the labor market.

But that's a rationale for the rationing of coverage, not care.

To be sure, there are a good number of people who would be able to utilize their position in the labor market to find new coverage if their current employer decided to drop their existing coverage. It'd surely be a hassle finding a new job, but it would be possible.

But, as health care becomes more and more expensive, there's an increasing number of people who can't easily find a new job to secure new coverage -- people who would be left without coverage, and subsequently without access to most care, if their current employer dropped their health benefits.

And that's how the rationing of care in this country is irrational. It's not determined by need or cost-effectiveness of the treatment, but instead by whether the patient can afford it (there is charity care available for some critical standalone treatments, though the cost of that care is just shifted onto those who do pay, which further contributes to the cycle).

What's more, the larger question remains, should health coverage really be dependent upon your position in the labor market?

One of the most intriguing features of reform plans like Healthy Wisconsin (HW) or the Wisconsin Health Plan (WHP) is that they would effectively sever the tie between health coverage and employment.

At the same time, however, this brings up an issue with the funding for plans like HW and the WHP. While they would separate coverage from employment, they wouldn't separate funding from employers. In fact, employers would be relied upon the most for funding under HW and the WHP.

This is a legitimate concern, and one that is largely borne out of the fact that health coverage has been largely paid for directly by employers in the US throughout the last century. Changing that in one swoop wouldn't be easy.

Of course, it's also true that employers wouldn't necessarily get stuck holding the bag entirely under HW or the WHP. Similar to the way that many employers are cutting benefits -- i.e., reducing compensation -- as health care costs go up in today's system, under HW or the WHP the compensation freeze or cut would just come from somewhere else (probably wages) if the employer assessment becomes too great.

But perhaps a better answer to this dilemma of how to separate health coverage from employment is the Healthy Americans Act (HAA) proposed by Dem Sen. Ron Wyden late last year and recently co-sponsored by GOP Sen. Bob Bennett. Importantly, the HAA also has the backing of some major employers, such as the CEO of Safeway, along with major labor unions, such as the Service Employees International Union.

The basic idea of the HAA is that employers would "cash out" their health coverage expenses in the form of increased wages for employees for at least two years. Individuals then would be required to purchase a private insurance policy or face tax penalties, which is similar to the individual mandate in Massachusetts.

This two-year "cash out" period is intended as a transition from coverage as an employer-based benefit to coverage as a personal responsibility.

After the two year period, employers would no longer need to pay the extra wages, and instead would pay an assessment based upon an equation involving the average regional premium rate, the number of FTE employees, and revenue per FTE employee. This assessment would make up only about 10 percent of the total funding for the system as a whole; so, while employers would still be contributing something directly, it would not nearly be as much as they would be contributing directly to a system like HW or the WHP.

Key to the HAA is the federal subsidies that would be given to individuals up to 400 percent of the poverty level to help pay for their coverage. These subsidies would be paid for by the employer assessment described above along with the elimination of the federal tax break for employer-sponsored health coverage and some savings to Medicaid that would come along with the plan.

It's unclear -- to me, anyway -- whether something like the HAA could be tailored to Wisconsin alone, though it seems worth a look, especially if getting health care out of the labor market is a goal, and it certainly should be.

More details on the HAA can be found here.

Is a Productive Health Care Debate Possible in Today's State Legislature?

The Brawler came across an interesting article the other day on the state GOP leadership's reaction to the Wisconsin Health Plan when it was initially announced in summer of 2005.

Here's a snippet from the article, which appeared in the June 16, 2005 issue of the Cap Times:

Despite its backing by [Rep. Curt] Gielow, a Republican, other Republicans quickly blasted the proposal as a big-government scheme.

Rep. Robin Vos, R-Racine, described the plan as a form of government-mandated "Hillary-care," referring to former first lady Hillary Clinton's health insurance proposal of the 1990s.

"It's hard to know what to say," Vos told Gielow. "Radical is a kind term for this program, in my opinion."

Rep. Leah Vukmir, R-Wauwatosa, called it "nothing short of a framework for socialized medicine in Wisconsin" that would create a "slippery slope of compulsory managed care and unending tax increases."

Sen. Ted Kanavas, R-Brookfield, said he was "outraged" by the "ludicrous" plan. "I do not want a system where a Madison bureaucrat decides on a whim what doctors I am able to see or who provides care for my family," he said in a statement.

"Socialism and more government should not be the way of this new millennium," he said.

This is interesting because many of the specific complaints conservatives have been raising about Healthy Wisconsin wouldn't be an issue under the WHP:

• Healthy WI was hastily thrown together and into the budget. The same couldn't be said of the WHP, which was made public over two years ago. And the WHP also has been brought before numerous public forums since its announcement.

• No detailed report on the estimated effects of Healthy WI exists. The same can't be said for the WHP, which underwent a detailed review by the Lewin Group resulting in a 170+ page report.

• Healthy WI doesn't include enough consumer involvement. The same can't be said of the WHP, which is entirely comprised of high deductible health plans. It's possible to haggle over the specific deductible amount and how much should be pre-funded into the HSA, but the basic idea of consumer-driven health care is on prominent display in the WHP.

There are other smaller complaints raised about Healthy WI that wouldn't exist under the WHP, such as the 92 percent requirement for private insurers, the use of fee-for-service plans, the existence of affinity groups, etc.

And if we could get the two sides of the legislature to come to the table over a proposal like the WHP -- I'm not saying they need to agree on it as is, but just come to the table over it -- it would be a major step forward for the health care debate in Wisconsin.

But, as the Brawler deduces from the above quote, the current leadership of the state GOP doesn't seem all that interested in coming to any table where a fundamental solution to our health care woes is on tap.

The WHP: A Level Playing Field with Choice & Personal Responsibility

If nothing else, the new Lewin Group report on the Wisconsin Health Plan makes the WHP the most well-vetted of any of the three fundamental reform proposals being considered by legislators.

All fundamental health care plans level the playing field for consumers, and the WHP is no different on this front. Leveling the playing field for health coverage is most beneficial to the less healthy, which tends to be the older population.

This chart from the Lewin report demonstrates how average health care costs increase with age:

Putting everyone in the same boat regardless of health status is the idea of community rating. The more healthy essentially subsidize the less healthy and in return they get the security of knowing that if (or, more likely, when) they or one of their dependants move into the category of less healthy, they will retain a solid set of benefits at an affordable price.

Community rating is going to be an aspect of any fundamental health plan, but there are a couple of aspects that distinguish the WHP from the rest of the field: choice and personal responsibility.

While the other two fundamental health care plans are essentially single payer, the WHP retains the multiple payer system. There are some downsides to this on the administrative side -- costs are typically higher under a multiple payer system -- the advantage is that it retains some level of consumer choice.

This choice is heightened under the WHP by the tiering that's involved; consumers can choose between plans in the first tier, which would be funded entirely through the WHP, or they can opt for broader coverage in one of the higher tier plans by paying the difference in the premium between that plan and the first tier plans.

In addition to choice, the WHP also retains a strong level of personal responsibility through its implementation of cost-sharing, specifically in the form of a high deductible. This cost-sharing ensures that while there is a social safety net for the less healthy that will be largely subsidized by the more healthy, there is still a place for personal responsibility in terms of both health care costs and a focus on wellness.

I've been critical of High Deductible Health Plans (HDHPs) before on this blog, but I've also noted that when structured with proper patient and consumer protections -- such as a reasonably low deductible, at least partial annual funding of the HSA, and no cost sharing on preventive care (all of which the WHP includes) -- they can be a good tool for keeping health care costs in check. More specifically, studies have shown that HDHPs can lower some of the unnecessary health care utilization costs that have contributed to our expensive system.

But the same leveling that makes the WHP -- and all fundamental reform -- so attractive is also what makes it a politically challenging issue. In any fundamental reform there are going to be winners and losers.

That's not to say there isn't plenty of winning and losing in our current system, and it's hardly questionable that the winning and losing would be less drastic after fundamental reform. Nevertheless, under fundamental reform, some people are going to see their coverage go up, while others will see their coverage go down. And that fact alone is going to cause political problems, even if it puts us in a better position than we are in today.

And the troubles don't end with just coverage. While those who are seeing their coverage decrease are also seeing their costs decrease -- although in the WHP they could always increase their coverage by moving to one of the higher tier plans or putting more money into the HSA -- those who are seeing their coverage increase are also seeing their costs increase. And it's this latter point that will probably prove the most politically difficult to overcome in the upcoming health care reform debate.

As the Lewin study makes clear, employers who do not currently offer health care benefits to their employees are going to get hit harder under the WHP than those who do. This isn't really a surprise. The Lewin Group predicts that most employers will be able to withstand the cost increases for health care benefits by reducing some other form of compensation, most likely wages.

Lewin estimates the average employer who doesn't offer health benefits now will reduce wages by about $2,800 per worker, while the average employer who does offer health benefits now will reduce wages by about $173 per worker (mostly because the WHP payroll tax will include wages for part time and seasonal employees who typically don't get health coverage today). But since employer costs would be tied to payroll level, Lewin estimates that the bulk of the wage cuts would be focused on the higher income levels, as this chart demonstrates:

This isn't to say, however, that the most paychecks would necessarily drop under the WHP. This is particularly true when tax cuts are taken into consideration. Not only would personal property taxes for busineses be eliminated entirely, businesses would also see their general property taxes drop by $213 million while households would see their property taxes decrease by $550 million in the first year. After these tax cuts are taken into consideration, it's likely many employers wouldn't find any wage cuts necessary.

It's also important to note that, in relation to the wage question, the savings associated with the WHP -- which the Lewin report placed at $8.9 billion over the first decade -- aren't really realized for the first couple of years after the plan is in place (see chart below). So while some wages may be impacted initially, the long term effect should be to strengthen wages in the state.

And it's also necessary to remember that these wage effects do not take into consideration the increase in worker assets that would come from the funding of HSAs by the state, which starts off at $500 annually and accumulates from year to year.

But, nonetheless, is it fair to expect that wages might decrease for some workers as a result of the WHP, even if only initially? If you consider health benefits to be a part of compensation, which most economists do, then the answer is "yes." In fact, many unions have opted for wage freezes, or sometimes cuts, in order to avoid greater cost sharing for health care benefits -- it's the same idea here.

But is it fair to those who really don't want health coverage and would prefer to just get the money in wages? There the answer -- at least on the surface -- is probably "no," but that can't be the only consideration when it comes to health care coverage. After all, just because someone chooses not to get health insurance doesn't mean that person isn't going to need health care at some point.

And when the uninsured person eventually does need health care -- and all of us do, at some point -- it's not like the costs of that care just go away. Instead, those costs get shifted to those of us who do have health insurance. How fair is that? It's the same basic idea as requiring everyone in the state to have car insurance if they own a car.

In the end, there are many complex and important points to debate and consider when it comes to health care reform. Fundamental reform will unquestionably have great overall benefits in the future -- over 99 percent coverage and $8.9 billion in health savings in the next decade highlight that fact -- but, as with any change, there will be some costs, especially up front, and those costs will effect certain segments of the population more than others.

It will be interesting to see what aspects of the WHP get included in the "unity plan" that's expected to be announced by Senate Dems in the next month. It's sure to level the playing field in a similar way as the WHP, but how much choice and personal responsibility it includes will be important aspects to focus on.

The WHP Goes Through the Actuarial Wringer

I'll leave the details to future posts, but it looks like the Wisconsin Health Plan stood up well in a 170-plus page review by the gold standard of health care actuaries, the Lewin Group.

There wasn't anything new to the overall structure of the WHP, which the Wisconsin Health Project discusses here and I discuss here, but some of the funding details were altered and the Lewin Group also provided a definitive say on the savings from the WHP, which amounts to around $8.9 billion over the first decade. And that's with providing coverage to over 99 percent of the Wisconsin population.

And the Lewin study also details how the WHP would result in a hefty property tax cut for homeowners and businesses -- to the tune of just under $1 billion -- which would be funded through pulling the "Rolls Royce" public worker health benefits into the WHP fold. I imagine that would be music to a fiscal conservative's ears (but I know better than that).

More to come later...

Comparing Federal Health Plans: Who Wins?

I haven't given much thought to health plans proposed at the federal level. Consensus is difficult enough to reach at the state or local level, it seems believing an agreement can be reached at the national level any time soon requires a leap of both faith and logic.

And by the time something does move forward in Congress and make it to the president's desk, the proposals that are currently before our federal government will be little more than a distant memory, anyway.

But a new analysis by the independent Commonwealth Fund of four major national reform proposals is still interesting because it provides a quick, yet thorough, glimpse into what federal reform would do and what it would cost.

The four main plans investigated were:

1. The Health Care Tax Reform Proposal (President Bush)
   
2. The Healthy Americans Act (Sen. Wyden)
   
3. Federal/State Partnerships Bill (Rep. Baldwin and others)
4. AmeriCare (Rep. Stark, Sen. Kennedy, and others)

Here's a handy chart that breaks down the coverage and costs involved in all four:

Putting the Federal/State Partnerships Bill up against the others probably wasn't the best thing to do since it's a proposal that depends almost entirely on state proposals that have yet to be defined.

But it's clear the other three plans, according to the Commonwealth Fund review (which was actually completed by the Lewin Group), would all decrease overall health system spending while increasing the number of insured.

Of course, the term "insured" doesn't always mean the same thing. Although the Healthy Americans Act and AmeriCare seek to extend comprehensive insurance, as the Commonwealth Fund report explains (emphasis mine), "The president’s proposal achieves savings by reducing the comprehensiveness of coverage and inducing lower utilization of services."

You can read more about that in the update of this post.

But one of the more eye-opening sections of the Commonwealth Fund report is where it breaks down the savings under each of the proposals for individuals/families based on income level.

Here's the chart for the Senator Wyden's Healthy Americans Act:

Here's the chart for the Rep. Stark's AmeriCare plan:

Here's the chart for President Bush's Tax Reform Proposal:

The trends there are unmistakable. And they're also consciously crafted by the sponsors of each proposal.

And don't forget the Healthy Americans Act and AmeriCare proposals would insure roughly five times the number of people as the Bush tax plan, and do so using comprehensive insurance rather than scaled down coverage.

These proposals aren't going anywhere, at least in the near future, but it is useful to look at where each puts its priorities for health care reform.

UPDATE: I should add that the Commonwealth Fund report is mostly a short term analysis. Long term prospects for each plan discussed are likely to be different.

The big long term problem I have with the Bush plan is that it provides incentives for the healthy to leave the insurance market. By doing so it concentrates the market risk on those less healthy individuals/families who remain, subsequently concentrating the cost on them. And the manner in which the tax deduction is indexed, over time a larger portion of people who remain in the insurance market -- i.e., the less healthy -- will see their taxes increase as annual premiums surpass the deduction cap.

As for AmeriCare, the short term savings come from reduced administrative costs associated with a single payer system. Whether these savings can be sustained over time by providing incentives for people -- and providers -- not to over-indulge in their comprehensive coverage is a big question.

It's my belief that the Wyden plan offers the most promise for short term and long term sustainability because it provides incentives for both remaining in the insurance market and being at least somewhat conscious of the health care choices that are made. How conscious, of course, is key to making sure spending is controlled into the forseeable future.

In a roundabout way, looking at the short term and long term propects of these federal plans really sheds light on the promise of the Wisconsin Health Plan. Not only does the WHP cover everyone and make sure the healthy remain in the market for risk pooling purposes, it also provides unquestionably strong financial incentives for people to be conscious of their health care spending without risking their health by encouraging them to bypass on preventative or emergency care.

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.

"Soviet-Style" Health Care

Caught in the midst of a Cold War time warp, Manitowoc County exec and state Rep. Bob Ziegelbauer (D-Manitowoc) had this to say the other day regarding health care reform in Wisconsin: "Do we want Soviet-style central planning, or do we trust individuals to make their own health care decisions. It's really that simple."

Didn't he get the memo? The terrorists are the enemy now.

Observe the difference: "Do we want al Qaeda-style sleeper cell planning, or do we trust individuals to make their own health care decisions. It's really that simple."

See what I mean? Much scarier, especially for the post-perestroika under 35 crowd, yet only equally as ridiculous.

(Side-Note: The Manitowoc Herald Times Reporter didn't put a question mark after the first sentence of Ziegelbauer's statement, which means it's either a typo or it was pretty clear to the reporter that the county exec/state rep really wasn't asking a question.)

Ziegelbauer went on to note that he's always urging his Mantiowoc County employees to sign-up for HSAs to save the county money and help them to be the best health care consumers they can be.

No word on whether Ziegelbauer realizes that one of the "Soviet-style central planning" bills before the state legislature proposes the use of HSAs statewide, or whether Ziegelbauer himself forgoes the comprehensive health care plan he's afforded through either of his public positions to sign up for a HSA.