A Long Way to Go Before Crossing the Finish Line
This op-ed article by Michael Dudley on health reform appeared in the March 23rd issue of “Inside Business” in Norfolk. It also appeared in the Harrisonsburg “Daily News Record” and Roanoke’s “The Roanoke Times.”
While businesses and individuals have been anticipating the changes to come with health care reform, it’s still too soon to count on anything. Health insurance companies have had the “pedal to the metal” for the past two years racing toward Jan. 1, 2014, preparing for the date when the most substantive provisions of health insurance reform enacted in March 2010 go into effect.
The Supreme Court will hear oral arguments in late March and issue a ruling by June as to the constitutionality of “individual mandates,” the requirement that every American citizen must purchase health insurance or pay a penalty for not doing so.
The Supreme Court could rule in one of three ways. The first possible ruling is that mandates are constitutional, and in that case, health plans and insurance companies will continue driving forward to implement the provisions of the law.
The second possibility is that the court will rule that mandates are unconstitutional and the law is inextricably linked to mandates, making the entire law unconstitutional. In that case, health plans will put the brakes on health care reform and come to a dead stop as the law is thrown out. Health plans can live with either of these “stop or go” rulings. But the third “halfway” outcome could send health care reform hurtling forward without any wheels on the car. That is, the Supreme Court could rule that the individual mandate is unconstitutional, but the remainder of the law is constitutional.
This outcome would save the popular, but costly, provisions – such as covering adult children to age 26 through parents’ insurance, lifting constraints on pre-existing conditions, eliminating lifetime maximum payouts and other provisions consumers like.
However, with the individual mandate requirement removed, many healthy Americans would delay their purchase of health insurance until they really need it. A family might skip purchasing health insurance unless or until they know they are planning to have a baby or need an expensive operation.
This “halfway” decision by the Supreme Court would increase costs astronomically for everyone and, as a result, premiums for everyone would skyrocket.
Should the Supreme Court rule this third way, there are a variety of market-based solutions that may make the out-of-control race car slow down, without destroying the health care system. One idea is that health plans and insurance companies might manage their risk by implementing defined enrollment periods, perhaps opening enrollment for only one month every 12 or 18 months. Individuals and families that choose not to purchase insurance will have to wait to purchase health coverage for 12 or 18 months, and the premium will be significantly more expensive the longer they wait.
Ultimately, Optima Health supports the intent of health care reform to extend health coverage to tens of millions of Americans and a number of other consumer protections. However, even if these goals are accomplished, the root cause of the problem of unaffordable health care will not be addressed until doctors, hospitals and health insurance plans agree to work together to transform the delivery of health care services, such that the quality of health care services is enhanced, each patient’s experience with the health system is improved and the total cost of care is reduced.
Unfortunately, health insurance reform as passed does precious little to encourage solving the root cause of expensive health care.
Perhaps it is time to tackle this problem before the government intervenes. Just as preventive auto maintenance keeps a car running smoothly and efficiently, doctors, hospital and health plans could do much to prevent the further heavy hand of government intervention.
Michael Dudley is president and CEO of Optima Health, and Sentara Healthcare senior vice president. He serves on the boards of Hampton Roads Chamber of Commerce, Health Plan Alliance and America’s Health Insurance Plans, and is a fellow with the American College of Health Care Executives. He can be reached by email at firstname.lastname@example.org.