Conn. innovation should start with health care
The availability of affordable health care for the people of Connecticut is necessary to our health and well-being. One proposal has been a public option where individuals can purchase or get health insurance at a reduced price through the state. This is the wrong approach because it will lead to a government run and managed health care system. Other failed options to reduce costs include the strategy of simply paying less and letting the system figure it out. This has only lead to lower quality and less available care. The real solution lies in understanding why health care is so expensive and making changes that lower costs while preserving availability and quality. There are three causes of high healthcare costs that can be fixed at the state level; over regulation; consolidation with reduced competition; and the ability of individuals, small businesses and the self employed to band together to negotiate bulk contracts with lower premiums.
Health care is an over-regulated industry with a significant percentage of health care dollars and manpower devoted to dealing with obsolete and ineffective regulations. For example the average physician devotes between 10-20 hours per week or about two days per week on regulatory compliance. That time would be better spent caring for patients. Hospital systems, nursing homes and ambulatory surgery centers have the same problem sometimes on a larger and more costly scale. The governor or the state legislature should immediately form a task force that would meet with the hospitals, nursing homes, ambulatory surgery centers, physicians and other health care providers to determine which state regulations can be eliminated or revised to lower costs while still ensuring patient safety.
Private practices and community hospitals the mainstream of care a decade ago have been replaced by the creation of large hospital systems. On the positive side this enables the former community hospitals which are now components of larger systems to offer more advanced and comprehensive care. The larger systems also have more bargaining power with insurance companies and there is as higher costs associated with the consolidation. According to a study by the Massachusetts Attorney General there can be up to a 300 percent difference in insurance payments without improvement in quality based on bargaining power. We need a system where patients and physicians have a choice how they will receive health care. We also need competition to keep costs down. Unfortunately our 100-plus-year-old antitrust laws that are designed to preserve competition have had the opposite effect of reducing competition in healthcare. Under the “state action doctrine,” states can take over the supervision of antitrust laws. They can redesign them to innovate and increase competition and lower costs. One example of this concept is the Minnesota Healthcare Cooperative Act.
The public option does allow individuals to take advantage of the state’s ability to purchase health insurance in bulk at lower premiums. But it will lead to the disappearance of private health insurance and lead to a government run healthcare system. Bureaucracy, subsidies paid for by higher taxes and the politicization of health care priorities will follow. What Connecticut needs to do instead is to empower individuals, the self-employed and small businesses to form buying groups or other innovative models can negotiate with multiple insurance companies to get the lowest premiums. This was done in the past when we had association health plans. These disappeared with the ACA. We need to resurrect the concept of group purchasing in a different form.
The three ways to reduce health care costs described can significantly reduce health care costs without, without reducing quality or access. Everyone in Connecticut will benefit from lower health care costs. It will also make Connecticut better able to retain and attract new businesses. Connecticut must become a state of innovation and not stagnation if we are to prosper in the 21st century. Health care innovation is a good place to start.