For several years now, both state
and federal lawmakers tried to score points with voters by piling mandates
on health insurance plans. From setting minimum hospital stays for women
who give birth to meddling in pharmaceutical drug coverage, the political
class claimed it could snap its fingers and make health care problems
disappear. Unfortunately the bill
for this political meddling is now past due.
A recent survey by Dun & Bradstreet
Corp. revealed that only 39% of small businesses now provide health care
benefits to their workers compared to 46% in 1996. From l996 to 1997 the
percentage of uninsured Americans increased from l5.6% to 16.1%. Why are
more Americans uninsured? Because, once again, medical costs and health
insurance premiums are rising.
According to a survey by KPMG Peat
Marwick, rising medical costs caused insurance premiums to jump 3.3% this
year. In an article on the growing problem, Business Week cited
Thompson Marine Transportation Co. in Morgan City, Louisiana, which operates
tugboats. Thompson Marine saw insurance premiums for its 25 workers increase
50% this year. Although most small businesses won’t drop insurance coverage
altogether, they are asking their employees to assume more of the costs
of such insurance plans. Many employees are deciding the cost is simply
So what is the government’s big
solution to the dilemma of increasing costs of health insurance premiums?
Add more mandates. The big piece of legislation on the horizon is the
so-called Patient Bill of Rights. Proposed by President Bill Clinton,
both Democrats and Republicans are offering competing versions of legislation
that would mandate even more spending by HMOs.
In order to keep medical costs
down, HMOs have created a private sector version of Clinton’s own 1994
proposal for reforming the health care system. HMOs decide which medical
procedures, drugs and other items they will cover. If patients want something
that isnt approved, they’ve got to pay for themselves (which is
the primary difference with the Clinton scheme, which would have left
consumers with no way to go around the government to obtain health care).
The various Patient Bill of Rights
make such cost controls virtually impossible. For example, one of the
ways HMOs keep medical costs under control is by authorizing emergency
room visits only for genuine life threatening emergencies. Usage of emergency
rooms for nonurgent medical problems is a serious problem — some studies
suggest that close to half of all people who go to emergency rooms do
so for routine, nonurgent care.
The various Patient Bill of Rights
proposals eliminate the ability of HMOs to save costs by preventing such
visits. For example, if I call my HMO tonight and complain that I have
an intense headache, they will tell me to take an over-the-counter pain
killer and see a doctor the next day if the pain persists. According to
some doctors and patient advocates this is a dangerously callous attitude
– my headache could actually signify any number of life threatening conditions
such as a brain aneurysm or tumor. Any number of seemingly nonurgent symptoms,
after all, could represent a life threatening problem.
True as that may be, any health
care system which buys into that thinking will soon find medical costs
spiraling out of control. And thats just what the Patient Bill of
Rights proposed to do open the floodgates of medical spending.
The end result will be a sort of
government-sponsored shell game with health care. As HMO spending increases,
so will premiums and fewer people will be able to afford insurance. This
decline will be used to justify ever more expensive regulations, which
in turn will raise the cost of insurance and so on in a vicious cycle
that will likely be resolved only with a return to free market principles
for medicine or, more likely, the continual socialization of health care
along the lines envisioned by President Clinton’s 1994 proposals.
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