While Massachusetts receives national attention, Pennsylvania has a plan of equal merit
Midweek Perspectives: Health insurance for all — yes, we can
While Massachusetts receives national attention, Pennsylvania has a plan of equal merit
Wednesday, April 26, 2006 | Pittsburgh Post Gazette
By Steven Larchuk and Scott Tyson, M.D.
With great fanfare Massachusetts Gov. Mitt Romney, Republican, and his Democratic legislature have found enough common ground to pass a mandatory health insurance plan. Some have hailed it as a model for every state; others have challenged it as a sell-out to the private insurance industry. Regardless of its merits, the passage of the Massachusetts act establishes the important precedent that health-care reform can be tackled at the state level.
The ice is broken — and it’s time for Pennsylvania to act on its own proposal.
Pennsylvania Senate Bill 1085, the “Balanced and Comprehensive Health Reform Act,” is now in committee in Harrisburg. The Senate leadership and the governor await a sign that Pennsylvanians are serious about health-care reform.
There are significant differences between the Pennsylvania plan and the Massachusetts act, but the essential goal is similar: universal health care for all in their respective states. We have an opportunity to pilot two distinctly different programs to see which is most successful in achieving that elusive dream.
Under the Massachusetts act, everyone that’s not covered by Medicare or an employer’s group insurance plan must purchase their own private health insurance. Those earning less than three times the poverty level will be provided some level of government subsidy to help pay for insurance; those earning more are on their own. Anyone who fails to purchase private insurance must report it on their annual tax return and pay a fine equal to half of the cost of such insurance. This blends stick and carrot, but it relies upon the belief that private companies can be trusted to create “affordable” insurance policies.
In contrast, the Pennsylvania approach sees private insurance companies as part of the problem, not part of the solution. Instead of making the purchase of private insurance compulsory, Pennsylvania would substantially eliminate health insurance companies. Instead, our health-care dollars would be placed in a common trust fund managed by appointed health-care management experts, not insurance executives. Payment would be made directly and promptly to every provider, hospital, pharmacy and care facility.
This approach is similar to Medicare as it exists today. It would simplify administration and reduce waste. Every Pennsylvanian is covered regardless of who they work for, unemployment, pre-existing conditions or student status. This is what is commonly known as a single-payer system.
Under Massachusetts law, at least in theory, everyone will be covered, but health-care providers and patients will still have to navigate through a myriad of insurance plans, each with distinct rules, requirements and procedures. This unavoidably increases costs but assures profits for private insurers. This waste tends to be in the range of 20 percent for most large insurers, meaning that only 80 cents of every dollar goes to providing care. By comparison, Medicare manages on just a 3 percent administrative overhead and the Pennsylvania plan has a built-in statutory cap of 5 percent, assuring that 95 percent of every health-care dollar is well spent.
A multiplicity of insurers also encourages the denial of claims with one insurer able to shift the costs of an individual’s care to another insurer or to the patient’s own pocket. Anyone who’s been caught in the middle of this maddening game knows it is the very definition of frustration. By contrast, a single-payer system would emphasize service and efficiency, rather than maximizing the bottom line.
But wait, there’s more — much more. While champions of the Massachusetts act predict there will be some cost savings through more efficient usage of hospital emergency rooms, the Pennsylvania plan goes substantially further to shrink the need for health care and to address other aspects of our health-care crisis. For starters, the Pennsylvania plan envisions a robust wellness curriculum in our schools to put the focus on health, not just health care.
SB1085 also includes malpractice reform which assures swift and fair compensation where deserved and yet reduces malpractice insurance premiums to zero. This is unique to the Pennsylvania plan and will save billions of dollars currently wasted on defensive medicine. It will also make Pennsylvania once again an attractive place to practice medicine and help to stem the loss of our physicians, as recently documented by the Pennsylvania Medical Society.
Cynics may simply call this a choice between big insurance and big government. If that is so, then Massachusetts opts to trust its fate to big insurance. If Pennsylvania passes SB1085, or “single payer plus,” then America will have a golden opportunity to compare and contrast these two approaches in real time, with real people and on a national stage.
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Steven Larchuk, a lawyer in Sewickley, is chairman of the Pennsylvania HealthCare Solutions Coalition (www.pahcsc.org). Scott Tyson, M.D., is a Pittsburgh-area pediatrician and president of Pennsylvanians United for Single Payer Health (www.just-healthcare.org).