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When You've Got Your Health INSURANCE You've Got Just About Everything

 

Background

Access to health care has historically been one of the dividing lines between the "haves" and the "have nots". Over the past century, the progress in medical care and medical technology has made health care much more affordable and effective. The introduction of health insurance in the mid-1900s vastly expanded access to health services which, in turn, contributed to a major increase in life expectancies and the quality of life.

Access to health care is so linked to having a long and healthy life that the American culture has broadly recognized it as more of a right than a commodity. Public opinion polls routinely rank health care coverage and access among the most important national issues. Because there is no excuse for withholding care for the sick -- other than, plainly, its cost -- denial of care has often been viewed as immoral, compelling outrage by most sectors of society. These views gave birth to Medicare, Medicaid, a requirement that hospitals treat indigents who come to their emergency rooms, a prohibition against a hospital "dumping" indigent patients at another facility, and many other protections and services.

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In the early 1990s, the Clinton Administration tried to take the logical next step, ensuring that all Americans have access to health care by one means or another, whenever it is needed. Rather than try to deal with fragments of the issue on a piecemeal basis, they tried to address the entire system through one cogent, coordinated system. Of course, that proved to be its undoing. Even though America believed health care to be a right, so many financial interests were impacted that they coalesced long enough to defeat the effort, largely by scaring millions into believing the delusion that health care would be rationed and become much more expensive.

But the social and philosophical underpinnings of that effort remain. The denial of care still compels outrage. The notion that health care access is directly linked to a family's ability to pay for it is still interpreted by most as a problem which must be solved. America is still faced with the "three-legged stool" of health care delivery -- access, cost, and quality -- the failure of any one of which translates to the stool falling over. Unfortunately, our government has been addressing these factors in the same way that the carnival plate-juggler responds to his plates: just keep rotating among them to keep them from hitting the ground.

Since the mid-1990s, the massive movement toward consolidation in the ownership of health care facilities and enterprises has also affected access. Most notably, managed care systems and hospitals have come under the ownership of a progressively smaller number of huge corporations. The emphasis on maximizing profits, under the deceptive guise of protecting the interests of corporate shareholders, has also rabidly infected the industry. Even hospitals, once viewed as the sacrosanct bastion of altruistic service to those in need, repeatedly switched to "for profit" status.

Access is perhaps most directly limited by the practice of "redlining", by which an insurer offers its product only to particular neighborhoods while refusing to cover those in other neighborhoods. It is venomous when practiced in connection with health insurance, just as when practiced in homeowners insurance. Although insurers typically try to explain such discrimination in terms of business practices and risk, the only business practice involved is the desire to avoid people who are less wealthy, less healthy, and more likely to actually use the services which are covered. Painfully, when it comes to health insurance, these circumstances are linked: with less money, there is less likelihood of having had lifelong preventive health services. Thus, there is more of a chance that services will be needed.

To allow "redlining" in health insurance and health care perpetuates the problems that have become endemic in these areas. Redlining increases the costs throughout the health industry, to the people who do have health insurance, and to the Federal government, through cost shifting: charging more to those who do have coverage. In short, "redlining" is in direct conflict with the principle of health care as a right and as a moral imperative.   The bottom line is that access is increasingly more limited. Consumers have fewer choices and have become much more vulnerable to the caprice and corporate practices of the owners and managers. Ironically, the future of health care in the US that was articulated by the opponents to reform in 1993 and 1994 – rationing, restricted access, fewer choices of providers, and higher total costs -- materialized, but it was due to the absence of reform, rather than its presence.

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Ideas / Solutions

There is an urgent need for creative steps that open the doors of access, while still allowing health care providers and health plans to flourish in a competitive environment. Along with the rights of industry to act in their best interests, it is also incumbent upon them to honor the obligations that accompany certain actions.  

First of all, any time that a hospital, managed care system, or other health care organization wants to shift from "non profit" to "for profit" status, or wants to acquire and absorb another system or organization, it should trigger a requirement that the entity adopt a community that is underserved. The enterprise should be assigned by the state regulator to a geographic community that the regulator determines, through a public process, to have an inadequate number (or significantly lower than average percentage, per capita) of health care professionals or facilities. This requirement could derive from Individual states enacting laws to assign this responsibility to their insurance and health plan / HMO regulators, or by the Federal government legislating a directive to the states that they do so, perhaps as a contingency for Federal health care funding.

The number of residents to be served by the "adoption" program should be a uniform percentage of the individuals that the "for profit" or consolidated entity seeks to serve within the state: perhaps 20 percent. For example, if a hospital that serves 50,000 patients per year in an affluent suburb wants to become a "for profit" hospital, the state regulator would condition approval on the hospital setting up a clinic that is designed to serve 10,000 patients per year in an underserved, urban community. If a health plan that covers 50,000 insureds seeks to acquire or merge with another competing health plan that covers 25,000 insureds, then the regulator should assign to the combined company an underserved locality and instruct it to accept 15,000 people. Those 15,000 could enroll as individuals, small businesses, or small groups at the same rates that are charged for similar sized groups in the health plan’s preferred-coverage localities.

Second, since the merger of managed care systems or other health care organizations can, by its increased market share, pose a real threat to competition, consumer choice, and availability of services, the regulator should pose some key conditions on the merger. First, the expanded entity should be required to accept for coverage any individual, family, or business in the entity's service area that applies for coverage. Second, the service area would have to be approved by the regulator, so as not to exclude communities of low-income or potentially high-risk individuals by “redlining” away from them. The approved service area would include both the insurer's proposed service area and any additional contiguous or expansion of areas that the regulator determines is appropriate in order to protect against "redlining". Third, the regulator would be empowered to direct the health plan to, in effect, adopt specific underserved communities into its service area to proactively reverse the impact of past under-service and “redlining”, even if such area is not contiguous to the proposed area.

Mechanisms such as these would not -- and should not -- curtail the current trend toward consolidation and "for profit" operation, as that would be contrary to our economy's competitive principles. However they would -- and should -- ensure that actions taken by health care enterprises to enhance corporate health do not sacrifice the public's health in the process.

 
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