01/2003 The Pulse

Published January 1, 2003

The most important, least reported outcome of last year’s elections are what happened in the state legislatures. According to preliminary results from the National Conference of State Legislatures (NCSL), the Republicans gained a total of 280 legislative seats across the country.

This is a stunning reversal of historical trends. According to NCSL, “the President’s party has lost an average of more than 350 seats in every mid-term election cycle since at least 1938.” The GOP gained control of five legislative chambers and tied in two others, for a total control of 21 legislatures (up from 17) and split control of eight legislatures, while the Democrats will now control 17 legislatures (down from 18).

Most of the states with Democratic control are in the South (including Alabama, Arkansas, Georgia, Louisiana, Mississippi, Oklahoma, Tennessee, and West Virginia) and are likely as conservative as some of the Northern Republican states.

The NCSL information was passed on to me by Jim Frogue at the American Legislative Exchange Council. I’m sure he will share it with you if you email him at [email protected].

Wisconsin AFL-CIO Wants Single Payer

You’ve surely heard by now that Oregon’s single-payer initiative was defeated by an eye-popping margin of 79 percent to 21 percent. [See “Oregon Voters Rebuff Single-Payer Measure,” Health Care News, December 2002.) One might think that would put single-payer to rest once and for all. But that would put an entire cottage industry of single-payer advocates out of work, so no such luck.

Instead, we continue to get minor variations on the theme. For instance, the Wisconsin AFL-CIO has decided this would be a swell time to launch a new plan “under which all workers in the state and their dependents would be covered under a single health plan paid for by assessments levied on employers,” according to Julie Jacob in AMNews. The article says, “details of the plan … have not been hammered out yet,” but proponents are confident it would lower costs by 25 percent.

Probably it would be unkind to ask how they can predict savings without knowing the details of the proposal. But the state medical society is joining in on the fun. It is blowing the dust off a 10-year-old proposal described as similar to the AFL-CIO proposal, except it would be paid for by that all-purpose easy answer: a tax on cigarettes.

The president of the Medical Society of Milwaukee County is described as being “intrigued” by the AFL-CIO proposal. She calls it, “Out-of-the-box thinking.”

Source: http://www.ama-assn.org/sci-pubs/amnews/pick_02/bise1111.htm

Fort Wayne Leaders Look to MSAs

Finding “new ways of thinking” is indeed the topic of community meetings all over the country right now. A meeting in Fort Wayne, Indiana was a good example.

It brought together employers, providers, and insurers to discuss how to “stabilize skyrocketing health care prices,” according to Doug LeDuc in the Fort Wayne News Sentinel. The chief medical officer for Anthem Blue Cross Blue Shield told the group hospitals “don’t face pressure to reduce costs through quality improvements, but actually are rewarded for mistakes with increased revenue when they are compensated for the corrective care they provide,” writes LeDuc.

A hospital administrator claimed new technologies increase costs, but another executive said “improvements in technology can also lower health care costs.” He also said medical savings accounts would help force more efficiency as employees “shop around for the best value in health care.” The publisher of the paper, Mary Jacobus, agreed, saying, “The patient is going to have to realize the cost or expense and have some financial investment into the cost.”

Source: The article is by Doug LeDuc. There is a fee for accessing articles more than seven days old. Go to http://wwwfortwayne.com

Denver Leaders like MSAs, Too

Anthem was also prominent at a similar meeting in Denver. This one featured a keynote address by Uwe Reinhardt, who said the U.S. can afford to pay more for health care. He predicts health care will consume 28 percent of GDP by 2030, up from 13 percent today, but “what else would you spend your money on? SUVs?”

The Denver Post reports Reinhardt also proposed a new tax of $120 billion a year to pay for health care for the poor, but says “health industry leaders … took a decidedly different approach.” They gave a “heavy endorsement” to “bare-bones health insurance coupled with medical savings accounts.” They also liked the idea of tax credits “to allow low-income residents to buy health insurance.”

Source: http://www.denverpost.com/Stories/0,1413,36%257E33%257E957891,00.html?search=filter

Fort Worth Business Moving to Consumer-driven Health

Consumerism in health care is certainly reaching the mainstream press. The Fort Worth Star Telegram, for instance, ran a big article in its business section describing what local employers are doing to hold down costs.

Writer Maria Perotin reports, “companies are unveiling health care plans that charge higher premiums, shift more prescription costs to employees, and offer incentives to workers who rein in health expenses.” Later in the article she says employees will pay 19 percent of their costs and 24 percent for dependents, up from 18 percent and 23 percent. That hardly sounds like a crisis, although a spokeswoman for the local branch of Consumers Union is apoplectic about it. “(Employees) might choose to forego care they need because they can’t afford the out-of-pocket costs,” she says.

Still, employers seem to be moving decisively towards consumer-driven care. The article features Nokia, with 4,000 workers in the area, which is offering a consumer-driven option. Other companies are using disease management programs, raising Rx co-pays, or simply switching insurers.

Source: http://www.dfw.com/mld/dfw/business/4434722.htm

Individual Market Enrollment “Exploding”

Meanwhile, the individual market is suddenly looking pretty healthy, according to Managed Care Week. The article says WellPoint has found stagnant sales in the large and small group markets, but “improvement in the individual segment as laid-off employees selected coverage from us while looking for a new job,” according to CEO Leonard Schaeffer.

Cobalt Blue CEO Tom Hefty is quoted as saying in Wisconsin “the individual market in the last two years has exploded. We are doubling sales every year in the individual market. …” He adds, “the trend towards defined contribution is going to accelerate that. If you look at a 30 percent employee contribution, a 25-year-old can buy cheaper individual coverage on his own.”

And Anthem CEO Mike Smith says his company added 54,000 new individual members during the first half of 2002. Humana’s chief actuary, John Bertko, says, “The intersection of the small end of the small group market and the individual market, at least in our perspective, shows that the individual will grow and probably the small end of the small group market is going to shrink.”

Source: The article is not available on-line. It ran in the November 4, 2002 edition of Managed Care Week. For more information. go to http://www.aishealth.com/Products/NewsMCW.html

More Private-Sector Expansion

An article by Ron Shinkman in Healthleaders reinforces the private-sector trend. This one cites the experience of Humana, Fortis, UNICARE, the Wisconsin Blues, and American Medical Security, all of which report individual enrollment increasing. An AMS spokesman says the company’s individual enrollment has “grown in recent years to a par with our small group business.”

The article notes the benefits aren’t as rich as group plans, and individuals are subject to underwriting, but the market provides a safety net for workers whose employers stop providing coverage.

Source: http://www.healthleaders.com/magazine/feature1.php?contentid=39743&categoryid=153

Greg Scandlen is assistant editor for Health Care News. Log on to http://www.ncpa.org/sub for Scandlen article archives. Email Scandlen at [email protected].