Doctors Support Market-Based Health Care

Published November 1, 2001

At the Washington State Medical Association’s (WSMA) annual meeting in early October, a majority of some 200 doctors present voted to continue supporting the existing market-based health care system, while still striving for universal coverage.

The group resisted the call by some physicians to push for a new health care system in Washington—one in which the state would tax businesses and residents to pay for all health services in a plan often described as “everyone in, no one out.”

Such a single-payer health system, promoted by the Health Care 2000 coalition, would replace not only private health care arrangements in the state, but the public health insurance system as well.

Thumbs Up for MSAs

Reiterating its support for universal health care coverage, the WSMA said such coverage should include:

  • Affordable “bare-bones” health insurance, including the repeal of state insurance mandates currently requiring a variety of nonessential benefits and providers of other services.
  • Refundable tax credits for people buying individual insurance policies.
  • Elimination of the federal cap on the number of Medical Savings Accounts, which are given preferential tax treatment.

The WSMA also declared it would press the state to increase Medicaid payments to physicians by making Medicaid’s reimbursement rates as high as Medicare’s. And the association would support legislation eliminating the business-and-occupation tax on payments physicians receive from Medicaid, Medicare, and the state’s Basic Health Plan.

According to news sources, the WSMA’s new president, Dr. Sam Cullison, stated, “We remain committed to access to affordable insurance for all, but our focus must be on saving medical practices from further deterioration.”

The Problem Is Money

Underlying all the issues is money. Physicians believe the legislature budgets too little for Medicaid and the Basic Health Plan, which in turn fail to pay them enough to cover the costs of their services.

Most association physicians question whether they would fare better under a single-payer system. Many suspect they would not. If the government under-funds its health programs now, they worry, how can it be expected to do any better under a single-payer for all health services?

“Many of the difficulties we face today come from the government’s penchant to over-promise and under-fund its programs,” observed Dr. Nancy Auer, immediate past president of the WSMA, in a report to the association’s board. Her observation is supported by an independent report, “Health Care Financing and Delivery System Options: An Impartial Evaluation,” conducted last year for the association by respected Seattle analyst Lance Heineccius.

In weighing the advantages and disadvantages of a state single-payer system, Heineccius says under such a system, payments to physicians and other providers of health services “would likely decline due to limited funds available to the state for the program.”

Over time, Heineccius predicted, the government would more than likely reduce payments to providers to balance the state budget, rather than increase taxes and increase patients’ financial responsibility. The ultimate cost-control would be the rationing of many health care services.

Universal Infrastructure Exists

The debate over what to do about health care financing and health care delivery has been going on for years. Last year, the WSMA created a task force on health care financing reform, guided in part by the association’s goal of universal insurance coverage for all Washington residents.

Auer recently reported to the association’s board the seven-physician task force decided “much of the policy and legislatively created infrastructure to get universal access to affordable health insurance and to services is already in existence.”

That infrastructure includes Medicare, Medicaid, the Basic Health Plan (for the state’s working poor), the Medically Indigent Program, employer-sponsored coverage for employees, and the revived individual insurance market.

What Should Be Covered?

One of the key problems with the existing system, according to Auer and the task force, is everyone wants everything to be covered by insurance. As a result, insurance products are burdened with regulatory demands in the form of unfunded benefit mandates. “Health care does not operate in a vacuum,” agreed Joseph Bast, president of the Chicago-based Heartland Institute. “When consumer demand is replaced with regulatory demand, the consumer loses.”

“The business community will testify that the lack of affordability of many of the products in the marketplace is a leading reason for the lack of coverage for many employees,” Auer noted.

At a minimum, the task force recommended coverage to include:

  • primary care
  • specialty care
  • physician and mental health services
  • inpatient hospital services
  • prenatal and maternity services
  • home health and hospice services
  • prescription drugs
  • durable medical equipment
  • diagnostic imaging and laboratory services.

Senseless Mandates

The task force’s package excludes many state-mandated health care services. For instance, Auer said the task force questioned “the value of financing massage therapy as a benefit in an insured product.”

“What is the value to society when in 2000, Regence BlueShield paid out more for massage therapy than for oncology services?” Auer asked. “To the task force, this simply does not make sense.”

The debate over whether to reform or replace Washington’s health care system is certain to continue. The Health Care 2000 group will likely press on with its agenda, despite two failed attempts last year to collect enough signatures to qualify a single-payer initiative for presentation to the voters and to the legislature.

During the 2001 legislative session, the group’s initiative was introduced as Senate Bill 5768. The bill failed, but Independent Business Association director Gary Smith recently cautioned his members: “This concept is much more than just an idea. It is probably less than 10 votes away from becoming law in Washington state.”