Health Care in the News Nationwide

Published September 1, 2006

Denver. The Denver Business Journal reported the local National Federation of Independent Business chapter was “going to Washington” to fight for Association Health Plan legislation that has been endorsed by 8,000 small business owners in Colorado. It’s an uphill fight: As the article reports, the bill was filibustered in the Senate in May and could not be brought to a vote. Coloradans hope to get Sen. Ken Salazar (D-CO) to change his position, with more than 8,000 small business owners in Colorado having signed petitions asking him and bill cosponsor Sen. Wayne Allard (R) to support the measure. Source: “NFIB takes coverage fight to D.C.,” by Amy Fletcher, Denver Business Journal, June 16,

Nashville. The Nashville Business Journal ran a “guest commentary” by local broker Tim Potter discussing things employers can do to hold down health care costs, including the following: educate and involve employees; collect aggregate health information and compile health risk assessments; provide incentives for healthy lifestyles; pay attention to depression; and educate workers about their carrier’s cost-containment programs. Potter doesn’t mention it, but for those employers who don’t want to be everybody’s mother, there is an easy way to hold down costs: establish a defined contribution approach and cap the expense. That way, employees can start to take responsibility for themselves. Source: “Health care benefits and the rising cost of doing nothing,” by Tim Potter, Nashville Business Journal, June 23,

Boston. The Boston Business Journal ran an article suggesting employers can take advantage of several tax benefits by complying with Massachusetts’ new mandatory coverage law. While employers are not required to contribute to the cost of employees’ health care coverage, “employees’ health care premiums are deductible in computing the employer’s own income taxes,” when paid through a Section 125 cafeteria plan, and as of January 1, 2007, employers will be required to set up such cafeteria plans. Hmmmm. Such a requirement sounds like an ERISA violation, and the notion that employEE-paid premiums are deductible for employERs is a new one to me. Source: “The tax benefits of mandatory health coverage,” by Morris N. Robinson, Boston Business Journal, June 16,

Houston. The Houston Business Journal ran an article about what the insurance industry is doing about the uninsured. Unfortunately, the article repeats the false claim that “50 percent of all bankruptcies are filed due to medical debt.” (What does it take to spike this kind of phony factoid once it is out in the public mind?) The article goes on to mention Costco and Wal-Mart selling lower-cost coverage, “medical tourism plans” (through which increasing numbers of American companies are sending their employees overseas for treatments that cost less than they would if performed in U.S. hospitals), and hospital discount programs–but it doesn’t say a word about real alternatives such as HSAs. Weird. Source: “Health insurance industry confronting crisis of the uninsured,” by Donna S. Clark and Kathleen P. Rubinstein, Houston Business Journal, July 7,

San Jose. The Silicon Valley Business Journal reports, “Legislators are closer than ever to creating a state health insurance program,” in California, but the article says it will probably not happen this year. The story discusses proposals to create a state-run single-payer system, but it says mandatory coverage (as in Massachusetts) is more likely to be enacted. The article quotes Marian Mulkey of the California Health Care Foundation as saying, “This seems to be where many people are converging.” But the article concludes any proposal will need Gov. Arnold Schwarzenegger’s (R) active support to become law. Source: “Universal insurance is closer,” by Timothy Roberts, Silicon Valley/San Jose Business Journal, June 23,

Kansas City. The Kansas City Business Journal interviewed a bunch of local leaders about their wish lists for rebuilding the nation’s health care system. Most of the responses are self-interested. A home care administrator wants Medicare to cover custodial care, a Blue Cross executive wants everyone to be covered through “a mix of private and public solutions,” etc. But there is some new thinking here as well. A “health care lawyer” wants patients, not insurers, to become the principal buyers of health care and wants “Government [to] step out of the way of free enterprise.” A university president wants “tax laws that favor employer-based insurance [to be] replaced with individual tax credits for health insurance spending.” So the dialogue is gradually expanding and moving away from the tired old bromides. Source: “Ideas for rebuilding health care system include some common elements,” by Rob Roberts, Kansas City Business Journal, June 16,

Columbus. In Columbus, Ohio, some physicians are looking at starting their own health insurance company to cover their practices. They are currently trying to raise $250,000 to conduct an actuarial study of the possibility. The docs are sick of the rising cost of coverage while their incomes are being reduced by Medicare, Medicaid, and commercial insurance plans, according to an article in Business First of Columbus. They feel there is a precedent in the formation of a carrier to provide malpractice coverage. Source: “Docs mull launching health insurer,” by Jeff Bell, Business First of Columbus, July 14,

Portland, Oregon. Writing in the Portland Business Journal on July 14, Jeff Closs, president and CEO of Benu Inc., which provides midsized employers with health plan choices in Oregon and southwest Washington, argues that while insurers compete for employer business, there is very little competition at the employee level. He writes, “this single-carrier, no choice system of health insurance leads to higher costs and dissatisfied customers.” He thinks the way to get insurance companies to compete for employees within an employer group is to pay “premiums that [are] commensurate with the number of chronically ill enrollees.” Closs runs a company that risk-adjusts premiums for different carriers within an employer group. Source: “Consumer competition creates lower health insurance costs,” by Jeff Closs, Portland Business Journal, July 14,

South Carolina. Consumers for Health Care Choices founding member Regina Herzlinger wrote an article for the July 14 issue of Harvard Business School’s ongoing series, Working Knowledge, in which she makes “The Case for Consumer Driven Medicaid.” Herzlinger cites South Carolina Gov. Mark Sanford’s (R) proposal to reform Medicaid by giving recipients a choice of coverage, including a consumer-driven approach. She notes that in the private sector, “the overall accomplishments of the consumer-driven plans are notable. They not only dramatically controlled cost increases, but also improved the health status of those with chronic diseases.” Source: “The Case for Consumer Driven Medicaid,” by Regina Herzlinger, Working Knowledge, July 14, 2006,

Greg Scandlen ([email protected]) is the founder and president of Consumers for Health Care Choices, a membership organization based in Hagerstown, Maryland.