Study Identifies States’ Health Policy Reform Successes … and Mistakes

Published December 1, 2007

On September 4, a public policy research group in Kansas released a study showing which health care reforms are–and are not–working in other states.

The study, Avoiding Reform Pitfalls: An Rx for Healthy Health Care, by Sarah McIntosh, vice president of programs for the Flint Hills Center for Public Policy, also offered suggestions for what Kansas should emulate and avoid.

McIntosh reviewed Massachusetts’ universal health care law, which took effect this summer; Florida’s Medicaid Reform Pilot Project; California’s universal health care proposal; a new Missouri law allowing small business owners to make pre-tax contributions to employees’ individually selected policies; Oklahoma’s plan to allow for Personal Health Accounts and the All Kids Act; South Carolina’s Healthy Connections plan; and Maine’s Dirigo Health Reform Act.

Kansas, McIntosh noted, currently is considering reforms for the 10 percent of its residents who are reportedly uninsured.

“Kansans must be aware of the costs of health care reform, both from a taxpayer standpoint and as individuals purchasing health insurance,” McIntosh writes. “While some ideas may sound good at first, the realities may prove to be quite the opposite. That is why analyzing how other reforms have played out and the true consequences these plans create is vital to forming sound policy decisions in Kansas.”

Good Models

Learning from other states’ successes and failures is a good strategy, said Devon M. Herrick, Ph.D., a senior policy analyst at the National Center for Policy Analysis in Dallas.

“Looking at what various states have done is a good way for other states to avoid costly mistakes,” Herrick explained.

“Take Massachusetts, for example. California is modeling its state health proposal on what Massachusetts has done, [but] all the while, Massachusetts is having trouble enforcing its individual mandate.

“A better model to emulate is what South Carolina and Florida are doing to cover the uninsured and low-income populations in the state,” Herrick added.

Consumer Choice

According to McIntosh, the goal of South Carolina’s Healthy Connections plan “is to empower the beneficiaries with more control so that they can pick the care that best fits their needs. … This ensures better health outcomes and reins in the growth of health care costs.”

Meanwhile, Florida is using consumer-driven health care options–such as having the state allot beneficiaries a risk-adjusted credit, which they can use to buy both routine and catastrophic health care coverage from private providers.

“While this program is relatively new and effects of the expansion are yet to be seen,” McIntosh writes, “early indicators suggest that Florida is on the path to a healthier health care system.”

More Options

“Lawmakers and the public are quick to equate health care with health insurance. This is a misnomer,” McIntosh writes in the study. “But if health insurance can incorporate the principles of responsibility and choice, it should augment the quality of health care.”

The study notes health care should not be “one size fits all.” For example, women don’t need their insurance to cover prostate exams any more than men need it to cover Pap smears. And while some individuals need to visit a doctor only once a year, others visit often.

“What would happen if the government mandated that everyone pay the same amount and then handed out all different types of vehicles?” McIntosh writes. “Many people would be unhappy while a few would hit the jackpot. People would not stand for having the government take their money and choose the car they got to drive. Why should the government be allowed to control those choices?”

Good Suggestion

Before adopting any policy, McIntosh writes, the Kansas Health Policy Authority (KHPA), legislators, and citizens should carefully consider their options.

“The tendency is to just do something,” McIntosh wrote. “But if the wrong ‘something’ is chosen the result can be more devastating than sticking with the status quo. Instead, the KHPA should consider all of the options for health care reform while studying reforms in other states. Legislators should examine the benefits of consumer-driven health care and give individuals control over their own health insurance.”

Diana M. Ernst, a health care policy fellow at the Pacific Research Institute, a think tank in San Francisco, applauded that approach.

“McIntosh has written a thorough piece summarizing various efforts in the states to reform health care, noting that this is ‘federalism at work,'” Ernst said. “Time will only tell which health plans actually work, however. The lesson we can learn is that the urgent desire to implement ‘universal coverage’ is costly, challenging for parts of the population that are taxed as a result, and ultimately does not fix the problem.”

Dr. Sanjit Bagchi ([email protected]) writes from India.

For more information …

“Avoiding Reform Pitfalls: An Rx for Healthy Health Care,” by Sarah McIntosh, Flint Hills Center for Public Policy, September 4, 2007: