Economy & Economic Development  April 9, 2010

No reform to health care, critics say

The head of Banner Health Systems, which owns McKee Medical Center in Loveland and operates North Colorado Medical Center in Greeley, is among those warning that the new health-care overhaul will take a toll on delivery of care without delivering the promised reforms.

“The stress and strain on the (health-care) delivery system will be pretty significant,´ said Peter Fine, Banner Health president and CEO. He said the strain will come from potentially 32 million new patients who will be covered under the Patient Protection and Affordable Care Act signed into law by President Obama in late March.

“Who’s going to take care of them?” Fine asks. “Family physicians are already hard to find. They’re going to go back to the emergency room, and you haven’t changed the system.”

Fine said the new law is “really about health industry reform, but you haven’t changed the delivery system.”

Fine maintains the new law will have negative impacts on hospitals, family doctors and state Medicaid programs as more people qualify to receive care as the law begins to take effect over the next four years.

“The other thing that’s very disconcerting is the additional pressure on states to pick up Medicaid coverage,” he said. “The states will still need to come up with Dollar One to match Medicaid.”

Medicaid, passed as part of health-care reform in 1965 along with Medicare for seniors, is a program whose costs are shared by the state and federal government. Under the 2010 reform, the federal government will pay the full cost of newly eligible Medicaid recipients over the next three years, according to an analysis by HealthLeaders, a provider of health-care information.

Mixed feelings

Fort Collins family physician Cory Carroll, M.D., a strong proponent of a national single-payer system like that used in Canada and other advanced countries, has mixed feelings about the new law.

“I’m ecstatic that we’re beginning to talk about this in a meaningful way, although I’m disappointed that the public option wasn’t included,” he said. A so-called public option was passed by the U.S. House of Representatives but could not find enough votes in the Senate and was excluded from the final bill.

Carroll shares Fine’s view that there won’t be enough primary care doctors to serve the millions of additional people who will be covered.

“We don’t have the capacity to take care of all these new people,” he said. “This is going to point out that defect and we’ll see more emergency room care. I hate to say it, but this (law) is not going to have any real significant impact on the cost of health care.”

Carroll said he thinks the health insurance companies – who fiercely opposed the public option out of fear that a government-run plan would drive them out of business – were the real winners.

“They won because they wrote the law,” he said. “I’m disappointed and I’m frustrated by the fact that there’s overwhelming evidence that there are better outcomes in a single-payer system.

“I think a public option would have allowed for more competition,” he added. “A for-profit system just doesn’t work in health care.”

Boon to insurance industry?

While some aspects of the new law will go into effect immediately, others will be phased in over the next several years. The bill does include some real reforms, such as no longer allowing insurance companies to deny coverage because of a pre-existing condition or to drop a policyholder because of an expensive illness.

Those reforms will cost insurance companies more, but on the other hand the industry will gain millions of new customers because of the law’s requirement that most people carry insurance, including young, healthy people who often don’t buy it.

Robert Zirkelbach, a spokesman for American Health Insurance Plans, said the insurance industry does not regard the law as a boon to its bottom line.

“Getting more people covered is a step forward, but this legislation won’t reduce health-care costs,” he said. “It imposes more taxes and regulations that will increase the cost of coverage.”

Several insurance companies across the nation have been seeking big rate increases in anticipation of the new law going into effect. In Michigan, some insurance companies have asked for 56 percent premium increases while companies in California have sought rate increases as high as 39 percent.

Zirkelbach said rate increases are needed because of the steadily rising cost of delivering care. “Premiums are increasing because medical costs are soaring and younger people are dropping out (of coverage) due to the economy,” he said. “Our members are seeing rate increases at hospitals of more than 40 percent and there’s no focus on those increases. Unless there’s greater focus on the underlying costs of medical care, health-care reform won’t be sustainable.”

Small business attack

The new law aims to help businesses, particularly small businesses, cope with the ever-rising cost of employer-based health insurance coverage, where premiums have more than doubled since 2000 – rising three times faster than wages.

Starting this year, businesses with fewer than 25 employees will be eligible for new tax credits that would cover up to 35 percent of their health insurance premiums. It’s estimated that about 60 percent of Americans get their health insurance through their place of employment.

But small business has been reluctant to embrace anything about the new law. Tony Gagliardi, Colorado chapter director of the National Federation of Independent Business, has nothing good to say about the law.

“From NFIB’s standpoint, this is really about the biggest tax increase in history,” he said. “It’s a job-loss bill that will do very little. This is nothing but an all-out attack on the health industry and small business.”

Gagliardi said new paperwork requirements will cost small business, as owners are forced to hire consultants to deal with the complexities of the law. He also notes that businesses with more than 50 workers that don’t provide government-approved coverage by 2014 will face a tax of $2,000 per worker.

“This isn’t going to reduce (health-care costs for business) or slow it down,” he said. “This will kick it into high gear.”

The head of Banner Health Systems, which owns McKee Medical Center in Loveland and operates North Colorado Medical Center in Greeley, is among those warning that the new health-care overhaul will take a toll on delivery of care without delivering the promised reforms.

“The stress and strain on the (health-care) delivery system will be pretty significant,´ said Peter Fine, Banner Health president and CEO. He said the strain will come from potentially 32 million new patients who will be covered under the Patient Protection and Affordable Care Act signed into law by President Obama in late March.

“Who’s going to take care…

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