• Background discussion of ObamaCare
• May 2014 National meeting of AAPS at Marriot Hotel (MOM) Mpls.
• Outline of MPPA medical system reform proposal.
1. Introduction of those present: Lee Beecher, President, Peter Nelson, Mike Ainslie, Don Gehrig, Dave Racer, Hannelore Habrucker, Gabriel Komjathy, Bob Geist.
Peter Nelson discussed the various loopholes in PPACA (ObamaCare) for defined contribution plans, but that these had been cut down by the IRS. He is preparing a paper on the subject.
Likely pre-election political maneuvers were discussed noting that there were numerous court cases, insurance problems for families as premium rates rise, and the paucity of MN HIX navigators relative to number of uninsured. Dave Racer recently concluded a survey of insurance agents, which found real problems with trying to serve clients attempting to comply with ObamaCare.
3. AAPS May 9, 2014 national meeting in Mpls: “Thrive, Not Just Survive”
The program: Dave Racer discussed an outline of the program, Friday afternoon May 9 at the MOM Marriot Hotel. The first session will a Primary Care Panel, the second a Surgery and Other Specialty Panel. There are number of excellent national speakers (Richard Reese, Lawrence Huntoon, Alleta Eck, as well as a large number of locals (including MPPAs Nelson , Beecher, Gehrig, Racer (meeting chair) and Susan Wasson, Twila Brase, and even a patient, albeit, we are all patients.
Some potential additional speakers were mentioned including former congressman Lee Gross about OP care with a monthly fee, and Milton Wolf, MD of MO running for the Senate.
Promotion of the meeting was discussed. AASP will do the national promotion as usual. Many ideas were advanced to reach out to the local audience. These included enlisting the help of the MN and surrounding state medical schools, local primary care and specialty professional organizations, a blurb and/or advertising ins local magazines including MetroDoc and TCMS newsletter, MMA newsletter, MNPhysician, MN county medical societies, especially Zumbro Valley (and Mayo Clinic contacts), HHS (Scott Leitz) and MDH (Ed Ehlinger), Medical societies of surrounding states, CCHF (Twila Brase), MN small business community, Chamber of Commerce, clinic contacts, primary care training program chairs (e.g., Mack Baird, UMN), insurance corporations and insurance agents (needing products to serve a free-market), and more may come to mind.
We discussed media alerts for newspaper reporters, radio and TV stations.
Dave Racer will discuss with AAPS a possible welcoming event Thursday for early arriving speakers and AAPS personnel.
4. MPPA Health Care Reform outline.
Mike Ainslie went over the 4 principles:
1. Patients chose and carry own health insurance.
2. Free Markets provide insurance and health care services
3. Encourage employers to provide portable health care insurance
4. Assist those who need help through civil society, free market, and states.
The principles were discussed—a copy of outline is attached. I was asked to send out a copy of the outline separately so all could critique the proposal and suggest ways of achieving what amounts to a free-market for medical insurance and delivery of services where the consumer/patient is king, not the commercial or government barons.
Since FMA program for Medicaid is a free-market public sector program, I was asked to send out a copy of the FMA brief handout (I will add the more detailed file also) separately so that all could likewise critique the proposal and suggest ways to achieve legislative approval and state implementation.
[In the past MPPA forums were held on the goals and reforms necessary to achieve a free medical market. I looked up the initiative started on December 16, 2006 with a distinguished group including chairs of legislative committees—please see the appendix for the details of why and how the effort fizzled.]
There being no further business, the meeting was adjourned at 8 PM.
The history of attempts to implement a free-market in the public sector
using HSA-like programs
With the debacle of ObamaCare unfolding and docs looking for an out, and hopefully with a change in federal and state political control in 2014 an 2016, a new effort to create an evolutionary free-market medical system may be feasible—this would be opposite of the many planner “free” care utopias such as ObamaCare and other Nationalized managed care systems. Managed care has a fatal flaw:
No central authority, however brilliant [or good willed] the managers, can accomplish the functions of freely determined prices for the allocation of labor, capital, and human ingenuity (Cassidy J. The price prophet. The New Yorker. February 7, 2000:44-51.
A free market is the only way medical inflation can be controlled and the nation’s solvency preserved. A free market, where the patient/family is king and no longer the commodity traded for servicing, is one where quality of patient-centered care can thrive and quality of population-centered quality statistics can rise without the blunt regulatory barriers of managed care barons.
I looked back at a 2006 group meeting (MPPA members were the main producers) devoted to medical sector reform. The minutes of that meeting are appended here to which I have added a brief on what happened thereafter.
The choices in the old minutes boiled down to:
1. “Free” care, or
2. A free-market
12-16-06 Group Meeting
Final draft 12-18-06
Agenda: (see the email attachments of each presentation and for the excellent MDH July 2006 Report.)
Background: It was noted that there are two fundamental proposals to achieve UHI likely to be considered this year by many state legislatures.
The first model targets 100% of a state’s population with an insurance mandate program involving all individual, firms, and their insurance policies.
The second model targets only the uninsured—in MN 7.4% of the population. Whichever the target, most models rely heavily on managed “free” care funded by vouchers for the poor, who are limited to buying only managed care insurance, not services.
An alternative to managed care is to use a free-market for empowering poor [Medicaid] families directly with money by funding HSAs [later known as Family Medical Accounts—RWG.]
1. Introduction of those present:
Scott Wright and David Allen co-chairs, Robert Geist, Peter Nelson, Ken Heithoff, Jim Abeler, Matt Dean, Lee Beecher, David Dalquist [an owner of a large private corporation] , and Ted Fritsche,
2. David Allen discussed Goals of Health Care Reform. He noted that proposals ought to be judged on how well they achieve: a) affordable Universal insurance—not “coverage” that has become code for 3rd party payment of nearly all care; b) Economical health care—will be affordable by avoiding unnecessary overhead of insurance middleman adjudicating payment for services and rationing functions that distorts health care delivery and innovation; and c) Value—when decisions about value of services are made by patients and families rather than a central authority, quality and innovation can be optimized.
3) Scott Wright discussed “Lessons on health care—what I learned talking to 70,000 voters”. One cannot do justice to the presentation here (see the attached presentation file). He proposed market-based reforms. These are greater consumer value from up front pricing and transparency for patients. HSAs have the effect of producing an incentive to spend money wisely. Greater competition across state lines and the nation, which might involve association health plans, community rating, prescription drug re-importation, and interstate sale of health insurance plans.
4) Bob Geist discussed “HSAs for the public sector to achieve affordable UHI”. He noted the failure of managed care to control costs or to deliver quality care. He recommended a change from regulated “free care” to using income related HSAs for poor families. HSAs have the advantage of being tax-free going in, when saved, and when going out. The emerging HSA market in the private sector has shown a positive effect by significantly reducing the rate of insurance inflation and by increasing the rate of preventive care, and compliance in care of chronic diseases. There are many anecdotes of change in patient behavior. HSA money also has the value of bringing equity to poor families as they are empowered with money in the market the same as those in the private sector. HSAs are a practical way to achieve affordable UHI by targeting the use HSAs for adult and child populations in Medicaid and the uninsured.
5) Discussion: It was noted that there is great concern about the potential of huge costs resulting from large complex insurance mandate programs for UHI now being floated in MN. An alternative means to achieve affordable UHI is needed.
Legislators noted the power of language and slogans to sell insurance mandate programs: “crisis”, “right to health care”; “universal”; “quality”; “efficiency”; “privatization”; “best practices”; “evidence-based…whatever”; “pay for quality—not volume”; and so forth.”) But counter slogans for HSA programs of money directly subsidizing the poor can be just as powerful: “a right to money for health care”; “money to families—not the corporations”; “cash for kids”, “empower families and children,” “a plan for children”, “family power”, etc.)
The legislators present thought the most likely things to pass this year were a plan to insure all children and even a constitutional amendment for the state to support universal health care—these are 2 models: regulated “free care” or a self-organized free market.
There was agreement that families ought to be protected against a financial catastrophe because of illness—the proper role of insurance. The current managed care model is prepaid “coverage” for all care—the driver of demand inflation stimulated by insurance subsidies. The appearance of cheap insurance puts demand in overdrive since over-insurance reduces the apparent price of services. In contrast, an HSA/HDHP program for the uninsured using MNCare (the state as the major indemnity insurer) could probably reduce costs compared to HMO insurance and save both and state and families significant money.
The CEO of one large local firm noted the reluctance of employees to embrace something as new as HSAs and the problem presented by first year funding. The CEO of another large firm noted his experience when starting MSAs years ago—the result from a complete switch to MSAs (now HSAs) has saved millions. An interesting story was about the change in behavior of a tobacco addict when she had to visibly use her own savings. [A small business in St. Paul found a complete turnover to a HDHP from an HMO policy was budget neutral for the firm, take home did not change, insurance inflation neared zero, and the firm was able to subsequently raise wages.]
Consensus: The consensus was that there is a choice of how to achieve UHI.
The model of 100% insurance mandates heavily reliant on a managed care system has the potential of severe financial problems. These programs do not address the “free care” driver of demand inflation in a meaningful way, but instead by rationing access to supply—an economic oxymoron. There is a real concern that such a regulatory system, further prodded by more volume, could implode if current provider pay below cost of producing services results in clinical practices failing. There is already a problem of demoralization of our dedicated professional workforce, and a fear that technologic innovation will decline, and our academic infrastructure driving quality will be further eroded.
The alternative model of targeting only the uninsured 7.4% in MN seems to make more sense. Patients and families empowered with money saved with HDHPs is an emerging insurance market in the private sector. The early results have been a significant control of insurance premium inflation and improved quality of preventive care and compliance by patients with chronic diseases. There is no reason the state could not achieve similar results in the public sector, albeit, a population with more health needs. People empowered with money are prudent in spending and can accurately gauge the value goods and services (their quality and quantity) when informed by prices. This is true in all other microeconomic sectors and a model that can achieve affordable medical care and affordable insurance for all American families to protect them from the risk of a financial catastrophe from illness.
6) Conclusion: The Group recommended that a specific program for insuring the poor with HSAs be developed. Allen, Geist, and Peterson will meet to outline a more detailed incremental program emphasizing insuring children first and later a program to embrace other public program adults in Medicaid programs and from amongst the uninsured.
This program will be presented to select staff at the capitol on Wednesday, 12-20 at 10 AM. The resources needed to structure a viable state program will be an important issue. Meanwhile, members of the group will maintain contact with key players. Presentations are also planned for others.
7. Adjournment. There being no other business, the meeting was adjourned.
Minutes submitted for approval by
Robert W. Geist MD
(651) 484-6968; email@example.com
[Please call or email for any questions or for corrections, deletions, and additions for the minutes.]
Subsequently there were many meetings including legislator chairs (Jim Abeler, Matt Dean, and Fran Bradley) plus David Allen, Peter Nelson Chris Schneeman, House staff (Randy Chun, Tom Pender), and many others. Developed were a Care for Mn Children (CMC) plan (Allen), a Medical Benefit Account (HSA-like) plan for implementation, Abeler ruled out using it for Medicaid (he thought not legislatively possible at the time) and focused on MNCare (a Care for More Families program–CMF) with HF 578 to implement an HSA-like program.
All legislative initiatives fizzled—the times were not right; it was like trying to shoot the moon without computers and rockets.
Again, With the debacle of ObamaCare unfolding and docs looking for an out, and hopefully new federal and state political control, a new effort to create a free-market may be feasible—it is the only way to control medical inflation and achieve the nation’s solvency.