Short Takes On News & Events

Report: Effort To Curb Health Costs Should Be ‘Led By The States’

By Julie Appleby

January 9th, 2014, 5:00 AM

Governors and other state leaders have the leverage to slow rising health costs and should not wait for action by the federal government, a commission chaired by two former governors said in a report Wednesday.

Ritter and Leavitt (Photos by Bill Ingalls-NASA/Jessica Marcy-KHN)

State leaders can use their clout as large purchasers of health care as well as regulators to set goals for health spending and quality, said the report by the State Health Care Cost Containment Commission.

“This must be led by the states,” said former Colorado Gov. Bill Ritter, a Democrat and co-chair of the commission along with former Utah Gov. Michael Leavitt, a Republican. Other commissioners included members representing insurers, hospitals, employers and consumer groups.

Leavitt noted that Utah and Massachusetts — a red state and a blue state, respectively — have each made strides to control costs and create more integrated health care systems.

“They are two very different cultures, but both moved forward long before the federal government,” he said a briefing in Washington, D.C.

Robert Reischauer, another member of the commission, said the group’s recommendations “point in the direction of the types of regulations that will make for a vibrant market.” Reischauer is a Medicare trustee and was director of the Congressional Budget Office from 1989 to 1995.

States that are successful will see their economies grow, wages rise, and health care improve, Reischauer said. “As other states see the differences, they will come along.”

The group was organized by the University of Virginia’s Miller Center and funded by insurer Kaiser Permanente and the Robert Wood Johnson Foundation. (KHN is not affiliated with Kaiser Permanente).

The federal role should be to give states the flexibility to innovate, the commissioners said,.

As an example, Leavitt pointed to a recent decision by the Obama administration allowing Arkansas to move forward with a state-designed Medicaid expansion that allows enrollees to join private health plans. “That signals acceptance by Health and Human Services that the administration is willing to acknowledge states can develop [programs] that reflect their own values,” Leavitt said.

Some of the recommendations endorse additional regulations, such as requiring insurers or medical providers to publicly report prices and quality ratings. Others  include:

  • Adopting annual state spending goals or limits on how much per-resident health spending should rise over 5 years, perhaps as a fraction of state economic growth.
  • Using antitrust power to foster coordination of health systems, or to block market consolidation in cases where one entity has so much market control that it affects prices.
  • Using education to promote healthier lifestyles for residents and state employees.

Without these type of actions, the country is on the way to spending an estimated $14,000 per person per year on medical care by 2021, up from almost $9,000 today, said Gerald Baliles, director and CEO of the Miller Center and a former Virginia governor.

“While we’ve seen health cost increases slowing, we’ve still hit the tipping point, and it has a huge impact on consumers and state budget,” Baliles said. “Just as states led in clean air and education reform, they are likely to lead in health care reform.”

4 Responses to “Report: Effort To Curb Health Costs Should Be ‘Led By The States’”

  1. Randy Beckett NP-C says:

    If the states could regulate drug prices, fee schedules and protocols for practice we could drastically cut costs.

  2. DAVID POWELL says:

    Kansas passed their “mandate Lite” legislation in 2013 allowing individuals, families and groups to build the plan they feel best fits their situation using a base major medical plan with a “menu” of benefit choices. Each person, family or business knows what they ARE buying and NOT buying as well as the price BEFORE they take out the coverage. That gives choices and lowers premiums for everyone.
    But the Obama Administration has stepped in and said we can’t do that because it MUST contain all the mandates – like maternity that the 60 year male must pay for? No common sense!!! Let the states decide – not the Federal Government!!!
    PPACA says under section 1312 that people may buy any plan that meets essential coverage standards an goes on to define in 5000A essential coverage as any plan approved for sale in a state by the state insurance department. Get the Federal Government out of it!!!

  3. Max Herr says:

    California, with overwhelming numbers of illegal immigrants, which is creating social policies intended to encourage more illegal immigrants to cross borders to get here, has virtually no chance of controlling health care expenses in the manner described.

    Medi-Cal already provides reimbursements to physicians, hospitals and other healthcare providers which are already BELOW the pathetic payments received from HMOs and PPOs. And as a result, fewer physicians are taking Medi-Cal patients, and hospitals are closing their emergency rooms in order not to go bankrupt.

    Utah and Massachussetts may have demographics that respond to the measures being suggested, but California does not.

    Should the federal government tinker more with healthcare than it already has? Absolutely not! They have completely overturned the apple cart, when the only thing they needed to do was open Medicaid to the chronically uninsured and raise taxes to pay for it.

    Wait! Raise taxes? The problem is that no one wants to talk about the things that are necessary to deal with our government’s chronic and near-fatal addiction to spending without the revenue to pay for it. All the money paid to send and maintain troops in Iraq and Afghanistan since the 1990s could have covered the healthcare needs of every uninsured person in America, including illegal immigrants.

    The priorities of the federal government have been on their heads since GW Bush was inaugurated, and made worse by BH Obama. Changing the current situation is nearly impossible, and no one who says they have the answer has the ability to carry out that plan.

  4. camaron says:

    “Wait! Raise taxes? The problem is that no one wants to talk about the things that are necessary to deal with our government’s chronic and near-fatal addiction to spending without the revenue to pay for it. All the money paid to send and maintain troops in Iraq and Afghanistan since the 1990s could have covered the healthcare needs of every uninsured person in America, including illegal immigrants.”

    Face the facts. The problem is very simple. Regardless of who comes through the emergency room doors, illegals or not, as long as we have laws that prohibit hospitals from refusing to treat the uninsured, we will continue to have a cost problem. Every other industrialized nation in the world does two main things to control healthcare costs. They collect taxes and they ration care. These nations have very high tax rates and you may have to wait for elective appointments and procedures. Only in America do we refuse to raise taxes and refuse to ration care. Obamacare is not the perfect solution. Obamacare is a start. Obamacare was needed to begin a dialog about our failed healthcare system. Ultimately, America will adopt a single-payer nationalized healthcare system, taxes will rise to pay for it and we will have rationed healthcare. When? It is only a matter of time.

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