Terri Bonoff

The Problem

This nation faces a crisis in our healthcare system.  We spend more per capita on
healthcare than any other industrialized nation, yet still 47 million Americans are
uninsured, including nearly 10 million children and millions more still are underinsured. 
Premiums have risen over 80% since 2000 and the increase threatens our health,
economy, and small businesses.  Still, our leaders in Washington lack the political will to
do anything about the looming disaster.  

In fact, rising care costs are already crippling American industry.  The big three
automakers currently spend $1,400 for every car they produce on the health premiums of former employees.  Small business employees currently spend 49% more for family
coverage than their large-employer counterparts.  Our small businesses simply cannot
afford to continue the current employer-based health system.

The Solution

We must adopt a two part strategy; insuring all Americans and driving costs out of the
system. Real reform is not sustainable unless we drive costs out of the system.  Most
studies of our current care system begin by stating that it is full of inefficiencies and
opportunities for cost savings.  Duplicative record keeping and payment structures simply
add an extra step and extra cost to the system.  Additionally, many Americans suffer from “over-treatment” because providers get paid for providing treatment not for making and keeping us well. 

The first step to addressing these problems is to change the economic incentives in
providing care.  Minnesota is unique in that it is one of a handful of states that have a
“not for profit” healthcare system.  As a consequence, we see a much lower uninsured
rate in Minnesota, but even one person without adequate insurance is too much. 

That is why we must begin to shift our payment system from one that pays for treating
injury and illness in to one that pays for keeping people well.  Not only will it save the
entire system money, it will lead to a healthier population.  We must transform our
system into one that pays for wellness and prevention programs not one that pays for
volume, a system that pays for managing and preventing chronic conditions not for
treating them as the patient’s health is deteriorating. The proposals being heard in this
MN legislative session include adopting a “Medical Home” model as a way to drive costs
down and increase quality. In addition new ways of letting people compare costs and
quality are being proposed as reforms that will ultimately increase quality and keep costs
down. These initiatives can be part of a national program, continuing our tradition of
making the MN standard the national standard. 

Even after we have done all that we can to control costs, there will still be millions of
Americans that cannot afford to purchase the insurance and care that they need.  In the
richest nation in the world, it is unacceptable that people go without medical care and
attention.  Over 150,000 Americans have died since 2000 simply for the lack of adequate
health coverage.  This has to change.  

We must guarantee health coverage for all Americans.  We can do this by creating a
means test and subsidizing premiums for those who cannot afford to pay.  If people don’t
have insurance, it doesn’t mean that they aren’t getting care, it just means that they get it from emergency rooms and other high-cost outlets.  This extra cost is something that we all pay for in the form of higher costs across the rest of the system and more expensive catastrophic care later in life when the uninsured find themselves in the Medicare system.

That guarantee should not stop at getting everyone covered though.  We must guarantee
that all Americans keep their coverage no matter what.  Too many people stay in their
jobs just for the health coverage.  Too many people lose coverage when they are laid off. 
We must begin to separate healthcare from our current employer-based system.  The
burden on small businesses is too great and threat of a lapse in coverage is serious.

There are So Many Things That We Can Do To Control Costs

The federal government should set a standard requiring 85% of all premiums be
spent on patient care.  One of the greatest inefficiencies in our current system is the 29
cents of every dollar spent on administrative costs.  If the public is going to use its
resources to help subsidize premiums, we have a right to require that as much of those
resources as possible go directly to the patient in the form of care.

We must move quickly to a system of standardized medical records.  Minnesota has a
law mandating that all care and insurance providers develop a standard information
system by 2015.  Experts believe that if this practice were adopted on a federal level, we
could reduce the total cost of providing care by 77 billion dollars a year.

We must allow the federal government to negotiate the price of prescription drugs. 
It is inconceivable that Medicare cannot take advantage of its huge purchasing power
under the Part D program.  While it is true that there are other deficiencies in the VA
prescription drug program, they have shown that negotiating prices can result in huge
savings for those in the program.

The Bottom Line

The problem with healthcare in this country will not be solved overnight, but the
challenge is not a lack of plans.  The challenge that we face is the lack of political will to
make a change.  We must act swiftly to guarantee coverage to all, regardless of their
means or whether they lose or change jobs.  Finally, removing healthcare from the
employer removes the burden of the cost of care from the business community as we
fight to stay competitive in a global market.