Economy May Slow Obama's Health Reforms on Louisiana Medical News

Economy May Slow Obama's Health Reforms

By: TED GRIGGS

Although the Obama administration's early moves signal a commitment to restructuring healthcare, Louisiana experts say the changes made over the next four years could be significant but still fall short of the comprehensive reform needed.

The president's goals include providing affordable, accessible health care for everyone while lowering costs through investments in health information technology, prevention and coordination of care. The annual cost for the program has been estimated at $50 billion to $65 billion.

"I think that the problem is going to be the financing of it," said Alan Levine, secretary of the Louisiana Department of Health and Hospitals.

The logical source for funds is the Medicaid Disproportionate Share Hospital Payment Program, money meant to care for the uninsured, Levine said. But using that money to expand health insurance coverage would drastically affect the state's public hospital system.

"I'm not saying we shouldn't do that. What I'm saying is that would have a dramatic impact, and we would have to plan for that," Levine said.

So would other states that have a larger than average number of indigent patients. During the 2008 fiscal year, the program budget was close to $18 billion.

The other things that will hamper the Obama administration is that budgets will have to cover the cost of two major stimulus bills and the related borrowing, Levine said. The federal government will basically be borrowing $800 billion to $900 billion, and the ongoing cost of that debt is going to strain the U.S. Treasury.

"To fund a dramatic expansion of healthcare is going to cost, on a recurring basis, a lot of money nationally," Levine said. "While the objective is lofty, and we applaud the objective, we have to be realistic about what Congress is going to actually be able to afford."

Gil Dupré, chief executive officer of the Louisiana Association of Health Plans, said restructuring healthcare is more of an evolutionary process than a revolutionary one.

When Dupré took his first healthcare job, his co-workers told him that he had probably made a mistake because national health insurance was coming, and everyone at the health plan was going to lose their job

"That was in 1971, and they're still working on it," he said.

There is more momentum now to resolve the root causes of the problems in healthcare, and maybe people should be encouraged by that, Dupré said. But the problems are complex, affecting so many people and involving so much money that pushing through comprehensive changes will be difficult.

Those types of changes probably won't take place during the next four years but could happen over a longer period of time, he said.

Meanwhile, Dupré said he is encouraged by a few developments.

First, none of the Obama administration's leaders are promoting the idea of a single-payer, government-run system.

Although that idea has its supporters, and always will, Dupré said he doesn't think the majority of Americans think that's the way to go.

However, the administration's support of universal access to care is something everyone should support, he said. It's widely believed that people who have health insurance are healthier than people who don't.

"We ought to be doing everything we can to find a reasonable way to make sure that everybody has coverage, meaning that everybody has access to care," Dupré said.

The Obama administration also appears to want a public-private partnership that would allow health plans to use their decades of experience coordinating care, promoting health, and managing chronic conditions to be part of the solution, he said.

In addition, the things the new president wants and that the state has proposed through Louisiana Health First are quite similar, he said. There is reason for some optimism that the state will get the federal waiver needed to implement the program, although that has been slowed by Tom Daschle's failed nomination as U.S. Secretary of Health and Human services.

The fact that the new administration and Louisiana are looking for the same things in healthcare restructuring is a hopeful sign, Dupré said. Unfortunately, CMS approval won't come until a new secretary and new head of CMS are appointed.

Under Louisiana Health First, Medicaid money would be used to buy commercial insurance coverage rather than paying doctors and other providers for services. The managed-care proposal is supposed to reduce costs and improve care.

Critics say the plan will only reduce the amount of money available for care because there will be more administrative expenses, not to mention insurance company profits.

Levine said some of the president's proposals, such as allowing consumers to choose a health plan for themselves or one that has the same sort of benefits enjoyed by federal workers, are almost identical to Louisiana Health First.

Reform is needed, Levine said, but not a solution that treats every state the same.

"You can't compare New York with Wyoming or Louisiana with Florida or Texas with North Dakota," Levine said. "You have 50 different states with unique populations and so the states have to have a seat at the table."

Whatever the reform, state governments and their stakeholders should be allowed to put together solutions that make sense for them, Levine said. That way some of the current problems can be avoided.

One result of Medicaid setting rates nationally is that physicians on the Northshore of Lake Pontchartrain are paid less than their New Orleans counterparts, Levine said. The problem is so bad that Louisiana may lose some of the Northshore physicians.

"It doesn't make sense, but there's nothing I can do about it because it's a federal issue," Levine said. "Changing that formula literally requires an act of Congress."