The State of Health

P ER SPEC TIVES ON

R EFO RM April 28, 2010

A supplement to

• View the health care overhaul through the eyes of providers, physicians, public and private insurers and lawmakers on both sides

3

Wednesday, April 28, 2010

Health care reform: What to (and not to) expect

By Greg Buwick For The Transcript

Misinterpretation and confusion are two words that best describe the reaction to the newly passed health care reform legislation. As one of the state’s leading representatives providing health insurance to businesses and individuals, I have summarized the most important points of the reform, highlighting what you can expect in the near future.

Myth: Free health

care. Not only is health care not free, but costs will go up in many areas to provide benefits to both the insured and uninsured. Taxes will go up for some, premiums are expected to rise for many and all of us will be paying more for goods and services to fund this reform.

Immediate change: Keep in mind that all changes must first go through a process that includes changes to contracts that are approved by

the State Insurance Department. The initial changes are anticipated to take place in September while some reforms will not be fully implemented until 2014.

What follows is a summary of health care reforms that may have an impact on your business and employees in the near future. As with any legislation, there are portions of the new law that are open to interpretation and that will require clarification.

Reforms with effective dates in 2010 National risk pool: Creates high-risk pool coverage for people who cannot obtain current individual coverage due to pre-existing conditions.

Oklahoma currently has a high-risk pool program.

This national program will work with the state program and will end Jan. 1, 2014.

Small-employer tax credits: Allows qualified small employer contributions to purchase coverage for employees. To qualify, the business must have no more than 25 fulltime-equivalent employees, pay average annual wages of less than $50,000 and provide qualified coverage. The full amount of the credit will be available to employers with 10 or fewer employees and average annual wages of less than $25,000 and will phase out when those thresholds are exceeded.

Preventative services: Cost-sharing for specific preventative services such as immunizations and screenings is prohibited. This is already law for the majority of preventative services covered by health plans in Oklahoma.

Lifetime benefit limits: Prohibits lifetime limits on the dollar value of benefits for any participant or beneficiary.

Most insurance companies in Oklahoma currently have a $5 million lifetime maximum per person. (The Chamber Choice program through Blue Cross Blue Shield has a $2 million lifetime maximum.)

Increased dependent coverage: Increases the age of a dependent for health plan coverage to 26.

Coverage of emergency services: Mandates coverage for emer-

gency services at in-network level, regardless of provider.

Preexisting coverage for children: Mandates coverage of preexisting conditions for children 19 and under.

Waiting periods: Waiting periods cannot exceed 90 days.

Benefit summary to employees: Requires that a summary of coverage be provided to applicants and enrollees.

Medicare drug rebates: Medicare patients who have spent $2,830 for prescription drugs and face a gap in prescription drug coverage would receive a oneyear $250 rebate.

Excise Tax on Indoor Tanning: Imposes a 10 percent excise tax on purchases of indoor tanning services. The service provider is to assess the tax on customers.

What to expect in 2011 Reporting on W-2s: Requires all employers to include on W-2s the aggregate cost of employer-sponsored health benefits.

Flexible spending account limit: Limits flexible-spending account contributions for medical expenses to $2,500 per year and indexes the cap for inflation.

Over-the-counter drug exclusion from account-based plans: Changes the definition of

“medical expense” for the purposes of employer-provided health coverage — including health flexiblespending accounts and health savings accounts — to say the plan cannot provide nontaxable reimbursements of over-thecounter medications unless the over-the-counter medications are insulin or are prescribed by a doctor.

Cafeteria safe harbor for small employers: Small employers

(generally those with 100 or fewer employees) will be allowed to adopt new “simple cafeteria plans.”

Insurance companies are working to interpret and implement these changes to health insurance.

The insurance companies will be on the front line to communicate these changes to their policy holders. Your agent is your best resource in determining how the health care reform bill will affect you.

Greg Buwick is president of Republic Benefits Group LLC.

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Wednesday, April 28, 2010

Norman Regional prepared for reform

By David Whitaker For The Transcript

Healthcare reform: It’s been a hotly debated topic and constant news fixture.

You are probably wondering how these new changes will affect you, your loved ones and the community in which you live.

As the president and CEO of Norman Regional Health System, I wanted to give you and our community an update on how new legislation will affect Norman Regional.

The Patient Protection & Affordable Care Act (H.R. 3590) and the Health Care & Education Affordability Reconciliation Act of 2010 (H.R. 4872), beginning in 2014, will cover 19 million uninsured, with a majority of uninsured covered by 2016 (32 million). The overall cost to the country will be $938 billion. The bill was supported by the American Hospital Association, the Federation of American Hospitals and the American Medical Association.

Reform and reimbursement An analysis prepared by the Oklahoma Hospital Association projects a $54 million reduction in Medicare reimbursement for Norman Regional Health System from 2010 through 2019.

The best-case scenario is the coverage provided for the newly insured would be at or near existing Medic-

aid rates, which historically reimburses care providers at very low rates, forcing some providers to opt out of caring for both state and federally funded programs and creating significant access to care issues.

Future challenges A big question facing health care providers is how care will be provided to the newly insured. Currently, many patients face long waits to see providers.

The nation is also looking at serious shortages of health care personnel, specifically primary-care physicians and nurses.

The Association of American Medical Colleges predicted in a recent Wall Street Journal article a shortage of nearly 150,000 physicians over the next 15 years. They estimate it will take over ten years to educate enough doctors to put a dent in the nation’s health care needs. The bill does provide increased payments for the development of Community Health Centers and training for the National Health Service Corps over five years beginning in 2011.

The bill also mandates investing in workforce development initiatives to improve training, development and recruitment of future health care providers.

But those programs will take time to develop and mature.

An brief overview of the health care reform bill • Effective within six months, dependent children through age 26 would be eligible for insurance under their parents’ plans.

• Although most of the bill’s provisions are effective in 2014, several bill requirements went into effect April 1, including the first cuts to hospital Medicare funding nationwide. Total hospital Medicare budget cuts over the next 10 years total $112.6 billion.

• As with any insurance plan, participants will pay premiums.

• Requires most Americans to have health insurance.

• Retools how insurance companies do busi-

ness, prohibiting insurers from putting lifetime caps on coverage or denying care or coverage for those with pre-existing conditions. It will offer smallbusiness tax credits to help small-business owners make insurance available for their staff • Provides coverage for 32 million uninsured Americans. (Many will still not have insurance, such as illegal immigrants.)

• Adds 16 million people to Medicaid programs nationally — 265,000 new patients for Oklahoma beginning in 2014, with 100 percent of costs being paid through the federal government with decreasing payments over time, down to 90 percent by

2020.

• Subsidizes private coverage for low- and middle-income people.

• States a federal budget savings of $143 billion over the next 10 years.

• Implementable in three months of the law taking effect, those previously locked out of health insurance due to pre-existing conditions will be eligible for subsidized coverage through a new high-risk insurance program. The high-risk pool will assist those with preexisting conditions in getting coverage in the interim between the passage of comprehensive health reform and the launch of the health insurance exchanges in 2014.

Some of the preliminary guidelines for the high-risk pool: • Applicants must be U.S. citizens not covered by another form of insurance, have been denied coverage due to a preexisting condition and have been without coverage for at least six months.

• Older people can’t be charged more than four times younger ones.

• The plan must cover at least 65 percent of participants’ health costs and follow annual out-of-pocket limits set in the bill.

• Premiums will be based on standard rates, which states define as average premiums charged by private insurers for similar coverage.

Our plan The financial impact of the Patient Protection and Affordable Care Act, we feel, will be significant to the Health System. Right now there are too many questions remaining about the proposed programs and funding to know specific or definitive effects moving forward. However, the Health System is proactively reviewing its current services and programs looking for additional efficiencies, new sources of revenue and cost-containment to assure the continuation of quality health care delivered in a safe environment for our regional community for many years to come.

David Whitaker, FACHE, is president and CEO of Norman Regional Health System.

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Wednesday, April 28, 2010

Health care reform and its impact on the small business Cindy Merrick For the Transcript

The health care reform legislation signed by President Obama on March 23 is a comprehensive health care bill that is estimated to increase insurance coverage to 94 percent of Americans.

There are provisions in the bill for both individuals and employers.

The legislation includes a small business health care tax credit designed to allow small businesses to afford employee health insurance.

The Congressional Budget Office estimates the tax credit will save small businesses $40 billion in insurance premiums by 2019.

This tax credit, which went into effect Jan. 1, was designed cover up to 35 per-

cent of the premiums small businesses pay to cover employees. In 2014, the rate will increase to 50 percent.

Most small businesses want to provide health care coverage for their employees but have difficulty doing so because of high insurance premiums. On average, a small business currently pays 18 percent more for the same coverage as a larger company, and small businesses face higher administrative costs to set up and maintain a health care plan. The premiums small businesses pay have three to four times as much administrative cost built into them compared to the plans of large businesses. Small companies have smaller risk pools and experience significant price increases when just one or two

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employees become ill or injured.

The Health Care Reform Bill includes additional benefits for small businesses.

For example, companies with 100 workers or fewer can collectively pool their buying power and decrease administrative costs by purchasing the insurance through an exchange. The new rules also prohibit “community rating.” The community rating rule prohibits insurance companies from charging more to cover businesses with sicker workers or raising the rates when someone does become ill. It is estimated that 4 million small businesses are eligible for the credit if they provide health care for their workers. Qualifying companies must have fewer than the equivalent of

25 full-time workers. A firm with fewer than 50 half-time workers would also be eligible. In addition, the companies’ average annual employee wages must be below $50,000, and they must cover at least 50 percent of the cost of health care coverage for their employees.

However, the truth of the matter is Obama stepped into a sinkhole when he took office. Reforming our health care system is like corralling cats. There is little, if any, language in the reform bill that addresses the increasing premium costs. There are no current caps on insurance premiums in the bill. Experts are predicting costs to insurance companies will actually go up and premiums will rise. There is no immediate

money to pay for these reforms and no plan that informs us of where the money will come from. If premiums remain steady or decrease, we will be paying for this reform in other areas of our lives.

As a co-owner of a small business, I have witnessed first-hand the rising cost of health care premiums. For example, at Therapy In Motion, we currently provide insurance for our employees, their spouses and their families. Our insurance premiums increased 15 percent last year and about 86 percent over the past five years, making it difficult for us to continue to provide health insurance.

Medical providers are receiving lower reimbursement payments from insurance com-

panies, limitations on services provided and the elimination of insured’s treatment procedures and medical supplies. There is a proposed 21 percent cut in Medicare reimbursement rates that will be voted on in May. This is why many medical providers no longer accept Medicare, HMO’s or insurance companies with limited reimbursement.

With the rising operational costs and the increases in liability and malpractice insurance premiums, medical providers are experiencing financial set backs and must be forced to cut back their services and benefits for their employees.

Cindy Merrick, M.S., P.T., is founder and president of Therapy in Motion.

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Wednesday, April 28, 2010

Health care reform and the human touch

By Christopher Edge For The Transcript

The current health bill could potentially bring about the biggest change in health care since Medicare.

Given the federal government is the author, I find it hard to believe its plan will work any more efficiently than previous plans.

Remember, this is the same government that gave us Medicare, Medicaid, Veteran’s health care and the Indian health care service.

Those systems are dysfunctional and financially strained.

This same government’s answer to improving communication in health care was to establish HIPPA. This same government implemented “managed care,” which only managed to raise cost, divert funds and turn over control of our health care to executives.

This same government allowed denial of access and claims in an environment of escalating premiums and declining coverage then rewarded dishonesty and arrogance with bailouts.

This is the same government that just secured for themselves the gold standard health care plan — the same government that does not want to share it with us; the same government that voted themselves retirement for life — and in the next breath gave ours away; and the same government that allowed record amounts of fraudulent claims. This “same” government wants to fix “our” health care system. Why is it broken? The answer is greed, corruption and fraud

at every level of government and business.

This same government mandates policies, regulates businesses and receives incentives daily so they will vote as directed. This same government has taken us back in history to 1776 — back to excessive taxation without representation.

There was a time when it was considered an honor and a privilege to serve your country in a political position.

For the sacrifice required, you received the thanks of a grateful nation and a fair salary for an honest day’s work.

Now, it appears to mean you can accumulate great personal wealth with the loss of dignity, integrity and character as the price paid. Those in Washington are showing their true colors — and they are not red, white and blue.

This same government fails to realize that it is the status quo that needs to change.

It is directly responsible for the greed and corruption that devours its citizens as though we are of no value except to exploit our patriotic nature.

This government has destabilized the very foundation the economy is built upon. Its job is to govern, not mandate and certainly not to own private businesses. It is to oversee the participants, be sure the game of competition is played on a level field: no stacking of the deck, no favoritism, no special interest.

The medical system has been mismanaged and it is indeed in need of repair, but it does not need to be rebuilt from the ground up and cer-

tainly not by the federal government.

The touch from another human being remains one of the most powerful tools in medicine. The human touch is a simple gesture that expresses our genuine concern for the physical and emotional well being of another. It is given freely and in the knowledge that eventually it will be our turn, we will be patient.

We hope that total strangers will care and that we will not be abandoned in our time of need when technology and medical science have been depleted. That is when we offer the greatest gift God has given us: the strength of His spirit through our touch.

A touch that can open our hearts and souls to the human possibilities found in prayer, faith and the belief that miracles happen every day. One only needs to be open to the experience. Contrary to what you may hear, we are still a people of “one nation under God” and are taught to believe that through prayer anything is possible.

In closing, I am reminded of a quote by an unknown physician. “One need only touch a small part of the world to make a difference.”

He went on to say, “No matter how much the economics of medicine may change, it always comes down to the doctor and the patient in the room together, and nothing and no one can take that away.”

Christopher Edge, M.D., is a practicing physician in Norman.

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Wednesday, April 28, 2010

Health care reform: The real issues facing patients, doctors

By David P. Clemens For The Transcript

There has been much talk about the role of the primary care physician in the recent health care discussion.

Your primary care physician is usually the one physician who provides most of your medical care, often a family doctor or internist if you are an adult.

Primary care physicians may provide all or most of your medical care, or just wellness care or acute illness care.

Wellness care includes comprehensive physical exams and health maintenance exams. These checkups are focused on illness prevention and general health, rather than on a specific diagnosis. Some insurances cover wellness care, but many do not. Medicare covers very little wellness care for example.

While it seems reasonable that wellness care should decrease the cost of health care overall, there have actually been very few scientific studies confirming this. Most of the scientific studies are for specific tests or exams — pap smears, mammograms, colonoscopies, etc. — and these studies are often inconclusive.

How do you want your physician to spend his or her time: Discussing your symptoms or illnesses with you? Reviewing your lab and test results? Examining you for signs of illness?

Educating himself on the latest medical advances?

Most patients would agree that all of these activities are good ways for physicians to spend their working hours.

Primary care physicians

are confronted with an ever-increasing burden of additional administrative activities that increase overhead without improving efficiency or health in general.

How about spending time reading suggestions for your care from your insurance company? From your pharmacist? What about calling your insurance company to ask for permission to prescribe a medication? What about waiting 20 minutes on hold with your insurance company to request permission to run a test? Changing prescriptions to match your insurance company’s latest list? Rewriting your prescriptions for the generic?

Rewriting your prescriptions for 90 days instead of 30? Or rewriting them for 34 days or 100 tabs instead?

It matters little to your physician which pharmaceutical company has signed a deal with your insurance company for a lower price to make their drug the new preferred product.

Perhaps you’d like your physician to spend his or her time discussing with you whether your insurance company will really pay for that compete physical you requested? What about the time spent recoding your lab or office visit because your insurance did not cover that physical exam?

How about the time explaining to you that the new test you saw on Channel 3 last night is still in development and is not even available, let alone covered by insurance yet?

We see far too much emphasis in the media about medication choices and treatment options. Do

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you really think supporting primetime advertising is the best use of your health care dollars?

Perhaps you think your health care provider should spend time filling out your request for a handicapped parking card? Filling out your Family Medical Leave forms for your boss? Writing a note for work or school for the days you missed last week but were not really sick enough to come to see the doctor?

What about the time filling out a special form for your disability insurance?

How about the time talking to the banker to make sure that the payroll for the employees will be covered when Medicare decides to withhold or reduce the payments without notice? How

about the time spent with you in the office, hearing your complaints about our receptionist requiring verification about your address, employment or insurance coverage? What about time spent calling your insurance company to verify that you still have the insurance

so that you don’t have to pay in-full when you come to the office? Your insurance cards are like credit cards, you need to show them every time you charge services to them.

How about office management time — interviewing, hiring, or supervising employees to do these things?

So what is the answer?

Ask six physicians, and you might hear eight different opinions. Currently, insurance reimbursement for primary care is too low to allow very much experimentation in delivery models. We simply have too little time and too many non-patient-care activities.

We don’t even have enough time to give much thought to the changes. We are overwhelmed with paperwork. A recent study suggested the average primary care physician works five hours per week less than 10 years ago. One suggested explanation is that the extra effort is no longer as satisfying or rewarding for the physician. Additionally, fewer medical students are choosing to pursue primary care training than 10 years ago, adding to the problem of health care provider shortages. Another recent report revealed

that primary care reimbursement, when adjusted for inflation, had decreased 25 percent over the past 15 years.

By and large, it really is your health that matters most. The most important aspect of health care reform should be that each of us takes personal responsibility for our own health.

Far more important than almost any medical examination or test are the lifestyle things we can do for ourselves: • Cut down on fast foods and soft drinks. Cut down on carbohydrates and fats.

Cut down on your alcohol consumption. Cut back on caffeine. Cut out the tobacco.

• Wear your seat belts in the car. Turn the television off and get outside.

Increase your activity level — increase it a lot.

• Take yourself for a walk. Take your dog for a walk. Take your kids for a walk. Take your spouse for a walk.

Do it for yourself. Do it for your family. Your doctor and your health insurance are not the real issues in life.

David P. Clemens, M.D., is a practicing physician in Norman.

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Wednesday, April 28, 2010

8

National health care reform and the future of SoonerCare

By Mike Fogarty For The Transcript

The SoonerCare (Medicaid) program appears to reap substantial benefits from national health care reform.

Beginning Jan. 1, 2014, the most immediate impact on the program will be to move the Oklahoma Health Care Authority closer to its statutory mission of covering many of our uninsured residents.

According to a 2008 survey conducted by the University of Minnesota’s State Health Access Data Assistance Center, nearly 75 percent of Oklahoma’s uninsured say the primary reason they do not enroll in employer-sponsored insurance is because it is too expensive. The national health care reform legislation, as it is currently understood, significantly reduces the number of uninsured by making affordable insurance options available.

Based on data from the U.S. Census Bureau, the total number of uninsured Oklahomans in 2009 was 494,114, or 14 percent of the state’s population (1year estimates, 2008 data collected in 2009). This total includes 67,200 children under 19 years, 418,057 adults 19 to 64 years and 8,857 elderly Oklahomans.

In May, the actuarial consulting firm Milliman Inc., along with Dr. Kenneth Thorpe, PhD, provided analysis for the article “Hidden Health Tax: Americans Pay a Premi-

um.” They found the additional costs to each insured family to cover the uncompensated care costs of the uninsured had risen from $922 per family per year in 2005 to $1,017 per family per year in 2008. It is estimated that the cost of covering the uninsured through this “hidden tax” amounted to more than $954 million per year in 2005. For Oklahoma in 2009, this equates to about $1 billion in uncompensated care costs of the uninsured being shifted to Oklahoma families who do purchase health insurance.

Hospitals throughout the state should see uncompensated care costs decrease significantly once the new population begins receiving benefits. OHCA data indicate uncompensated care — both bad debt and charity care — account for about $365 million, or 7.4 percent, of total hospital costs as reported by Oklahoma hospitals.

One of the key provisions of the federal legislation will make SoonerCare coverage available to all uninsured to age 65, who earn less than 133 percent of the federal poverty level. For a single person, this equates to an annual gross wage of $14,403, or $6.92 per hour. For the average Oklahoma household of three people, the qualifying wage is $24,352 in total annual household income.

Based on current understanding of the national health care reform bill, the potential number of newly covered Oklahomans served by SoonerCare will

A benefit of national health care reform to Oklahoma is that with 250,000 newly insured lives, the $1 billion in total uncompensated care costs should also be cut in half. be 250,000. Of the 250,000 people, as many as 50,000 Oklahomans who are currently qualified yet not enrolled in SoonerCare will likely enroll, due primarily to the mandate for individual insurance coverage. The state is required to offer this coverage beginning Jan. 1, 2014.

The estimated cost to the state of Oklahoma is based on the schedule of Federal Medical Assistance Percentage set forth in the legislation. Beginning in 2014, for three years through 2016 the cost estimates reflect the federal government will pay 100 percent for those newly qualified. The federal government will pay 95 percent, 94 percent and 93 percent, respectively, in years 2017, 2018 and 2019.

The federal share will remain at 90 percent for all future years.

Of the 250,000 people newly covered by SoonerCare beginning Jan. 1, 2014, the federal government will pay 100 percent for about 200,000 individuals (primarily adults) who were not previously qualified for SoonerCare. For the remaining 50,000 people who are currently qualified yet not enrolled in SoonerCare, the federal government will continue

paying the regular Medicaid matching rate, which is set at 64.43 percent beginning in fiscal year 2010.

(The rate is subject to change year by year based on economic factors.)

The estimated total state cost to administer and provide coverage to these previously uninsured citizens is $41.5 million for the first year (2014); $42 million for 2015; $43 million for 2016; $67 million for 2017; $73 million for 2018; $79 million for 2019; and $95 million for 2020 and each year thereafter. If all qualified Oklahomans enroll in the program, the cost to the state would be about $14 per person per month in 2014 through 2016, $23 in 2017, $25 in 2018, $27 in 2019, $32 in 2020 and beyond.

The potential coverage of 250,000 qualified Okla-

homans should result in the total number of uninsured being cut in half, significantly reducing the amount of cost-shifting and uncompensated care currently being borne by insured families, employers, hospitals and other health care providers.

A benefit of national health care reform to Oklahoma is that with 250,000 newly insured lives, the $1 billion in total uncompensated care costs should also be cut in half.

The average yearly state investment of $63 million to provide the mandated coverage will likely see a return on investment of 8 to 1 — for each state dollar spent, an $8 reduction in uncompensated care costs should result.

Something must be done in our state and nation to curb the rising number of uninsured and

the resulting rise in cost of uncompensated care. It is a self-perpetuating spiral: The higher the number of uninsured, the higher the “hidden tax” of uncompensated care cost-shifts to those who remain insured; the more the cost-shift raises the price of health services and insurance, the more people are forced to drop coverage and add to the number of uninsured. The largest factor depriving Oklahomans of health coverage is affordability, and the costspiral is a major factor in driving up health insurance costs.

Reasonable minds will surely differ on whether the new national reform effort will slow or stop this spiral by making coverage an affordable personal responsibility. As a matter of federal Medicaid policy, it most certainly will help Oklahoma build on our success in offering affordable coverage through SoonerCare and Insure Oklahoma.

Mike Fogarty is chief executive officer of the Oklahoma Health Care Authority.

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9

Wednesday, April 28, 2010

OK insurer finding opportunities within health care reform

By Bert Marshall For The Transcript

After months and years of discussion, the muchanticipated Patient Protection and Affordable Care Act has become law. Now that health care reform has moved from possibility to reality, the contents of this law can be broken down into simple terms: the good, the bad and the unknown.

Within each challenge, there still lies an opportunity to make real, lasting improvements to the health of our nation.

Let’s begin by addressing the good: The Patient Protection and Affordable Care Act achieves near-universal coverage for more than 30 million Americans.

The achievement of this feat is threefold: It expands Medicaid for low-income Americans, provides subsidies on health insurance premiums for the middle class and requires the remaining U.S. population to purchase health insurance.

While near-universal coverage is certainly a positive change, with the good comes the bad: a trilliondollar price tag and imposition of new taxes and fees at a time when our economy remains fragile. Moreover, the Medicaid expansion will place a tremendous burden on state budgets, many of which are already stretched too thin. And perhaps most important, the legislation does little to impact the underlying cost curve.

Finally, we are faced with

the unknown. The federal government has created a new marketplace with new restrictions and requirements, the results of which cannot be predicted.

At Blue Cross and Blue Shield of Oklahoma, we believe we can affect positive change by bending the cost curve. The truth behind rising medical care costs is that we spend more because we consume more medical services. Each year, the volume of claims we receive increases by 3 percent. Preventable illnesses comprise more than 75 percent of our country's total health care spending.

But how do we reverse these trends while reducing costs? We can do it through six interrelated steps: • Invest in health information technology • Enact tort reform • Reform the physician payment structure • Explore comparative effectiveness • Address public health and • Implement consequences for unhealthy behaviors Health information technology is necessary to expedite processes and create better efficiencies in health care. By coordinating care through the use of electronic medical records, we can prevent wasteful spending on redundant tests or drug interactions from prescriptions provided by different physicians.

This will provide physicians with more information and patient history to enable integrated, quality care.

For electronic medical records to be a viable option for physicians, tort reform is needed. With electronic files, a number of liabilities are raised, and physicians need protection against frivolous lawsuits.

These protections also will reduce the instances of defensive medicine, which are estimated to cost the health care system $60 billion to $108 billion annually.

The current physician payment structure must be altered to reward physicians for effectiveness of treatment, rather than volume of services provided.

Currently, 30 percent of health care dollars are wasted on poor quality of care such as inappropriate treatment, waste and defensive medicine. The patient-centered medical-home model focuses on prevention, resulting in an outcomesbased approach to health care.

This structure puts greater emphasis on primary care services, monitoring the treatment of chronic conditions and taking steps to prevent unnecessary emergency care and specialist visits.

Blue Cross and Blue Shield of Oklahoma is taking steps toward implementing the medical-home concept by conducting a medical-home pilot with MEDecision, a health care technology company, and a large hospital-based group of Tulsa physicians.

The next logical step to reduce costs is to identify and implement best practices in medicine. The Blue

Cross and Blue Shield Association proposed a Comparative Effectiveness Institute to identify the most successful medicines and treatments, comparing therapies touted as the “latest and greatest,” with those already available.

We cannot effectively turn back the dial on the rising cost of medical care in America without fundamentally addressing the wellness of our nation. Lowcost lifestyle changes are proven to be as effective — or more effective — than drugs or surgery for most patients. The simplest lifestyle modifications — such as improved diet, exercise and tobacco use prevention — can save millions.

Just as we should reward efforts to improve health and live healthy lifestyles, there also should be consequences for unhealthy behaviors. If we look to auto insurance as a model, risky behaviors like speeding and accidents result in higher premiums. Bad drivers are not subsidized by good drivers. Rather, each individual’s rates reflect his or her behavior. By focusing on measures such as tobacco usage, healthy weight, blood pressure and cholesterol levels, we can develop a payment structure that provides incentives for taking steps to improve or maintain one's health.

Health care reform has only just begun. While

we’ve made some strides, there is still much to be done to ensure the long term health of our nation and stability of our health care system. Through reasonable, solutions-based measures like those listed above, we can enact positive change to improve the health of our citizens while taking rational steps to reduce the costs of medical care for all.

Bert Marshall is the president of Blue Cross and Blue Shield of Oklahoma, the state’s oldest and largest health insurer. Blue Cross and Blue Shield of Oklahoma covers more than 600,000 Oklahomans.

Wednesday, April 28, 2010

10

America’s health: We can — and will — do better

By Cal Hobson For the Transcript

Recognizing the strong, emotional and often heartfelt opposition to the new federal health care legislation, I appreciate the opportunity to present a factually based commentary about what is in the new law, as opposed to what was and continues to be falsely attributed to it.

Death panels, federal takeover of the health system, Washington bureaucrats getting between you and your doctor are all great sound bites and designed to inflame and scare citizens. Fortunately, that’s all they are — sound bites peddled by some politicians and special interest groups with not a smidgen of truth to them.

The new law is necessary because the current American health care system is not fiscally or morally sustainable in the near or long-term. It is financially breaking millions of families — with and without health insurance — gobbling up an everincreasing share of our country’s gross domestic product and depriving other critically important segments of our economy the investments they need and deserve. For examples think education, infrastructure, defense, and debt reduction.

The following facts highlight a few of the key provisions in what is the most important and, yes, far-reaching health legislation since the passage of Medicare and Medicaid in

The long-running saga in the Oklahoma Legislature about whether to provide coverage for kids with autism is now, thank goodness, a moot point.

1965. Those landmark accomplishments were also met with partisan opposition when passed but are now not only accepted but are politically untouchable.

You don’t have to believe me. Name an elected official who supports their repeal, and I’ll name you a soon to be unemployed politician. With time, the same will be true of this new initiative as the accusations, myths and outright lies about it fade into history.

Now for some truths about the new law.

• About 32 million out of 46 million uninsured Americans will now have insurance. For obvious reasons inmates and illegal aliens are not included in the coverage.

• Eighty-three percent of Americans currently have insurance but also pay heavily for the health care given to those who don’t. It’s called uncompensated care, and in Oklahoma, the average family of four pays thousands of dollars annually for it through their own insurance policies. That’s the primary reason the currently insured should care about the uninsured.

It’s costing us billions to

pay for health care for the uninsured and is getting worse and more expensive every day.

• Adults and children with pre-existing medical conditions and those who develop medical problems can no longer be denied coverage or dropped from coverage. For example, the long-running saga in the Oklahoma Legislature about whether to provide coverage for kids with autism is now, thank goodness, a moot point effective this September.

Also no arbitrary cap can be set by insurance companies on lifetime medical benefits. Diseases like cancer, diabetes and heart disease obviously don’t recognize these monetary limitations and thus millions of our fellow citizens have been driven into bankruptcy or to early deaths.

• Dependents can now stay on parents’ health insurance policies until age 26, regardless of whether they are students.

• The prescription drug “donut hole” is beginning to be filled, and seniors who find themselves in this predicament right now will receive a $250 rebate check this year. By 2018, this arbitrary finan-

cial black hole will completely disappear.

• For the first time long-term care insurance is included and expanded coverage for eligible poor children is guaranteed through 2014. Lord knows Oklahoma has more than its share of poor children: We’re ranked, unfortunately, among the worst 10 states. By the way, the great state of Texas ranks not only No. 1 in football but also in the percentage of poor children without insurance.

• The total cost of the bill over ten years is indeed $871 billion, but the nonpartisan Congressional Budget Office has certified it will reduce the federal deficit by $142 billion. How can that be? It’s simply because the current health care system is breaking the national bank — as well as many people’s budgets — through uncontrolled and uncontrollable cost increases.

Ten years ago, the cost of health care was fully oneeighth of the entire gross domestic product, and now it is one-sixth on its way to one-fifth.

It is also true that part of

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the cost of this new legislation will be paid for through reductions in the Medicare program with special emphasis on waste, fraud, abuse and duplication. This should have been good news to fiscal hawks like Sen. (Dr.) Tom Coburn who have made similar complaints about Medicare for years. Also hospitals, drug companies and other major participants will be required to make significant financial contributions to the health system, which will help cover the cost of the new law.

Studies show they can afford it.

In closing, I wish this new law had been passed with bipartisan support in Congress. It didn’t, and now, of course, its constitutionality is being litigated through the courts by a

group of state Republican attorneys general. The vast majority of legal experts have indicated their efforts will be expensive and in the end, futile.

The law will be upheld.

In the meantime, it gives me great comfort to know that millions of our fellow citizens go to bed at night knowing health care is finally a benefit — a human right, if you will — for all, not just for some.

For those of you who are cheering on the crowd who wants to repeal this law, please look a parent of a child with autism in the eye and explain why. I don’t think you’ll enjoy the conversation.

Cal Hobson is a former state Senate president pro tempore and now serves as executive director of operations for University of Oklahoma Outreach.

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Wednesday, April 28, 2010

Heath care reform and Its impact on Oklahoma

By Tom Coburn For The Transcript

Since Congress passed a new health care spending bill, I’ve spent a great deal of time travelling the state and holding town hall meetings.

Across Oklahoma, people are expressing grave concerns and confusion about the bill. They are not alone.

In fact, many members of Congress do not understand the bill they just passed.

Unfortunately, my discussions with state and federal agencies have reinforced my concerns that the consequences of this bill will be severe and harmful for Oklahoma and every other state in the country.

This bill, I believe, is the most reckless and irresponsible piece of legislation Congress has passed in decades. At a time when we need to be lowering health care costs and shoring up Medicare and Social Security, Congress has decided to expand broken and bankrupt programs and create new burdens for families.

The bottom line is the typical Oklahoman can expect to pay more for lower quality health care with fewer choices. Yet, what is even more troubling than the consequences we can predict are the consequences we can’t predict.

When Congress interferes in the market and the sacred doctor-patient relationship, the negative ramifications are far-reaching.

We already see this throughout our health care system.

Medicaid, for instance,

allegedly guarantees health care to low-income Americans. In reality, however, 40 percent of doctors do not treat Medicaid patients so Medicaid patients receive substandard care compared to patients with private insurance. The Medicaid reimbursement rate for doctors is so low that many doctors would go out of business if they saw every Medicaid patient they could. But because doctors care about all patients, many practices, including my own practice in Oklahoma, provide health care to Medicaid patients even though we often lose money in the process. Medicaid proves that access to a government program is not access to health care. Yet, under the new law, half of all uninsured Americans will be forced into Medicaid.

Proponents of the plan claim it will work because of the bill’s “individual mandate” – a provision that forces every American to buy insurance or face a tax penalty – combined with subsidies to buy insurance and provisions forcing insurance companies to cover everyone. A more likely result will be the total collapse of the private health insurance industry, which may be what the authors of the bill intend.

Instead of obeying bureaucrats in Washington and spending at least $3,000 a year on health insurance, a young, healthy Oklahoman will save at least $1,000 to $2,000 a year – and probably much more – if they wash their hands of

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the program completely, pay a fine of $695 and obtain insurance if they get sick or have an accident. If young and healthy people opt out, which seems to be what the government is encouraging them to do, insurance rates for families and older Americans will skyrocket. Insurance works when everyone participates. When the government creates incentives for the healthiest group of Americans to drop out, everyone else pays more.

Even if this disastrous consequence does not occur, Oklahomans can expect the following: • 84,980 Oklahoma sen-

iors enrolled in Medicare Advantage will have their benefits reduced by half, according to the Congressional Budget Office director.

• About 750,000 Oklahoma households making less than $200,000 will pay higher taxes, based on estimates by the Joint Committee on Taxation.

• The youngest Oklahomans could pay 15 to 30 percent more as premiums go up in the individual market, which will create another incentive for them to dump their insurance altogether.

• Oklahoma small busi-

nesses employing 50 or more people will pay either higher health care costs or a new penalty because of new government mandates.

• About 200,000 adults in Oklahoma will be enrolled in Medicaid because the bill greatly expands Medicaid eligibility.

• The Medicaid expansion will place a severe burden on Oklahoma’s state budget. The expansion could cost Oklahoma more than $60 million a year once fully implemented, which will force the governor and legislature to raise taxes, raise college tuitions, decrease the quality of education, or all three.

• Each Oklahoman will carry the burden of $8,470 in new government spending under the plan.

• Every Oklahoman who pays taxes is going to be paying for abortions with their own dollars. The President’s executive order will not prevent taxpayer-funded abortion, according to the National Right to Life Committee and the U.S. Conference of Catholic Bishops.

• Oklahoma patients and doctors will have less control of treatment decisions. The new bill gives the Secretary of Health and Human Services and a board of unelected bureaucrats vast new powers to decide the scope of coverage and which services will be reimbursed. As a result, the government will effectively ration care and shorten life spans as federal bureaucrats overrule doctors. In my own practice,

patients I diagnosed with cancer and other diseases would have died prematurely if my treatment decisions were determined in Washington, D.C., rather than my exam room.

• The bill’s micromanagement of doctors and reckless expansion of government-run health care will encourage more doctors to retire even as our nation faces a doctor shortage. Our nation could face a shortage of as many as 150,000 doctors in the next 15 years, according to the Association of American Medical Colleges.

A new independent report from the Obama Administration’s Centers for Medicare and Medicaid Services confirms that the health care bill will increase costs and cause 7 million seniors in Oklahoma and across America to lose their coverage. This report is another indication that the bill will not work as advertised.

I’m hopeful many of these dire consequences can be avoided if the American people demand that Congress repeal this foolish and reckless plan. As long as I’m in the Senate, I’ll use every power available to me to repeal this bill and replace it with a reform plan – such as the Patients’ Choice Act I introduced last year – that will cover more Americans without bankrupting our country or putting the government in charge of health care.

Tom Coburn, M.D., represents Oklahoma in the U.S. Senate.