IF THERE is anything Americans are agreed upon it is that their health care system is a mess. Yet, people ranging from White House officials to health economists to a legion of inside-the-Beltway pundits are just as certain that a cure is years away. They are wrong. The state of Minnesota has come up with a practical plan to fix its health care system.
Last Friday the Minnesota legislature, with bipartisan support, passed legislation known as HealthRight. Minnesota politicians on the left and the right were able to break through the gridlock that has developed in national health policy by realizing that the control of health-care costs and provision of access to affordable insurance are not incompatible goals. The opposite is true. Movement became possible in Minnesota with the political epiphany that allowed liberals and conservatives to see that the only way to increase access to health care is by making changes in the system that will contain costs.
HealthRight moves to contain costs by instituting some simple, long overdue reforms. It mandates that private insurance companies doing business in the state sell basic coverage that does not exclude the sick and disabled or charge women and older people exorbitant premiums. This means cheaper insurance will be available to every citizen.
The legislation bans conflict-of-interest ownership arrangements and self-referrals by health-care providers. This means lowering costs by cutting down on unnecessary tests and procedures. The law creates minimal practice guidelines for physicians which will lower the stratospheric costs of malpractice insurance and defensive medicine. And a state commission gets the authority to regulate the purchase of new technologies and large capital investments by hospitals as well as to set targets for what the state is willing to pay for those Minnesotans who get their health care through state programs.
These reforms will cut costs. This frees more money to help subsidize insurance for the uninsured.
Additional revenues for subsidizing insurance for those now uninsured are generated by raising the cigarette tax a nickel a pack, adding a 2 percent surcharge on all hospital, doctor and dentists' bills and imposing a 1 percent tax on all HMOs and nonprofit insurers' bills. Medicaid and Medicare charges are exempt from these new excise taxes.
The doctors and hospitals hate the new taxes. But HealthRight deliberately uses taxes on providers rather than money from general revenues to force greater efficiency in the health-care industry. By imposing a tax on providers and establishing real reforms in the existing system, the money can be found to put affordable insurance within reach of the 400,000 children and adults in Minnesota without coverage.
Under the provisions of HealthRight, all Minnesotans who do not qualify for Medicaid or Medicare will be able to buy health insurance with a subsidy pegged to their income. HealthRight is not a handout. Each person must carry some of the burden of paying the cost of insurance. A family of three earning roughly $10,000 a year can buy a basic package of health services for $8 a month. The state will pay $300. If that same family earns $30,000 a year or more, it can still purchase HealthRight insurance, but it pays the full $300 monthly premium without a subsidy.
HealthRight does not address every health-care need. Out-patient services, prenatal care, immunizations, eyeglasses and short hospital stays form the core of the coverage available under the subsidized insurance scheme. Prevention gets much more attention than catastrophic illness or injury. But by emphasizing prevention and health maintenance, HealthRight lowers the odds that Minnesotans are going to find themselves in a hospital or nursing home bed.
Unlike Oregon, the only other state to try health-care reform seriously, Minnesota has constructed a program which provides access to the uninsured without demanding rationing of care for the poor. Other states and Congress should take a cue from Minnesota. The only way to provide affordable, quality health care to all Americans is by swallowing the politically bitter medicine of cost-containment.
Arthur L. Caplan teaches in the Center for Biomedical Ethics at the University of Minnesota. Steven Miles is a physician in the Hennepin County Medical Center in Minneapolis.