It’s been a rough time for health care. Sixteen of the 23 federally funded, not-for-profit Consumer Operated and Oriented Plans (co-ops) have now failed. Humana reduced its Georgia coverage area, and Cigna, UnitedHealthcare and Aetna have completely pulled out of Georgia’s federally managed insurance exchange.
Most premium rate increase requests for commercial health insurance in 2017 are in the double digits – the weighted average increase is 27 percent. We got ours recently: 16 percent.
In some parts of Georgia, the outlook is worse. With little competition, rural Georgia has the dubious distinction of some of the nation’s highest health care prices and worst health care outcomes. Four rural hospitals recently were forced to close, including the one in Ellijay, my hometown, and two-thirds are operating in the red. Only nine states have fewer primary care doctors per capita. Several counties have no primary care doctor.
Even more depressing is that any attempt to talk about addressing this dreary situation is so mired in politics it’s almost impossible to have a logical discussion.
As with many issues, the media and political pundits paint this as a decision between two bad options: Do nothing or do more of what got us into this mess. Conservatives in Washington have some good ideas but can’t seem to get their act together. Liberals maintain that more money to expand Medicaid is the solution.
Georgia recently addressed a sticky issue where costs were out of control, outcomes weren’t good and the politics were dicey. Yet Gov. Nathan Deal, with unanimous approval from Democrats and Republicans in the legislature, passed sweeping criminal justice reforms. Four years in, crime is down, millions of dollars have been saved by diverting nonviolent offenders from expensive prison beds, and the savings have been invested in lower cost, more effective, community-based services. Most important: We’ve turned around the lives of thousands of Georgians.
The themes are similar in health care. Like prisons, emergency rooms are expensive but necessary for some; expensive and unnecessary for many. Consider that the average ER visit costs $1,000; the average clinic costs $29.
Hospital ERs are federally mandated to treat anyone, regardless of their ability to pay. This “free” care, an unfunded mandate, is expensive: The estimated 565,000 uninsured Georgians living below the poverty line consume, on average, $2,500 in health care services a year. That’s roughly $1.4 billion a year you and I are subsidizing in one way or another.
What if there was a way to spend that money more efficiently?
Primary care should be the first focus. A good option is direct primary care, which operates much like a Netflix subscription or fitness center membership. The monthly subscription is $40-$80, depending on age. It saves money and allows for innovation by removing government and insurers from the doctor-patient relationship. Washington State, one of 16 states allowing direct care, provides this option on its exchange and for Medicaid recipients. Early results show savings in overall health care costs of 20 percent.
Next, with Georgia the capital of health IT, it should be easy to aggregate several sources of funding to pay an individual’s health insurance premium. Although the primary funding will be from federal funds, government (taxpayers) shouldn’t bear the entire burden. Individuals, employers, churches, charities, friends and families could also contribute.
A survey found small-business owners who don’t currently offer insurance would contribute an average of $1,400. If the federal government is willing to provide $2,500 (far less than the $7,000-plus per person cost for Medicaid expansion), that adds up to $3,900 — not counting other potential sources.
For those who don’t sign up or can’t find an affordable plan, the unused federal funds would directly fund qualifying care by safety net providers. Assuming the worst-case scenario, where none of the 565,000 individuals sign up for insurance, $400 million would be available for primary care and $1 billion could cover uncompensated care, exactly the amount Georgia hospitals reported in 2014. Savings would be reinvested in evidence-based public health programs to further reduce costs and improve quality.
Focusing on primary care, creating multiple sources of funding for insurance, fully funding safety net providers and reinvesting in public health is not a bad start. Even better, the cost to government is no more than what we are already spending in a very inefficient manner. The result is a plan clearly better than the status quo and an opportunity for Georgia to lead the way in solving our nation’s health care challenges.
(Kelly McCutchen is president of the Georgia Public Policy Foundation, an independent think tank that proposes market-oriented approaches to public policy.)