Monday, January 3, 2011

If Jindal’s Got the Job He Wants, Why Is He Still Fighting Health Care Reform?

Governor Bobby Jindal insists that he is not running for president, that he has the only job he wants — that of being governor of Louisiana.

There is a simple way that the governor could prove that: he could order Attorney General Buddy Caldwell to withdraw Louisiana from the suit challenging the new health care reform law, the Affordable Care Act.

Why? Because the Affordable Care Act is good for what ails Louisiana.

Admitting that might not help Jindal’s standing among national Republicans, but there is no better way to prove his commitment to serving Louisiana than dropping a politicized legal challenge to a law that helps Louisiana families and businesses, the health care provider community, and the State of Louisiana. In fact, under Jindal, state government has moved to take advantage of provisions of the new law.

To understand why this law is good for Louisiana, it is necessary to understand the state of health in Louisiana today. Doing so reveals that the Affordable Care Act goes a long way towards addressing what ails health care in this state (and, also, this country).

The Affordable Care Act addresses key things that ail Louisiana and Louisiana’s health care delivery system. It will not only improve access to care in Louisiana, it will stabilize the finances of the provider community and ensure that the state’s health care dollars (spent primarily through Medicaid) get more bang for the buck.

For Democrats, recognizing the state of health care in Louisiana and understanding how the Act responds to what ails it, reveals the blatantly partisan nature of the attacks on the law by Jindal and others. The sound public policy at the heart of the act reveals the efforts to deny Louisiana citizens, businesses and the provider community the benefits of this Act to be strictly partisan and diametrically opposite of the best interests of the state and its people.

Understanding Louisiana’s health care challenges and how the Act responds to those reveals the opponents of the Act for what they are — partisans who place politics above any consideration for the well being of the people of this state.

This is Louisiana Health Care

The Louisiana Department of Health & Hospitals’ Chronic Disease Prevention and Control Unit provides these facts about our state on their website:
  • Approximately 208,000 adults or seven percent of adults in Louisiana have been diagnosed with diabetes.
  • African Americans have the highest prevalence of diabetes, with a nine percent diagnosis rate, compared to five percent of Hispanics and six percent of the white population.
  • Over 20% of adults currently do not have health insurance of any kind, including Medicaid or Medicare.
  • Nearly one out of four adults is obese.
  • Louisiana has the fourth highest cardiovascular death rate in the nation.
  • One in four adults in Louisiana are current smokers.
  • One in four Louisiana children have tried cigarettes by the 6th grade.
  • Cardiovascular disease is the leading cause of death in Louisiana, accounting for almost 40 percent of all death in the state.
The state’s Office of Public Health annual report card shows that chronic diseases kill people at a higher rate in Louisiana than in other states. This is because the diseases are not detected early here and, by the time they are detected, the disease processes have inflicted more damage to the patient’s body. The cost of treatment is higher at that point, the chances of successfully managing the disease lower, the quality of life for the patient is reduced, and the ability of that person to be a productive member of society is reduced as well.

In short, diseases that are manageable if they are diagnosed and treated early, kill more of us because they are not. This is what results when there are barriers that prevent people from getting access to the care that they need. Cost is one of the primary barriers to care — the cost of care or the inability to afford insurance that could help pay for that care. We are afflicted by chronic diseases at higher rates than the rest of the country and those diseases kill us sooner than they do people in other states.

One prominent barrier to access to care in Louisiana is that much of the state (except for the metropolitan areas) has been designated areas where shortages of primary care health professionals exist. Where such shortages exist, it means there either is not a doctor in town, or there are not enough doctors in town to service the population of the community. As a result, people must travel some distance in order to see a doctor.

That often requires a person taking time off from work in order to seek care. Having to travel outside the community to seek care costs the person seeking care time and money. Chronic illnesses, absences from work, and time off to seek care and treatment also have a negative impact on worker productivity, which affects every business in the state.

The High Price of Being Uninsured

Louisiana ranks among the states with the highest percentage of working age residents who don’t have health insurance. The LSU Public Policy Research Lab conducts an annual survey on health insurance coverage in Louisiana for the Department of Health & Hospitals. According to the most recent survey, there are at least 27 parishes in which more than 20 percent of the adult working age population (people between the ages of 19 and 64) do not have health insurance. The margin of error in the survey allows that the number of parishes with at least that percentage of uninsured could be higher, as many as two-thirds of the state’s parishes.

Since most small businesses in Louisiana don’t offer health insurance and only a small majority of other businesses as well, that loss of work is compounded by the significant out of pocket expenses for the person seeking care.

If people try to reduce out of pocket expenses by going to an LSU Hospital or clinic, the reduced cost is replaced by extended time required to wait to get care.

The high percentage of Louisiana’s adult population without any form of insurance has an impact that extends beyond the uninsured person, their family and the businesses where they work. The lack of a third-party payer (that is, some form of insurance) has a profound financial impact on those providers who deliver care to the uninsured. Many people know that if you turn up at a hospital emergency room, you will get to see a doctor and you will get treated. The result of providing care to the uninsured costs Louisiana’s 140 or so acute care hospitals hundreds of millions of dollars each year.

There is a form of reimbursement for that care, based on a formula, but the bulk of those disproportionate share dollars go to the LSU hospitals as part of the state’s method of funding those hospitals and because those hospitals provide care to so many people who don’t have insurance.

The bottom line is that there are so many uninsured working age adults in Louisiana that the disproportionate share dollars don’t go far enough to cover the costs of delivering that care, thereby putting a huge financial strain on hospitals and providers across the state.

Compound that with a steady stream of state cuts in Medicaid reimbursements to private providers and you have the rapidly tightening the financial bind that is crushing private sector health care providers — doctors, clinics and hospitals.

The Cost Shifting Death Spiral

The combination of large numbers of people without a third-party helping them pay their medical bills and a public insurance program that is forced to reduce its payment for services due to state budget woes creates an irrepressible demand by providers to ease some of that pressure by driving up charges to those patients with the ability to pay — that is, people with private insurance coverage. Consequently, costs are shifted onto those patients with private insurance, which produces pressure on the insurance companies to offset those higher costs through premium increases.

That cost-shifting spiral puts the cost of private insurance out of the reach of more people every year as premiums and co-pays escalate beyond the ability and/or willingness of employers and employees to pay. In the summer of 2009, a spokesperson for Blue Cross Blue Shield of Louisiana estimated that only about 30 percent of small businesses in Louisiana offer their employees any kind of health insurance coverage. Other estimates are that less than 50 percent of all employers in Louisiana offer health insurance to their employees.

The cost shifting has provoked fights between insurance companies and hospitals over reimbursement rates. There were well-publicized clashes in 2010 between the state's largest health care insurance provider Blue Cross Blue Shield of Louisiana and several hospitals and groups, including the state's largest network of private hospitals operated by the Franciscan Missionaries of Our Lady.

If current trends continue unabated, the number insured will continue to decline and the number of uninsured will continue to rise in a death dance that will ultimately result in the collapse of employment-based health insurance. That, in turn, will bring down much of the provider community with it.

What has been happening in Louisiana has been happening across the country, although the process of decline is not as far advanced elsewhere as it is here.

It is against this backdrop of the spiraling health care costs, growing ranks of the uninsured and mounting financial instability in the provider community that a national consensus developed in 2008 about the need for reform.

Market-based Response to the Death Spiral 

The Patient Protection and Affordable Care Act that was signed into law by President Barack Obama in April 2010 seeks to pull the system out of its death spiral by ensuring that more people have some form of third-party payer helping them pay for their health care needs. That will come through a mandate that just about everyone who can afford it has health insurance or, for those who can’t afford it, Medicaid will be expanded to ensure that the cost of care can be paid.

The mandate was an idea that originated with Republicans in the mid-1990s in response to President Clinton’s attempted health care reform. It was also the cornerstone of health insurance reform implemented in Massachusetts under Republican Governor Mitt Romney earlier in the first decade of this century.

This is not socialized medicine. The federal government has not bought any hospitals. Doctors and nurses are not becoming public servants. As is the case with Medicare and Medicaid, care will still be delivered through private providers. The difference is that the federal government will be helping to pay for the care either through tax credits or through expanded Medicaid eligibility.

To those who say the country can’t afford this, the correct response is that the country can’t afford not to have this program. Health care costs are a major factor driving growth in government spending. It is also a major component in future liabilities of the government.

The Patient Protection and Affordable Care Act bends the cost curve of health care by making sure that more care is paid for at the point of care, rather than shifting costs onto those with private health insurance. Reducing cost shifting improves the viability of Medicare and of private insurance by improving the balance sheet of providers from individual physicians to major hospitals. The health information technology investments included in the 2009 stimulus legislation will also make the system operate more efficiently and improve the quality of care.

In Louisiana, the Affordable Care Act will bring coverage to more than 750,000 residents who currently do not have any form of insurance. About half of the newly covered will receive tax credits to help pay for coverage. This will bring $9 billion new health care dollars into Louisiana and into the coffers of Louisiana providers in the first five years that the health insurance exchange program begins in 2014.

The other half of the newly insured under the Act will come via expanded Medicaid coverage, bringing another $7 billion into the state and into the coffers of health care providers. Yes, the state will have to spend more on Medicaid (about 5% more than it is currently obligated to pay), but the benefits of better care for large segments of the population and financial stability for the provider community represent a tremendous return on that small investment.

The Affordable Care Act will reduce family insurance premiums by between $1,700 and $2,500 for the same benefits package they have now by the second year the insurance exchange program is in effect (2015).

The Affordable Care Act represents a huge tax cut for business by offering tax credits for small businesses that offer health insurance coverage to their employees. In July of last year, about 60,000 Louisiana businesses were notified that they are eligible for these tax credits under the Affordable Care Act.

Also in July, more than 95,000 Louisiana residents who had been denied insurance coverage due to pre-existing conditions became eligible to buy insurance at the same rates as healthy people in their age cohort. Louisiana, under the direction of Governor Jindal, chose not to participate in this program. This immediately stranded 1,700 Louisiana residents who are participants in the state’s high-risk pool for those with pre-existing conditions. Those people are paying higher rates for their coverage than is available to them through the federal program. In addition, Jindal’s refusal to participate in the program means that the federal government had to expand its involvement in health care in Louisiana rather than partner with state government.

In September of last year (2010), children up to the age of 26 became eligible to remain on their parents’ health insurance coverage if those adult children are not offered health insurance on their job. Estimates are that there are more than 25,000 young adults affected by this provision.

At the same time (September 2010), the Act reduced the cost of health insurance for more than 60,000 early retirees in Louisiana who have coverage through their former employees. The state of Louisiana — at Governor Jindal’s direction — enrolled to participate in this aspect of the program to help it pay for health insurance coverage for its early retirees. Yes, the state moved to participate in one of the benefits of the Act at the same time the state was fighting to have the law declared unconstitutional.

The Act also will close the 'donut hole' in the Medicare Part D prescription drug program.

The Act also provides funding for 99 new community health centers across Louisiana that will go a long way towards ending health professional shortage areas in the state. In addition, the American Reinvestment and Recovery Act includes money for job training for health care professionals ranging from registered nurses down to nurses aides.

The provision that annual health exams and health screens be provided without the need for a deductible or co-payment further reduces access to care, and will enable earlier detection of the chronic diseases that ravage people while they go undetected.

In addition, the Affordable Care Act and spending including in the 2009 stimulus legislation included money for additional training for health professionals and technicians to help ease the health professional shortages that exist in Louisiana and other states.

ACA: Good for What Ails Louisiana and Health Care

Any way you look at it, the Patient Protection and Affordable Care Act is a good prescription for what ails Louisiana and Louisiana health care. Better access and care for patients, financial stability and predictability for the provider community, a taming of the cost of health insurance premiums for individuals and businesses, will all contribute to a healthier, more productive Louisiana.

The Affordable Care Act is not a mixed blessing for Louisiana!

In fact, if one were to seriously try to address only Louisiana’s health issues and our health care problems with a commitment for reforming the existing system, you’d be hard pressed to come up with something better than the market-based health insurance reforms that are the core of the Affordable Care Act.

Governor Jindal puts politics ahead of the well being of this state by insisting that Louisiana continue its fight to have this law declared unconstitutional.

If he is truly interested in serving this state and its people, he would drop that quest immediately.

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