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Wednesday
Mar192014

PBN Op-Ed: It’s not if, rather how to make health care reform work

OP-ED/LETTERS TO THE EDITOR

Guest Column:
Ted Almon

3/17/14

Original Source.

Much of the recent controversy over the funding for Rhode Island’s health insurance exchange, Healtsource RI, misses the point of how the exchange fits into a larger vision of health care reform. Hopefully, the bold reform initiative just submitted to the General Assembly by the stakeholder advocacy group HealthRIght (of which I am chairman) will lend some perspective to the reform effort in our state.

Some years ago I had a friend who was a divorce attorney. I remember him telling me how it was virtually impossible to negotiate a property settlement when one of the parties really didn’t want to get divorced. He said the first step was to get both sides to agree there was going to be a divorce.

It strikes me we find ourselves in a similar situation with the Affordable Care Act (Obamacare). We can’t make it work when one side really doesn’t want it to work.

There have been efforts to reform our health care system going back to Teddy Roosevelt’s time. There always seems to be consensus on the need for reform, but one has to wonder… does everyone really agree we have to change such a large part of our economy?

One suspect group would have to include me, people who make money off the system as it is now. My company sells medical equipment and supplies and has grown successfully for many years. So why do I support fundamental and systemic reform?

The answer lies in simple facts. We have had consistent growth in the uninsured population as health coverage has become unaffordable to more and more families. The Annals of Family Medicine in a 2012 article predicted that even with the ACA, the cost of family health coverage would exceed median family income by 2037. Reform really must succeed this time.

HealthSource RI, our own made-in-Rhode Island health insurance exchange, is the local lynchpin of the Obamacare plan. When combined with the individual mandate, which I concede can be grating to the inner libertarian in all of us, the idea of consolidating all health care financing through the exchange is both compelling and very powerful.

Most people don’t realize that much of what we call health care costs have nothing to do with providing patient care. Rather, they are administrative costs, often burdensome paperwork necessitated by the numerous and varied payment methods we use for providers. It adds more than 30 percent to the total cost of care. The exchange is a tool to fundamentally re-engineer this administrative burden and reallocate the savings to expanding coverage and improving quality. Why wouldn’t we want to do this?

Those who focus solely on the cost of building or operating the exchange are either missing the point or threatened by the potential for improvement it represents. Amazon.com cost billions to build and operate before the benefits of a digital exchange for consumer goods became clear. Admittedly that model is still evolving, but the potential for technology like Amazon or HealthSource RI to transform markets is undeniable.

Businesspeople in particular should recognize that while accepting change is always challenging, it is an essential element of continuous improvement. In our business when we consider disruptive change, I sometimes have to say, “I don’t want to hear all the reasons this won’t work, I want to know how to make it work.”

That is where I think we are with HealthSource RI. We have already made a very large investment in building this tool. The cost of operating it now could be much less than we already spend to operate the outdated administrative infrastructure it will replace. It has the power to transform the market for health coverage and become a force for broader change within the health care delivery network. To look at HealthSource RI in isolation is the wrong perspective. We must see it as a pivotal part of a larger plan.

HealthRIght has submitted to the General Assembly an overarching reform plan that features the role of HealthSource RI among the other essential elements of a transformed health care system for R.I. S2533, sponsored by Sen. Gayle Goldin of Providence, with the support of Rep. Frank Ferri of Warwick, is now an active bill. We should all pay attention now to how it proceeds and why. There will surely be those who offer all the reasons why it can’t work. Let’s try to consider instead how we could make it work. •


Ted Almon is CEO of the Claflin Co. and chairman of HealthRIght, as well as a member of the Expert Advisory Panel of HealthSource RI.

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