OPINION: Legislation won't benefit patients

By Mike King
http://www.ajc.com

Georgia’s Republican legislators held it together on the last day of the session just long enough to push through two measures that they claim will stimulate competition in the state’s health care marketplace. State legislative leaders, borrowing from the health care playbook of GOP think tanks, contend that consumers will benefit by encouraging such “reforms.”

But the reality is that neither measure is likely to make much of a difference in lowering costs or providing better access to care. One simply changes where a lot of insured patients will undergo surgery; instead of the hospital, they’ll be steered to facilities owned by physicians. The other measure amounts to a tax preference for the private insurance market over demonstrably successful, government-subsidized programs like PeachCare for Kids.

Doctors were the driving force the last time the state’s GOP leadership weighed in heavily on health care costs, and they were again this year. In 2005, the Legislature passed sweeping tort reform, including limitations on lawsuits and jury awards for medical malpractice. While the new laws haven’t been in place long, the trend doesn’t suggest malpractice reform will have an appreciable impact on medical costs. This year’s laws probably won’t either.

Hospitals vs. doctors

The hardest-fought measure this year —- pitting two powerful lobbying groups, surgeons and hospitals, against each other —- rewrites the state’s authority over medical facilities and services. Republicans have long held those rules, known as the Certificate of Need law, are anti-competitive. The arcane regulations needed an overhaul.

But the demand to change the law became more pitched when surgeons demanded they be allowed to open their own outpatient surgery centers, pitting them against hospitals, which fear losing their best-paying patients. The hospitals complained, correctly, that they had to take all comers —- the uninsured, Medicaid patients, illegal immigrants —- when they show up in emergency rooms in need of care. Doctor-owned facilities can pick and choose what patients to take.

The new rules require the outpatient surgery centers to provide at least some minimal levels of care to Medicaid patients and the uninsured. (It will be up to the state to make sure they are in compliance.) But the new rule, while a clear victory for physicians, won’t necessarily be one for consumers. The hospitals will most likely be stuck with a disproportionate share of poor and poorly insured patients, which will force them to make up the losses in higher charges for nonsurgical services.

Risky insurance strategy

The state will offer tax breaks for insurance companies to sell low-cost health plans with high annual deductibles as a way to cover more Georgians without insurance.

The tax breaks would be tied to health savings accounts; consumers can tap them to pay for charges they incur before the deductible is met or for services not covered by the plan.

GOP proponents of the high-deductible plans say they could eventually cover as many as 500,000 of the state’s 1.7 million uninsured residents. But experience in other states shows that number to be wildly exaggerated. Plus, there is a genuine risk that employers now providing coverage of workers in more traditional health plans will be tempted to switch to the bare-bones, high-deductible plans in order to get a tax break of their own.

One analysis shows that insurance companies offering the plans will get about $150 million in tax breaks over the first five years they are sold. By 2013, the annual break to the companies could amount to about $40 million.

Contrast that with what $40 million would buy if the state invested that much in expanding its Medicaid program to more working poor adults, as well as expanding PeachCare, the state’s insurance plan for children. The $40 million would draw a large enough federal match to cover an additional 31,000 low-wage workers and about 100,000 more children.

The state’s GOP leadership would no doubt characterize such an expansion as an entitlement, their favorite description of the highly effective PeachCare program. Instead, Georgians without health insurance will have to await evidence that the “incentive” the state is offering insurance companies will translate into a plan they can truly afford.

—- Mike King, for the editorial board (mking@ajc.com)

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