Could the uninsured finally find relief?

Area congressman's "No Discrimination Health Insurance Act" hopes to find a distinguishing place among other health care fixes

Editorial by Sean Fitzgerald

When Eighth District Congressional Rep. Steve Kagen (D-Wisconsin) made his bid for office in early 2006, he built his campaign message around curing health care cost woes at the federal level.

A trained physician and owner of his own specialty allergy clinic, Kagen has seen the ugly side of federal Medicare and Medicaid programs, noting – at least in Medicare’s case – that the program “is a mess, and the payment structure is not rooted in reality.”

Troubled as well by what he considers a high number of uninsured in the United States – some 47 million, which Kagen quickly notes, includes himself – the congressman ideally wants to make health care available to every citizen who needs it.

I sat down with Rep. Kagen at his Appleton office a month ago to discuss his 12-page bill, titled the No Discrimination Health Insurance Act of 2008. The legislation – penned in February and currently looking to make the agenda on several congressional committees – would require health insurance companies to openly disclose their prices, as well as charge every citizen the same fee for the same service within the same geographic region.

How does it accomplish this?

Kagen proposes a model which would restore the concept of community-based health risk pools in alignment with the metropolitan statistical areas already established by the U.S. Census Bureau. Similar to the community credit union model, any citizen living within a particular community is eligible to participate in that community’s health risk pool, regardless of any pre-existing medical conditions. It wouldn’t make a difference who you work for, to which professional associations you belong, even your past history of health.

The goal is to “create the largest risk pools possible,” Kagen said, then allow insurance companies to compete in the open market by establishing standard, transparent rating for costs across each community. Individuals could still opt out of the community health risk pool, and it’s perhaps more likely that healthier individuals would do so in search of better pricing for themselves, suggest a number of local employee benefits experts.

To be certain, the health insurance industry isn’t likely to openly accept Kagen’s suggestions, though there’s been little lash back from the powerful lobby at this point.

And health care providers are a bit leery themselves. Providers – which negotiate rates with insurance carriers because of the volume of patients an insurance carrier can bring toward stabilizing the cost of health care delivery – already take substantial loss on most services paid for by Medicare and Medicaid. Most providers also provide further discounts from charges for low-income patients who don’t qualify for Medicaid.

A crucial concern lies in the fact that these federal medical assistance programs often dictate a provider’s actual cost of delivery on a service, thereby affecting those prices that are negotiated with insurance companies, as well as those costs which are paid by the uninsured. Top health care officials locally are concerned whether Kagen’s proposal helps to solve the problem, or simply create more administrative constraints and present further financial strain on already struggling not-for-profit hospitals and clinics.

Wisconsin, in particular, is fortunate in that its Wisconsin Hospital Association provider members have collaborated to create WI PricePoint, a consumer information resource with facility-specific average charges for each procedure, and WI CheckPoint, a voluntary hospital reporting initiative with information on health care quality and safety metrics.

Rep. Kagen’s legislation seeks a menu of such pricing for health care services in an attempt to provide uniform pricing across a geographic region, but wouldn’t provide additional information on quality, for example, the re-admission rates for open heart  surgeries performed by Hospital A compared with those performed by Hospital B.

All criticisms aside, Kagen’s bill rekindles a few oft-swept-under-the-rug discussions on the national system of health care that could lead to other possible solutions. Health care issues in the U.S. amount to a large, swaggering animal that often appears out of control, and any fix is going to have to occur by tackling one element of the system at a time.

For more information on the proposal, or to follow H.R. 5449 as it negotiates its way through various committees, go online to www.govtrack.us. You can also learn more and find contact information for Rep. Kagen at http://kagen.house.gov.