Doctor Speaks for Universal Health care
By Richard Creaser
Derby Line Forum
Derby Line, Vermont
November 12, 2003
DERBY LINE – The workers at the Tivoly Inc. plant in Derby Line have serious concerns regarding their healthcare insurance options. Not only have costs continued to climb over the last decade, they are finding it increasingly difficult to find a carrier willing to take them on. The future of healthcare at Tivoly and in the state of Vermont were the topic of discussion at a public forum at St. Edward’s Church in Derby Line on Thursday night.
“The average age at the plant is 51 years old,” said John Kudla of Brownington. “Blue Cross wouldn’t even quote us.”
A battle over healthcare funding and insurance is brewing among legislators, and Governor Jim Douglas recently announced that he favors a plan that would attract more insurance companies back to Vermont. His plan would encourage more companies rather than a government-funded single-payer system.
The main speaker at the forum in Derby Line Thursday, Dr. Deborah Richter of the Vermont Healthcare for All (VTHCA), said workers like the people at Tivoly would be most likely to benefit from a single-payer system.
Under the current system, premiums increase and coverage continues to decline as the Tivoly workers struggle to maintain some kind of medical insurance plan, said Eric Crowe of Beebe.
“We have 110 workers on the plan plus another 15 retirees drawing from it,” said Mr. Crowe. “If we lose the plan, if we go down, they’ll be swallowed up with us.”
Escalating costs are a reaction from the insurance companies, said Dr. Richter. Competition among insurers is to secure the largest pool with the least amount of risk.
The aging workforce at the Tivoly plant represents one of the least desirable factors insurance analysts can see. Older people are simply more likely to require medical care in the near future.
As insurance premiums continue to rise and qualifying services decline, the number of people opting into their employer’s medical plan will also decline, further driving up the costs for those still enrolled. Within the next few years, particularly among the younger work force, the decision to forego insurance is likely going to increase, said Dr. Richter.
“You are going to see a rise in people taking out catastrophic policies that will keep them from losing their homes but they will have to pay the first ten or fifteen thousand dollars,” she said. “That’s where we’re headed.”
Statistics indicate that roughly 10 percent of the population uses 72 percent of healthcare resources, said Dr. Richter. This figure includes individuals with long-term healthcare needs like diabetics and people with extended medical requirements such as post-operative patients or premature babies.
Financially, it makes little sense for insurance companies to want to cover the sickest 10 percent. This has given rise to exclusions based on risk pools and other statistical data.
Dr. Richter challenges the notion that bringing in more insurance carriers will help to reduce or slow climbing premiums. She contends that such ideas are “magical thinking”.
“Bringing in more insurance companies won’t lower costs any more than bringing in more real estate agents will affect property value,” she said.
The very flexibility and number of insurance plan options is what helps contribute to rising healthcare costs, said Dr. Richter. No single billing clerk can fully understand the proper paperwork protocol for every insurance plan and every option within that plan.
“What would happen if everyone went to the corner grocery using different currencies and bought a gallon of milk at a different price?” she asked. “How many clerks would need to be behind that counter? More than one, I can tell you that.”
This complexity consumes 15 percent of healthcare dollars, she said. Administrators are using nearly one in every seven cents simply to make sure that claims are properly accounted for and remittance paid.
The simplest way to eliminate much of that bureaucracy is to move towards a single payer healthcare system. The VTHCA has championed a universal healthcare model for Vermont for several years and the movement is gaining momentum.
“Financially, economically the numbers add up,” said dr. Richter. “Now we just need the political will to put it into practice.”
Under the proposed model, Medicare and Medicaid funds would be shifted into a general pool. A 5.8 percent employer payroll tax and a 2.9 percent employee payroll tax would also be added to the general pool. That money would form the financial basis for the single payer system.
“We could support the current healthcare system, provide coverage for all Vermonters based on the money we are already spending,” she said.
Representative David Bolduc expressed his reservations about expecting government to take on the burden of managing a healthcare system.
“I have some very real concerns about becoming involved in this based on the results of other things the government has done like Act 60,” he said. “It’s probably best to keep government out of healthcare.”
Professionals in the healthcare field would handle the management of the system with oversight provided by a board advocating for the general population, replied Dr. Richter. The government’s role would be to ensure that the payments are distributed promptly and efficiently.
“Paying for things is something that the government does and does very well,” she said. “I do trust them to finance healthcare but I don’t trust them to run Fletcher Allen, the Springfield hospital or the local doctor’s office.”
Naturally, shifting away from a patchwork of private insurance companies would cause hardship in the insurance industry. Medical billing assistants would lose positions and brokers would see declines in their income.
“The damage to the health insurance industry is the unspoken result of universal healthcare,” said Dr. Richter. “There would still be a place for one agency to administer claims and someone like Blue Cross could do a good job of that.”
The public and politicians need to rethink how they perceive the healthcare system, said Dr. Richter. Healthcare needs to be viewed as a public good like fire and police protection and not as a consumer service.
The single payer model would provide the financial stability to ensure that hospitals are properly staffed and equipped in the event that you, as a taxpayer, should ever require their services.
The majority of hospital expenses, some 84 percent of healthcare costs, are fixed, making a stable financial arrangement that much more attractive to healthcare providers. The buildings require utilities and maintenance, the hospitals need beds and linens and a staff needs to be present every hour of every day regardless of how many people use them.
“These hospitals aren’t just sitting around waiting for well-insured people to get in car accidents,” said Dr. Richter.
By ensuring that health services are funded and maintained in a consistent manner, this provides users some guarantees that services will most likely still be available when they are needed, she said.
“So we would have a much deeper infrastructure under universal healthcare,” said Jim Wuertele of St. Johnsbury.
“You would be able to do this because every patient becomes, in effect, a paying customer,” said Dr. Richter.
Containing costs under a single payer system would be the next challenge. That would involve decisions based on the level and types of coverage that the universal model would cover, said Dr. Richter.
Naturally, she said, that coverage would also determine the actual cost to administer the program.
The types of services covered would, hopefully, include those services most frequently used or in demand by the majority of the population. Some services, particularly those with unverified or unknown medical value may need to be carefully considered.
“You have some practices at the fringes of medical theory like aromatherapy,” she said.
Circumcision is another practice that is not medically necessary but is still widely practiced, said Dr. Richter. If people wanted to cover it under the plan, each operation would cost the program about $200.
“If I were looking at the budget and there was somewhere that needed cutting…” she said to many chuckles.
The final determination on what procedures were covered and which were not is something that should be democratically determined. The institution of democratic determination would provide a single payer model with something the current healthcare system lacks: public accountability.
Dr. Richter presented the two sides of the issue of whether or not to include a co-pay on the universal plan. For the very poorest of people, even a small co-pay can deter them from seeking medical assistance early on.
“But this would not deter them to the point where they die of a treatable condition because they were afraid of how much the procedure would cost their family,” she said.
At the same time, a co-pay could discourage casual abuses of the system.
“It would discourage unnecessary care,” said Dr. Richter. “You would be less likely to go to the doctor for stupid things like a cold or diaper rash if you had to pay every time you went.”
The shift to a single payer system would also provide some real economic benefits to offset some of the harm to the insurance industry. Businesses would benefit from the model in two ways.
The first would see a significant decline in the money employers pay to maintain healthcare coverage for their workers.
The second would be assurances that all of their employees do have access to some form of medical care.
“Don’t you think business would rather pay a 5.8 percent payroll tax than 8 percent of wages to cover the employer contribution to an insurance premium?” said Dr. Richter.
The payroll tax will hurt some small businesses, particularly those who currently offer minimal or no medical coverage.
The benefits for employees will be just as real as the benefits for employers, especially for people like the workers at Tivoly.
“If the hundred guys under my watch had that extra $50 a week to spend, that would be quite a bit of extra money back into the community,” said Mr. Crowe.
Mr. Bolduc commended Dr. Richter for her presentation but encouraged the forum’s participants to remain open to all sides of the debate.
“You made some very good points here tonight but my job as a legislator is to listen to all sides before making a judgment,” he said.
“I can learn a lot from the negative side if people feel it’s worth arguing against,” agreed Mr. Wuertele.
If a single payer model or some variant of it is going to be used, people need to approach their legislators and bring the issue to Montpelier, said Dr. Richter.
“This is something that needs to go before the House in January,” she said. “If we lose, we won’t go away.”