Ted Simons: Congress continues to work on healthcare reform. The house has a 1900-page bill it hopes to bring to the floor for debate very soon. Another bill is being drafted in the senate. Both are an attempt to insure more Americans and control ever-increasing healthcare costs. To do that, Roger Hughes, executive director of St. Luke's health initiatives, says we'll have to change how we pay for healthcare.
Roger Hughes: We have a third party -- you know, system, that essentially is -- is a way of paying for healthcare. It's not health insurance at all. And it insulates the customer in this case from the true cost of that care. And somebody else, you know, allegedly is picking up that tab. It happens to be the American taxpayer, but somebody thinks it's the government or the employer that's providing this benefit. It encourages overconsumption, which in turn, encourages overproduction and that creates this vicious cycle of rising prices. What's coming out of Washington today is still wanting to hitch health insurance to an employer-based model and in my estimation, until we move way from that model and then begin to consider what I think are the other two main alternatives, either some type of a single payer system and that doesn't mean government-owned and operated, but something like Medicaid for all. Or some kind of system where health insurance and costs are in the form of individual vouchers and tax credits.
Ted Simons: Joining me to talk about healthcare reform -- Assistant house minority leader representative Kyrsten Sinema. She's a Phoenix democrat and one of 32 state legislators nationwide to serve on the White House healthcare reform taskforce. Also here is Tom Patterson, chairman of the Goldwater Institute. He's also a former state senator. He's a Republican and a retired emergency room doctor. Good to have you both on "Horizon."
Both: Good to be here.
Ted Simons: You heard Roger Hughes, let's go ahead and just dive right in. From what you just heard, does that make sense to you?
Kyrsten Sinema: Certainly. The first portion that Roger discussed concerning how costs escalate over time and that we have overproduction and overconsumption, absolutely. If you have an insurance plan or the ability to pay, you can get as much care as you want in America today.
Ted Simons: The idea of overconsumption is driving everything. Make sense?
Tom Patterson: Absolutely, Ted, it's true. There's no other industry in which a consumer goes to a provider and neither of them knows what the cost of the service to be provided might be and neither of them cares because they're not paying it. The patient, the consumer is not paying it, and so there's a constant pressure to overconsume and that has a lot to do with why we've got a system that's good in many respects but simply costs too much.
Ted Simons: We have the best medical professionals in the world and yet fewer people seem to be able to afford their care. Back to Roger Hughes. He gave two ideas. Single payer or voucher tax credits?
Tom Patterson: That's precisely the question that we're sitting on now as a nation. That's what this debate is really all about. We need a system in which government makes the calls and mandates and defines the fees or can we as Americans take healthcare back into our own hands and be the ones that with our doctors make the decisions, we're responsible for and accountable for the financial aspects as well as the outcomes of those decisions but we make them ourselves and that's the way we can wring costs out of the system, if that’s the way we want to go.
Kyrsten Sinema: Congress put neither of those two options on the table. What congress put on the table is a hybrid option that utilizes our existing system including many of its flaws of employer-based insurance and opens up a new exchange which actually is not new in Arizona. We have one. That provides new opportunities for consumers who don't have access to affordable care and it's more of a hybrid. It doesn't solve all of problems that we see now in terms of overconsumption and rising costs, but it does attempt to control them.
Ted Simons: I know the house talks about extending coverage to tens of millions of folks which is a major factor in the healthcare debate-- the house plan talks about extending coverage and can't deny coverage to pre-existing conditions. That's not so much a hybrid. That's what people are asking for. Can it be done and can we afford it?
Kyrsten Sinema: Think the most important part of any package on the hill is the prohibition against discriminating against people with preexisting health conditions. There are millions who don't have coverage or can't get full coverage because of preexisting health conditions. They often see care from emergency rooms and that's uncompensated that you and I are paying for. So the cost will decrease over the long run. The house bill will save $104 billion over the course of 10 years by providing true preventive and intervention care rather than catastrophic care. Saving costs over the long run.
Tom Patterson: Wait a second. That's not what the congressional budget analysts say. It costs more money than ever and here's the thing, Ted. We have all of these estimates going around. Obama started off, saying it is not going to cost anything. And people laughed and then it was $850 billion and then 1.05 and now we’re up to 1.5 trillion-- none of those numbers in reality mean that much. Nobody can estimate what this program would cost in 10 years. We do know this. It would be a lot more than anybody is estimating at this point. These programs always cost more than their estimated cost. Medicare costs seven times nor in 10 years than the original budget estimates and this is a horrendously expensive program, even according to the analysts and more than they're analyzing right now.
Ted Simons: Compare and contrast the expense of the program -- whatever expense prediction you want -- and what we'll wind up paying for healthcare if nothing substantial is done, or changed.
Tom Patterson: The nothing option is something that nobody I know of is advocating for. That's not out there -- to do nothing. The question is, are we better off having government deciding who gets what and trying to tamp down the utilization of medical care through -- if I may use the word, rationing -- or are we better off having patients and doctors making decisions with the dollars in their hands and be accountable for the decisions and trust them to make the right medically and financially accountable decisions.
Kyrsten Sinema: The cost of doing nothing will be astronomical. Premium costs have risen by 130% and are anticipated to increase next year alone by another 15%. That's not sustainable. What we do know is this: We have two plans in congress that will eventually merge and become one piece of legislation. But absent that, the alternative will be to do nothing. That's what congress has done over the last 60 years. When they’ve tried to do this in the past, they’ve been unable to enact reform. They have to do it now.
Ted Simons: As far as the Republican plan, and let's kind of go that direction, because there's a plan out there. It's a little nebulous as we speak now. But it does call for easing restrictions on the insurance industry, to expand coverage and sells insurance policies across state lines without submitting to the state regulations each individual regulation. Does that make sense to you?
Kyrsten Sinema: I think it depends. In general, allowing companies to engage in business across state lines makes sense. It’s the American way. The idea that you can engage in free enterprise wherever you are. It makes sense to have some general regulations to ensure you're protecting against fraud and hurting consumers and those are things that can be easily worked out. I think moving across state boundaries makes sense.
Tom Patterson: We sell all other lines of insurance across state lines and it works fine. There's no reason we couldn't open up the insurance market. What's at stake are insurance mandated and many, many insurance groups have gotten into state governments and influenced state legislators and I was there and know how it works. And Kyrsten does too. When you can sell across state lines, the mandates go away and because no one is going to buy insurance from a state with a lot of mandates and that saves up to 30-35% depending on what state you're comparing it to. It's a no-brainer.
Ted Simons: And yet the budget office says as many as a million people may not be able to get insurance if that particular avenue is taken. Do you agree with that?
Tom Patterson: No. That -- that is an analyst's way of looking at it, that is static and doesn't take into account the dynamic things that would happen. The problem with insurance is it's too expensive. If it wasn't so expensive, a lot of the other problems that flow from that would not be with us either. If we can save money -- and I know we could by selling insurance across state lines, it would increase access to insurance, not limit it.
Kyrsten Sinema: I think that's not the greatest weakness of the Republican legislation. There are some good aspects of the Republican bill. There are a couple of key flaws. It doesn't include the mandate for insurance companies to stop discriminating people with preexisting medical conditions. That’s one of the most pressing concerns. The other grave concern, it doesn't cover very many people. It's cheaper, but primarily because it doesn't cover as many people. It's not robust enough to address the needs of our country.
Ted Simons: What do you do with people with preexisting conditions?
Tom Patterson: Kyrsten's idea, which is a very common one, is to throw them in the insurance system and make those with medical insurance pay for them – it’s a big problem though. Think of this, you go to the doctor and I've got bad news. You've got cancer and AIDS and since you don't have insurance, you're in a heap of trouble. If you can, you're going to get on the phone to your insurance agency and say I need a policy right now. That's not insurance. That's a way to pay the bills. And in Massachusetts where they have this preexisting condition in their law, they found that insurance companies were selling policies for one week at a time. It sounds good, but it's more complicated and there are better ways -- you know, people have preexisting conditions and don't have insurance -- by the way, no insurance company should ever be allowed to terminate somebody's insurance because of a condition that comes up. That's the flip side of it. But if you have a preexisting condition, no insurance, we have to figure out some way of doing risk pools, tax credits, some combination. We have to take care of those people.
Kyrsten Sinema: The American people are already paying for it. We subsidize their costs and we’re for this through our taxes each day. What many people do with preexisting conditions is quit their jobs to become poor so they can qualify for Medicaid and then you and I are paying the bill. That's one of the worst ways to address it. The one thing Tom and I did agree on, is it is wrong to dump someone from their health insurance if they develop an illness or disease.
Ted Simons: I want to get back to Roger Hughes regarding the concept of mandatory health insurance. Here's what he had to say about that.
Roger Hughes: I think you can make a strong case for actually going to a true insurance model, where everybody is required to have catastrophic coverage just like you buy it on your house or on your car. And then for the people that can't provide that, that is publicly subsidized and then you take away first dollar coverage and then you allow people to provide various kinds of plans, depending on their resources and their ability and their interest on the private insurance market. Some people -- I mean, the only thing that everybody has to be in the system, but individuals can still choose from a variety of individualized plans on what they want to purchase.
Ted Simons: Very quickly, you've got to make sure everyone is covered and that includes preexisting conditions, or else the whole thing gets out of whack.
Roger Hughes: It has to be mandatory. Whether for a single payer system or some individualized plan it has to be mandatory.
Ted Simons: Does it have to be mandatory? Whatever we do, will everyone have to be in the boat or will it sink otherwise?
Tom Patterson: I think first we bring down the expenses. Make it realistically available to every American. Provide them the money for their medical insurance and health savings account if they need it. I’d like to stay away from the mandate; I don't think it's mandatory if we have a way it make insurance affordable to everybody.
Ted Simons: What do you think?
Kyrsten Sinema: Well, President Obama doesn't support the mandate until he got a concession from the insurance industry and they said, look, we'll stop discriminating, but in exchange for allowing the people in the big pools, we need a mandate and he agreed under those conditions and those two things work together if you have one more aspect, which is subsidies for individuals who can't afford it so they can have choices in the private which company works for them.
Ted Simons: In a word, Tort reform, is it necessary?
Kyrsten Sinema: Well, I would say, yes, and I'm an attorney. And the president is doing right, the reform pilot he's doing throughout the country and I want to see those succeed.
Ted Simons: Can you give me one?
Tom Patterson: Absolutely, don't tell me you're serious about cutting costs if you're not serious about tort reform. And these programs of the president are not serious reform.
Ted Simons: That's it. Our time is up.
Both: Thank you.