Health-care reform: One step at a time

Phil G. Busey Sr.
The Edmond Sun

EDMOND July 10, 2009 12:56 am

— Health-care problems magnify in a recession. Debate has raged about reform for decades. Congress and states chose to do nothing. Like an ostrich our head was in the sand. The longer we failed to act the more costly, complicated and serious the dilemma. Focus is now on reform. The Obama administration offers a plan. Others offer plans.
Reform is required. Do not forget, while raising concerns, we should have acted long ago. The delays affect what we can do today and how quickly. Napoleon said, “Give me the bad news first. Then I can act on it.” We knew the bad news and did nothing. In perspective it took years to dig this hole. It will take time to dig out. Reforming a multi-dimensional system will be costly.
Reforms should be phased in carefully, fixing one thing at a time. The pressing aspects of the uninsured must be fixed first with open dialogue about varied options. Health-care issues include premium costs, business and group coverage, funding, Medicare, record keeping, wellness and service provider costs and physician liabilities. Effectively solving all of these at once is near impossible.
By some estimates, 47 million Americans are uninsured. Action is hampered by years of inaction. Reforms must be pragmatic. This points to a government-private partnership. When politicians speak only of negative impacts on the private insurers I cynically wonder how much of the $400 million annual health-care lobbying budget influenced that view? This is a complex crisis. Federal funding may be the only real option. State budgets cannot support reforms.
Insure Oklahoma, while well intentioned, is fiscally feeble. Funding is based on tobacco tax revenues of about $34 million alone and may cover up to 18,000 lives. We have 600,000 uninsured. Oklahoma, with 46 other states, projects budget shortfalls next year. Already some agencies are imposing mandatory wage reductions. Revenues are not enough to fund state health-care plans let alone meet governmental needs. The cost impact to Oklahoma for uninsured, outside the direct $1 billion, is $6 billion in lost profitability and business opportunity with a negative loss of 55,000 jobs. Based on these numbers, 47 million uninsured costs the nation conservatively $500 billion.
A measured approach to reform avoids pitfalls later. First, address covering uninsured. Second, offer a risk guarantee to enable small businesses and groups to acquire, keep and afford coverage. Use federal funding as the source of claims, guarantees and risk reserves much like a self-funded plan to utilize private providers to insure categories of need from uninsured to small groups. Any participant should be required to pay a fair premium to the plan based upon income, capability and criteria.
The goal is not to restructure the entire system but make insurance available to uninsured Americans and relieve cost burdens for certain smaller businesses and groups. Those with insurance still would be covered under their normal plans. Immediate reforms should focus and be limited to only those who cannot obtain insurance, have lost insurance, need catastrophic coverage or small groups that are high risk. Include small business groups meeting financial criteria that cannot afford insurance. Slow down. Do it right. This is too complex to see how quick we can implement change.
The goal should be a functional private-government partnership. Keep insurance with the private providers. Craft a government program that resembles a self-funded plan. Then benefits can be tailored, money stays with the government reducing premiums and is used to pay claims or mitigate risk. The plan remains administered by third-party administrators that are providers with networks and knowledge.
A government plan, without private participation is not the best option. Under this concept the government, like self-funded businesses, provides funding, sets terms of coverage and eligibility. Administration is private. Cover those who lost or cannot obtain coverage. Those already covered or participating in group plans must keep them. Avoid taxing those who pay for insurance. Aim at reducing small business costs. Allow associations for pooling employees for insurance. This requires comprehensive, government and private sector cooperation to control costs and be successful.
An aging population creates a greater census risk for companies. The plan has to induce or mandate private companies to insure aging groups. Many companies with 100 or fewer employees are too small to even be considered for group coverage due to risk. Government risk mitigation can make coverage possible but we should limit creating a health-care bureaucracy.
The financial firepower of the U.S. can be used to support an initial health-care solution. Federal funds, in a self insured format can guaranty, pay and support insurer’s participation in a government, private sector partnership using the best both have to offer. There is no magic bullet. It will be tough work but it has to be done one step at a time.

PHIL G. BUSEY SR., an Edmond resident, is chairman and CEO of The Busey Group of Companies.