Hospital in Providence.
Rhode Island’s health-care system is one of the most expensive in the world, according to a study of the state’s health system released last month.
Rhode Island has the fourth highest per-capita spending on health care – 21.5 percent more than the national average – in a country that far exceeds any other in spending on medical services. Yet the state’s health-care system is often referred to as being “in crisis.” How can that be?
The dollars are going to the wrong place, according to “Rhode Island Can Afford Health Care For All,” a study commissioned by the Coalition for Consume Justice and paid for through a $10,000 grant from the General Assembly.
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Written by authors from Boston University’s Health Reform Program, the report claims that the money being spent on health-care in Rhode Island right now – about $7.2 billion in fiscal year 2002 – is sufficient to provide complete, comprehensive medical care for every Rhode Islander. But much of it now is wasted on administrative fat, payment bureaucracy and unnecessary medical procedures, the study says.
The report espouses a “single payer” system, much like the systems now in place in Canada and in many European countries, where health-care administration is run by national governments. But don’t get the wrong idea – this isn’t nationalizing or socializing medicine, insists Alan Sager, a health-services professor and one of the report’s primary authors.
“The traditional U.S. view of single payer is that it requires replacing all private insurance by doubling the income tax or sales tax or something like that,” Sager said. “That’s obviously reprehensible.”
Instead, the study calls for “consolidated financing” of the state’s health system. Rather than multiple payers – Medicare, Medicaid, private health insurance – each spending money on the same things, Sager says those revenue streams should be merged into one reservoir, or a health-care trust fund, to be managed by one entity.
That consolidation would cut out a ton of waste, Sager says.
For instance, the system would do away with the incessant cat-and-mouse games between insurers and providers, Sager said: resolving claims denials, discrepancies in payment schedules for the same services; cost shifting between payers and providers.
Also, since everybody would be covered under the single-payer system, there would be no costs associated with determining eligibility, figuring out each patient’s benefits under a myriad of health plans
“All of these things are nonsense,” Sager said. “No other country puts up with it.”
The report also touts “professionalism within a budget,” maintaining that physicians and other medical professionals could spend health-care dollars far more carefully. It proposes neutralizing financial incentives by earmarking a fixed percentage of health-care costs to pay doctors, 20 percent, while asking them to spend the balance in the most efficient way possible.
If Rhode Island were to initiate these changes – consolidate its health-care dollars and have providers spend money more carefully – it would provide comprehensive health care for all state residents by spending $47.7 billion on health care over the next six years. Following “business as usual,” the report says, would result in a projected $54.6 billion expenditure during that time – still leaving thousands of residents uninsured or “under-insured.”
The argument could be made that Rhode Island is closer to the goal of “affordable health care for all” than any other state. It has the lowest percentage of residents without health insurance in the country, with just 6.2 percent of Rhode Islanders uninsured, according to the 2000 census.
The Coalition for Consumer Justice study says it would cost $128 million a year to close that gap and extend health benefits to all uninsured residents – a seemingly achievable number. But that doesn’t even come close to the goal of affordable “insurance for all,” the study’s authors say.
About six times that amount, $818 million a year, is needed to help plug the holes in the health coverage of Rhode Island’s “under-insured.” These are residents or workers who lack comprehensive health coverage. They share hefty percentages of premiums and shell out ever-steeper co-payments, for example. This population also includes Medicare recipients who have gaps in coverage for things like prescription drugs.
The study concludes that the $1 billion cost of filling those coverage gaps – and covering the totally uninsured – could be covered by spending today’s pool of health-care dollars more wisely.
Arline Bolvin, executive director of the Coalition for Consumer Justice, said she hopes the study will spark meaningful debate among business leaders, lawmakers and the health-care community.
“This report is a tool to be used to educate the public that there are solutions to our health-care crisis, like consolidated financing, that won’t break the bank,” Bolvin said. “Now we have specific data for Rhode Island that shows how it can be done.”
She said the group will present the report to the General Assembly next year.
While implementing the recommendations would be a daunting task for any state government, Sager says that it’s at the state level – not federal – where innovations in health policy will occur. He points to the failure of former President Clinton’s health-care reform plan, which he says occurred largely because of the wide differences between health systems in the various states.
“Congress isn’t going to act until it’s reassured by evidence in the states that this will work,” he said. “There is no one-size-fits-all solution. You’ve got to tinker.”
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