Editorial: Rationalizing health care
Provider tax helps reduce number of uninsured
Editorial Board, The Register Guard
June 1, 2009
The most urgent need of the health care system is not more resources. What's needed are more rational ways of using the vast resources already available. Oregon is about to take a big step in that direction.
Oregon already has universal health care, or something close to it. What it doesn't have is universal health insurance. The uninsured can obtain health care, but often only after their need becomes desperate, and then in the most expensive setting — a hospital emergency room. The cost of this care is absorbed by hospitals and shifted to those with health insurance. Attempts to extend insurance to those who lack it can be seen not as inviting more people into the health care system, but as improving the system through a more rational use of existing resources.
Last Thursday the House Revenue Committee approved House Bill 2116, which would provide free or low-cost health insurance to 80,000 children and 50,000 low-income adults. The cost would be paid by a 1 percent tax on insurance premiums, and a tax of up to 5.5 percent on hospital revenues. The bill has the support of legislative leaders, the state's hospitals and most insurers, and is likely to become law.
Hospitals and insurance companies, after long negotiations, agreed to the taxes because they expect the money to come back to them. The state will use each dollar of tax revenues to obtain $1.66 in Medicaid matching funds from the federal government. This pool of money will be used to expand health insurance for children and low-income adults, and to increase the amount the state pays to hospitals for Medicaid services.
About one in six Oregonians, or 621,000 people, lack health insurance, according to Census statistics collected before the recession gathered force. HB 2116 will reduce that number by about 20 percent.
Increasing the number of insured patients ought to produce a corresponding reduction in the amount of care that hospitals provide without compensation. Insured patients also are likely to obtain medical care before their conditions worsen to the point that leads them to the emergency room. By substituting lower-cost routine and preventive care for the most expensive kind, broader insurance coverage should reduce health care costs overall.
The private insurance system bears part of the burden for uncompensated care, and it is creaking under the weight.
Hospitals, clinics and doctors have to cover their costs somehow, and their only revenue-producing patients are the ones with private insurance — treating Medicare and Medicaid patients is a break-even proposition at best. The cost of treating the uninsured is a growing component of insurance premiums. Insuring more Oregonians will relieve this pressure, which means the tax on premiums should actually help contain the cost of private health insurance.
Oregon will still be a long way from having universal health care coverage. But the state, with the cooperation of hospitals and insurers, has found a way to make more efficient use of the vast amounts of public and private resources that flow into the health care system. That's progress.
Link to the story: http://www.registerguard.com/csp/cms/sites/web/opinion/14567264-47/story.csp
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