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Health care: Minnesota can and must do better

Rebecca Otto

As we rang in the New Year, many of us gave thanks for family, friends, and our health.

But health care insecurity remains a reality for too many of us: the farmer in Redwood Falls choosing between a $30,000 annual family policy and seed for next spring; the St. Paul couple delaying retirement four more years to ensure their 22-year-old has health coverage; the Beltrami County woman on Medicaid who can’t find a dentist willing to treat her abscessed tooth; the young woman in Minneapolis avoiding getting tested for a genetic marker for cancer for fear that a pre-existing condition could make it impossible to get health coverage in the future.

These decisions are making people sick. We must do better.

In 2013, Americans spent $8,713 per person on health care, 2½ times the average spent by OECD nations. The Minnesota Department of Health projects that spending will more than double by 2023. This growth outpaces state economic output, and will cut into all other things we care about – including education, environmental protection, and economic growth.

Worse, we’re not getting good value for our money. A 2017 Commonwealth Fund study found that the U.S. health care system ranked last on overall performance among 11 high-income developed nations.

I asked my governor campaign’s policy team to research how we can create a health care system that guarantees care to every Minnesotan, delivers a comprehensive standard benefit set, lowers costs, and encourages continuous quality improvement in health outcomes. Here’s what we found. 

What doesn't work

Bill after GOP bill to repeal or destroy the Affordable Care Act has been scored by the Congressional Budget Office as leading to millions of people losing health coverage.

The GOP’s recently passed federal tax bill is projected to increase premiums for individuals and small businesses and increase the number of uninsured by 13 million, while raising the national debt and increasing pressure to cut Medicare and Medicaid. 

In Minnesota, Republican legislators recently passed stop-gaps to stabilize the individual market, including state-funded discounts for those not receiving federal tax subsidies, as well as subsidies to insurance companies in hopes they will remain in the market and restrain rate increases. Republicans passed these measures while letting a less expensive and more effective proposal — a MinnesotaCare buy-in — flounder without a committee hearing. 

What works

Our analysis found that nations with lower health care costs and comparable or better quality share certain characteristics: 

  • Health care is universal, and is usually publicly financed through general tax revenues instead of insurance premiums.

  • They have a guaranteed, standard, comprehensive benefit set.

  • Private nonprofit providers compete for patients.

  • The focus is on primary care and population health.

We reviewed universal health care systems as well as the research literature on value-driving payment reforms in the U.S. and abroad, and developed my Healthy Minnesota Plan based on what has been shown to work. You choose your health care provider.  There are no premiums or deductibles. Every Minnesotan receives a standard comprehensive benefit set, including mental health and substance abuse treatment, reproductive health and family planning, maternity, and vision and dental care. 

The Healthy Minnesota Plan focuses on the importance of a stable primary-care provider-patient relationship and on obtaining value for our health care dollar. Under the plan, payment systems will be designed to encourage private providers — whether they are part of care delivery groups, independent practitioners, or institutionally based — to be efficient and innovative, and to coordinate care. For most providers, gone will be the pay-per-visit or procedure system that encourages quantity over value, and gone will be the time-consuming coding and billing and pre-authorizations. Providers can focus on their core mission: keeping us healthy.

Paying for it

How do we pay for it? By some measures, as much as 64 percent of health care spending is already public under Medicare, Medicaid, workers comp, the VA, local, state, and federal government employee plans, and military Tri-care. We will seek federal waivers and redirect all current public health care spending into a single protected state fund. We will eliminate the skyrocketing health insurance premiums paid by individuals and employers. Instead, we will create a system of broad-based and fair taxation agreed to with the Legislature.

Decades of research indicate that this kind of approach will save the vast majority of Minnesota families money while providing comparable or better quality health care. The evidence we have conservatively suggests that, after an initial period of transition, savings could exceed 15 percent, curbing spending growth into the future while covering all Minnesotans and greatly reducing the inequities that currently exist in health care.

Government’s purpose is to improve the common good. Ensuring that all Minnesotans have health care security is a New Year’s resolution worthy of our shared effort.

Rebecca Otto is Minnesota’s state auditor and a 2018 candidate for governor.

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Comments (9)

How Pay For It?

Has Ms. Otto proposed a credible plan to pay for the Healthy Minnesota Plan? I searched her website and found this sentence: "We cannot say exactly how much revenue is involved because it will depend on the level and type of benefits the legislature decides upon, but we can speak in terms of percents."

This isn't a serious financing proposal; it's deliberately vague and boilerplate. Other details are missing from her proposal: (1) Will provider reimbursements be significantly lowered, as occurs in all other single-payer plans throughout the world and in our own Medicare and Medicaid systems? (2) Why would physicians stay in Minnesota if they can earn much higher incomes elsewhere? (3) Who qualifies for this program? How long do you have to be a Minnesota resident? Are illegal immigrants included? What's to stop sick people from becoming residents merely to access free medical care? (4) Will medical malpractice laws be reformed to reduce the large amount of defensive medicine that doctors employ? Democratic politicians are beholden to personal injury lawyers for campaign donations, aka campaign bribes. (5) California and Vermont backed off from state-run single-payer programs that require tax increases that would cause citizens and businesses to flee. Why would such a plan work in Minnesota but not in those states?

Come on, news media. Do your jobs and ask penetrating questions of all candidates, including the ones who share your political ideology.

So let's see . . .

Last I checked, it broke down like this (Ms Otto was being too conservative):

Per year, per capita health care cost:

Italy: $3,207

United Kingdom: $3,971

Japan $3,713

Australia: $4,177

France: $4,367

Canada: $4,506

Sweden: $5,003

Germany: $5,119

Switzerland: $6,787

United States: $9,024

www.pgpf.org/chart-archive/0006_health-care-oecd

(Update: "$10,345 per person: U.S. health care spending reaches new peak" www.pbs.org/newshour/rundown/new-peak-us-health-care-spending-10345-per-...)

And don't forget: We get worse health care outcomes than any of the other countries on that list: More chronic disease and shorter life spans.

In terms of Gross Domestic Product comparison, here are those numbers as tracked by the Commonwealth Fund from 1980 (30 years before the ACA became law) to 2013. (Note: In 1980 we were spending about the same percentage of our GDP as most other countries on the list.)

United States: 17.1% (update: U.S. gov says that grew to 17.8% in 2016)

France: 11.6%

Sweden: 11.5%

Germany: 11.2%

Netherlands: 11.1%

Switzerland: 11.1%

Denmark: 11.1%

New Zealand: 11.0%

Canada: 10.7%

Japan: 10.2%

Norway: 9.4%

Australia: 9.4%

United Kingdom: 8.8%

www.commonwealthfund.org/publications/issue-briefs/2015/oct/us-health-ca...

I won't bore you with the details of how the savings break down when the different GDP rates above are applied to it, but in case you'd like to do any rational calculating on the potential upside of the universal health care systems those other countries have been enjoying the benefits of for decades (very few of them are "single-payer," by the way), here's the basic MN number to start with:

"In 2015, Minnesota current-dollar GDP was $328.3 billion"

www.bea.gov/regional/bearfacts/pdf.cfm?fips=27000&areatype=STATE&geotype=3

Please give that a little thought (and "by the numbers" examination) and tell me why you think the American (and Minnesotan) health care system is a shining example of how to do things ("conservatively"?) and, if you do, why you think we aren't smart or capable enough to figure out how to do what those other countries have been doing for decades without anyone going broke, packing their bags and leaving for greener pastures, or having a terrible life on account of their (inferior?) health care system.

What works?

The list of what works is actually what doesn't work. Tax revenues pay for it? The ACA has a staggering amount of costs that will drive the national debt up if we keep it. A standard benefit set? Clinics and doctors have started to ration of who they can see and who they will not see. The more you get to a true payer system, the less availability of heath care there will be. Competition for patients? They're all pulling out because of the enormous costs the ACA and single payer requires. Focus on the population? It's more like a focus for votes. In the other countries Otto describes, there is a divide of the small amount of 'haves' and 'have-nots' where most are that their healthcare systems have created. The haves get the best care while the rest have to wait.
Keep trying this Ms. Otto and we'll see how successful you are in November.

ACA???

The ACA is not even close to a single payer system.

As opposed to our former system

Whereupon the "haves" got good quality care, the have nots got medical bankruptcy, and the sick got dead. Please explain the vaunted free market approach that will allow my 4 year old son with a heart defect, actual, affordable health care, both on the insurance end and the provider side, that does not involve begging to a charity for what could quite possibly be his life, both now and in adulthood. I'll change my tune. Not that I'm worried, because I already know such an approach does not exist, and cannot exist in the for-profit healthcare world you idolize. He'd be put back on the insurance "black list" and be forced to either beg for assistance, or give up any hope for a normal life and live in destitution. Well if you folks don't succeed in eliminating Medicaid, that is.

Sorry...

Sorry Ms. Otto, your shoot first, ask questions later style as demonstrated by your behavior in the resignation of Senator Franken makes me question your judgement universally. AG Swanson and Rep. Walz both seem better suited to being our next Governor.

Health Care

The most telling line in by Ms. Otto "government's purpose is to improve the common good". What we have In the ACA does not do that and changes need to be made that make health care a right for the commoner; what we have now it is health care for the "haves" the rest be dammed. While Ms. Otto's plan sounds ambitious that type of health care is delivered in developed countries around the world at less cost and greater effectiveness than what United States citizens receive. Ms. Otto may not become governor but the issue of health care will not go away; at the very least the Republican controlled legislature should at a very minimum look at the MinnSure Buy in that has been proposed.

Wrong Assumption

You wrongly assume that I oppose single payer, and that I support our current health care financing system. I just pointed out that Ms. Otto doesn't provide a credible financing plan to pay for her plan's goals, just as happened in California.

Health Care

For profit enterprises must by their very nature charge more than non-profit organizations for rendering the same services. Why should we expect health care to be an exception to this rule? In speaking to people from Canada, France and England I have never heard anyone complain about their health care or express a longing for the U.S.A. system.