May 17, 2008

May 17, 2008 | Commentary on Health Care

Ensuring a Healthy D.C.

Some things never change. Year after year, David Catania, an Independent at-large member of the D.C. City Council, proposes intelligent, innovative ways to achieve universal health coverage for District residents.

And some things do change -- mayors, for instance. Mayor Adrian Fenty seems much more interested in expanding health coverage and improving health care than his predecessor was. And that's why D.C. now has a real opportunity to make major health reform a reality for the district, and to show the rest of the nation how to do it right.

Which brings us back to this year's offering from Catania, chair of the Council's Committee on Health. Dubbed "Healthy D.C.," his latest proposal aims to extend coverage to the District's 25,000 uninsured residents. Key elements include a mandate that everyone carry insurance and $21 million in new taxes to help subsidize the purchase of insurance by those who need assistance.

Obviously, the proposal will encounter resistance from the right, the left and from those who are profiting from -- or who simply feel comfortable with -- the status quo. And "go slow" was the advice from a recent Washington Post editorial, which urged "a tough-minded review" of the plan, addressing everything from its financing mechanisms to safeguards against "freeloading" from residents of Maryland and Virginia.

The stage is set for that review. Catania plans to include his "Healthy D.C." bill in the Mayor's 2009 budget, and public hearings on the budget are underway.

But as these discussions proceed, Catania and Fenty would do well to reject a "go slow" approach. Instead, they should "go big."

Luckily, there's a bigger and better approach already at hand: The District's Equal Access Act. An earlier brainchild of Catania's, this plan would put high quality, affordable health care within reach of all District residents.

What would this older, bolder plan do? Plenty. It would:

  • Let all D.C. residents pick the kind of health coverage they want and take it with them from job to job. Most people are uninsured because they lost coverage when they lost or changed jobs, not because they never had it.
  • Force insurance companies to compete directly for consumers' business. Competition not only lowers prices, it holds companies accountable for their performance.
  • Let the District's business, labor, civic and religious organizations sponsor health insurance for their members -- or, alternatively, rate insurance offerings for price, performance, benefit quality or ethical practices.
  • Allow residents to take advantage of information technology networks and the growing body of quality-of-care information. This not only helps consumers make informed choices, it drives quality improvement among plans and providers.

Put it all together, and a competitive health marketplace would force insurers to try to give ordinary citizens the best possible service and products. Were the District opened to true competition for the coverage dollar, individuals and families dissatisfied with their current coverage could simply switch to another provider. The threat of losing market share induces high anxiety among insurance executives. And that's a good thing, as it encourages them to improve, drives innovation and delivers higher value for consumers and patients.

Catania's Equal Access Act would usher in just this kind of revolutionary change. It would combine the very best features of group health insurance -- the broad pooling of risks and the availability of generous tax breaks for coverage -- with the advantages of individual insurance, including personal choice and full portability of coverage. It's no coincidence that these are some of the most attractive features of the Federal Employees Health Benefits Program (FEHBP), which so many health policy analysts rightly admire.

The plan would dramatically shift the balance of power in the District's health system -- taking it from employers and insurers and giving it to individuals and families. Under the bill, the consumer is king. Consumers would make the decision about what coverage suits them best, and they would control the flow of dollars.

Employers could offer insurance the way they do today, or they could make a defined contribution toward employee health coverage, just as they do for 401(k) pension programs. Rather than pick and chose a limited number benefits for everyone, government officials would guarantee a broad selection of health plans and benefit options for all.

With personal, portable health coverage, problems such as gaps in coverage (particularly between jobs) and discontinuity of care would virtually disappear. Competition, not government standardization, drives innovation in health care, including innovations in wellness and prevention.

"Healthy D.C." is a good starting point for broader discussion, but it's no cure-all. At the end of the day, it merely retreads old, failed models of health insurance and dresses them up with policies imported from high-cost states such as New York, New Jersey and Massachusetts. It would patch access holes with new subsidies, fill budgetary gaps with new and unreliable taxes, and top off the whole business with an unpopular and unnecessary mandate.

The central flaw is that it puts government in the driver's seat. D.C. officials would enter an "exclusive" contract with Blue Cross and Blue Shield Company, to provide its own heavily subsidized, standardized health insurance product for uninsured D.C. residents -- and that's the end of the discussion.

Real health care reform requires a profound shift in power, from a system in which government, or employers, or insurers call the shots, to one which is centered on -- and controlled by -- patients

By all means, let's have a "tough-minded" review of "Healthy D.C." But let the review focus on solving the problems inherent in the plan, rather than aim merely to pick it apart and let reform die. Again.

Luckily, a plan that overcomes all the shortcomings of "Healthy D.C." is waiting in the wings, on Mr. Catania's own drawing board.

Robert E. Moffit is director of the Heritage Foundation's Center for Health Policy Studies.

About the Author

Robert E. Moffit, Ph.D. Senior Fellow
Center for Health Policy Studies

First Appeared in WashingtonPost.com