McCain, Obama Differ on Cure for Health Care
September 02, 2008
Denver Business Journal
Friday, August 15, 2008
McCain, Obama differ on cure for health care
Denver Business Journal - by Bob Mook
Presidential hopefuls John McCain and Barack Obama agree that the nation’s health care system has a problem.
And while Colorado health care experts say both candidates’ proposals may offer some solutions to what ails the industry, they caution that in some cases, the proposed cures may be worse than the disease.
Jeff Selberg, CEO of Exempla Healthcare, which manages three Denver-area hospitals, said the differences between the U.S. senators seeking the presidency gets back to the philosophical question of what’s the most pressing issue: giving people more access to care or controlling costs.
“Obama puts access and coverage first,” Selberg said. “He’s willing to jump in the fray with an employer mandate in order to get there.”
McCain’s plan emphasizes health care costs, Selberg said, and contains provisions to encourage medical providers — such as doctors and hospitals — to operate more efficiently and effectively.
“If we don’t address the cost of delivery, any reform plan will be bankrupted by the inflation dragon,” Selberg said.
But Jim Hertel, publisher of Colorado Managed Care, an industry newsletter, is leery of certain elements of McCain’s plan.
He said McCain’s proposal to let individuals purchase insurance plans sold across state lines would be especially hurtful to Western states.
Eastern states and the West Coast tend to have mandates that make insurance coverage more expensive — such as a Massachusetts law that requires insurers to cover the costs of fertility treatment.
Hertel said that could make individual insurance more expensive in states such as Colorado, which have fewer mandates that drive up costs.
“The problem is, the more expensive states affect the overall cost pattern, and the national market for insurance would reflect the mix of different states’ costs combined together,” Hertel said.
Both McCain and Obama want a more simplified approach for how medical providers are reimbursed by insurers. Both say they want to make health coverage more available and more affordable to more people.
They concur that one of the best ways to rein in rising health care costs is to encourage Americans to get healthier. They also want to help improve the industry’s information technology to make it more efficient, and reduce administrative expenses.
But they differ on the fundamental question of how to get there, with typical Republican-Democratic opposing approaches.
Arizona’s McCain, the presumptive Republican nominee, favors an approach that relies on free-market solutions — removing the favorable tax treatment of employer-sponsored insurance in favor of tax credits for individuals and families to increase incentives for getting coverage.
McCain’s plan also would promote competition by encouraging innovative multiyear insurance products and deregulating the insurance market. His plan doesn’t require employers or individuals to obtain insurance.
Illinois’ Obama, the presumptive Democratic nominee, wants to require businesses to provide health insurance or contribute a percentage of payroll toward the cost of a new public plan designed to help small businesses and those without access to get coverage. Small businesses would be exempt from the requirement, but would receive a refundable tax credit of up to 50 percent of premiums paid on behalf of their employees.
Obama also would provide federal subsidies to partially reimburse employers for their catastrophic health care costs if the employers guarantee they’ll reduce employee premiums. He also favors expanding government insurance programs such as Medicaid.
Hertel said neither candidate adequately addresses the health care problem — favoring policies that are politically pragmatic, rather than able to significantly change the system. He questioned whether a Democratic-controlled Congress would agree to McCain’s plan.
Likewise, Selberg said Republicans likely would dismiss Obama’s health care proposals — particularly insurance mandates for employers — as “socialized medicine.”
Jon Oberlander, associate professor of social medicine and health policy and administration at the University of North Carolina, said while Obama’s proposal would improve health care access, the candidate lacks a realistic way to pay for the expansion of government plans. Oberlander said this during a recent health care symposium at Beaver Creek.
As for McCain’s plan, Oberlander said that Americans are unlikely to move away from employer-sponsored coverage — particularly when 92 percent of the nation’s voters already have insurance. He said “the power of the status quo” could derail reformers’ efforts.
One obstacle that health care reform might face is that Americans don’t view it as an urgent concern right now.
Health care fell from the No. 2 public policy (behind Iraq) in 2007 to No. 4 (behind energy, gas costs and the economy) in 2008, according to Public Opinion Strategies, a survey research firm that has an office in Golden.
Oberlander added the candidates’ mutual support to support federal research related to curing chronic disease, public education efforts to teach children about the importance of good nutrition and exercise, and electronic medical records won’t help control costs “in any meaningful way.”
But Exempla’s Selberg said he’s optimistic that McCain or Obama could make meaningful changes.
“I see an opportunity for people on both sides of the aisle,” he said. “Whoever gets elected will have to extend his hand to the other party. But I see a lot of commonality between the two as far as basic building blocks.”
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