An Alternative to Expanding Medicaid: Market-Based Reforms

healthcare_reformby James A. Bacon

Republicans in the General Assembly are dead-set against expanding Medicaid and incurring a new budget-busting fiscal obligation. But what are they for? What solutions do they propose to help the hundreds of thousands of lower-income Virginians who can’t afford medical insurance?

One approach explained yesterday by Del. John O’Bannon, R-Henrico, vice chair of the House Health, Welfare and Institutions Committee, is to strengthen the safety net of free clinics that provide primary care services for the poor and near-poor. One can argue that the state’s commitment to free clinics is insufficient to serve Virginia’s large uninsured population but at least it’s a theoretical alternative to an inflexible Medicaid program that stifles money-saving innovations.

Another approach is to implement market-based reforms to promote competition and transparency in Virginia’s health care sector. The hope is that empowering entrepreneurs and consumers will restrain the relentless cost increases that have made medical treatments so unaffordable to begin with — in effect, treating the disease, not the symptom.

The federal government dominates health care policy in the United States because it makes the rules for Medicare, Medicaid, and the state health care exchanges set up by the Affordable Care Act, which account for more than half of all health care spending. But state laws and regulations shape local health care markets, too.

O’Bannon’s vision is to make Virginia’s health care system more competitive and to empower consumers with more information on the cost of elective procedures. He and like-minded legislators have submitted bills, or likely will, to prune state laws and regulations that buttress special interests and inhibit innovation. Here’s a quick run-down:

Certificate of Public Need. Reforming the Certificate of Public Need process is at the top of O’Bannon’s list. The law, which requires would-be investors to demonstrate a public need for new medical facilities and imaging services, is criticized for protecting the turf of established providers and limiting competition. HB 193 would not eliminate the law entirely but would exempt everything except open-heart surgery, organ transplants and nursing homes from the need for regulatory review.

As concessions to the hospital industry, O’Bannon proposes phasing in the law over tree years to provide a “soft landing.” To avoid the problem of ambulatory surgery centers “cherry picking” the most profitable patients and sticking hospitals with uninsured and low-paying Medicaid patients, new entrants into the market would be required to provide the same level of charity care as established providers. O’Bannon acknowledges that the bill faces stiff resistance but hopes he can negotiate a compromise with hospitals.

Transparency. O’Bannon said he intends to file bill that give health consumers the right to find the price of elective procedures. Consumers facing $1,000 or more in deductibles and/or co-pays should be allowed to shop around and find the best deals. That information should be readily available to hospitals, he said. “Consumers have the right to know what it will cost to get it done.”

Direct primary care. O’Bannon cited the work of another Republican legislator on the topic of “direct primary care,” which allows consumers to contract directly with primary care physicians, bypassing the middleman insurance provider. The American Association of Family Physicians describes it this way:

The direct primary care (DPC) model gives family physicians a meaningful alternative to fee-for-service insurance billing, typically by charging patients a monthly, quarterly, or annual fee (i.e., a retainer) that covers all or most primary care services including clinical, laboratory, and consultative services, and care coordination and comprehensive care management. Because some services are not covered by a retainer, DPC practices often suggest that patients acquire a high-deductible wraparound policy to cover emergencies.

Direct primary care benefits patients by providing substantial savings and a greater degree of access to, and time with, physicians.

This proposed legislation, says O’Bannon, would state explicitly that the contracting parties are exempt from insurance regulations.

Medical licensure. Critics of the health care system have observed that medical licensure creates occupational guilds in which politically powerful professions stake out medical procedures that only they can perform. While justified on the grounds of patient safety, the issue looming doctor shortage makes licensure particularly problematic for physicians. O’Bannon said consideration is being given to the idea of expanding the scope of practice for nurse practitioners and to integrating military medics into the civilian health care system.

Meanwhile, the health care sector is undergoing a revolution as entrepreneurs concoct new applications for information technology. O’Bannon cited the “the patient will see you now” phenomenon in which patients use their smart phones to shop more aggressively for doctors and wearable sensors that can monitor everything from temperature to blood sugar levels. Virginia’s policy, he said, should be to encourage providers to be more flexible in how they adapt to these new technologies.

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7 responses to “An Alternative to Expanding Medicaid: Market-Based Reforms

  1. re: ” But what are they for? What solutions do they propose to help the hundreds of thousands of lower-income Virginians who can’t afford medical insurance?”

    One approach explained yesterday by Del. John O’Bannon,

    Another approach is to implement market-based reforms

    O’Bannon’s vision is to make Virginia’s health care system more competitive

    you confuse “ideas” from various individuals as a GOP-supported alternative legislative agenda.

    it’s not like the GOP has not had – years – to develop and focus their ideas into something they support as a legislative priority rather than silly and disingenuous blather… for the gullible.

    if the GOP were serious about real alternatives – they would have them on the table ready to go to the Gov.

    defending their irresponsible fecklessness just is beyond the pale..

    we did not suddenly have 400,000 people without health insurance in Va and blaming it on the Feds and Dems without any serious response of their own – is like dealing with 8 year olds… who don’t like homework and blame the teacher and their parents.

  2. Definition of primary care physician – A physician, such as a family practitioner or internist who is chosen by an individual to provide continuous medical care, trained to treat a wide variety of health-related problems, and responsible for referral to specialists as needed.

    I have had numerous highly respected medical specialists tell me that the most important thing for their own health and for their family’s health is having quick and easy access to a highly regarded Primarily Care Physician.

    These very same specialists have also told me that these high quality on call General Practice Physicians are extremely hard to find and keep today. That even they, the highly ranked medical Specialists, have difficulty finding and retaining these “primary care doctors” for themselves and for their own families.

    Imagine then the great gap in health care this creates for everyone else. As surely this gap in the system multiplies costs, damage, suffering, and expense exponentially, rippling its pernicious consequences across the full spectrum of health issues for individuals, groups, and society generally.

    Apparently our modern emerging health systems are destroying and/or discouraging the ability of these essential key players to do their job. And only they can assure the overall quality of any nation’s health system.

    • The Government does not promote Primary Care Physicians because Primary Care Physicians who do their job properly stand in the way of Government (its long distance faceless bureaucracy0, seizing control of all its citizens’ health.

      Building up its centralized and impersonal power over people’s heath and lives is the sole driver behind the Big Government’s push for Centralized Electronic Records on everything imaginable. This includes keeping the detailed particulars on each “subjects” personal health.

      This centralized record keeping is the core resource and power base on all Tyranny since the beginning of time. It always has been and it always will be, and the claim will always be. “But don’t worry, we’ll take of everything, including you wherever you are and whatever you need.” That is the big lie.

  3. the key phrase is “continuity of care”.

    the Primary Care physician is SUPPOSED to be the keeper of records – information central of all things medical related to you.

    so – say you don’t have a regular PC person – what happens ?

    say -you go to the ER and they find out something important about your health that needs to be known by subsequent providers.

    what happens to that record? Oh they’ll ask you who your primar care physician is – but if you don’t have one – they not only put “none” on their report but none of that report goes to anyone else.

    Now – the big bad nasty govt has tried to get doctors to adopt electronic medical records so that wherever you go -they know your medical history and can deliver competent care that takes into account your medical history.

    but the anti-govt folks and assorted privacy naysayers have effectively demonized the whole idea of electronic medical records of which those without a regular primary care physician – need more than those who have a regular PC physician.

    It’s anti-govt stuff like this that just destroys simple and cheap ways to improve care and reduce mistakes.

    the world we live in – is electronic – whether it’s banking DMV, or MOOC but the luddites have managed to make it the enemy of good health care.

    even a lowly regarded primary care physician – can read – an electronic medical history and avoid really dumb errors.

  4. Jim Bacon can never get it through his head that medical care is a needed SERVICE.

    It is not a widget. It is not a software program. It is not a light bulb. It is not an economic “Input.”

    When I hear all this GOP blather about “the need for market based reforms” I start to cringe. What that means is that medical care will end up even more like a big cable company that cherry picks its markets according to profitability. If you live in the remote rural areas or in inner cities that aren’t so profitable, you’re out of luck as far as getting Net service. Imagine what happens if COPN goes out the window. Throngs of Urgicares and plastic surgery joints will be thrown up in richer neighborhoods. If you are poor and sick or injured, you are plumb about of luck. Unless, of course, you head to one of those newfangled “free clinics.”

    So Jim has written two blog postings based entirely upon the ideas of one, single, conservative Republican legislator who happens to be a physician.

    And a Happy New Year!

  5. Peter,
    “What that means is that medical care will end up even more like a big cable company that cherry picks its markets according to profitability.”

    Then Peter, I would assume you are for doing away with Certificate of Need?

  6. An “idea” the GOP could easily champion – would be to create a network of managed care clinics – that use electronic medical histories so that the clients don’t need to be wedded to one provider and all providers can know the clients entire medical history and treat them competently – and cost effectively.

    that electronic record would also be made available to all ERs in Va hospitals so that when someone comes to the ER -they not only know their medical history – they know who their normal providers are – and can coordinate and/or send them back to the managed care clinics for things that are not bona-fide emergencies – reducing frivolous use of the ERs for non-urgent care.

    that’s an idea that I would support – and congratulate the GOP for actually providing a real alternative … of course, they’d actually have to step up and fund it – rather than their more typical habit of ‘talking about ideas that “could” be done’.

    the real question is – is the GOP truly interested in actually dealing with the issue in any substantiative way or do they just want to continue as critics?

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