HSAs, Disease Management and Long-Term Care Insurance

House Speaker William J. Howell, R-Stafford, has unveiled a comprehensive program to address Virginia’s run-away Medicaid budget while preserving the quality of care for the poor and indigent. Said Howell in a prepared statement issued this afternoon:

The current Medicaid system is an impediment to better health for Virginians. It has suffered from the inertia of maintaining the status quo. Now, it faces fiscal instability in the short term and – if not remedied – a potential reduction in access to quality care over the long run. Therefore, we want to reform Medicaid and make it a program that offers better health outcomes at lower costs for the neediest Virginians.

Highlights include:

  • Enroll Medicaid recipients into Health Savings Accounts, with the goal of instilling a sense of “personal responsibility” among Medicaid recipients.
  • Expand disease management programs
  • Encourage the use of electronic medical records and benefit transfers
  • Establish small business insurance pools
  • Provide tax credits for long-term care insurance

For details, see the House press release here and accompanying handout here.

I’ll be interested to see what others say, but at first blush this looks very promising. As Del. Phil Hamilton says, “The positive reforms we are introducing today are not the cuts on services and participation levels that have been the hallmark of changes to Medicaid in other states. Instead, after a comprehensive review of how state government supplies needed health care, we realized we must restore integrity – on an individual, systemic, and fiscal level – to this program. “


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11 responses to “HSAs, Disease Management and Long-Term Care Insurance”

  1. It will be interesting to see the actual language of the proposals. Even a pig can be made to sound pretty if you describe it as soft, round and pink.

    It remains difficult to understand, however, how consumers can make informed choices about health care without better access to information on quality, safety and fees.

  2. Anonymous Avatar

    Does anyone know if your contribution to HSA’s will be tax-deductable? In other words, if your annual income is $30,000 and you contribute $1,000 to your HSA will you then be taxed on $29,000?

    Fosters greater flexibility in individual consumer choices of health care services while proving a more efficient payment option for providers

    What choices? There is one hospital where I live. If you get sick, you go there. The lengths an already established medical provider will go to in order to prevent another facility to open up that is run by another company are legendary.

    For further clarification, please read, The Washington Post Business Editorial, October 21, 2005
    By Steven Pearlstein which can be found at http://www.kaine2005.org/news/articles/20051021h.php

  3. James Atticus Bowden Avatar
    James Atticus Bowden

    Lots of opportunities to excel here. Like letting others contribute to an individual HSA and get a tax deduction. Look forward to seeing what is what.

  4. Jim Bacon Avatar

    Anonymous 10:10, You raise a critical though neglected issue: the evolution of regional health care “systems” into de facto health care “monopolies.” That takes us into a field far beyond Medicaid reform, into the realm of systemwide health care reform.

    There are static efficiencies associated with these monolithic health care systems, which exist in Hampton Roads (Sentara) and Roanoke/Western Virginia (Carilion). But these monopolies also stifle competition and outside innovation.

    There is a growing body of thought that the health care industry should evolve toward medical “factories,” or facilities that specialize in doing one set of procedures very, very well — at lower cost and superior medical outcomes. (A rare example here in Richmond is Bostwick Laboratories, which focuses with monomaniacal intensity on conducting prostate biopsies, which it does faster, less expensively and with superior accuracy than any other laboratory in the world.)

    But such an arrangement would necessitate a radical restructuring of the health care industry away from all-things-to-all-people hospitals (imagine a factory that manufactured multiple lines of cars, trucks, buses and military jeeps) into highly focused specialty institutions. But that will never happen because hospitals are protected by a thing called the “Certificate of Public Need,” which gives them effective veto power over competitors entering the market. For a variety of reasons, some legitimate, some not, hospitals will never abandon COPN.

    If we want to truly reform health care in Virginia, and not just Medicaid, that is a key place to start.

  5. Jim Bacon Avatar

    Claire, you raise another good point. If we want consumer-driven health care, there needs to be more transparency in the system. People need access to information regarding the charges and history of medical outcomes of all health care providers. It gets really tricky comparing apples to apples — if MCV Hospital has a higher mortality rate is it because the quality of health care sucks or because MCV gets the sickest patients? — but the effort needs to be made.

  6. Anonymous Avatar

    I’m a bit confused on the accounts. Are they saying that if the people don’t use their “allotment” they can spend it on whatever they want? What if their “allotment” runs out?

    If these are people at or below poverty level, do they think they are going to use the money to seek preventative medical services? If you had a choice between groceries for your family and paying dues at a gym, which one would you choose?

    I have to wonder why we are continuously looking for more ways to get every citizen insured. If they get the same deductibles that state officials bargained for public employees, they won’t be able to afford it. It seems the root of the problem, the cost of healthcare, is left untended. Are doctors, hospitals, health care companies, pharmaceutical companies, etc. going to just keep raising the prices until no one but the rich can afford to seek medical attention? The power companies are regulated, the phone company is regulated. Even Microsoft is regulated. Why can’t we regulate health care prices?

  7. Anonymous Avatar

    Jim,

    Anon 10:10 here.

    Thanks for your follow-up.

    It would seem to me that given the fact Health Care providers in the Commonwealth opperate under COPN the current proposal to, “Foster greater flexibility in individual consumer choices of health care services while proving a more efficient payment option for providers”, is somewhat of a moot point. Particularly when it comes to consumer choice.

    The legislature doesn’t have much room to legistale under such a model. In fact, they have given almost all of their authority to the “monopolies.”

  8. James Atticus Bowden Avatar
    James Atticus Bowden

    Anon 1:16 please read Economics in One Lesson by Henry Hazlitt and forswear price controls forever. EC 10. Price controls = supply shortages.

  9. Anonymous Avatar

    Mr. Bowden,

    Thanks for the reference but I am already aware that price control can equal supply shortages. I am also aware that the current economic planning equals only the rich will be able to afford health care in this country. I am not suggesting a government controlled health care system like Canada. I’m suggesting that if the prices were moderately controlled throughout the US, the prices could be lower and companies can still make a buck. Some states have tried this and the doctors flee to the next state where they can charge more. They have to. With the price of drugs, hospital services and malpractice insurance still unmonitored, they can’t afford to stay. If the prices are lowered throughout the nation from the top down, they don’t have to move on to the next state and we can all afford to be sick every once in a while.

    It’s pretty sad when middle and lower class Americans can afford Cable, Microsoft and Dell but can’t afford health care. Consumers can usually control prices by making the choice not to buy services if they’re not affordable. We have no choice with health care. We all have to have it so we’re at the mercy of the companies who set the prices. As long as government continues to seek ways to pay the prices instead of controlling the prices, they will continue to rise for everyone. Either the prices come down or there will be many more depending on state-paid services. Eventually it gets to the point where there’s no point in working if you’re 80 years old and you’re losing everything to the local hospital.

    To me, trying to find health care insurance for every citizen is like trying to figure out the cheapest way to keep replacing the carpet instead of fixing a leaking toilet.

    Right at this very minute, I know 5 people in my office that are eligible to retire. 2 have worked 40+ years for the Commonwealth and earn decent pay. They can’t retire because of health care costs. If they can’t afford it how do you think citizens that work at Taco Bell and Kmart will?

    There are a lot of smart people (who I’m sure have taken Economics 101) that can surely figure out a way for people to be able to go to the doctor without having to go bankrupt and losing everything they’ve worked for.

  10. James Atticus Bowden Avatar
    James Atticus Bowden

    Anon: There are many ways to reform the government-business entanglement on medical services. Moderate price controls bring moderate shortages. Let’s reform wisely – and soon.

  11. James Atticus Bowden Avatar
    James Atticus Bowden

    Anon: There are many ways to reform the government-business entanglement on medical services. Moderate price controls bring moderate shortages. Let’s reform wisely – and soon.

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