Republican Governor Tim Pawlenty of Minnsota, discussed as a 2012 Presidential hopeful, has written a letter to his state’s congressional delegation endorsing some of the health care reform ideas proposed by Democratic lawmakers and the president, but asking them to rejected legislative packages already on the table. In his letter, Pawlenty focused almost entirely on cost savings and has not taken on the costly and difficult task of subsidizing insurance for the uninsured. However, there are significant reforms within these compromise proposals and they at least show that there can be some bipartisan agreement on reform. Missing from the proposals are substantial subsidies for the uninsured and specific plans for containing costs of Medicare and Medicaid programs.
Pawlenty says that his list of reforms to the health care system will pay for themselves, which fits with Obama’s demand that new legislation not add to the deficit. Democratic lawmakers had agreed on many reforms in recent weeks but failed to determine how to pay for expenses such as subsidies for the nations’ millions of uninsured.
Pawlenty endorese malpractice lawsuit reform, also a goal for President Barack Obama. Malpractice suits against health care professionals add costs to the system in doctors’ and institutions’ insurance costs, legal fees and damage awards. There may be cost savings in some states by capping the awards, but many states already have limits. In his analysis of high costs of medical care, Atul Gwande, in a New Yorker article, found that despite tort reform, some areas pay twice as much for medical services as others.
Pawlenty also agrees with President Obama’s desire to stop insurance companies from excluding preexisting conditions. This reform measure will force insurance companies to take all persons who can afford their premiums rather than allowing selection of the healthiest members of the public, leaving the sick to self-finance and rely on public institutions. Shifting patients to private insurance will cut public spending to the benefit of the federal budget.
However, for the insurance industry, this measure will increase costs. It then puts the burden on insurers to manage health care efficiently so as to keep premiums from rising, thus pricing other businesses and individuals out of the market.
Pawlenty also agrees with President Obama’s call for efficiency through the use of electronic medical records. President Obama campaigned on this point and pushed Congress to include funds for electronic record infrastructure in the $787 billion stimulus bill. Thus, in about ten years, doctors and health care professionals will be able to compare costs and benefits of different types of procedures and methods of care and make more informed choices. Currently, our system has a prejudice that more care is better care, which leads to overuse of services. The results are likely to profoundly alter medical care in the long term, but immediate results cannot be expected.
Pawlenty has raised the question of how fees for services should be structured, suggesting that pay for performance is better than pay for procedure. This is considered by many to be a radical idea in medical care, although it is being experimented with in many places. The idea is that health care professionals should be paid for in relation to the outcome of care, rather than paid for each office visit, test, or procedure, regardless of outcome.
Finally, Pawlenty wants to fix the tax code so that individual insurance is not disadvantaged compared to employer-provided insurance. This idea has been discussed widely by Democrats, although too many lawmakers have shied away from it because it sounds like a tax. A better way to look at it is the removal of a subsidy for affluent workers. Currently, businesses can deduct insurance-plan costs from their tax liability. If they provide a top-quality plan, they are providing very high cost services to wealthy individuals and receiving a tax write-off. When an individual consumer seeks to buy health insurance, he or she does not receive a similar deduction. To Pawlenty’s credit, he has identified this as a cost control measure. Removal of the subsidy will raise funds for the government and lower the overall rate of growth in health care spending.
Republicans have been largely silent on measures to reform health care so far, and Governor Pawlenty’s step into the debate is a welcome one. While he has not clearly dealt with the issue of subsidies for the uninsured, he has proposed and agreed to various measures that are financially sound and significant for health care reform.
