23 October 2009

Letter to Senator Snowe regarding health reform

Dear Senator Snowe,

My name is Andrew Nortrup and I am one of your constituents. First let me say that I am incredibly pleased to have you as my Senator. I have heard your name in the news quite often in the recent weeks and I find that you continue to demonstrate the levelheaded moderation down to earth common sense that is the hallmark of our State. Please continue to do this and you will have my steadfast support when it comes time for you to run for re-election again.

I would like to spend a few minutes to discuss the health care debate. I know that you have worked intimately with it as a member of the finance committee. I also know that you have reserved final judgment on the bill to see what comes out of the joint Senate. I would like to make you aware of the things that I consider most pressing in health care reform for our country.

I agree with the President that the health care system in this country is in great need of reform. However, I disagree with the method of fixing the problem. The current proposals appear to be intent on extending insurance coverage to all Americans. It is a noble effort but I think that to fix it is to fix a symptom and not the cause of problem. The real culprit to our nations health care problems are the skyrocketing costs of health insurance, health care and medication are alarming.

I think that finding responsible methods of cost control should be our first objective. The single simplest manner to do this is through creating a uniform pricing standard for all payers in the health insurance system. The state of Maryland has had such a system in place for many years with great success, and I think that we should look to that as a model for the rest of the country.

A system where the country or each individual state sets a uniform cost for procedures and medications in their state would have many benefits. It would provide transparency to customers, allowing them to make like comparisons to their health insurance options. It allows doctors and hospitals to worry about providing medicine rather then fighting with the insurance company about the price of their procedures. Lastly it would allow insurance companies to reduce the overhead that the currently spend negotiating for prices, and instead reduce the prices they charge their customers.
In contrast the current system where each insurance company and each health care provider negotiate individually on a case-by-case basis is wasteful and unjust. The amount of overhead that is spent by all actors in this system is wasteful, as each insurer must negotiate with every hospital every year for the price of every procedure. It also requires doctors, hospitals, and insurers to have large and complex billing departments to manage the collection of fees on different schedules for each insures or hospital that they work with.

Not only is the current system wasteful, it fails to provide beneficial or cost effective health care outcomes for the people it is intended to serve. There is no way that a system where two people receiving the same procedure in the same hospital from the same doctor pay two different prices is just. Worse yet the system skews high costs the uninsured and persons serviced by small health insurers who lack the bargaining power of the large health insurers in the region. (Redefining Health Care (2006), Michael E. Porter and Elizabeth Olmsted Teisberg p. 66). It creates a system that is anti-competitive by nature. The larger the insurers receive better prices causing the health care provider to raise the prices on small insurers to meet the bottom line.

Creating a national or state-by-state system where all health insurers and patients pay the same rate for all health care in their state is the best way to ensure that there is real competition in the marketplace. It will force insurers and providers to compete on the quality of their service and ability to provide economical pricing options to their clients.

Unfortunately I fear that that public option that was highly debated in the finance committee and is a part of the other four health reform bills currently being debated on the floors of congress will not actually create more competition and may restrict competition further. Because of the negotiated costs system that is currently in place in the health care industry, adding a new insurer with a set of fixed costs would drive insurers out of their small markets as the hospital's need to shift their costs somewhere to account for the lost revenue from a national plan with fixed rates.

Lastly, in the longer term we must also find ways to decouple health insurance from employers. This will enable the American worker in a way that they have not been enabled since WWII. They will be able to move freely from job to job without fear of not being hired because of their health. Secondly we must reform the payment system away from the fee-for-service model to a model that is based on treating illnesses as a whole. Such a system will encourage doctors and patients to get the treatments that are needed to cure them and not to get the tests that generate the most income.

In conclusion, please continue your steadfast work on behalf of the state of Maine, in order to ensure that the State and the country are on a healthy footing in our health care system. Do this by working to have a universal pricing system adopted as part of the health care reform process. I also look forward to the work that must be done in order to decouple health insurance from employment and to change the way that we charge for health to be based on your illness not on the procedures performed.

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