Why is the RI Exchange Doomed? Providence Journal

Why is the RI Exchange Doomed? Providence Journal

Why is the RI Exchange Doomed? Providence Journal

By Ted Almon

Posted Jul. 13, 2015 at 2:01 AM
I must take issue with Mike Stenhouse’s July 7 Commentary piece, “Ruling dooms R.I. exchange." Stenhouse jumps to the conclusion that because insurers are seeking higher rates (not yet approved) for next year, the state's health insurance exchange, HealthSource RI, has failed. Of course the alternative status quo has seen rates escalate at double the rate of inflation for more than 20 years, so his impatience with the exchange seems a bit overwrought.

So is it the cost of operating the exchange, really? Actually the governor and the legislature have only allocated to the exchange the amount it would cost for Rhode Island to use the federal exchange, Healthcare.gov. By any standard, HealthSource RI has performed far better to this point.
So who is it that is so threatened by our nascent exchange? And why? Whoever it is that is funding the opposition, including Stenhouse's organization, the Rhode Island Center for Freedom and Prosperity, is dead set against us saving any money on health care by using the exchange to aggregate purchasing power. Why else, when Rhode Islanders spends over $8 billion on health care, would he be so exercised about HealthSource RI, to which the state has allocated only $6 million.

Well, we won’t find that out from the balance of the column, as the author suddenly turns to a more “disturbingly dangerous agenda," a dark plot of which he purports HealthSource RI must be a part. “The free market must be preserved in Rhode Island,” he exhorts.

What free market was that? And how is it that group purchasing through an exchange isn’t free enterprise? Of course it is.

It may be sad to some, but health care is not a business. The American people decided it was a basic human right when our iconic conservative President Ronald Reagan signed the federal law forcing all hospitals to provide care to all patients in their emergency departments regardless of their ability to pay. Businesses don’t do that, and never mind that half the population is already covered by the government in the Medicare and Medicaid programs. Even Stenhouse's sponsors can’t expect those programs to go away, although I suspect that is exactly what they would like.

I have certainly benefited personally from our system of free enterprise. I believe in free markets and advocate consumerism wherever it will work. It isn’t a blinding paradigm though that keeps me from seeing where it won’t. Even the staunchest conservatives I know don’t want to privatize the military to mercenaries. Just think of health care as akin to our national defense.

Perhaps we can then accept together that health care is a social program. What is making it so inefficient is our own insistence on treating it like a business. Suggestions such as eliminating mandates and selling insurance across state lines have been studied to death or tried elsewhere and found wanting.

I am a reasonably astute businessman and I have spent a good quarter-century looking at ways to make the market work in health care. HealthSource RI is the most powerful tool that consumers and small businesses have had yet. Together, through the exchange, perhaps they can stimulate some new competition, or better yet, reform of the whole system.
Attacking the exchange in defense of free enterprise seems contradictory. HealthSource RI is simply group purchasing, and group purchasing is very much a market force.

The Affordable Care Act of which the insurance exchanges are a part is indeed a political compromise. Most health policy experts I know believe that simply expanding Medicare to cover more of the population would have been a far simpler and more effective solution. Medicare has been working for over 40 years and has higher patient satisfaction and lower administrative costs than commercial insurance.

Facing the logic and simplicity of Medicare for all, you would think conservatives would be satisfied with the compromise that is Obamacare, but obviously they aren’t. Since Reagan conceded we would treat, and therefore pay for, everyone, it makes one wonder: To what exactly do they object?

Ted Almon is president and CEO of Claflin Co., in Warwick, a distributor of medical supplies and equipment. He is a member of the Expert Advisory Board of HealthSource RI.

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