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A vision for sensible health care

Published September 16, 2006

When Ronald E. Bachman retired from Price water house Coopers last year, he decided to take on a few thorny issues. How do you insure the uninsured? Expand mental health benefits? Make Medicare and Medicaid consumer-centric?

As an actuary who had been in charge of PricewaterhouseCoopers' health care practice for the Southeast, Bachman had worked with hospitals, employers, doctors and insurers. He had also testified before Congress and worked closely with everyone from Sen. Ted Kennedy to Jimmy Carter to the late Sen. Paul Wellstone. But it was former House Speaker Newt Gingrich who tapped Bachman's retirement interests, making him a senior fellow at Gingrich's think tank, the Center for Health Transformation.

On Thursday, Bachman brought his vision of the future of health care to an employer symposium in Tampa sponsored by Humana. Before his local appearance, Bachman talked to the St. Petersburg Times about how real health care changes might evolve.

Q: The public's perception of "consumer-centric" health plans is that they simply mean the insured pays more for less. What's going to change that?

A: In the first-generation plans, it's typically a high-deductible design. The individual is responsible for lots of money up front, so only the young, healthy and wealthy will sign up. We need to move to a second-generation plan design where you create real behavioral change, not just cost-shifting. If all you're doing is cost-shifting, it's destined to fail.

Q: What does a second-generation plan look like?

A: Let's say you're a diabetic with a high-deductible plan. If you do the right things - take your meds, follow the program, stabilize your condition - it means not only lower health-care costs for yourself, but for the whole system. Under health-care consumerism, the diabetic shares in those savings, getting some of that money back into his own account. With health-care savings accounts, we now have the legal framework to put money in an individual account that can be accumulated into the future. Before it was always "use it or lose it."

Q: There's a lot of talk about "transparency" in quality and pricing which will allow consumers to select the best, most cost-effective doctors and hospitals. But how much is that really done today?

A: The process is developing from curiosity to decisionable information. And it's getting there faster on hospitals than on doctors. Right now if your hospital ranks poorly you think, yeah, but my doctor is okay. But if your physician admits to two hospitals, you have a choice.

The information has to be more reliable and credible. But we make decisions about car-buying based on quality and price information and that's going to happen in the health-care world, too.

Q: What do you think of Medicare's new drug benefit?

A: I believe Medicare itself should be fundamentally changed. Why, when you turn 65, should you be required to have a Part A, B, D? It's a 1965 structure that was never allowed to evolve. We can model Medicare in ways to bring in health-care consumerism. You could get rewards for choosing quality hospitals that are lower cost, getting money to pay for your prescriptions.

Q: How do you reduce the number of uninsured?

A: In Massachusetts, they found that 40 percent of the uninsured are young males making enough to afford insurance. But they bet they won't get sick and if they do, they've got nothing to lose. So in Massachusetts, they're going to require you have insurance.

Another 20 percent of the uninsured in Massachusetts are eligible for Medicaid, so they hook them up. Then 40 percent are low-income, uninsured, who need a government subsidy because existing insurance products are not affordable.

I think the No. 1 step to reaching the uninsured is going to be selling them individual policies. But we have to create a marketplace that allows for viable, competitive, lower-cost policies and we don't have that now. We have 50 different marketplaces, with many states dominated by a couple of insurers. Why are Florida citizens prevented from buying an insurance policy that's been approved in Arizona? You should be able to get on the Internet and, once a plan has been approved in one state, buy it anywhere.

Kris Hundley can be reached or at 727 892-2996.

[Last modified October 27, 2006, 14:26:54]

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