A healthy dose of reality

[MDM4AU 336]

The Chicago Tribune

A healthy dose of reality

July 19, 2007

In California, Gov. Arnold Schwarzenegger is battling Democratic foes to save his $12 billion universal health coverage plan. In Pennsylvania, the most expensive elements of Gov. Ed Rendell's health proposal were deferred, after a budget brouhaha that temporarily shut down state government. Here in Illinois, Gov. Rod Blagojevich still hopes to convince lawmakers that his massively expensive health insurance plan is worth the awesome price tag. So far, no luck.

If the governor is reading the papers and scanning all the studies that have crossed his desk recently, he can't be too sanguine about changing many minds.

Let's review. The Civic Federation of Chicago, a nonpartisan research group, concluded a while back that Blagojevich's plan to expand health insurance for 1.4 million uninsured Illinoisans is far too costly for a state facing serious financial difficulties, particularly its ballooning pension obligations. It's a convincing case.

The federation suggested that Blagojevich's $2.1 billion price tag for his health program could veer out of control quickly. In four years, it noted, the expansion of health-care coverage is projected by the administration to cost $3.7 billion to $4.5 billion. That's likely to be a conservative estimate "because medical care inflation routinely outpaces the overall rate of inflation," the federation reported.

Its suggestion: Start by reforming the current system and effectively managing the state's existing health insurance program for its employees and retirees. That could save as much as $466 million, the federation said.

If Blagojevich were hoping for some good news from Massachusetts, where massive health insurance reform is under way, he will be disappointed again. The Bay State is leading the nation with its landmark health insurance initiative, but lawmakers there are sounding alarms. Massachusetts Senate President Therese Murray recently warned: "If we do not constrain health-care costs, the system we worked so hard to create and implement will collapse."

The math is simple. Increased costs lead to higher insurance premiums, which lead to greater government costs for subsidies to keep people covered. The perverse part is that covering more people, a good thing, generally increases costs, a bad thing, because more people gain access to more care when they're covered.

So now, Massachusetts is scrambling to find ways to save money. Officials there are hoping to reduce high-cost medical procedures that don't produce clear benefits. (Or, as the state's health and human services secretary said: "More is not better.")

They want to push doctors to switch to electronic medical records. A fine idea. They plan to fight harder against obesity and other costly, largely preventable health problems. Sure, why not? Another likely major target: better managing of chronic diseases such as diabetes.

All of that sounds good; Illinois also has plans to constrain costs if the new program is approved. The truth, though, is medical costs have proved to be highly resistant to all efforts at reduction.

As a last cautionary tale, Blagojevich and Illinois lawmakers may want to riffle through a recent Congressional Budget Office report to be reminded of how expanding government health insurance programs can go awry. The office concluded that as many as half the children who get health insurance through a popular federal government program known as SCHIP had been covered under private insurance. That means parents shifted their kids from private insurance, which they paid, to a public program, which is paid in large part by the government. And taxpayers get stuck with the tab.

As lawmakers ponder how much, if any, of the governor's ambitious plan is affordable, they'd be well advised to forget about the allure of promising all things to all voters. Instead, if anything, they should to ask: Who needs help the most?

Oh, and they might also note something else that Rendell said after he and the legislature compromised. When asked whether he blinked, Rendell shot back: "Everybody blinked. Unless there's mutual blinking, there's no budget."

Illinois, by the way, has no budget.

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