Government Health Plan Would Hurt Quality, Innovation, Choice

For more than a year, health plans have been working collaboratively with federal lawmakers and key stakeholders to facilitate the ongoing health care reform effort. While there has been remarkable consensus on many fronts, there has not been agreement on the role government should play in America's health care system.

As everyone continues to work to improve our health care system, the debate over a new, government-run health insurance plan is taking center stage. We must carefully think through the far-reaching changes that would result from a government-run plan. A government-run plan could destabilize the market, reduce consumer choice, increase the cost of private coverage, and reduce the quality of health care.

While the details are still being formulated, what is clear at this point is that the public does not support a government-run approach. According to a Kaiser Family Foundation poll, 59 percent of Americans would oppose a new government-run option if it had an unfair advantage over private plans, and only 32 percent would support it (Kaiser Family Foundation, April 23).

Yet many Americans might be forced into a government-run plan if such a plan were made available -- experts predict more than 100 million.

A shift in enrollment of this size would destabilize the private market and quickly undermine the employer-based system that nearly 170 million Americans depend on today. As private insurers attempt to compete on an un-level playing field with the government plan, we will see fewer and fewer private plans -- effectively eliminating choices for consumers.

Let's look at how the creation of a government-run health plan could destabilize the health care market.

Existing government-run plans (e.g., Medicare and Medicaid) have significant challenges to maintaining their solvency into the future. Moreover, they do not currently cover providers' costs to deliver care to patients.

Medicare pays 30 percent less to hospitals and 20 percent less to physicians than private insurers do, and Medicaid plans often cover only a small fraction of provider costs. While private plans negotiate with providers to set reimbursement rates, payment rates for government-run plans are set by law. Hospitals and other health care providers have no recourse when government sets the rates. The only thing providers can and will do is opt out.

Doctors choosing not to accept new Medicare patients has been a long-standing problem, and a new government-run plan will only exacerbate access-to-care barriers. The result will be that consumers will see less choice in the marketplace and more cost-shifting to private coverage, beyond the $90 billion annually that occurs today across the country.

We don't want to create a system that will discourage new medical professionals from entering the field, especially given the expected needs of an aging population. Private health plans have put reforms in place to improve quality and control costs. These include pay-for-performance, chronic disease management, health IT, and applying the principles of evidence-based medicine.

Large managed-care companies and smaller private insurers have put an emphasis on preventive care and providing members with a medical home.

For instance, Anthem Blue Cross and Blue Shield's Quality-In-Sights: Hospital Incentive Program (Q-HIP) is helping to improve the quality of health care provided by Virginia hospitals by rewarding them for practicing evidence-based medicine and implementing best practices. In 2008, 67 Virginia hospitals received a total of more than $25 million for meeting Q-HIP standards. This year, we estimate that number will increase to approximately $32 million.

Through Q-HIP data measured over the past five years, we have seen impressive improvements in the quality of health care delivered to Virginians. Some examples include a 52 percent reduction in serious complication rates for angioplasty, and a 54 percent improvement in the number of heart attack patients who receive a critical procedure that restores blood flow to the heart within 90 minutes of entering the emergency room (a best-practice standard established by the American College of Cardiology).

These and other examples show quality initiatives work -- and if the health care community continues to work collaboratively, we can continue to improve the quality of care delivered, which will help control rising costs.

Much of this positive work could be undone under a new government-run plan.

We all understand that reducing the cost of health care coverage won't happen until we get serious about reducing the costs of medical services. To the extent that individuals shift from private plans to a new government-run health insurance plan that is less innovative, private plans will have less ability to drive necessary changes in the delivery system and improve quality and control costs -- the most critical elements of health care reform.

By working together, we can make health care reform work.

C. Burke King is president of Anthem Blue Cross and Blue Shield in Virginia. Contact him at .