By Chelsea Hadaway
chadaway@scbiznews.com
Published Nov. 3, 2009

State business leaders, insurance executives and health care providers gathered in Columbia on Monday for a summit on the state of health insurance in South Carolina.

The summit, sponsored by the S.C. Association of Health Underwriters, was held at the Columbia Metropolitan Convention Center.

Insurance industry

The insurance industry’s major concern is the rising cost of health care and the ineffectiveness of a public option to solve any of the industry’s problems.

“Health insurance is expensive because health care is expensive,” said Michael Keegan, director of state affairs for the National Association of Health Underwriters. If those costs are not reined in, health insurance will to continue to be too expensive, he said.

He added that the public option would not be an affordable answer. He said that, although the program might initially be affordable, it won’t be in a few years, citing Medicare and Medicaid as examples.

Keegan and others see a potential shift away from private, employer-sponsored coverage if a public option is available and there is an employer mandate to provide coverage. He said businesses would find it less expensive to not provide coverage — which would mean a $1,000 penalty per person to the government — than to pay the $8,000 per month to privately cover an employee.

Providers

This highlights what health care providers see as a paradox. Because they will lose money on reimbursements — again, Medicaid and Medicare were cited — practices and physicians will want to minimize their number of public option patients, they said.

Carl Butler, CEO of Lowcountry Orthopedics, said he pays $20,000 to $30,000 a month on health insurance for his employees.

If employer coverage was mandated and a public option existed, having employees switch to the public option would be less expensive. But because the practice would lose money on public option patients, the practice wouldn’t be able to see them, he said.

The resounding consensus among panelists was that the public option would be bad — for providers, for private health insurance companies and for taxpayers.

“If we had the public option, primary care would be extinct in four or five years,” said Ron Piccione, CEO of Palmetto Primary Care Physicians.

Piccione said the solution lies in letting the private market fix its own problems.

“The federal government needs to move out of the way and let the private market take care of it,” he said.

Dave Hamill, CEO of Hampton Regional Medical Center, said, “The more regulatory burden is put on physicians, the less time is spent with patients.”

Business

Otis Rawl, CEO of the S.C. Chamber of Commerce, also would like to see regulations and mandates removed, but from the health insurance and employer side.

“Give employers the ability to write their own plan — take away mandates so that businesses can choose what they want,” he said.

From the employer side, it’s also important “to create a culture of health in your organization,” said Darrell Douglas, with the S.C. Business Coalition on Health. Poor health leads to a loss of productivity, which is detrimental not only to business but to the country’s global competitiveness, he said.

“There are many things employers can do. Incentives nudge people in the right direction,” he said. But incentives alone won’t work; they have to be coupled with mandates, he said.

Government

Gwen McGriff echoed the need for creation of a healthier society. McGriff is deputy director and general counsel for the S.C. Department of Insurance.

“We are raising a generation of children who will have chronic diseases,” she said. She said she has seen 13-year-old girls wearing women’s size 22 clothing because they’re so obese. “This is the culture we as a country are modeling as acceptable for our children.”

Private insurance

The panel of insurance carriers expressed disapproval of the direction the health care debate has taken.

“The real issue is the cost of care, not the financing mechanism,” said Will Shrader, vice president of the actuarial department for BlueCross BlueShield of South Carolina.

Several issues add to the increasing cost of care, he said. The physician fee-for-service payment structure creates an incentive to create more cost, he said. Instead, incentives should be based on best practices and quality.

“The biggest challenge is how do you monitor and hold accountable the doctor to be cost-effective?” said Neal Coyle, vice president of sales for WellPath health insurance. He contends that the most expensive instrument in health care is the doctor’s pen.

Coyle also said there is a need for transparency in the cost of health care. Consumers need to be able to see prices upfront and be able to shop around, he said.

“We are a mirror” reflecting the cost of care, said Carson Meehan, president of Carolina Care Plan. He said the health insurance industry has been demonized throughout the debate but is not the main source of the rising costs.

For more on the health insurance debate, read the third installment of the series on health care reform in the Nov. 9 issue of the Charleston Regional Business Journal.