Mainers react to Bush speech Health savings accounts, high cost of care debated

In Maine this week, health care officials and industry representatives responded to President Bush’s recommendations for improving the nation’s health care system.

In his State of the Union address Tuesday, Bush said, “For all Americans, we must confront the rising cost of care, strengthen the doctor-patient relationship, and help people afford the insurance coverage they need.”

More specifically, the president identified the need to step up access to medical information technology, to support the option of personal health savings accounts, or HSAs, as adjuncts to high-deductible insurance policies, and to reform medical liability laws.

Dr. Dennis Shubert, head of the Maine Quality Forum for establishing medical practice standards and a statewide health plan, said Thursday that Maine is well on the way to having an electronic network for sharing critical health data. The state’s largest hospital systems – MaineHealth in Portland, Central Maine Healthcare in Lewiston, MaineGeneral Healthcare in Waterville and Eastern Maine Healthcare Systems in Brewer – have been hard at work developing electronic medical records within their own facilities, he noted.

Beyond that, state officials have developed a plan for linking these systems to a statewide data bank of medical information, so a doctor in Portland, for example, would have ready access to certain information – such as recent lab results, X-rays, allergy information and medications – about a patient from somewhere else in the state. The Maine Health Information Network Technology project, known as MHINT, is expected to be up and running in a limited way by 2007. Shubert said that, as far as he knows, Maine is further along in developing a statewide network than any other state.

Providing medical practitioners with quick access to current, accurate patient information is key to reducing medical errors, improving the care of chronic health conditions, and reducing unnecessary testing and treatment, Shubert said. It also allows overscheduled physicians more face-to-face time with patients and sets the stage for better communication.

The president’s call for more tax-deductible health savings accounts touched a nerve here. At Consumers for Affordable Health Care, executive director Joe Ditre said HSAs provide “wealth care, not health care” and run counter to Maine’s efforts to provide comprehensive health coverage to all residents.

An HSA is a special payroll savings plan linked to an individual’s high-deductible health insurance policy. The savings account can be used to pay most out-of-pocket costs, including the policy’s annual deductible amount, co-payments, prescription costs, dental and vision care, some alternative therapies and more. HSA contributions may be deducted from federally taxable income, but some states, including Maine, do tax the contributions.

The president and others say HSAs allow consumers to purchase relatively inexpensive high-deductible health coverage plans while paying noncatastrophic health care costs out of the special savings account. This encourages consumers to be more responsible and cost-conscious about their lifestyles and their health spending, and because HSAs are funded with pre-tax dollars, the money goes further, some argue.

“What’s so offensive is our president saying these plans are going to control health care costs, when in truth they have the opposite effect,” Ditre said. “They take wealthy, healthy people out of the insurance pool and leave low- and moderate-income people with more health problems to pay higher and higher premiums.”

Ditre said well-off Americans use tax-free HSAs to shelter large amounts of money for retirement, while lower-income people rarely have enough money to contribute meaningfully to the accounts. HSAs encourage employers to offer the high-deductible plans, and employees to purchase them. High-deductible policies deliver high profits to insurance companies, while the bank and credit card companies that manage the linked HSAs benefit from a system of fees and charges consumers must pay.

It’s just another Bush administration “profit fest” for private industry at the expense of consumers, Ditre charged.

Tarren Bragdon of the Maine Heritage Policy Center said Wednesday that HSAs have been slow to catch on in Maine, largely because the state’s tax laws don’t encourage them.

“Maine is one of just a handful of states that do not allow you to make pre-tax payroll contributions to your HSA,” he said. “Maine does allow you to take a deduction for your insurance premiums, but not for an HSA.”

Bragdon noted that essentially all 40,000 Mainers who have purchased low-cost, high-deductible nongroup insurance from Anthem Blue Cross and Blue Shield – which has a corner on the individual health insurance market in Maine – are eligible for an HSA, but only about 900 of the accounts have been set up in the two years they’ve been available.

Maine lawmakers should pass a bill now before the Appropriations Committee that would allow a state deduction for HSAs, Bragdon said.

“We need to try a lot of different things in health care. Why not let there be a lot of choices?” he asked.

Even more entrenched is the perennial issue of medical liability reform. Physician groups argue that without capping jury awards in malpractice cases, their liability insurance rates will skyrocket. Some physicians, especially in high-risk specialty practices, have left the field because they are unable to pay the cost of insurance. This contributes to the difficulty of recruiting doctors, especially to poor, rural states like Maine.

Consumer groups and trial attorneys say capping damages lets incompetent or negligent doctors off the hook and allows them to continue their harmful practices.

Gordon Smith, executive director of the Maine Medical Association, said Thursday that it’s unfortunate the issue seems to break along political party lines. At the federal level, he said, a bill that would cap at $250,000 the amount a jury could award a victim for noneconomic damages has been approved by the House of Representatives, but is not expected to pass the Senate.

“We’re not optimistic that we’ll achieve tort reform at the federal level in the foreseeable future,” Smith said – all the more reason to enact it at the state level.

Though Maine physicians historically have paid relatively low liability insurance rates, Smith said Oct. 1, 2005, brought an increase of between 25 percent and 80 percent, depending on specialty.

The MMA has backed liability reform bills in every legislative session since 1980, Smith said. “As long as we believe a cap is necessary to better the economic climate for doctors in Maine, we’ll keep introducing it,” he said.