TED ALMON: HEALTHSOURCE RI STILL A BARGAIN
The debate over funding for Rhode Island’s successful health insurance exchange, HealthSource RI, just doesn’t seem to go away. I have written in support of the exchange on several occasions in the past, summoning the most pragmatic business arguments I could muster. To me, the exchange is akin to other technology solutions we often invest in for our business to operate more efficiently. Yes, they cost money up front, but they ultimately provide savings through enhanced productivity.
Evidently, what I missed was that political entities like Rhode Island don’t always operate like a business. Since ours is a private enterprise, when I decide as CEO on a capital investment, I am only spending the owners’ money. When I advocate an investment by the state, I am talking about spending the taxpayers’ money.
So let me reframe my argument in that context, with apologies if I may have seemed presumptuous or taken with the weight of my own logic in the past. I still think that having control of our own health insurance exchange is a critical element of containing the cost of health care in our state, which could be an essential ingredient of future economic development.
For businesses in our state, as well as those who might consider moving or expanding here, the cost of providing health benefits to employees far exceeds energy costs, state taxes, regulatory compliance and virtually all other business expenses. If we can figure out how to do it for less, well, the implications for business development should be obvious.
Recently, some — including House Speaker Nicholas Mattiello — have suggested that Rhode Island might simply defer to the federal government’s exchange, the previously much maligned Healthcare.gov, presumably as a way of saving money for the state. It is responsible to consider this strategy, of course, but very little has been said about the actual cost comparison, not to mention whether, after having spent nearly $150 million to build HealthSource RI, the Feds would even allow us to just walk away from using it.
Lest anyone think otherwise, the cost to the state of using the federal exchange would not be free. While the formula for what we would be charged is a bit convoluted, and some assumptions about enrollment are necessary, the
best estimates of policy experts I know come in at around $17 million per year.
One rather obvious compromise idea would be to simply set the budget for HealthSource RI at an equal amount, at least until such time as either the exchange can come up with an alternative funding plan, or is able to clearly demonstrate the savings value of its programs.
By almost any standard, HealthSource RI has been a resounding success. Enrollment has exceeded expectations, and despite dire warnings by opponents to the contrary, the cost of plans has been below estimates. The website and its elaborate support structure work as they are supposed to.
By intention and design, though, HealthSource RI is much more than a mere convenience to consumers who use it. It is potentially the most powerful tool yet devised to influence payment reform in our health-care system, and payment reform is nearly universally acknowledged as the key to bending downward the inexorable cost curve we have endured for decades. If it costs taxpayers no more than the only alternative, it is hard to imagine this debate isn’t over — but my guess is it won’t be.
I don’t think it is too cynical to suggest balking at the cost of HealthSource RI merely provides convenient cover to those whose real objections are more self-serving or ideological than practical. Disruptive technology like HealthSource RI always threatens some who are invested in the status quo. Then too, there will be predictable yelping from the small-government advocates, although HealthSource RI, like the currently successful Beacon Mutual Insurance Co., which sells workers’ compensation insurance, need not be an instrument of government.
There is value, I think, in flushing critics into the open where their real positions can be assessed on their own merits. Allowing them a pat position like “we simply can’t afford it” mires one of our most important economic development reform efforts in pointless demagoguery.
If our state’s leaders really want to save taxpayer money, I would suggest they consider how to get all the public employees into HealthSource RI. Ted Almon is the president and CEO of Claflin Co., a medical equipment and supply company in Warwick, a member of the expert advisory committee of HealthSource RI, and co-chair of the reform advocacy group HealthRIght