published Jan 12, 2016 in the Portland Business Journal
by Dr. Samuel Metz, Guest columnist
Next November, some lucky citizens will vote for (or against) a statewide universal healthcare system. But they won’t be Oregonians.
Colorado healthcare advocates just placed Initiative 20 (“ColoradoCare”) on its November 2016 ballot. If approved, this detailed proposal would make Colorado the first state to replace its fragmented healthcare financing system (similar to Oregon’s and all other states) with a program providing health care access to every resident.
Federal programs (e.g. Medicare, Veterans Affairs) would remain untouched. Everyone not covered by these programs would have their care financed through a single, newly created public agency.
It’s a daring leap of faith. No other state has implemented universal care of any kind.
Why won’t Oregon be first?
Inertia, mostly. Oregonians spend about $38 billion annually on health care, nearly 20 percent of spending on everything.
Changing where these dollars flow means lost money for someone; understandably, they invest heavily to prevent that loss. As Bruce Vladeck, former head of what is now the U.S. Centers for Medicare & Medicaid Services (CMS), said, “Every dollar in cost savings is a dollar less income for one or more interest groups.”
Oregon has a lot of interest groups.
How many dollars in cost savings would be generated by these expected cost savings? A ColoradoCare study estimates the state will save $6 billion with Initiative 20 (a similar program in Oregon would probably save $4 billion).
How are these savings achieved? Through the intimidating task of diverting current premium payments to a single state health care agency. Total spending goes down, but that lowered spending becomes re-labeled as “taxes.”
There’s the rub — who pays those taxes?
Initiative 20 uses a 10 percent payroll tax (3 percent by employees, 7 percent by employers) and a similar tax on personal non-wage income.
For businesses currently providing private insurance and those residents with incomes below $200,000, costs go down. For wealthier residents and those businesses with self-funded plans (or who currently provide no benefits at all), costs go up.
What those paying more will gain in return are consistent healthcare costs (an unexpected hospitalization will not increase tax payments). Universal care also ends labor-management disputes over benefits.
Who handles this money? ColoradoCare proposes an elected board of trustees responsible for allocating collected taxes to provide the best possible healthcare. “Best possible healthcare” is determined by the voters who elect those trustees.
Predictably, Colorado politicians are divided, and not exclusively on party lines. The reticence of Democratic governor John Hickenlooper to endorse this plan probably reflects the unhappy experience of Vermont Governor Peter Shumlin; his state legislature enacted a universal plan but gave him the job of designing a plan to collect $2 billion in new taxes.
Rather than take the heat, he canceled the entire project, thereby earning the enmity of every health care reform advocate in Vermont. At least Initiative 20 spares Colorado’s governor that responsibility.
Physicians for a National Health Program (PNHP), which advocates for single payer health care, faults ColoradoCare for failing to be a true single payer plan.
Because the Colorado plan leaves all federal health care agencies intact and allows private insurance companies to sell supplemental policies, the state still deals with multiple payers. Because of this less-than-ideal arrangement, PNHP is skeptical that ColoradoCare will achieve all of its projected savings.
Still, ColoradoCare expects a decrease in healthcare spending, more residents with access to care, better public health and a net gain of 31,000 jobs.
Or so goes the prediction.
We must give the Colorado predictions credit, however. Two dozen other studies of universal care in the U.S. come to the same conclusion as those of ColoradoCare: Universal care plans provide better care to more people for less money.
During his Oregon tour last July, T.R. Reid, chair of Colorado Foundation for Universal Health Care and an ardent advocate of Initiative 20, boasted that Colorado beat Oregon to legalized marijuana and predicted it will beat Oregon to universal care as well. He may be right.
But Oregon is not standing still. This month, the Oregon Health Authority will initiate our first state-sanctioned study of universal care in Oregon. When its results are presented to our February 2017 legislative session, our representatives will have interesting reading.
Is it a good thing to go second? Perhaps. If ColoradoCare begins on schedule in 2019, Oregon will have a real-world example of how to do healthcare right. Or wrong, as the case may be.
The whole country will be watching Colorado. If Colorado fulfills predictions, there may be universal care in Oregon’s future as well.
If we can’t be first, there’s still glory (and maybe better health care) being in second place.
Dr. Samuel Metz is a Portland anesthesiologist. To submit a guest column on a health-related topic, please contact Elizabeth Hayes.