Hawaii has been long touted for its mandatory employer-provided health insurance system, but Gordon Ito, the state insurance commissioner, has a dire warning.
If residents don’t develop healthier habits, Ito said, the whole plan set up for their care will collapse, and not too long from now. That’s a looming threat that will require action throughout the health-care landscape: cost-cutting moves from patients, providers and insurers alike.
There’s been a doubling in the payout in premiums every 10 years, he said, and the 2017 total of $7 billion, including publicly funded and private insurance, is expected to rise by $2 billion to $3 billion in two to three years.
“We’re at a crisis point — people don’t realize it,” said Ito, addressing the Honolulu Star-Advertiser editorial board last week. “The health care cost is really impacting the entire state: businesses, government, people’s household budgets. Net income is really being impacted, wages are really being depressed.”
But he said the key lies in controlling not the premium rates themselves — the Insurance Commission can’t by law prevent a rate increase if it’s needed to cover actual costs, he said — but the skyrocketing cost of care itself.
The status quo is unsustainable, he added, and nobody could dispute that assertion. Hawaii’s Prepaid Health Care Act (PPHCA), enacted in 1974, is on a collision course with the businesses that provide the coverage, by law, to every employee working 20 hours a week or more.
That’s because, by law, the portion of the premium that the employee picks up is capped at 1.5 percent of their wages. With premium costs on a steep climb, the burden on businesses is becoming far too heavy.
Left unchecked, the problem will drive business lobbies to put mounting pressure on lawmakers to dismantle PPHCA, or curb it radically. Every effort must be made to keep that crucial part of the social safety net in place, and as robust as possible, or the state’s residents will fall off the insurance rolls.
Too many uninsured people will end up seeking care in the emergency rooms, care that is unreimbursed, which in turn shifts costs to those still with coverage. And that will drive up premiums further for them.
The state Insurance Commission’s part lies in its examination of rate increase requests, confirming that the insurance carriers — principally Hawaii Medical Service Association and Kaiser Permanente — are improving efficiency and are keeping their budgets lean.
This can be tricky to do without compromising care. The recent upheaval over HMSA’s initiative to redirect dialysis patients off a charity-paid insurance plan exemplifies the difficult balancing act, especially where life-threatening illnesses such as kidney disease is concerned.
Similarly, providers need to make sure that new methods of interacting with patients are applied in ways that preserve care while reducing unnecessary costs. These include telemedicine as well as consultations by phone and email. More adoption of the electronic medical records make record-sharing and coordination easier across various medical providers on the patient’s team.
Many of these ideas have been on the planning agenda or actively pressed by the Obama administration through the federal Affordable Care Act. “Bending the cost curve” is an expression favored by Ito, but it resonated throughout the Obama years as well.
Unfortunately, costs are still on an upward track, nationally as well as locally. Ito believes a better database tracking medical services across Hawaii populations could guide policy actions to contain their costs. He hopes the state Legislature will pass a bill to create such a database.
That would be a nice-to-have resource, but enough data should be available to guide policy actions now. The emphasis needs to be on putting actual downward pressure on costs, rather than diverting resources and energy toward data compilation.
Ito is right, however, that the patients themselves own a lion’s share of the responsibility in cost containment. Programs to cultivate healthier habits among everyone, but especially among the young, are essential to progress in Hawaii’s anti-
obesity campaign. Promoting access to healthy food and drinks as a policy goal makes sense.
The state has been successful over time using similar initiatives to reduce smoking and the cancers it causes. But realistically, modeling campaigns for other health-care goals after that is a project for the decades.
Some reduction in health-care plan benefits, as an immediate coping strategy, seems almost inevitable in the short term. But there must be a sufficiently aggressive move to contain costs on the provider and patient side at the same time. That is the only way that the islands can recover health-care balance without sacrificing essential services.
Hawaii should be proud of its reputation as a state with robust health care and coverage — and should not carelessly let that slip away.
