Hurdles of health care reform: the obstacles are enormous, and so are the stakes. But there are some new ideas for reining in health care costs and keeping Americans healthy.

• Author: King, Martha P.

Today's health care headlines distress even the most seasoned lawmakers.

"Health Costs Soaring"

"State's Health Care in Near Crisis"

"Uninsured Patients Pack Clinics"

"Grim Choices Face States in Making Cuts in Medicaid"

"States Not Prepared for Bioterrorism Attack"

No state seems immune from the powerful forces of rising health costs, more uninsured people, disastrous budget shortfalls, a strained public health system and workforce shortages. The bad news can overwhelm would-be reformers because the issues are so tough.

So what's a concerned legislator to do? One or two bills can't fix the enormous health problems facing states. Ideally, legislators would have the luxury of time to examine the entire health system, work with broad-based coalitions to determine the goals and priorities, and move forward from there. But the immediate demands and the legislative process don't readily lend themselves to a systematic examination of health issues and long-term vision.

"Legislators tend to be pretty myopic," says Kansas Representative Bob Bethell. "We take care of the dog biting us today, but we don't look down the road at the other dogs lined up until they get closer."

Legislators often consider bills that address specific issues in a piecemeal fashion. Many bills propose narrow programs to meet specific needs--such as establishing an AIDS clinic or enacting insurance requirements or modifying licensing for various professions.

QUICK FIX CONSEQUENCES

A "quick fix" can have potential consequences--particularly unintended ones-that can create more costly problems.

One group complains they can't get treatment for a certain condition? Enact an insurance mandate.

Others complain about soaring premiums? Repeal insurance mandates.

Drug costs seem too high? Impose restrictions on types or numbers of drugs.

Without the right medicines patients end up in a hospital? Loosen drug restrictions.

Medicaid costs out of control? Cut provider payments.

Providers refuse to treat Medicaid patients? Raise provider payments.

"We can't keep this up," says Bethell, referring to the piecemeal way of doing business. "We need to set state health goals and then determine how to use the limited funding we have to do a better job of accomplishing them." He says legislators need to tame the attacking dogs, but also do something about preventing future dog bites. And that requires long-term planning.

To this end, Bethell sponsored legislation in 2002 to create the Kansas Commission on Health to " make recommendations on all aspects of health, with an emphasis on prevention, health promotion and reducing disparities" among such groups as low-income families and racial minorities. The commission would first establish measurable health goals for Kansas. Although the bill passed the House with strong bipartisan support, he says election year politics derailed it in the Senate. He promises to bring it back. "The stakes are too high not to do things in a more strategic way," he says.

PRESSING PROBLEMS

Even while setting long-term goals, legislators face difficult and immediate problems. Spending on health services has ballooned to consume 27 percent of the average state's budget, nearly double the share they spent on health services about a decade ago. The bulk goes to Medicaid, which grew by 12.8 percent in 2002, while state general fund spending grew a mere 1.2 percent. Twenty-seven states reported Medicaid cost overruns, which means cutting back or seriously squeezing other budget priorities.

Health costs rose less than 3 percent annually between 1994 and 1997. In contrast, 2001 saw an 11.2 percent overall rise in costs, 2002 will hit nearly 14 percent, and national projections indicate a 15.4 percent increase in 2003.

Small employers face exorbitant increases in health insurance premiums. A recent survey by the National Federation for Independent Business indicates that 69 percent of respondents reported at least a 20 percent increase in premiums in 2002, 39 percent experienced at least a 30 percent rise, and one in 10 reported increases of 50 percent or higher.

Some businesses have dropped employee health insurance or significantly raised the employee share of the costs, making coverage unaffordable for many low-wage workers. As a result, the number of uninsured people climbed above 41 million in 2002, after dipping below 40 million the year before. With more uninsured people, the demands on Medicaid and other publicly funded health programs grow.

Some new ideas may help lawmakers weather the current storm in the short term while moving toward longer term goals. For example, state lawmakers can seek new options to make insurance more affordable, Medicaid more efficient and effective, better manage the high costs of people with serious chronic health problems, emphasize personal responsibility and healthy behavior, and serve the uninsured.

SHORING UP THE PRIVATE MARKET

Efforts to make insurance...