Monday, August 19, 2019

Thoughtful, Cautious Approach to Healthcare Needed; By State Rep. Jim Olsen

State Rep. Jim Olsen
 
Healthcare is on everyone’s minds. The main concern is costs going through the roof! Healthcare is now the largest part of our economy, at 17% of our total GDP. Some retirees cannot afford their healthcare premiums, and others cannot afford the prescriptions that they so desperately need.

What can we do? What should we do?

One common answer is Medicaid expansion. This is an option that many people really like. It seems like the one move that will solve our healthcare problems. Advocates of this approach will point out the 9 to 1 return. If we, as a state put in 10 million, the federal government will put in 90 million dollars. If we put in 100 million dollars, they will put in 900 million dollars. Who could turn down a deal like that?

Well, as the saying goes, “If something seems too good to be true…” You can probably fill in the rest.

There are several ways this deal could go wrong:

Do you really trust that the federal government will continue to pay this money indefinitely? I hear you, neither do I. There is a real possibility that the federal government will eventually stop providing this money, leaving states with this financial burden. What do we do then?

There is no magical pot of money just waiting for our state to come and claim. With Washington facing an ongoing debt crisis and our national debt increasing by approximately $52,000 per second, Medicaid funding will almost certainly be on the chopping block in the future.

Additionally, Medicaid rolls will expand significantly, as we’ve seen in other states who choose this route. Medicaid is already one of the largest drivers of state spending prior to any expansion plan. All of this points to higher demand for healthcare services. Basic economics tells us that more demand for anything means that the price goes up. Healthcare prices have indeed gone up in states that have expanded Medicaid.

A third issue is the accessibility of Medicaid. Just because someone has Medicaid doesn’t mean they will get to see a doctor when it’s convenient. An analysis by Health Affairs found that only 69% of physicians accept Medicaid patients. Another study in the New England Journal of Medicine found that Medicaid recipients were six times more likely to be denied an appointment than people with private insurance.

Another study in the New England Journal of Medicine found that Medicaid recipients were six times more likely to be denied an appointment than people with private insurance. A third study found when Medicaid recipients do get an appointment, they wait an average of 42 days to see a doctor, twice as long as privately insured patients.

I don’t claim to have all the answers, but I do recognize some of the problems:

Healthcare is not truly a free market. There are so many regulations that stifle and distort both innovation and efficiency, which in turn pushes prices higher. Additionally, healthcare has a bigger and more complicated middleman—the insurance industry—than any other industry that I know of. This also increases prices for consumers.

So what can we do? Again, I don’t claim to have all the answers, but I believe if we move to a freer market, including price transparency, that is certainly a wise first step to finding the solution.

As legislators, we have opportunity to commission an interim study. These studies research policy ideas to help formulate a bill next session or a state program.

My interim study this year is focused on Main’s “Right to Shop” law. In Maine, when your doctor tells you that you need a certain procedure or operation, you receive a list of several providers and the prices they charge. These prices can vary quite a bit, and this approach usually saves 30 to 50% in the long run.

Through my interim study, we will examine if this approach could work in Oklahoma! This may become the first step we need to develop a free market approach to healthcare that will work better for all Oklahomans.

Rep. Jim Olsen represents District 2 in the Oklahoma House of Representatives, which includes portions of Seqouyah County.

Submitted by State Rep. Jim Olsen


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