ISSUE IN BRIEF:
HCRA
The Health Care
Reform Act (HCRA), first passed in 1997 and amended numerous times since,
will expire on June 30, 2005. The Business Council supports changes
to HCRA to:
- make
the health care system more accountable;
- spend
less money;
- spend
the money differently.
Current Law
The original Health
Care Reform Act was passed in 1997 and marked a shift from government
rate-setting of hospital prices to market-based pricing. As a transition,
the 1997 act imposed taxes on employers to pay for graduate medical education
and bad debt and charity care - costs that were formerly imbedded in
the government set rates.
Following amendments
to HCRA in 1999 and 2002 those taxes were extended and increased. In
addition, new government spending programs were created that now seriously
imperil real property taxes throughout the state. And some of the revenues
and spending of HCRA were left off-budget and free from public scrutiny.
One key reform adopted in 1997 - statewide hospital report cards - has
never been implemented.
Business Council Priorities
Putting HCRA funds
on-budget is essential to making the system more accountable to
taxpayers and the public and private payers of health insurance.
A more complete
picture of HCRA funding will tell the public a story of a system that
over-burdens employers with taxes, provides inadequate information and
measurements about what the programs deliver and often pays the same
for sub-par care that it does for those who provide excellent care.
The full power
of market forces has never been fully unleashed.
If encouraged
more, a deregulated market could result in greater regional collaboration
and a greater regional imprint on the local health-care system. This
could make the system stronger or stabilize it, rather than making it
weaker. Rather, we've seen a propensity for government intervention in
an effort to make sure virtually every hospital stays afloat. This artificial
propping up of institutions invariably leads to a system that is weaker
in aggregate. The Governor's Health Care Reform Task Force has wisely
recognized the inherent weakness in this approach and has recommended
a Commission to look at rightsizing
hospitals and nursing homes that are no longer needed. The state should move expeditiously.
HCRA saddles employers
with especially burdensome taxes, especially the tax to fund graduate
medical education. Not a single other state has adopted a tax on business
to pay for the education and training of new doctors. The Governor's
proposed budget raised the tax even higher. Instead, the graduate medical education tax
should be reduced.
We strongly
oppose any punishing new tax on businesses, individuals and health plans.
Health insurance
needs to be less costly and The Business Council will push for legislation
to allow
for Freedom Health policies. These higher deductible policies allow employers and
individuals to take advantage of Health Savings Accounts authorized as
part of the new Medicare Modernization Act. For most employers, no Freedom
Health policies equates to no health savings accounts.
The state is poised
to invest heavily in capital infrastructure, most notably information
technology. This money must be used strategically. One of the reasons
given for not closing hospitals is stranded debt. Some of this money
should be used to retire the debt of hospitals that are no longer needed.
The initiative
of the National Coordinator for Information Technology deserves special
attention. The office was created by President Bush. The goal is to make
an individual's electronic medical record available at different points of care in the
delivery system. HCRA should support this work.
