State's blue-ribbon panel stumbles in one of its selections

Rocky Mountain New editorial

We have not had a chance to fully evaluate the financial analyses of four plans that the state's Blue Ribbon Commission for Health Care Reform just received from a consulting group. But we can say one thing: The Lewin Group's economic analysis of one of the ideas - the Colorado Health Services Program, a single-payer proposal from the Colorado Nurses Association and longtime advocates of government-run health care - is short of persuasive.

Any such proposal would be unworkable in a single state. It would be particularly pernicious in Colorado, which has top-flight medical facilities that now attract patients from across the country.

Financing a single-payer system would require a massive tax increase on every working Coloradan. And the plan would create an irresistible magnet for non-residents to come here and get "free" care, or close to it - most likely at emergency rooms.

The commission must present one proposal to the legislature in January, with the expectation that lawmakers will then place that recommendation on the November ballot. Here's a time-saving suggestion for the panel: Don't spend a minute more considering the single-payer plan. Instead, invest your expertise weighing the three other alternatives, or developing a plan of your own.

The single-payer proposal would eliminate both private health insurance for most medical services and Medicaid. Instead, a 15-member government board would set reimbursement rates for doctors and other medical providers and control "administration and implementation of health care within the state . . . ." It must also "have constitutional powers to contain costs."

Which means the board will decide what doctors get paid and what procedures could be performed. Because the program cannot run an annual deficit, the board will have the power to deny or delay expensive procedures and medications to patients if annual budgets get tight.

Translation: big-time rationing, meaning patients with chronic illnesses who now depend on costly medications will suffer.

Those problems would be endemic in any state-run medical monopoly. Some proponents of single payer acknowledge such trade-offs and say they're a price worth paying so long as every resident is guaranteed medical coverage.

What makes that situation untenable in an individual state is that there's no way to prevent uninsured non-residents (citizen and immigrant alike) from coming here to get medical care at Colorado taxpayers' expense. Out-of-staters who have medical insurance but don't want to pay their out-of- pocket costs could show up here, too.

How? Get a fake Colorado ID. Or just check in at an emergency room. Federal law requires ERs to treat any patient who arrives at their doorsteps, or refer patients to another facility if they don't have an "emergency condition."

We have no doubt the enabling legislation would require non-residents with medical coverage to identify their insurance, so their providers could be billed. That might discourage some out-of-staters from expecting medical care for a pittance. But there's nothing to prevent uninsured patients from arriving here and receiving treatment.

And yet proponents of this plan have not accounted for this magnet effect in their proposal; neither has The Lewin Group. Indeed, the group's preliminary estimate suggests that this plan would save $1.7 billion over the first year it's in place, roughly 5.6 percent of medical costs in this state, by eliminating insurance premiums paid by workers and businesses, among other things.

Lewin likewise assumed that a single-payer plan passed last year by the California Legislature and vetoed by Gov. Arnold Schwarzenegger would be a cost-saver. That analysis also failed to acknowledge that non-residents would certainly demand care, so we wonder if the group's conclusions about any of these proposals are credible.

Let's not forget the taxes the plan would require, either. First is a new 4 percent payroll tax, which amounts to a pay cut of that magnitude for every working Coloradan. Next is an increase in the personal income-tax rate to 6 percent; that's a 30 percent hike over the current 4.63 percent rate.

Does anyone seriously think that a majority of Colorado voters have the stomach for such massive tax increases, let alone the medical rationing they'd be facing under this plan?

In other words,this plan is a non-starter politically. Seventy-nine percent of Oregon voters rejected a single-payer proposal in 2002; 73 percent of Californians did the same in 1994.

We've long advocated changes in the health-care system to increase coverage, ease dependence on emergency rooms and reduce cost-shifting.

This proposal would address the first concern in ham-handed fashion but do so by exacerbating the other two. And it would allow the rest of the country to play Coloradans for suckers. It deserves a quick and painless demise.