Scoppe: The wrong message to send business prospects

Associate EditorApril 4, 2013 

Scoppe

— IF YOU’VE been paying attention to Gov. Nikki Haley’s pro-public health, anti-Obamacare campaign, you might recognize the talking points:

“America is one of the least healthy industrialized nations, and South Carolina is one of America’s least healthy states.”

To be more economically competitive, we need a healthier workforce, which requires “improving health status, improving health-care delivery and lowering the per capita cost of care.”

We improve health status by tackling our state’s bottom-dragging indicators: diabetes (49th worst in the nation), low birth weight (47th), lack of health insurance (45th), obesity (42nd), infant mortality (40th) and smoking (39th).

Those numbers derive largely from “social determinants,” so improving health starts with changing people’s behavior — which we won’t do as long as “all of us get our health care because of our status, not our behavior.”

But that’s not the governor, or any of her team, talking. It’s Thornton Kirby, the head of the S.C. Hospital Association and the personification of the campaign to expand Medicaid coverage in South Carolina.

Mr. Kirby shares not only the public-health goals of the Haley administration but also many ideas about how to accomplish them. He considers Medicaid director Tony Keck a friend and describes him as “the best partner the hospitals have ever had” in moving toward higher-quality care. In fact, it’s easy to close your eyes and imagine that Mr. Keck is the one speaking when Mr. Kirby explains that a central problem in our health-care system is that “Americans want the very best health care in the world, they want someone else to pay for it, and they do not want to be held accountable for their actions.”

But while Mr. Keck and Gov. Haley argue that expanding Medicaid to cover working adults who make up to 138 percent of the federal poverty level will only make the problems worse, Mr. Kirby argues that it’s a vital part of correcting those problems. To understand why, we need to review how we got to this place.

When the federal government imposed wage caps during World War II, companies started offering health insurance as a way to attract talent. In the 1960s, the Congress created government insurance programs for groups who weren’t likely to have employers, and thus weren’t likely to be covered: the elderly, the disabled, poor pregnant women and babies; it would later add poor children. Two decades later, after public outrage over poor people being kicked out of hospitals to die, the Congress required hospitals that accept Medicare payments (which is to say, hospitals) to treat all emergency patients, whether they could pay or not.

The result, after six decades, is a system in which health insurance is paid for almost exclusively by the government and businesses, and the hospitals shift the cost of treating the uninsured to insurance purchasers — which is to say, to businesses.

It is, Mr. Kirby says with decided understatement, not the sort of system anyone would have designed deliberately. Nor is it sustainable. And as nonsensical as it is to have businesses pick up much of the cost of the nation’s health insurance — including costs for people who don’t work for them — it’s worse in states such as South Carolina, home to the nation’s fifth-sickest population and the fifth-highest rate of cost shifting.

Mr. Kirby describes this combination as “a double whammy” for businesses in South Carolina: “Because we are less healthy than most of the people in the U.S., we cost more to insure. That also means the people who are not covered, who are cost-shifted, are sicker, so the shift costs more to businesses.”

As a result, he says, the message we send to businesses is this: “We want you to come to South Carolina and bring your business here, and by the way, it’s going to cost you more. And we protect smokers, so you have to hire smokers. And there are obese people in this state, and we don’t get after them very much about their weight, so you have to hire obese people.”

“That’s not really” — and here’s that understatement again — “the message we want to be sending nationally.”

Which brings us back to Medicaid, whose expansion is the Congress’ solution to cost-shifting, among other things. If South Carolina expands the federal-state insurance program for the poor, the federal government will pick up 100 percent of the cost for the first three years and then gradually reduce its share to a still-hefty 90 percent.

Opponents say the expansion is so huge that we can’t afford even the 10 percent (they say lots of other things, but most of them are too embarrassingly ridiculous to repeat). Our 10 percent would cost $166 million in 2020, the first year we’d pay that much. That is indeed a tremendous amount. But by comparison, next year’s state general fund budget will be $6.3 billion.

Little wonder, then, that there’s been a deafening sort of silence on this issue from the S.C. Chamber of Commerce, which usually is quick to attack anything Obama. Mr. Kirby notes that S.C. businesses “are saying 10 percent is better than 100 percent, which is what we’re paying through the cost shift,” so they’re “not quite as willing to walk away from the solution” as politicians seem to be. Because as difficult as the current situation is for them, it will be worse once other states expand Medicaid, reducing the amount of money businesses in those states have to spend on health insurance.

“Too often this Obamacare law is cast as the federal government trying to cram something down our throats,” Mr. Kirby says. “Because it is the product of 50 states’ elected representatives, I think it’s equally fair to look at it this way: The other 49 states are offering to pay 90 percent of the cost of uninsured care in our state. We don’t have to take it. We can tell them, ‘No thanks; we’d rather do it ourselves.’ But it will be absorbed somewhere in the borders of South Carolina if they don’t help us pay for it.

“If the other 49 states want to pay 90 percent of the cost of covering our uninsured, we ought to let them so business doesn’t have to in this state.”

Ms. Scoppe can be reached at cscoppe@thestate.com or at (803) 771-8571.

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