The 130th Annual Meeting of APHA

Abstract #51718

Richard Kronick, PhD, Department of Family and Preventive Medicine, University of California San Diego, 9500 Gilman Drive, San Diego, CA 92093-0622, 8585344273, rkronick@ucsd.edu

This work describes a proposal developed by Richard Kronick and Tom Rice for a state-based approach to achieving universal coverage, and considers the implications of the proposal for health care cost containment, resource allocation, and provider payment. Kronick and Rice, in ‘A State-Based Proposal for Achieving Universal Coverage’ (available in Covering America: Real Remedies for the Uninsured, Economic and Social Research Institute, Washington, DC, June 2001), proposed that the United States adopt a health care financing system that provides comprehensive health insurance to all legal residents. The system will be administered by the states and overseen by the federal government. Employers will no longer be involved in providing health insurance coverage, although both employers and employees will contribute. The proposed system will replace most of the major components of the U.S. health care financing system; the two exceptions are Medicare and Medicaid-financed long-term care. States will have wide latitude in crafting their own particular systems. For example, a state can choose to establish a “Canadian-style” single-payer system, in which hospitals are paid based on a negotiated budget and physicians on a fee-for-service basis (presumably with an aggregate expenditure cap). Alternatively, and perhaps more likely, a state can contract with health plans that compete for enrollees through low premiums, high quality, and/or service, with individuals who choose more expensive plans paying for them with additional premiums. The plan will be financed through a variety of sources. The primary revenue source, a payroll tax levied on both employers and employees, will be supplemented by general federal revenues, state revenues, and, potentially, by individual contributions for certain plans and/or benefits beyond those included in the standard benefits package. Under this proposal, state governments will be required to make resource allocation decisions – either directly through setting hospital budgets and expenditure targets for physicians and other sectors, or indirectly through negotiation of capitated payment amounts with health plans and other providers. This proposal, like any broad-based health care financing reform proposal, inevitably raises difficult questions of interstate equity in how funds are raised and how they are distributed. I will discuss these interstate issues, and consider the implications of the proposal for medical education and training, for alternative approaches to resource allocation, and for the ability of state governments to successfully implement the tasks envisioned for them.

Learning Objectives:

• To encourage discussion about the implications of alterantive methods of achieving universal coverage on health care professionals, on access to care, and on health care costs.

Keywords: Universal Coverage, Cost Issues

Presenting author's disclosure statement:
I do not have any significant financial interest/arrangement or affiliation with any organization/institution whose products or services are being discussed in this session.