State should diversify health care

State health care premiums rose 16 percent in 2000, making it the second year in a row for double-digit percentage increases. And, said Minnesota Commissioner of Health Jan Malcolm, the upswing shows no signs of abating. So when employers around the state start dropping health benefits to cut costs – which eventually they will have to, if the trend continues – those leaving the safe haven of the University will not be covered for what might be the first time in their lives.

Both Malcolm and Caroline Jones, director of health care and transportation policy for the Minnesota Chamber of Commerce, partially blame increased usage of health care plans for the rate hikes. Data from the Minnesota Hospital and Healthcare Partnership support at least part of its claim: people are going to hospitals more often. Outpatient visits rose 2 percent in 1996, 3.3 percent in 97, 4.9 percent in 98 and 8 percent in 99.

While the correlation is clear, blaming people for using a service for which they and their employers pay seems ridiculous. Granted, increased prescription drug use, an aging population and expensive technological advances cut into profit margins for both hospitals and insurance providers. But passing that cost directly onto consumers should not be tolerated, and, in fact, would not be if Minnesota’s health care system fostered more competition. Currently, Jones said, three hospital groups – Allina, Fairview and HealthEast – comprise two-thirds of Minnesota’s health care providers. To make matters worse, three health care insurance providers – Medica, Blue Cross/Blue Shield and Health Partners – control almost 90 percent of the state’s health insurance market. And Medica is the insurance-providing half of Allina.

After nearly zero percent growth in the mid-1990s, these companies are fighting to make up for lost time and their market dominance allows them to do so at a rate which is detrimental to workers, small businesses and, through them, the state. Large companies can self-fund their employees’ health care, exempting the corporation from the rate increases. A small business, however, must go through an outside insurance provider because one employee racking up $1 million or more in hospital bills could bankrupt the company. Minnesota controls those providers with blanket regulations that, for many, do little more than waste money. “A company with four male employees over the age of 55 wouldn’t have much use for maternity insurance, but according to state law, they’d have to carry it,” Jones said. Easing these restrictions – at least temporarily and in a well-monitored fashion – would send less money to the three biggest insurance providers, giving other health care corporations the opportunity to break into a market with more than a 10 percent window.

Managed and state-run health care are both too unpopular among Americans to succeed. Gov. Jesse Ventura and the Legislature need to step in not to consolidate health care in Minnesota, but to diversify it.