Skipping a trip to the doctor because it’s too expensive winds up raising the cost of treatment for everyone in the long run, a health insurance executive told a Chamber Forum audience Monday at the Rogue Valley Country Club.
Don Antonucci, president of Regence BlueCross BlueShield of Oregon, said the problem for many people begins when the cost of care increases. That in turn puts pressure on medical insurance costs, boosting the cost of coverage, leading people to drop insurance and not to seek care, which starts the cycle over.
“In the end, cost of care continues to increase, while we’re now treating worsening conditions we could have treated earlier in the process,” Antonucci said. “This is the cycle America finds itself in today.”
The number of uninsured Americans will reach 60 million by 2015 and approach 70 million in 2020.
He cited industry research in 2010 showing 9 percent of employers intended to drop insurance coverage, while 21 percent probably will drop coverage.
There has been a growing shift of costs to private insurance ventures — in 2010 private insurance companies reimbursed providers at 140 percent of Medicare reimbursements, a spread that is expected to rise to 155 percent in 2015 and 166 percent by the end of the decade.
“Unless the gap is closed in the private market place, we know the uninsured are not going to get the care they need,” Antonucci said.
He said Americans can help reduce the costs by changing lifestyles to avoid diabetes and prediabetic conditions.
In fielding questions from the audience, he said the falling Medicare reimbursements will have a direct impact on local health care services.
“We’re going to see this play out pretty dramatically here as it relates to Medicaid,” Antonucci said. “In the state of Oregon, Medicaid is already reimbursing hospitals at a rate much lower than the cost of care. That’s about to be cut in the state by another $239 million. When you take federal matches (into account), that equates to over $600 million that’s coming out of the system.”
There is a possible positive in all this, he said. Coordinated care organizations, championed by Gov. John Kitzhaber, will cause hospitals, mental health agencies and other medical providers to work together. That will lead to coordination, rather than duplication of services.
“It’s been estimated that 30 percent of all health care that is given is considered wasteful,” he said. “The flip side is that 55 percent of patients don’t get the health care they need, so we’ve got to start reconciling both sides of (the equation).”
Asked about the Obama administration’s health care initiative, Antonucci described it as a first step.
“It really helps address the access side of it,” Antonucci said. “That’s going to be the difference between people who can afford medical insurance or not afford medical insurance. It’s going to be a huge boost, but not that magical pill.”
What isn’t addressed, he said, is the cost component.
“At some point, whether it’s the government or private market place, that’s going to have to change,” Antonucci said. “Or some people aren’t even going to be able to afford subsidized coverage. What we’re all going to have to work on is the cost component.”
While not every element of the reforms are perfect, he said, it has spurred significant activity on multiple levels.
“At the end of the day,” Antonucci said, “we need to act. Without reform, I don’t think we would take the kind of action we need to come together.”
The cost elements, he said, are not so much on the administrative side for either insurance companies or hospitals.
In Oregon, he said, insurance companies pay health care providers anywhere from 88 cents to 91 cents for every dollar of premiums.
“Insurance like Regence and other insurance companies are very much focused on continuing to tighten up administrative costs,” he said. “But if we don’t crack that nut and control the costs of services, we’re going to continue seeing higher costs.”
He said tort reform is needed because medical school graduates are going to other states because of legal liabilities.
“But that’s just one piece of the puzzle,” Antonucci said. “When you start adding all these things together, you can’t disregard anything that is going to save us dollars going forward.”
Reach reporter Greg Stiles at 541-776-4463 or email business@mailtribune.com.
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