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Spokane, Washington  Est. May 19, 1883

Opinion

Nation must face health care crisis

The Spokesman-Review

If health care could be purchased at Wal-Mart prices, lawmakers wouldn’t have to dream up strategies that make for great politics but poor policy.

The latest foray into nibbling around the edges of our nation’s health care mess is the state of Maryland’s legislation that hones in on the nation’s largest retailer.

Too bad this symbolic gesture won’t reverse the rising tide of people who are uninsured. Nor will it lower public health care costs. But it will provide a noisy, emotional sideshow as states, including Washington, take on a familiar punching bag.

In Maryland, lawmakers overrode the governor’s veto of a bill that requires companies with more than 10,000 workers to spend at least 8 percent of their payroll on employee health care. If they don’t, they pay the difference into the state’s Medicaid fund. The rationale is that states are subsidizing health care coverage for businesses.

That’s true as far as it goes, which isn’t very far. The only business that would be affected is Wal-Mart. What about businesses that also don’t meet the 8 percent mark or don’t offer any health care coverage?

About 5 percent of Wal-Mart’s work force of 1.3 million relies on Medicaid. The average for all retailers is 6 percent. About 45 million people nationwide are uninsured. Let’s say all 50 states pass such a law and Wal-Mart doesn’t take the obvious steps of reorganizing its work force or breaking up into smaller entities to avoid the law. Even in a best-case scenario, only a sliver of those previously uninsured will be covered. Plus, the costs would depress employee wages or be passed along to customers.

Some Washington state legislators are considering similar bills that would require 9 percent of payroll to be spent on health insurance for businesses that employ 5,000 workers or more. This would scoop up a few more companies, but most that size already offer adequate coverage.

It’s smaller businesses that typically don’t offer health insurance, and the bills would give them a pass. Those businesses aren’t being stingy, they simply can’t afford it. Coverage for a family of four can run about $11,000 a year. Adding that much to the compensation for a retail or fast-food worker is unrealistic.

Such mandates are like aiming a slingshot at King Kong. The state of Washington is facing an estimated $500 million in increased costs for Medicaid in the 2007-09 biennium. About 600,000 people in the state are uninsured; many more are underinsured. State revenues rise 4 percent to 6 percent a year; health care costs rise 10 percent.

In a December speech, Gov. Christine Gregoire outlined challenges that reflect the fact that 5 percent of patients incur 50 percent of costs. The state needs to better manage cases of chronic illness, emphasize care that has positive outcomes based on solid evidence, use technology to lower administrative costs and promote prevention. Easing the mandates that dictate what insurers must cover would also help.

Those are realistic cost-containment goals for any state, but the overall health care problem is so large that it requires a national consensus on what kind of system we expect and how we plan to pay for it.

Wal-Mart bashing might feel good, but in the long run it only discounts the challenge.