States are the best laboratories for healthcare reform

08 Feb States are the best laboratories for healthcare reform

Madison, Wis. – Barely 15 years ago, with the nation locked in a “work” versus “welfare” debate over mending the torn safety net for the poor, one state embarked on a different journey. Its plan linked public assistance to reasonable time limits and work requirements, thus creating incentives for needy families to climb out of poverty.
That state was Wisconsin. The bipartisan program was called “Wisconsin Works,” or W-2. It eventually became a national model.
Today, the nation is bogged down in a more complicated debate over healthcare reform. Most Republicans and Democrats in Congress agree the current system costs too much and fails to cover enough Americans, but they’re splintered on what to do about it. In fact, the one thing Congress appears to agree upon is that it’s the wrong place to solve the problem – at least, for now.
So they’re looking to the states for better ideas. And they may be willing to help pay for the best experiments.
With that political reality in mind, Gov. Jim Doyle last week urged the Legislature to work with him on a Wisconsin plan to bring down the cost of healthcare, improve quality and expand access to coverage. His plan involves these major elements:
• Creating “BadgerCarePlus,” an expansion of the current BadgerCare program, to allow every Wisconsin family the option of purchasing health insurance for their children. Premiums would range from $10 to $80 per month, per child.
• Expanding the state’s Medicaid program to offer health insurance to about 71,000 adults who may meet low-income requirements under BadgerCare, but who don’t have children.
• Streamlining eligibility practices for BadgerCare and Medicaid to ease enrollment problems, which have kept thousands of eligible children outside the system.
• Establishing a purchasing pool for businesses to buy catastrophic healthcare for their employees.
• Encouraging use of electronic health records, which help to reduce medical errors, increase efficiency, and put more power in the hands of health consumers.
Business case for reform
Many questions must be asked about costs, especially in light of a state budget deficit that was last estimated at $1.6 billion if current spending and revenue patterns hold. But doing nothing is politically risky in a state where access to healthcare has been on the decline and businesses of all sizes, from the General Motors plant in Janesville to the machine shop in Shawano, are struggling to afford the status quo.
It’s also a matter of global competitiveness. Unless healthcare costs are controlled in Wisconsin and the United States as a whole (it now accounts for one-fifth of the U.S. economy), our goods and services will be priced out of the world market.
There is bipartisan sentiment in Washington around the notion that states such as Wisconsin can point the way. Conservative thinkers such as Stuart Butler of the Heritage Foundation and liberals such as Henry Aaron of the Brookings Institution have long urged a “federalist” approach – using states as laboratories of democracy. Three bills in Congress would give states more leeway to experiment, and provide some help.
A handful of states have already launched initiatives. Illinois, West Virginia, New York, Massachusetts, and Vermont are expanding coverage to children, creating incentives for small businesses to provide coverage, using the tax code to broaden tax deductibility for healthcare costs, or trying a mix of strategies.
Hundreds of billions of dollars, and maybe more, could be spent at the federal level to reform healthcare – and then, the fix might not work. Why not experiment first at the state level, so long as the boldest states aren’t penalized for their innovation? For Doyle and the Legislature, it’s worth a careful, bipartisan try.
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