New Group of Health-Industry Insiders Seeks Leverage in Exchange

In a chapter titled “Who Protects the Consumer?,” from his economic classic Free to Choose: A Personal Statement, Milton Friedman raises the development of the nation’s railroad system as a case study:

As the campaign against the railroads mounted, some far-sighted railroad men recognized that they could turn it to their advantage, that they coud use the federal government to enforce their price-fixing and market-sharing agreements and to protect themselves from state and local governments.  They joined the reformers in supporting government regulation.  The outcome was the establishment of the Interstate Commerce Commission in 1887.

Readers of the Providence Business News may have heard an echo of that history while reading about a new group of healthcare organizations that is working jointly to ensure that their interests are not trampled by the healthcare exchange that Governor Chafee has set into motion, without supportive legislation, but with the assistance of Lt. Gov. Elizabeth Roberts:

An ad hoc coalition of business interests in Rhode Island has formed a new group to give voice to a set of “principles” they would like to see incorporated into the operating structure of the new R.I. Health Benefits Exchange.

The 16-member group, which calls itself the Coalition for Affordable Health Care Choices, includes all three of Rhode Island’s commercial health insurers, Blue Cross & Blue Shield of Rhode Island, Tufts Health Plan of Rhode Island, and UnitedHealthcare of New England. Other members include the Rhode Island Business Group on Health, the Greater Providence Chamber of Commerce, the Northern Rhode Island Chamber of Commerce, the Rhode Island Hospitality Association, and the Independent Insurance Agents of Rhode Island.

An arrangement that balances the designs and desires of the state government with those of this group of narrow interests won’t necessarily be ideal for healthcare consumers.  Indeed, unless carefully watched, it may only strengthen the hand of the three insurers currently operating within the state.

According to Representative Patricia Morgan (R, Coventry, Warwick, West Warwick), the state government of Rhode Island imposes 65 mandates for required coverage in health insurance programs — 22 more than the national average of 43 — creating a substantial impediment to bringing additional plans from out of state.  Morgan has introduced legislation (H7797) determine which of those mandates cover “essential” procedures.  Each mandate adds 1/2 to 3 percent to the cost of insurance premiums, she says.

H7797 is on the agenda for consideration by the House Committee on Corporations this Wednesday at the Rise of the House.