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Former Governors Branstad and Vilsack Discuss Health Care

posted on October 22, 2007 at 5:08 PM

The issues of last month's debate haven't dissipated. Joining us are two men who have occupied the Governor's office for the last twenty-four years, Democrat Tom Vilsack and Republican Terry Branstad. Governor Branstad is President of Des Moines University, a medical school. Governor Vilsack is lecturing at Drake Law School and practicing law in Des Moines. Both governors are familiar with the issues that are confronting the presidential candidates. Indeed they've been holding joint hearings to address Iowa's health issues.

Yepsen: I'm struck by the fact that the two of you, political -- different political parties, somewhat different political philosophies have decided to come together and work on health care and finding out what our problem is in Iowa. We've held hearings around the state. Governor Branstad, what did you find?

Branstad: Well, first of all, we were approached by a legislative interim committee that's focusing on health care reform. And I felt when they asked, that this is something that we ought to try to do and see if we can help develop a bipartisan consensus to address some of these critical issues. And I've had some experience Governor working on that. We had a commission on health care reform back in 1993, which David Lyons chaired for me.

Yepsen: What did you find out this time?

Branstad: Well, what we found out is, first of all, there's a lot of good things in Iowa. For the most part, the quality of our health care is good. We have a higher number of people insured than many plays, but that doesn't answer the question for those people that don't have insurance. And the costs keep going up and up and up, and that's really putting the squeeze on a lot of people, small business, self-employed, and generally people when they lose their job.

Yepsen: Governor Vilsack, what did you find?

Vilsack: Well, I think there's a real concern in this state for universal coverage. I think it was universal acceptance of the notion that everyone should have insurance coverage. I think there was a concern about the cost and how we could do a better job of improving quality. There was also a specific concern expressed about health care in terms of minority populations within the state. And there was a real desire, I think, on the part of legislators, commission members to actually do something significant.

Yepsen: What do we do? What is significant? What can Iowa do? We're a state. Isn't this a federal problem?

Branstad: Well, I think we can start with individuals doing things about dealing with the issues that we have of chronic disease, because almost one in -- actually over a third of Iowans, nearly two in five, have chronic diseases. And many of these can be prevented by lifestyle changes.

Yepsen: Yeah, but how does the government -- Governor Vilsack, how does the government get people like David Yepsen to go out and work out and get healthy?

Vilsack: Well, I tell you, Michigan is providing some direction in that respect. There's a financial incentive if we let the markets work, essentially encouraging the insurance industry to set up programs that would reward people for the right behavior. Michigan's blue cross blue shield is doing that. They're providing a 10-percent premium reduction for health insurance costs. So you can save money doing this. That's one thing. The second thing that the government can do is inform consumers and give consumers information. A more transparent health care system; the infection rates of hospitals, for example, would allow us to make more informed decisions about where the quality care is. A rand corporation study indicated that 50 percent of adults and 47 percent of children don't get the right care. There is a lot of work to be done in terms of quality. The Governor is absolutely right: We have good quality here; it can be better.

Yepsen: Governor Branstad, how bad is our problem? Almost all -- only 9.1 percent of Iowans don't have health insurance. So what's the problem?

Branstad: Well, for those 9.1 percent, it's a huge problem if you don't have health insurance and you have some big health problem. Now, admittedly, when you go to the hospital, they're going to provide care. But they're not getting the -- they don't have a medical home, which they need, and that's one of the things we talked about and we heard about in the hearings is the need -- that every Iowan would have a medical home, they would have a doctor that would be their doctor that then could then refer them to a specialist if they need it, that sort of thing. So because we only have 9.1 percent, much lower than a lot of other states uninsured, it's a more manageable thing to try to do in Iowa. But it's not easy because that 9.1 percent keeps changing. The people that are uninsured now maybe were not the ones that were uninsured last year. And many of those people are employed.

Vilsack: Here's why the medical home is important -- as the Governor mentioned -- because it's a way in which we can make sure people get the preventative measures and screening and tests they're supposed to get. Again, so few adults and so few children that do not have a medical home do not get those screens, and therefore we do not catch diseases at the earliest possible moment and we don't prevent them. So if we're really interested in bringing the cost down or slowing the growth rate of medical expense in this state, making the state more competitive economically, encouraging more business opportunity because we are a healthier and less expensive state for health care costs, we have got to focus on prevention and we have to focus on making sure we catch diseases as quickly as possible.

Branstad: Plus health systems basically -- our systems are basically focused on sick care. And we reimburse providers, hospitals and physicians, based on these more expensive procedures. We don't invest very much in prevention and wellness, and that's where we need to put more focus. And that's an investment that doesn't cost as much but, in the long run I think, can pay off in a very significant way.

Vilsack: And here's the reason -- you asked what government can do. Insurance companies currently have no financial incentive to reward prevention, because they insure someone, they go to a different insurance company, prevention doesn't benefit them. We've got to create a structure -- financial structure for insurance companies in this health care area that allows them to have a financial stake in making you make the right set of decisions. We don't have that today. And Iowa can again be a leader in establishing programs. The Iowa cares program is one of the reasons we have so few uninsured in this state. Other states are looking at this, and if enough states do enough in this area, we're going to get a national program.

Yepsen: How would you start to pay for some of these things? I mean you mentioned you can use the regulatory powers of government to get insurance companies to do things, but at some point don't the taxpayers of Iowa have to step up to the plate?

Branstad: Well, I don't think there's enough money to fund the health care system in the long term in this country unless we make some significant changes in lifestyle. So we've got to -- and I think there's certainly costs, when you look at some of these things. But some of the investments you make in wellness and prevention are also going to avoid some significant costs down the road. The big problem is, you know, the bridge between when you're making that investment now and the savings that you see down the road from --

Vilsack: Let me give you an example. If the state of Iowa would commit itself in its Medicaid program to being the best in class, the best of 50 states in avoiding hospitalizations for those who could otherwise get care through ambulatory care, it would save $31 million, according to the commonwealth fund. That's $31 million in the Medicaid program. Now, that's not the private insurance area, that's just Medicaid. If we could be best in class in preventing hospitalizations from nursing homes of our senior citizens, we'd save another several million dollars. So the first effort, rather than asking the taxpayers to pay more, is to take a look at how can we make the system better from a quality standpoint and how do we capture those savings and redirect it in expanding coverage, paying for medical records that are now electronic so that we get the data that will allow us to do a better job of being wise consumers of health insurance and health care.

Branstad: One thing we've done just at Des Moines University for our students and for our faculty and staff is that we do health risk assessments, and then you get a reading as to where your problems are, where your challenges are, if you need to lose weight, if you have a problem with cholesterol, if you have -- you know, if you're using tobacco products and need to quit, things like that. And then if you do the right thing, provide a financial reward. And I think if you build that also, then, into the insurance system so that those people that don't smoke have a lower insurance premium, those people that are getting appropriate exercise and the right nutrition and all of that, controlling the factors that are going to lead to chronic diseases -- because 75 percent of our health care costs are spent on chronic diseases. If we can attack that and attack it aggressively, we can make a real difference.

Yepsen: Governor Vilsack, attack chronic diseases. We try to make the health care system more efficient, particularly for poor Iowans.

Vilsack: Right.

Yepsen: You've still got a lot of people who are uninsured and maybe growing. So what do you do about those people who aren't, say, covered by Medicaid?

Vilsack: Well, first of all, this is not going to be done overnight, and our legislature has to set up a framework and a structure and provide us a clear vision as to where we need to be over the course of several years. But as you save resources in the existing system, you use those saved resources, you capture them and you use it to expand coverage. Now, I think eventually we're going to have to have some form of requirement on the part of individuals, on the part of businesses, or a combination of such, to ensure that everyone is insured. We really need to have everyone insured so that we spread the risk of all these health care costs over the entire population, not just over a select population. Secondly, we need to make sure that insurance companies are not rewarded for avoiding coverage. They spend a great deal of money in an effort to try to tell you you've got insurance but you're not going to get it when you're sick. And we need to provide resources to get those records -- electronic records, because we can save many, many mistakes that are being made today.

Branstad: An analogy might be auto insurance. You know, we have a financial responsibility law in this state that if you don't have auto insurance and you get in an accident, then you've got to post a significant bond of money in order to be able to drive. And as a result, we in Iowa have about among the lowest auto rates in the country because we have a high percentage of our people insured and people are responsible. And I think we also maybe have some pretty responsible drivers. But that's the same sort of thing I think we need to do on the health insurance side.

Yepsen: How is it working in Massachusetts?

Branstad: Well, it's early on. I think they've got some challenges in funding it. But at least -- you've got to give them credit, and I give Governor Romney credit for putting together a plan to require insurance for everybody. But they're struggling with how indeed it's going to be financed.

Yepsen: Governor Vilsack, I'm struck that that Massachusetts plan was a Republican Governor and a Democratic legislature who worked together and came up with this idea, part of which is what you just described. You've got to own health insurance just like you have to have car insurance. Will that work here in Iowa?

Vilsack: It could but, again, they have not solved the funding mechanism. Governor Romney vetoed the funding mechanism, and they're still grappling with how they're going to pay for it. And I was actually in the Governor's office not too long ago speaking to their finance people, and they are really concerned about how they're going to pay for it. I don't think they're looking in the right place. I think you have to look at how you make the system more transparent, how you make the system higher quality, how you avoid mistakes, and capture those savings and redirect it into expanded coverage and helping the poor, who can't afford health insurance to do so. Once you get to that point, I think the Governor and I would agree, not everyone is going to have the Cadillac of insurance policies. Like you're not going to have the Cadillac, but everybody ought to have a basic coverage plan. And then if you can afford something more and you want to spend your money that way, then you ought to be able to do so.

Yepsen: Why don't we just wait for the federal government to act? This is being debated on the campaign trail. Governor Branstad?

Branstad: Well, because that's why they call the states laboratories of democracy. You know, the same thing happened with welfare reform. We didn't wait for the federal government on welfare reform. We took action in Iowa, Wisconsin, Michigan. Many other states took action on welfare reform, and we kept going in and asking for waivers and doing innovative things to move more from welfare to work, and then finally the federal government got the message: Hey, this is working; state after state is asking for waivers; maybe we need to do a nationwide welfare reform. I remember going in and arguing with the health and human services when we passed a comprehensive welfare reform act in Iowa, bipartisan votes, and they said, well, we want you to just put 10 percent of your people in this control group. And I said, no, we want to do this for everybody. We'll be willing to put a small portion of people in a control group under the old system, but we didn't want to just have a small group of people under the new system. And eventually, because of a number of governors fighting for this, we were able to get it done. It was not an easy thing.

Yepsen: Governor Vilsack, why not wait for the feds?

Vilsack: Because you can learn from the experience of states what to do and what not to do. You can learn what works and what doesn't work. We know, for example, the children's health insurance program works. We know that it helps provide insurance coverage to children. We know that families like the idea of paying a small amount of money as a premium. In fact, there are many on Medicaid that wish they could qualify for Hawkeye so that they'd have the pride of being able to pay a small premium. So we know it works. We know the Iowa cares program works, again, asking the federal government for permission. So you give the states the capacity to experiment to figure out what works and what doesn't work, and then you have a much better national program. It will take the national government a number of years, even if they started tomorrow, to get the job done. So in the meantime, states can move forward. And this is a competitiveness issue. It's really important that the viewers understand this. We cannot as a country or as a state continue to pay as much as we're paying for health care if we want to be economically competitive in a very tough circumstance in the global economy.

Branstad: You know, one was tragedies is that you can just look at Medicare. On Medicare, Iowa gets penalized because we're efficient and good quality and low cost. And there's a -- there's an adverse -- there's almost a direct relationship. The worse the quality, the higher the reimbursement. Crazy! But that's the way the present federal system is under Medicare in terms of medical reimbursement. And the states with high quality in the upper Midwest, like Iowa, get the lowest reimbursement; and states like Louisiana and Florida, you know, get the highest reimbursement.

Yepsen: You both fought this issue during your terms.

Vilsack: And here's what's interesting about that issue. The current medical system pays for services. So in an ironic way, if the doctor doesn't do the right thing and the hospital doesn't do the right thing and you actually have to stay in the hospital longer, the system makes more money. What we ought to be doing is paying for results. And there are now projects within Medicare experimenting with a performance-based system, a results-based system. There's a clinic in Wisconsin focusing on quality, and the government is basically saying, look, if you improve quality, we'll let you retain a portion of the savings.

Branstad: Governor Leavitt, who is now the secretary of health and human services, is trying to move it in that direction. But trying to move the federal government, you know, it's a big, difficult thing to do.

Yepsen: Go back -- one of the things that I've noticed about Iowans -- and I think the two of you have too -- is that we like to help ourselves. What can we do to help ourselves. So from the hearings that you've conducted in the study that you've made on this issue -- Governor Vilsack, I'll start with you -- what should an Iowa business be doing? What should an Iowa community be doing to address these problems we've been talking about?

Vilsack: Well, I think Iowa businesses need to make sure that there's a wide range of services available. One of the things that I noticed in terms of minority populations is that there are some neighborhood clinics that are providing very, very basic health care. People are flocking to these clinics. There's one, creative visions just up the road from here in Des Moines. So businesses can advocate. They can basically point out to legislators, look, we are -- we will not be competitive from a price standpoint if we continue to have to pay insurance coverage for our workers. We want to do this but you have to help us. You have to create a system, and we want to be there are at partners.

Yepsen: Governor Branstad, are there things communities and individuals can do?

Branstad: Well, we have a program called Lighten Up Iowa. It's a great thing for communities and businesses to get involved in programs like that to help their employees lose weight, help them improve their nutrition, do the right things. It makes a real difference. There's other things that -- the legislature passed a reform bill last year to try to give small business the chance to be involved in insurance pools and part of that, as I understand, it's going to open up opportunities to reward people in their pool that don't use tobacco products and that in fact are doing the right things in terms of nutrition and exercise to avoid chronic disease.

Vilsack: And let me add one other thing. In terms of the community, the schools need to be engaged. Our young people need to be more active. We have a crisis looming with type two diabetes and juvenile diabetes that can be impacted and affected by proper nutrition choices by children and more exercise and physical activity. We are squeezing physical activity out of the school day, and we need to figure out a way to get it back in.

Yepsen: Both of you -- we've only got a couple minutes left. Both of you are watching this presidential campaign unfold in our state. The two parties are having a pretty good fight. I'm curious how you see the health care debate unfolding in the campaign. It seems to me that you've got Republicans who are talking about tax credits and empowering people to buy insurance. You've got Democrats who want to see an expansion of government programs. Governor Vilsack, how do you see this debate playing out in the Democratic party and then after the election?

Vilsack: I'm not sure I accept the premise of your question that Democrats are necessarily talking about a government run program. I think there are some Democratic candidates who are talking about choices and understand that the market is involved in this. I think the fundamental difference is whether or not we create some kind of mandate that leads us to universal coverage or whether we encourage the market and hope that eventually everyone makes the right set of decisions. I'm not sure that we can hope that a healthy 25 year old who is faced with the high cost of college expense is going to make necessarily the choice of buying health insurance, but we need that 25 year old in the pool in order to make it affordable for everyone.

Yepsen: Governor Branstad, how do you see the debate unfolding?

Branstad: Well, certainly Governor Huckabee, who has lost over a hundred pounds and has really done some very significant state things in the state of Arkansas on health care reform, I think has really hit this theme I heard him speak at the American Osteopathic Association meeting in San Diego, and he did a great job of connecting on what we need to do individually about the health care theme and then also some of the reforms and some things that can be done in the schools such -- and he required schools in Arkansas, students to be tested for body fat. And that's similar to what I'm talking about, health risk assessments. I think everybody ought to be doing health risk assessment so they know what their challenges are and so they're personally involved in dealing with their own health issues. And we also have Joe Biden coming to our camp this next Tuesday to talk about health care reform, and we're interested in inviting -- because we have medical students, people going into health care careers, we want candidates in both parties to come --

Yepsen: I've only got about ten seconds. Governor Branstad, very quickly. Do you see the next President and Congress dealing with this issue?

Branstad: I think it's critically important. We can't put it off.

Yepsen: Governor Vilsack?

Vilsack: Absolutely. Absolutely.

Tags: finance future governors health care health care reform health insurance Iowa Terry Branstad Tom Vilsack