Haley’s Fundamental Mistakes On Health Care

Ensuring the health care of the most vulnerable South Carolinians is an investment in the whole of society. Yet, in her first State of the State address, Governor Haley targets the sick and poor for especially bad treatment in this budget. She speaks as though the interests of the poor were somehow not connected with the rest of society. She has not responded to previous the warnings from health care professionals that reductions in regular care only lead to greater costs. As people must wait longer to receive treatment, they become sicker. Poor sick people are more likely to require emergency services to treat profound health problems under Haley’s plan. Poor people will be pushed out of care earlier and a lack of follow-up care ensures a return of any chronically ill person. The Haley “plan” is a cyclical-spending budget buster.

There are alternatives for controlling costs while providing health care services. Innovative solutions require investment to create the oversight that will lower costs.

Nikki Haley campaigning Mt. Pleasant, July 2010. Photo used under Creative Commons License. Source: Mary Austin, Flikr.

Physicians in Camden, New Jersey found that for some hospitals a quarter of their costs were coming from less than 5% of their patients. These patients were poor people with multiple chronic health problems located in the low-income neighborhoods with little access to preventive health care services (exactly the areas and services that will be most deprived under Governor Haley’s proposed cuts).

According to Dr. Atul Gawandespeaking to NPR’s Fresh Air about his article in the January 24th New Yorker:

Dr. Jeff Brenner … a family practitioner working in Camden, N.J. … figured that the people who had the highest costs in the health care system were also getting the worst care. By helping them, he could also lower the health care costs — not just for them but for the entire city of Camden.

After three years, Brenner and his team appear to be having a major impact. Gawande writes that his patients “averaged 62 hospital and E.R. visits per month before joining the program and 37 visits afterwards — a 40 percent reduction. Their hospital bills averaged $1.2 million per month before and just over half a million after — a 56 percent reduction…

Such an initial investment that will result in eventual cost reductions while treating payments is a viable option for South Carolina. Nikki Haley and the GOP leadership of the State House only appear to entertain notions of ending government services.  The health care system is severely stressed, yet, they speak only of tax rebates without regard for the costs and harm that will come from reducing or eliminating services.

A Governor of South Carolina should advocate for a real single payer health care system in this country. The current health care system forces the poor and elderly into an underfunded public health service, which already discourages preventative care and maintenance of chronic conditions. Doctors, clinics, hospitals and pharmaceutics companies compensate for the below-market Medicaid/Medicare payments by overservicing and overcharging insured patients. Insurance companies pass on the costs to the along to their clients, larded with a substantial corporate profit. This difference in coverage, cost and compensation is the engine that is driving out of control health care costs and pushing people out of coverage.

As a half-way measure, Governor Haley could embrace the cost control provisions of the current health care reform. According to the Physicians for a National Health Program, the Obama plan “contains…virtually every idea for cost control that any analyst has come up with.” The Governor and the leadership of the State House must examine the cost control aspects of the President’s plan and balance out the fairness of the plan with their proposed denial of services.

There are budget alternatives to the cuts proposed by Haley. Dr. John Ruoff of Fair Share has proposed combining state efficiency with tax increases that would save money by fully funding education, health care, and essential social services. By emphasizing investment in health care and job retention, the state could help break the cycle of worsening conditions for the hundreds of thousands of South Carolinians who depend on social services. Neither Haley nor the State House leadership will consider any alternatives to cutting budgets because they are prisoner of an anti-political ideology. Haley is incapable of appreciating the positive role of government in alleviating poverty, especially in an economic depression.

In her inaugural address, after an inaccurate and self-serving recapitulation of South Carolina history, Haley quoted Margaret Thatcher
“Once we concede that public spending and taxation are more than a necessary evil, we have lost sight of the core values of freedom.”
Haley’s speech follows her decision to give significant salary increases to her senior staff. Haley’s priorities are not just callous and self-serving. Haley is the prisoner of an ideology that sees service as something that serves wealthy individuals and is blind to the political economy of our state.

As journalist Andy Brack wrote in the December 24th State House Report,

In a Dec. 20 story in The Post and Courier, Haley said managing a state on $5 billion instead of $7 billion would continue to be tough.

“But when else would we have the opportunity to say, ‘Now we can really make changes that matter; now we’re really going to say what is the role of government.’” Later she added that she’d push for tighter spending caps as the state’s economy and funding turned around: “When we grow over a certain amount, anything over that, send it back to the taxpayer.’”

Sounds nice. But such talk is just plain irresponsible for at least three reasons.

Cake. Haley sounds as if she wants to be Marie Antoinette — to have her cake and eat it, too. Logically if she is for giving back money to taxpayers when there is an excess, then she should be for taking away money from them when there is a shortfall. But is raising taxes on her agenda? Absolutely not. So talk of refunds is politically convenient — and intellectually dishonest with taxpayers.

Pabulum. Regardless of whether refund talk was a trial balloon or something serious, raising the possibility is pure politics for the masses. It’s intended to get people to connect with the governor-elect in a positive way, even if there is no way such a refund would ever happen. It seeks to marginalize state government and its functions by someone who is supposed to start running state government in a few weeks.

Respect. Talking about rebating taxpayer money is offensive to the thousands of state employees who are underpaid and underappreciated for what they do to make state agencies run with increasing financial pressures. How would you feel if you hadn’t received a raise in a couple of years in the middle of a struggling economy and your boss said there was extra money, but he was going to give it back to customers?

South Carolina will not experience the resurgence that Haley predicts. Rather than looking for ways to share the cost of improving the economy, Haley and the State House leadership are looking to increase the burdens on the poorest South Carolinians, while returning only a temporary benefit to the state’s business. Conditions of the state’s poorest will worsen, and the state will find itself less and less able to cope with the associated costs of health care.

As a first step, a responsible governor would prioritize the needs of its citizens above any ideological commitment to eliminating government. The state leadership must also confront the possibility that the costs of coping with health care expenses are too related to the national economy to be efficiently handled at the state level. Rather than simply using her position to punish the poor with denied services, a responsible South Carolina governor would look for ways to transfer the state’s health care responsibilities to a national and universal program.

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