PROVIDENCE – All economic calculations are not created equal when it comes to the business advocacy perspective on health care in Rhode Island.

There were plenty of separate truths and divergent economic realities voiced at the Rhode Island Business Group on Health’s Advocacy and Legislative Affairs Breakfast on March 28.

The published agenda was to discuss high-profile legislation on health care currently pending before the 2014 session of the R.I. General Assembly – including changes in plan design, immunization funding, creation of an office of health policy to create centralized statewide health planning, medical tourism, creation of a single purchaser system, and restrictions on how the health insurance benefits exchange, known as HealthSourceRI, would be funded in the future.

Lt. Gov. Elizabeth H. Roberts gave the welcoming address, talking about the value of businesses having a seat at the table in forging a new health care delivery system in Rhode Island that not only reduces costs but also improves quality outcomes.

“I know that there is a conversation around the cost and how we’re going to sustain HealthSourceRI moving forward,” she said. “What is the role of HealthSourceRI? Is it Travelocity for health insurance? Or, is it, in fact, an entity that not only provides people with access to insurance, but also drives change in our market?”

But, from the moment that moderator Samuel Slade, president of Employee Benefits at USI insurance Services, posed the first question to the panel, what he termed the “Goldilocks” question: Is HealthSourceRI too big, too small, or just right?” the actual agenda was self-evident: to gain consensus in favor of legislation to cut back or deny future state funding for the state’s health insurance exchange, or to have it absorbed into the federal exchange.

Defining the public good differently
Gary Sasse, the director of the Hassenfeld Institute for Public Leadership at Bryant University, and former director of the Department of Administration under Gov. Donald Carcieri, likened HealthSourceRI to the blue tick hound his grandfather got him when he was learning to hunt, which became a 150-pound dog in three years that tore down his family’s home. “It’s not what size it is now, but how big it’s going to be in three years. We all hope that we don’t share a similar fate,” he said.

Albert Charbonneau, the new executive director of the RIBGH, thought that the mission of HealthSourceRI was misdirected – it wasn’t about changing health care, as he had heard in a radio advertisement driving to the breakfast that morning, it was about selling insurance, and it had done a terrible job in selling insurance to small businesses, looking at the numbers to date.

Rep. Spencer E. Dickinson, D-South Kingstown, a sponsor of legislation to deny any state revenue for funding the exchange, called the proposed budget of $24 million for HealthSourceRI too big. Instead, he preferred to see the exchange run by a private board, with a budget of about $4 million, complaining that he still didn’t know where the actual office of HealthSourceRI was, and if anyone in the audience did, could they please take him on a tour.

“It’s too big now,” Dickinson said. “What we need to do, coming out of this meeting, is [to find a way] to make it much smaller and make it work.”

Rep. Antonio Giarrusso, R-East Greenwich, who runs a jewelry company in Johnston, said he would prefer that the exchange be taken over by the federal exchange.

Sen. Joshua Miller, D-Cranston, began by joking: “As everybody knows who has been to one of my health care committee hearings, I choose my words very carefully. In terms of the exchange, it’s too frickin’ small,” to much laughter from the audience.

Measuring the economic benefits
On a more serious note, Miller put forth a series of calculations that challenged the economic and ideological assumptions of the other panelists.

By enrolling people – both in the expanded Medicaid program and in commercial insurance programs – you are driving down the cost of health care for everyone, Miller said. The lower costs accrue to everyone – in lower insurance premiums, in lower amounts of uncompensated care, and in better health outcomes.

Miller also touted the revenue that the state would realize as a result of expanded Medicaid – about $500 million. “If you were trying to attract a business to Rhode Island that would bring $500 million into our economy, what would you be willing to subsidize that company?” Miller posed to the audience.

How much, he continued, “are you willing to pay to have private and state dollars replaced with federal dollars?’

Further, Miller argued, citing the state’s number-two-in the nation ranking in efficiency in enrolling people through the exchange, “the most efficient thing we can do to the state’s health care system to drive down costs is to have more people enrolled with health insurance.”

In addition to the federal investment in Medicaid expansion, Miller continued, the Medicaid dollars do not include the federal subsidies for commercial insurance. If a person was spending $500 a month for health insurance, and with federal subsidies that cost was reduced to $100 a month, the $400 difference was being put back into the local economy, he said.

Miller likened the investment in HealthSourceRI to the proposed change in funding of the immunization program in Rhode Island, away from the current premium-based system that places the burden largely on commercially insured small businesses, and shares the cost with larger companies that are self-insured. The benefits accrue to everyone in Rhode Island, Miller said, and the new legislation would help to ensure that the costs were spread more equally.

Finally, Miller compared the startup costs of HealthSourceRI to his experience of opening a restaurant in Rhode Island, with the comparable costs pegged at $5 million today for the scale of the restaurant he opened 30 years ago. “I don’t’ put that $5 million in every year,” he said. “There are maintenance costs, but those don’t meet the $5 million threshold.”

Going forward, Miller called for the development of a ratio measuring how much money that was being brought in federally, the cost reductions of having people insured, the costs per person of benefits to those who are not participating in the exchange, compared to the actual cost of running the exchange.

“This is something that we should invest in, because it has a huge efficiency.”

Differences of opinion
All the other panelists disagreed with Miller, not so much taking on his analysis or the way he crunched the numbers, but rather as a matter of economic priorities or ideology.

Sasse, who previously told ConvergenceRI that articulating positions on health policy was not a priority for his initiative on defining leadership in Rhode Island, repeated the assertion that health care policy was not an economic priority when it came to his view of the state’s economy.

“It’s a choice issue,” Sasse said, responding to Miller’s contention about the $500 million coming into the state for expanded Medicaid services. “If you had $800 million that came from private investment instead of public investment,” Sasse asked, what are the priorities for spending that money. Sasse claimed that the costs of the state’s Medicaid budget was hurting Rhode Island in terms of competitiveness and the ability to invest in workforce development and reform of tax policies to create a more business friendly environment. “It’s taxpayer money; it doesn’t come from money trees.”

Miller answered Sasse, offering this rejoinder: “Getting more people insured is a much more efficient system [to drive down costs.]” In terms of comparisons with private commercial health insurance, Miller continued, “Medicare and Medicaid are exponentially more efficient in administering funds than private markets.”

Dickinson admitted that the back and forth discussion between Sasse and Miller “is way over my head; I’ve got some catching up to do.” The question for Dickinson was where the proposed $24 million for operating expenses was going to come from. Was it appropriate to take it out of the state budget? It was a decision that needed to be made in the next few months, Dickinson said, adding that given that federal money was expected to cover expenses through Fiscal Year 2015, it may be a question that awaits the next governor and legislature.

Dickinson said he liked the idea, put forward by RIBGH and other business groups, that the folks using the exchange should be the ones to pay for it. “Maybe they can set up a board and manage the program,” he said. Such a board, he continued, “could make it possibly $4 million instead of $24 million.”

Dickinson said he had talked with the former chairman of the House Finance Committee, Rep. Helio Melo, who had told him that the budget could go as low as $4 million. But Melo is no longer the chair as of last week, and no one is certain what the committee's plans are. “We have to make a decision in the next few weeks and decide in which direction we’re going to go.”

Slade interjected himself into the conversation to ask if anyone had specific data regarding the actual number of uninsured in Rhode Island had been signed up for commercial insurance or Medicaid. No one on the panel knew the actual figures. Slater said he hoped that Ferguson and the exchange would provide those numbers.

To go federal, or keep the state exchange
Giarrusso was the only person on the panel who outright advocated abandoning the state exchange, saying that Rhode Island should let the feds figure it out.

Sasse cautioned that Rhode Island should not become an outlier, predicting that the 2014 or the 2016 election would bring wholesale changes to Obamacare. “Rhode Island is not an island,” he said, predicting that the Affordable Care Act would be changed but not repealed. “We want to make certain that what we do here doesn’t make us an outlier; that’s the worse thing in the world we could do from an economic development status.”

Miller, not surprisingly, took the exact opposite tack: “The federal exchange might not be around if certain people have their way. The single voice for a lot of people is to destroy Obamacare. We should rely on the exchange, especially the exchange in Rhode Island,” he said. “It’s one of the few exchanges that addresses the needs of small businesses.”

One of the few areas that everyone agreed upon was the need for more transparency in the numbers for health care – from the All Payers Claims Database to the need to know the accurate numbers of costs to make good decisions about health care policy. “I won’t repeat this in public,” Miller said, in jest. “But [the need for greater transparency] is one of the few things that Gary and I agree on.”