H.A.L.T.! HEALTH ACTION TO LIMIT TAKEAWAYS A CONSTRUCTIVE APPROACH TO HEALTH CARE COST CONTAINMENT 20 QUESTIONS AND ANSWERS HEALTH SECURITY ACTION COUNCIL 21 1. Q. A. 2. Q. A. 3..Q. A. 4. Q. A. 5. Q. A. 6. Q. A. What is H.A.L.T.? (Health Action to Limit Takeaways) It is a comprehensive plan to contain health care costs Where did H.A.L.T. originate? It was developed by an expert group advisory to a coalition Why is H.A.L.T. needed now ? Because under the pressure of declining federal resources Has not the action of Congress in each of the last two No. Costs of health services continue to rise at a sub- No. The Administration and some members of Congress have already indicated. that additional major reductions are likely to be proposed in Medicare, Medicaid and child health programs. Why is the private sector included in the HALT plan? Because experience to date indicates that health care 7. Q. A. 8. Q. A. 9. Q. A. 10. Q. A. 11. Q. A. What order of magnitude of savings might HALT be able to achieve? 12. Q. For Medicare, Medicaid and other personal health services A. Are these reductions in present expenditures? 13. Q. A. No. They are containment of increases which will certainly occur without the intervention of the HALT plan. Over several years HALT's cost containment plan would bring down yearly increases in health costs to the level of increases in the Bureau of Labor Statistics annual cost of living index. Most states are being hard pressed by the increasing pressures Yes. In two ways. By participating in HALT they would Well how does HALT do all this? By mirrors? No, by applying cost containment procedures which have already been tested and found effective in a number of states, by installing a system of cost controls, and by mandating negotiations, within budgetary limits by hospitals, doctors and other providers with state agencies, insurance companies and consumer representatives. Specifically, how would it work? HALT has two phases. Phase I is operative for the first two years. It calls a halt to all hospital price increases except for an allowable increase up to the previous year's increase in the "market basket" hospital costs. The allowable increase takes account of wage increases of non-supervisory hospital employees. Phase II begins in the third year sooner if a state is able to complete its organization work in less time. What about doctors and other professional providers? In phase I their allowable increases would be held to the Would laboratory, x-ray, nursing home and other health Yes. All major health expenditures would be required to be held to the previous year's level, with specific allowances for the increased cost of providing the specified services. 14. Q. Who would supervise the program? A. A state designated agency in each jurisdiction, operating under Federal guidelines. 15. Q. Since hospitals are the major area of health expenditures, 16. Q. What happens in Phase II? A. The full HALT plan becomes operative. Hospitals would be required. to have prospective budgets negotiated with a state organized commission consisting of the public agency, The Medicare carrier, the insurance companies and consumer representatives. Within broad Federal guidelines states would be allowed considerable flexibility in the specific methods they select for containing hospital cost increases. Each state would adopt a prospective budget formula, within the predetermined ceilings for the year. This would cover Medicare, Medicaid and private payors. Representatives of doctors and other professional providers would negotiate with the state annual fee schedules or other reimbursement mechanisms which would set prices for services for the coming year. 17. Q. What about HMO's? A. The state commission would negotiate annual budgets with them. 18. Q. Would HALT be flexible enough to take into account major changes in population, unusual incidence of disease, and the financial problems of institutions which serve disproportionately large numbers of senior citizens, the poor and near poor? A. HALT would take these factors into account in annual budgeting and in retrospective budget adjustments, when appropriate. 19. Q. What would HALT do about the unemployed who have lost insurance coverage, the working poor who have lost Medicaid protection, and other similar groups? A. Unfortunately HALT would not be able to help them. It would not extend or improve eligibility or benefits. A comprehensive national health insurance program is needed to help these people and millions of others. HALT is simply a constructive alternative to containing health care costs, without further penalizing consumers. 20. Q. But isn't this a rather drastic proposal, likely to be opposed by many of the special interest groups? A. HALT is comprehensive rather than drastic. It's a systematic |