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May 2008 — Vol. 86, No. 4

Myths vs. facts

(Page 3 of 5)

 

MYTH:

It’s nearly impossible to reduce health care costs.

FACT:

There are several ways to improve the system, reduce costs and expand access to health care.

Most of the factors driving health care costs are beyond the control of state government. But the state can promote efficiency in the health care system, prevent additional costs and enable consumers to control costs. Changes could include:

  • Electronic medical records. These will reduce administrative costs and medical errors.

  • Quality improvement. This will also reduce medical errors and costs.

  • Avoiding new mandates. Connecticut’s more than 55 health care coverage mandates cumulatively add between 30% and 65% to insurance premiums.

  • Wellness programs. Helping companies set up disease management and prevention programs will lead to fewer health problems for employees and health care cost savings for employers.

  • Increasing Medicaid reimbursements. That will help avoid cost-shifting to privately insured patients.

 

MYTH:

A single-payer, government-run health system is the best way to increase access to health insurance.

FACT:

Reducing costs is the best way to increase access.

The true barrier to access is the cost of care. Over the last 10 years, insurance costs have soared about 80% in Connecticut, forcing people and businesses to question whether they can afford health benefits. But adopting a state-run system would be costly — as much as an estimated $17 billion, according to a study last year. What’s more, the cost of health insurance for state employees is at least $2,000 more per person than for private-sector workers. Health care costs now comprise 29% of the state budget.

In addition, countries with government-run systems have had discouraging results.

Sources: Office of Fiscal Analysis; U.S. Census Bureau; Fraser Institute; National Center for Public Policy Research; Connecticut Human Resources Reports LLC; Office of the State Comptroller; Connecticut Department of Labor

 

MYTH:

Connecticut’s high energy costs are not being addressed.

FACT:
Connecticut energy prices are among the highest in the country, but efforts are under way to alleviate the problem.

Because Connecticut is at the end of the country’s energy pipeline, our energy prices are close to the highest in the United States. The price for almost every form of energy in Connecticut is above the national average.

The state has been slow to approve needed upgrades to our energy infrastructure. But over the past few years, it has approved the Phase I and II upgrades of the 345-kilovolt line stretching from Bethel to Norwalk to Middletown. Phase I is complete and Phase II is under way, as are a variety of other projects in southern New England. These upgrades will help lower congestion charges in Connecticut. In addition, the legislature in 2006 enacted a law that will increase generation capacity and provides new incentives for energy efficiency. Nevertheless, the state still needs to take aggressive action to help lower costs.

 

MYTH:

Connecticut has enough energy resources to power its own economy.

FACT:

Connecticut must import energy as well as expand generation capacity.

Connecticut has several sources of electricity, including nuclear, coal, oil and hydroelectric power plants. Yet despite the use of conservation measures and new sources of renewable energy, Connecticut can meet only 57% percent of its electricity needs. The rest is purchased outside the state, thereby raising the cost of our electricity. The situation is likely to worsen, because the demand for electricity is expected to increase, and renewable-energy targets will be hard to meet. Con-necticut must encourage the development of sustainable technologies, the efficient use of energy resources, investments in new generation capacity and upgrades to our transmission infrastructure.

Source: New England Economic Partnership

 

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