Governor elections are supposed to be all about fresh ideas, and that should be especially true this year in Wisconsin as nine bright candidates vie for the top state job.
So far, with only six months before the August 11 primary election that will winnow the field to one Democrat from seven and one Republican from two to one, their platforms have failed to come up with a winning concept to deal with how to get a handle on out-of-control costs of health care. That is arguably the number one Wisconsin challenge for individuals and businesses.
Most major reforms of American health care have historically been developed at the federal level, such as Medicare and Obamacare. But states like Oregon and Indiana have made major reforms at the state level that could be picked up by our nine candidates.
It is the number one business issue according to a recent survey by the Wisconsin Manufacturers and Commerce. It is also the number one economic issue facing most families, with costs expected to rise double digits in 2026.
Fortunately, Indiana and Oregon, have come up with a political solution that politicians and citizens can easily grasp and put into place in relatively short order – price controls.
In most circumstances, centrists like me would resist price controls; let the markets discipline prices. But, and it’s a big “BUT,” there is no effective market in health care.
Unbelievably, the sellers, the hospital corporations, often own the buyers, the health care insurance plans. That quagmire defies all basic free market economics you learned in school. The providers, aka the sellers, often negotiate with themselves — with their own subsidies. It’s nuts.
Those two states (not Wisconsin, once the citadel of public policy reform) have figured out an effective solution. They have simply said that health care customers will pay no more than 200% to 300% of what Medicare pays. They are installing price caps. Oregon installed price caps in 2017 and Indiana last year.
That price control makes sense, because almost everyone agrees that Medicare, the biggest buyer of health care in the world, is a well-run system. I and almost everyone else on Medicare love it.
Medicare for All has long been a standard policy goal for the Progressive wing of the Democratic party. It has never gotten off the ground.
Even Republicans, who have never had a viable national health care plan, don’t complain about Medicare as a chassis for the economics of care.
Back at the state level several bold ideas have failed to gain traction. The concept of a Public Service Commission to regulate the non-competitive market for health care has gone nowhere. That’s perplexing because the state was long ago a leader in regulating the monopolistic and duopolistic markets for electricity. There is a precedent for regulation in this state.
Another initiative that has failed to break through is the wholesale adoption of lean disciplines in hospitals and clinics, similar to the six sigma practices that have transformed the manufacturing sector. Some health care systems, such as ThedaCare in the Fox Cities, Bellin Health in Green Bay and Gunderson Health in La Crosse, have led the way on lean practices, but major hospital corporations have relied on mergers and consolidation that enable huge price increases.
With heavy price increases, who needs to be quality-driven and cost efficient?
The big mergers in Wisconsin have gone unchallenged by Gov. Evers and Attorney General Josh Kaul.
Wellness initiatives in health plans, both public and private, have made a dent in health care hyper-inflation, but they are not powerful enough in terms of economics to put a clamp on soaring prices.
Where does that leave us?
Wisconsin State Senator Kelda Roys
Wisconsin Lt. Governor Sara Rodriguez
The Indiana price caps were put into place just recently, with a heavy endorsement from the Indiana Chamber of Commerce. It’s too early to measure the success in that state, but the Oregon plan, which applies to only state employees, has put a halt to hyper-inflation for them.
Two Democratic candidates, Sen. Kelda Roys and Lt. Gov. Sara Rodriquez have called for a public option that would allow Wisconsinites to buy into the state plan for public employees. That move to more government management will be partisan and politically difficult.
Price caps would be a simple solution.
Ascension, a big Wisconsin provider, already deals with the caps for its Indiana hospitals.
