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"Government-run" no longer defines the Indian health system

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markt | Aug 18, 2010 08:00 AM

A single phrase is often used to define the Indian health system: “Government-run.” Add those two words to any discussion about health care or reform and most people reach an immediate conclusion about the merits of the agency.

Now it is time for the phrase to disappear because it no longer accurately describes the Indian health system. After all, tribes or tribally authorized nonprofit agencies administer more than half of the IHS budget, through the Self-Determination Act or Self-Governance compacts.

Certainly the federal government plays a huge role in this health care delivery system – across the country. “As in all industrial nations, the U.S. government plays a large role in financing, organizing, overseeing, and, in some instances, even delivering health care,” said a report last August by the Robert Wood Johnson Foundation. How big are the numbers? Federal direct spending – Medicaid, Medicare & such – accounted for 33.7 percent of all health care spending. If you add in tribal, local, state and other government funding to the mix that figure reached $1.108 trillion – or about 46 percent of all health care dollars. The report said, “If tax subsidies that encourage provision of health coverage and health care are added in, the total public share comes close to three-fifths of all U.S. health spending.”

And all of these numbers are before the Patient Protection and Affordable Care Act was enacted into law and before any implementation.

But in the Indian Health system something else is occurring: the growing role of private networks. This is not new. Dr. Everett R. Rhodes, a former director of the Indian Health Service, wrote in a 2002 article for the Western Journal of Medicine: “A shift of Indian health services to the private sector is now occurring, however, especially in western states where the majority of American Indian people live.”

Dr. Rhodes cited a variety of factors, including, “as the Indian population ages, however, the proportion of the IHS service population requiring care in the private sector will likely increase.”

The fact is individual American Indians and Alaska Natives with private insurance, Medicare, and even Medicaid, have a marketplace of medical choices. The Indian health system is just one option.

Last week, for example, the largest hospital system in the Dakotas announced a new initiative. Sanford Health hired Dr. Donald Warne, a member of the Oglala Lakota Tribe from Pine Ridge and former executive director of the Aberdeen Area Tribal Chairmen’s Health Board, to coordinate activities among the hospital system, the federal Indian Health Service and the 28 tribes within Sanford's coverage region.

There will be more private interest in the Indian health system between now and 2014. One reason for that is even though Native Americans are not required to purchase health insurance; there are incentives under health care reform for individuals to do so.

The most important reason is that patients with private insurance don’t have to worry about contract health care running out of money. (This is also true for Medicaid, Medicare and other third-party insurance plans.) Another benefit: American Indians and Alaska Natives who purchase health insurance through the exchange do not have to pay co-pays or other cost-sharing if their income is under 300 percent of the federal poverty level (some $66,000 for a family of four, or nearly $83,000 in Alaska).

 I think there is an opportunity here. I’d like to see a Native American enterprise selling such an insurance policy through the exchange that focuses on this unique segment of the population. It would be win-win-win. The individual would benefit with better coverage, the company could sell a policy at a profit, and the Indian health system could benefit from more third party support.

When the Indian Health Service was created in 1955 its mission and operation was a government-run medical service. That simplicity is no more.

 Mark Trahant is a Kaiser Media Fellow examining the Indian Health Service and its relevance to the national health care reform debate. He is a member of Idaho’s Shoshone-Bannock Tribes and writes from Fort Hall, Idaho.  His new book is “The Last Great Battle of the Indian Wars,” the story of Sen. Henry Jackson and Forrest Gerard. Comment at www.marktrahant.com

Additional resources:

A letter from IHS director [PDF] Dr. Yvette Roubideaux to tribal leaders about activities that the Indian Health Service is undertaking to deliver the benefits made possible by the Indian Health Care Improvement Act.

A Kaiser Family Foundation brief [PDF] that explains the concept of the health care insurance exchanges.

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