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Show Hingkley Journal of Politics 2006 provider/freedom of choice regulation had HMO market shares approximately seven percent lower than comparable areas without these provisions (Federal Trade Commission, 2004, pp .29-30). While much of this evidence strongly hints at solely negative effects caused by AWP legislation, it is important to remember that much of it has not been conclusively proven. In states where AWP has been on the books for some time now, such as Kentucky, for example, only small increases, if any at all, have been measured in health insurance costs. However, since AWP is still relatively young and is only recently overcoming most of its legal challenges, its total impact is not yet fully known and most evidence concerning the subject is inconclusive. Other Possible Uses for AWP There are certainly some problems created by MCOs that do deserve to be remedied. The current situation in Utah in particular is problematic in several ways, and AWP may indeed help alleviate some of these current concerns. Geographical Proximity In Utah, for example, some residents of Carbon County have been known to regularly make an hour-long trip north to Utah County just to see an approved provider. Senator Mike Dmitrich, D-Price, even pointed out during a debate on the floor of the Utah State Senate that a shuttle has been arranged to transport patients north to Provo once a week for that very purpose (Bryson, 2005, p. 1). This problem is especially worrisome considering that the vast majority of Americans - Carbon County not excluded - get their health insurance through their employer, which often means they have little or no choice as to who their insurance provider will be. Not having the option to choose another plan while being forced to drive for an hour to obtain services through your current coverage is understandably frustrating. Perhaps Utah's AWP law could be made to apply strictly to those who are not geographically close to a preferred or approved provider - as is the case, for example, with Georgia's version. If an MCO insures patients in a given geographical area, they should make services available to them close to home - or else pay for someone else in that area to provide the care. Anti-Monopolistic An even bigger concern for many in Utah is the sheer size and influence of Intermountain Health Care (IHC), which is seen by some as holding a near-monopoly in the Utah market. Research has suggested that competition among different HMOs in a market does serve to drive costs down and quality up. If IHC does truly hold a monopolistic position in the market, then allowing IHC's patients to choose other doctors and clinics that are not a part the exclusive network could possibly address and moderate their dominating presence. However, since such legislation is not expressly designed to be anti-monopolistic, it may prove itself unable to help with such a situation. In fact, if IHC's prices remain low after they are not allowed to restrict patient choice, they may even attract more business than they did before. Furthermore, if Utah's AWP law hurts IHC's profits, it should also be expected to have a similar, negative effect on all of its competitors as well. Still, AWP is designed to help promote competition in the healthcare market, which is one of the necessary steps to mitigate a dominating, monopolistic presence. Discussion Economic Impacts It is no secret that General Motors has been facing some major financial difficulties as of late. Finance reports for the automobile giant have not looked good for some time, as their net losses came out to roughly $1.1 billion in the first quarter of 2005 alone (Hakim, 2005, p.l). That equals roughly 10% of their liquid assets - gone in just three months. The picture has not improved significantly since then, and although the automaker's largest market is America, where a stagnating economy and consumer movements away from GM's large, fuel-hungry SUVs have slowed new car sales and hurt profits, there is another culprit to be blamed for the company's crippling financial hemorrhaging - the rising cost of American healthcare. General Motors is expected to pay out roughly $5.2 billion dollars this year to provide medical coverage to their current and retired employees. That adds up to about $1,500 in overhead for every car GM produces. In contrast, Toyota Motor Corp. pays about $186 in healthcare costs for every car they make (Zakaria, 2005, p. 43). The rising cost of healthcare has hit American automakers especially hard, due largely to their highly unionized and generally older, better-trained workforce. However, the more expensive it becomes to insure your employees, the deeper the problem will run. "It's GM's problem today. It will be GE's problem tomorrow" (Zakaria, p. 43). Furthermore, the problem of healthcare costs is not isolated to large companies or certain economic sectors. In fact, the Jensen study previously reviewed, found that state mandates on health coverage fall disproportionately on smaller firms, who are less able to self-insure and thus avoid the consequences of mandates as well as absorb the rising rates of coverage (Jensen &. Morrissey, 1999, p. 453). As such firms get squeezed tighter, so will the average American. Market Competition Competition in a free market has proven itself time and again to be an effective regulator - at least when the consumers of that particular good comparison-shop for it, looking for the highest quality at the lowest price. Proponents of AWP laws argue that these laws will help to open up the healthcare mar- 81 |