PNHP's Official Blog » Rob Stone MD

What Would FDR Do?

Rob Stone MD — Wed, 20 Jan 2010 23:04:29 +0000

I had some face time with Rahm Emmanuel two weeks ago at my friend Owen’s. (Owen’s brother-in-law is the former Chair of the Democratic National Committee.) Rahm said nothing surprising, but made his points. He had just finished David Kennedy’s 1999 book Freedom from Fear about WW II, the Depression, and, germane to this conversation, the tremendous compromises involved in forging the New Deal. Politically, he asserted, if you want to make big changes, you have to choose your battles and win the big ones. If health reform goes down, then energy, global warming, financial reform, and labor’s legislative agenda are all at risk. He stayed right on message.

I posed this to him: “Many Democratic politicians, including our Blue Dog Rep. Baron Hill, tell us in private conversations that they believe we have to get to single payer eventually. What advice would you give on how to get there?” Without a blink, he replied it’s “going to be a long haul”, and if we don’t pass this bill it’s going to be even longer. He asserted that this bill begins building the required infrastructure for any future progress.

Since then, with the loss of the Democrats’ super-majority in the Senate everything is up in the air. Which brings us back to the recurring question – Should we Kill the Bill? There has been an incredible amount written in the Progressive community about this. At one end is Helen Redmond (CounterPunch 12/23) Beware the Progressive Democrat arguing that we can’t trust Sanders, Weiner, or Conyers and that we’ve got to build our movement without any of that unreliable crew (kind of a rough “logical”conclusion”, if you ask me).

At the other end is Nate Silver of FIveThirtyEight (12/16) Health Care: The Elevator Pitch (and a number of other posts) where this bright political analyst makes the case for incrementalism. Silver also notes “I’ve gotten as many nasty comments and e-mails from Democrats on this issue [over the last two weeks] as I have in the past six months from conservatives on all issues. That emotion is a factor in this debate seems self-evident to me.”

All that emotion is evident as the blame is ladled out for Scott Brown’s Senate victory. Is the message that the country is turning against the Progressives’ urge to legislate change, or that Obama has compromised the hope for change he promised by reverting to Washington business-as-usual and disappointing his base?

The healthcare bill will be at the center of this cyclone, and it’s too soon to say what gyrations the Dems will attempt to push it through. Our response as single payer advocates should remain unchanged – we have strong, informed positions on the poor policy provisions in the bill. I think we are best to remain silent on the political strategy (tragedy?) to be pursued. I see an important distinction between being a pointed, persistent, insistent, carping, kvetching, nagging critic of this bill for policy reasons on the one hand, and joining in the political discussion about the merits of killing the bill on the other.

Let’s not be drawn into the classic Progressive Circular Firing Squad. Our message is clear. If the Democrats still manage to pass some form of health reform, they can celebrate, but WE’RE STILL FOR HEALTH REFORM, AND THIS AIN’T IT!

If no bill passes, then we have a different set of problems/opportunities. If those who predict Republican ascendancy in the ’10 elections are right, then our work is really cut out for us. Meanwhile, all those who forsook single payer for the allure of the public option are ripe to be brought back into our fold. Movement building will continue. Opportunities to form coalitions will appear. As the business community becomes even more frustrated they will open to our message.

Here are the real lessons learned as we look back to the Iowa caucuses last January, from our vantage point looking out on the chaos this January:

1. As much as we had hoped that this was a historic opportunity to make drastic, needed changes in our healthcare system, there really wasn’t the support to go all the way to single payer. We can second guess Obama and Rahm forever, but I don’t believe there ever was a chance in hell that Evan Bayh, much less Lieberman or Ben Nelson would have ever voted for single payer.

2. We should look again at a strategy of incremental reforms, a strategy that has been fruitful for many movements. That is a longer story to explore later.

3. No matter how hard we try to predict the future, we will always be surprised. Remember that even if single payer had passed in the full glory of HR 676 without amendment, we would have to defend it, improve it, and deal with its unintended consequences. This work will never end.

How can we ever hope to win? As Bill Moyers asked David Corn on his PBS show January 8, “Have people been so politically abused that the will to fight for democracy, the political will has been dissipated? “

Will it first take campaign finance reform, to break the grip of the big money? Where will that movement come from? What other options do we have?

There is no better issue to organize around than universal health care. In the environmental movement we learned the word NIMBY – Not In My Back Yard. Sometimes people distain NIMBY’s, but many a NIMBY activist has started locally before coming around to a global perspective. Healthcare is everyone’s back yard, front yard, and right inside the house. Our issue’s not going away, even if some politicians do.

We will stay in this fight for the long haul. There is no real alternative except to quit. When I get discouraged, I turn to one of the original crusading journalists and a real hero, IF Stone (no relation):

“The only kinds of fights worth fighting are those you are going to lose, because somebody has to fight them and lose and lose and lose until someday, somebody who believes as you do wins. In order for somebody to win an important, major fight 100 years hence, a lot of other people have go to be willing – for the sheer fun and joy of it – to go right ahead and fight, knowing you’re going to lose. You mustn’t feel like a martyr. You’ve got to enjoy it.”

One of the great joys of being in PNHP has been the joy of meeting and working with so many wonderful people. I’m in this for the long haul and look forward to seeing you all many more times in the years to come.

Fightin’ The Blues

Rob Stone MD — Sun, 13 Dec 2009 18:42:41 +0000

On a cold and rainy December 2, while the Senate in Washington was slogging along debating health reform, a remnant troupe of public-option supporting Organizing for America stalwarts stood outside the corporate headquarters of WellPoint, Inc. in the center of downtown Indianapolis. Minutes before their demonstration started, three single payer activists slipped in and out of the WellPoint office dropping off a shareholder resolution for next May’s annual meeting.

WellPoint, also known as Anthem or Blue Cross, is the perverted spawn of what was once a charitable venture known as Blue Cross/Blue Shield of Indiana. From the 40’s up into the 90’s Blue Cross of Indiana was like all the other Blues around the country, non-profit with a charitable mission. Its board of directors included physicians, hospital administrators, labor and community leaders, and it existed to serve the needs of patients. But the healthcare market had become increasingly cutthroat, and in the aftermath of the Clinton Health Plan’s crash and burn, there was a huge consolidation in the industry. Doctors went from solo or small group practices into larger and larger groups. Hospitals that had been independent since their founding merged and national chains of for-profit hospitals grew powerful and predatory.

The most significant consolidation of all happened in the insurance industry, yet it is the least understood and appreciated. Health insurance was once predominately state or regional non-profit Blue Cross plans or other regional non-profits, and a few national for-profits. Now there are nine major national health insurers dominating the country. They are for-profit, beholden not to their customers but to their shareholders. Like most consolidated industries, they don’t compete head to head in most markets, but rather divide up the markets and crush smaller local competitors. Did I mention that the insurance industry is exempt from federal anti-trust laws? The American Medical Association’s 2007 report “Competition in health insurance: A comprehensive study of U.S. markets,” found that in the majority of areas studied, a single health insurer dominated the market. So much for competition.

The field these behemoths compete on is in Washington, DC. They can buy and sell Senators and dominate regulatory agencies. More on that later after we come back to the story in Indiana.

In the early 90’s the Hoosier Blue Cross leadership decided that the future looked bleak for non-profit health insurance. They began a series of maneuvers to radically restructure the company. They took off the gloves. Goodbye to a charitable mission. Goodbye to being tax-exempt. Hello Wall Street.

Blue Cross became Anthem turning a non-profit into a mutual company. This set the stage for demutualization and a public stock offering (IPO). In 2001 Anthem announced its intention to convert from a mutual insurance company to a stock corporation and filed its demutualization proposal with the Indiana Department of Insurance. By this time Anthem had already completed a frenzy of mergers and acquisitions of Blues in Colorado, Connecticut, Kentucky, Maine, New Hampshire, Nevada, and Ohio. None of policyholders in those states had any say in this matter. Just days after the Indiana Department of Insurance commissioner approved Anthem’s demutualization proposal, Anthem announced that its IPO had yielded $1.7 billion.

Now came the mother of all mergers. Blue Cross of California had been following a similar path beginning with their demutualization in 1993 and subsequent acquisition of Blues in Missouri, Georgia, Virginia, and Wisconsin, as well as acquiring the health divisions of Massachusetts Mutual, and John Hancock, among others. They changed the corporate name to WellPoint. In 2004 Anthem and WellPoint merged, becoming the largest health insurer in the US with 34 million lives covered.

The $20.8 billion merger created a cornucopia of compensation for executives of both parent companies. Not only did Anthem’s Indiana CEO Larry Glasscock receive a $42.5 million dollar bonus on top of his base salary of $3.7 million, other top Hoosier executives pocketed $4 to $16 million dollars each. The CEO of WellPoint in California, Leonard Schaeffer, retired on a package valued at $337 million. I am not making this up.

At the close of 2009, hope is gone that we will see universal health coverage come out of this Congress. Single payer advocates like myself never really believed it might come this time around, but couldn’t help but get our hopes up. It remains to be seen whether any bill that passes will end up being an incremental step in the right direction, but it won’t be a slippery slope.

Our Hoosier “Democratic” Senator Evan Bayh has distinguished himself as a hindrance to any reform bill that is not in the best interests of the hometown insurance company. Although he and his wife Susan proclaim no conflict of interest, she sits on the WellPoint board. Her compensation for serving on that board, as reported to the Securities and Exchange Commission, is $330,000 a year, more than twice Evan’s salary of $160,000 as a senator.

Progressives disagree about how to proceed from here. I spoke with T R Reid a few weeks ago in Boston. He is the author of the PBS Frontline Sick Around the World and a new book, The Healing of America. He makes a strong case for getting to universal care while keeping the private insurance industry, although he makes it clear that no nation has achieved universal care using for-profit companies.

Can universal health care be accomplished within our system of for-profit insurance companies? I’ve always favored the single payer approach, which seems more feasible to me than taming the insurance behemoths. Reid thinks we’ve got to consider the taming approach, so some of us decided to put that idea to the test, in the form of a shareholder resolution.

We delivered the resolution on that dark and rainy day. Now we await word about whether the SEC will require WellPoint to include it in the proxy for the annual meeting. It is a long shot, to be sure. But if Congress won’t take on the insurance industry, then someone has to. Here is our resolution, couched in the language our legal advisors recommended and adhering to all SEC requirements:

SHAREHOLDER RESOLUTION

Whereas, the United States allows too many people to suffer and die due to lack of adequate health insurance and this is threatening the economic stability of the country; and

Whereas, no country has achieved universal healthcare through for-profit health insurance; and

Whereas, in written statements WellPoint supports “the best healthcare value for our customers” and promises “to advocate for responsible healthcare reform”; and

Whereas, WellPoint has actively opposed President Obama’s healthcare reform efforts; and

Whereas, WellPoint was a nonprofit insurance company before it demutualized, raised capital through stock offerings, merged with, acquired, and demutualized other nonprofit Blue Cross/Blue Shield companies; therefore be it

Resolved, that the shareholders of WellPoint urge the board of directors to launch a feasibility study for returning to nonprofit status. This study, conducted at reasonable cost, with results made available to the stockholders, omitting any proprietary information, should be completed within nine months of the 2010 shareholder meeting.

Supporting Statement:

Investors are concerned about the effects of runaway health costs on the economy, and the crisis of over 46 million uninsured. Recent studies show 45,000 people a year die because they lack health insurance (American Journal of Public Health 9/17/09). Tens of millions more are underinsured, able to afford coverage only through policies with huge deductibles and out of pocket expenses. The impact of high deductible policies is seen in recent bankruptcy data showing 62% of personal bankruptcies caused by illness and medical bills, but 78% of those declaring bankruptcy for medical reasons had insurance when they became ill (American Journal of Medicine 8/09). WellPoint has been a leader in marketing high deductible policies, specifically under the Tonik label.

From 1999 to 2008 American health insurance premiums increased 119% while workers earnings and overall inflation rose 30% (Bureau of Labor Statistics). Businesses cannot continue to afford covering their employees. The Hewitt Associates study “The Road Ahead: 2009” found 1 in 5 employers are planning to drop health benefits in the next 3 to 5 years. This system is unsustainable.

Studies show 31% of US healthcare spending is attributed to overhead. In comparison, Medicare runs 3.1% overhead. Most other developed nations spend less than 10% on overhead (New England Journal of Medicine 8/21/03). Nations with universal systems spend about half what we spend on a per capita basis and have better health outcomes (Organization for Economic Cooperation and Development).

WellPoint reported its third quarter 2009 medical loss ratio at 81.1%. Medical loss ratio is the percentage of premiums that actually pays for care, and thus corresponds to 18.9% of premiums for overhead and profit. Although this is good for WellPoint’s profitability and share price, it supports the argument that for-profit health insurance is a major reason for the discrepancy in overhead expenses between the US and other countries.

WellPoint’s reputation has suffered as a consequence of the negative publicity surrounding its efforts to oppose healthcare reform. This resolution could change that.

I’ll keep you posted on our progress,

Rob

The Continuing Debate – Is This Bill Better Than Nothing?

Rob Stone MD — Fri, 20 Nov 2009 15:12:55 +0000

One of my professors years ago was a round little man who liked to warn us, with a twinkle in his eye, “Making predictions is very difficult, especially predictions about the future.” Will a bill pass, in what form, and then what will the long term implications be? It’s hard to predict.

The incomparable Dr John Geyman, former president of PNHP, makes a strong case in Tikkun “The Affordable Health Care for America Act (HR 3962) :Enough Reform to Succeed?” His argument is that whatever bill this Congress is able to pass will likely set the cause of single payer healthcare back because it “would leave in place an inefficient, exploitive insurance industry that is dying by its own hand, even as [the bill] props [the industry] up with enormous future profits through subsidized individual and employer mandates.” His comments follow up on those of Marcia Angell on the Huffington Post “Is the House Health Care Bill Better than Nothing?” and others that readers on this site have seen.

Not everyone on the Left agrees. Sam Stein’s piece in the Huffington Post is called “Goldman To Private Insurers: No Health Care Reform At All Is Best.” Goldman’s analysis for the health insurance behemoths is that no reform would benefit them the most, and if we end up with a version close to the House bill, that would cause the industry the most financial difficulty. Jonathan Cohn in The New Republic asks “The House Bill Is “Worse Than Nothing”? Really?”

Sorting all this out is tough and can be frustrating because there is so much wishful, non-reality-based thinking going on. It is clear that many of the supporters and opponents of the bills, both in Congress and the general public, are clearly deluded, and single payer is what has them flummoxed.

On the Left I keep talking to supporters of the public option who claim to be “single payer at heart”, and they believe that whatever passes will be the camel’s nose under the tent, the slippery slope to single payer. Seems delusional. If only they are right….

Speaking of the Right, many of them also believe that any bill this Democratic Congress will pass will become the same camel’s nose, the same slippery slope to socialism. Could they be right, too?

There is still work to do. The handwriting was on the wall Saturday 10/31 when anti-abortion Democrats had enough political oomph to get their Stupid Amendment debated and passed while the Progressive Caucus couldn’t muster enough support to bring either the Kucinich or Weiner Amendments to the floor.

No matter what happens, one thing is certain: we have to continue to build our movement. Next time around we have to get all those Representatives and Senators who plan to vote for reform this time, to vote for real single payer reform. And that would prove the delusional ones were right after all.

Links: HCHP Blog http://hchp.wordpress.com/ HCHP website: http://hchp.wordpress.com/

People Get Ready

Rob Stone MD — Fri, 29 May 2009 16:09:17 +0000

“People get ready, there’s a train a’comin’, Don’t need no ticket, you just get on board.”
- Curtis Mayfield

“If not now, If not now, tell me when?”
- Carrie Newcomer

….The closing songs sung by Carrie Newcomer at the Affordable Healthcare For All Rally on Monument Circle, across from WellPoint’s headquarters, May 20, 2009

Jim Mitchiner from PNHP Michigan arranged for me to speak to the House of Delegates at the annual meeting of the Michigan State Medical Society this April. There I met David Share, a physician working for Blue Cross of Michigan, which is still an independent non-profit insurance company like all the Blues were less than 20 years ago. They can’t turn down anyone with a pre-existing condition. Their board is made up of consumers and providers whose average annual compensation is under $50 thousand a year, compared with over $300 thousand per year on the WellPoint board. They support 42 free clinics throughout the state. It’s what the Blue Cross brand used to stand for. The idea of calling for WellPoint to re-mutualize was born.

Think globally and act locally. Some years ago I realized that we could do both by taking our message to one of the state’s largest employers, WellPoint based in Indianapolis. Starting as a non-profit state-based Blue Cross program like all the others, Blue Cross of Indiana de-mutualized in the 90’s. It went from non-profit to for-profit, raised a ton of money with a Wall Street stock offering, and started a rampage of mergers and acquisitions. In 2003 they merged with WellPoint, better known as Blue Cross of California, and became the largest health insurer in the country. For closing that deal, CEO Larry Glascock got a $42.5 million bonus. The HQ remained in Indiana, but WellPoint stayed as the name of the new company.

My wife Karen and I bought 5 shares (WLP, currently about $45 a share) a few years ago just so we could go to the annual meeting. Other members of our PNHP affiliate Hoosiers for a Commonsense Health Plan had stock as well, and a tradition was born. We have annually harangued them about recission, Medicare Advantage, Ingenex,and many other scandals – they are an easy target.

We needed something new this year in order to keep their attention and that of the media. I wrote an Op-Ed for the Indianapolis Star published 5 days before the meeting/rally with my critique of the company, including my dismay that our shareholder dollars were being spent trying to influence the healthcare reform debate. I noted “Last month the Sacramento Bee reported that in California WellPoint was making 3 million computer generated phone calls a week to try to influence the debate on reform. BusinessWeek magazine‘s headline called them ‘Robo-Calls.’ In 2007 the company spent $2 million on a publicity campaign to sink Governor Schwarzenneger’s proposal for a state universal care system.”

I concluded with:

“I fear that the for-profit insurance industry in America is the biggest barrier to achieving affordable universal coverage.

“With that in mind, I have a proposal for the board to consider – For the good of the company and the good of the country, I propose that WellPoint re-mutualize. That WellPoint return to its not-for-profit Blue Cross roots and spin back off all the state Blues that it acquired over the last 15 years.

“Give up this grand effort to become a behemoth astraddle the insurance market – you have only become a dinosaur.”

Having that published in the state’s largest newspaper, the stage was set for May 20. At 8 AM five of us were seated in the meeting room, and when the time came, I read my statement. Other members of thegroup shared their concerns, most notably that Susan Bayh’s position on the board, with her husband Evan in the Senate as it considers healthcare legislation, has the appearance of a huge conflict of interest. No one outside of our group spoke, except, of course, for the talking heads of the CEO and Chairman of the Board.

At 11 AM, under a clear blue sky in the center of town, Monument Circle, we opened our rally with folk singer Carrie Newcomer. We had 150 people decked out with signs and our blue Medicare For All T-shirts. My comments focused on the for-profit insurance gang being the biggest threat to meaningful reform. We closed with more music, and then 75 of us marched to Senator Bayh’s office a block away. The march made for particularly good TV footage. Thirty of us were able to get into his office and spent a surprisingly good hour with his chief of staff, as the Senator was in DC.

Should WellPoint return to non-profit status and is that part of our PNHP mission and message? In Indiana it’s an effective way to put our local insurance behemoth on the spot, and to get the media to spread our message that the insurance giants are the real enemy of healthcare reform. For those of you in Minnesota (United Health), Kentucky (Humana), Connecticut (Cigna and Aetna), California (HealthNet), Maryland (Coventry), or wherever, the strategy will be different. Confronting the local face of the for-profit health insurance industry has been a successful approach to raising awareness in our state, motivating our supporters, and putting the insurance gang on the defensive.

We’ll be back at WellPoint again next year. We’re all looking forward to it.

People Get Ready, performed by Carrie Newcomer 5/20/09

If Not Now, Tell Me When, written and performed by Carrie Newcomer

Time to play the single-payer card

Rob Stone MD — Tue, 31 Mar 2009 17:51:56 +0000

A health care reform bill out of Congress by the end of the summer? An end to our national nightmare within five months? The health insurance industry is banking on an Obama-Kennedy-Baucus bailout – “universal” health care, with taxpayer subsidies for those who can’t afford the unaffordable premiums.

Right now the insurance gang is controlling the debate, with big headlines about how they will give up a few of their most egregious behaviors and accept a modicum more government oversight as long as we mandate that everyone become their customer. And, most importantly, don’t let the Socialists have their way and allow a Medicare-like “public option.” They cry that it would be unfair competition to ask the for-profit insurance companies to go up against a government run plan.

If they think the government can do so much better than they can, why don’t we listen to them? Let’s go ahead and put everyone in a government plan!

The strategy from the industry and their Republican allies is obvious – appear to offer a series of compromises, but draw the line to prevent any government plan. Wrap it all up in a big package and proclaim that we’ve got a uniquely American solution to our problem: a huge system of taxpayer subsidies to the insurance industry, with no mechanism to control costs, because there are too many big money interests who don’t want to see real cost control. They are happy to expand access to insurance because it makes good business sense to create more customers.

The strategy of Obama, the Democrats, many labor leaders, and “progressive” groups like Health Care for America Now is equally clear. Let’s offer a compromise plan with many complex features, all of which need to be clarified and debated, and hope that we can get the whole thing through Congress intact, including the public option. This is a strategy for failure. The public option will be the part that gets compromised out.

Many prominent progressives like Paul Krugman and Jacob Hacker have argued that the public option is the key to the whole reform process. The public option will constrain the rapacious insurance companies. The public option will be popular and efficient. The public option will be, at its best, a slippery slope to a single-payer plan. Never mind that critics have pointed out that if the public plan is enacted, the insurance companies will find ways to game the system again. Never mind that the Right has recognized the slippery slope argument, and that is why they are so adamantly against it.

This calls for an obvious change in the Democrats’ strategy. Up to now they have tried hard to keep the voices for single payer out of the debate. They have reassured the Republicans that single payer isn’t even “on the table.” If they want to have a chance to get the public option through Congress, it’s time for a new strategy. Time to play the single-payer card.

Purely from a strategic perspective, the president should put single payer back on the table and start explaining to the people all the advantages of Medicare for All. Then, when the going gets tough in the trenches of Congress, they can compromise and settle for the public option, and a muscular enough public option that it could serve as a model (a slippery slope) for an eventual single-payer system.

Of course, maybe once the single-payer cat is out of the bag, the weight of logic and public support will just push the insurance gang right out of the way.