Republicans dismiss the uninsured, but what about the Democrats?

Posted by on Monday, Jul 30, 2012

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

GOP Says Coverage For The Uninsured Is No Longer The Priority

By Julie Rovner
NPR, July 27, 2012

For decades, the primary goal of those who would fix the U.S. health system has been to help people without insurance get coverage. Now, it seems, all that may be changing. At least some top Republicans are trying to steer the health debate away from the problem of the uninsured.

Take this exchange between Fox News Sunday host Chris Wallace and Senate Minority Leader Mitch McConnell (R-Ky.) earlier this month, just after the Supreme Court upheld most of President Obama’s health law.

Wallace: “What specifically are you going to do to provide universal coverage to the 30 million people who are uninsured?”

McConnell: “That is not the issue. … The question is how can you go step by step to improve the American health care system? It is already the finest health care system in the world.”

But McConnell isn’t the only top Republican saying covering the uninsured should no longer be the top priority.

“Conservatives cannot allow themselves to be browbeaten by failing to provide the same coverage numbers as Obamacare,” Sen. Orrin Hatch, R-Utah, told a conference at the conservative American Enterprise Institute. “To be clear, it is a disgrace that so many American families go without health insurance coverage. But we cannot succumb to the pressure to argue on the left’s terms.”

“Every once in a while, the Republicans have rare moments of honesty. And so when they say that they don’t want to expand coverage, this is one of those rare moments,” says Ethan Rome, who runs Health Care for America Now, an advocacy group working to promote and defend the health care law.

“They look around and they see middle-class families and others in need, and what do they want to do? They want to give tax breaks to the super rich,” he says. “That’s who they are and what they do. And I think that’s why they’re starting to talk about how they don’t want to expand coverage. Because they at least want to be truthful about a couple of things. And those are the ways in which they want to abandon certain populations and be frank about it.”

So the Republicans contend that the problem of the uninsured “is not the issue,” but the Democrats have enacted a program that pretends to provide universal coverage when they are leaving 30 million uninsured. Who is being honest here?

Because the issue of national health insurance has been associated with liberal/progressive politicians, some have mistakenly assumed that Physicians for a National Health Program (PNHP) has aligned itself with the Democratic Party. This is a non sequitur.

PNHP is a 501(c)3 organization, and, as such, does not support any political candidate nor any political party.

More importantly, PNHP is a single issue organization, exclusively supporting a single payer national health program – an improved Medicare for all. Neither the Democratic Party nor the Republican Party supports single payer.

During the political season, it is tempting for single payer supporters to select a party that might be more open to single payer, and then to support candidates of that party in the election. But top down doesn’t work, as those who supported the Democrats can now see. The top rejected single payer.

We need a bottom up approach by joining together in coalitions, by educating the public, and by promoting grassroots efforts to bring a loud and clear single payer message to all would-be politicians, regardless of political affiliation. As individuals, we can support candidates that lead on the single payer issue, but as an organization, PNHP will lead on policy, not politics.

Is “repeal and replace” real policy, or just a sound bite?

Posted by on Friday, Jul 27, 2012

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

The health-care ‘repeal and replace’ hoax

By Jack Bernard
The Charleston Gazette, July 25, 2012

Charleston, W.Va. — “Repeal and replace!” That is a very catchy slogan indeed. Of course, any objective observer knows that it has very little chance of happening, but it still makes for a great sound bite.

Since 2007, the Democrats have had to override Republican Senatorial filibusters 36O times, far more than ever before. This concerns me for two reasons. First, using the filibuster thwarts democracy and may be unconstitutional. Second, excessively employing the filibuster sets a precedent for others to follow when they are in the minority.

Let’s assume a very unlikely Republican sweep occurs in 2012. Romney wins, the House stays Republican and the Senate goes for the GOP with 51 or 52 Senators. Chances are still slim that repeal will take place due to the filibuster rule. Eight or nine Democrats would have to jump ship and vote with the Republicans, my party, to repeal the law before it really has a chance to be fully implemented in 2014.

Will Rogers once stated: “I do not belong to any organized political party, I am a Democrat.” But, to a growing degree, that party is showing more solidarity in support of its positions. Why? Because moderates in both parties have been run out of office. Getting liberal Democrats to support a Republican repeal effort is highly improbable unless a compelling case can be made that what replaces it will meet with clear public support.

What should most concern my party’s leaders about its proposals is that they are unlikely to ever generate much backing from the voters. People may not approve of the insurance mandate, but that does not mean that they want the Ryan alternative: Medicare turned into a voucher program, with the risk shifted from the federal government to senior citizens. Or, that states and their taxpayers are going to happily accept the Medicaid program being turned into a block grant whereby in the long-term they have to cut services or enrollment unless they raise state taxes.

On the policy wonk side, these efforts are laughable. No systemic changes are entailed. These proposals merely shift the burden from the federal government to the elderly and the states. They do little to constrain cost increases through changes in the delivery and financing of care, unless you count forcing poorer, sicker old people to refrain from getting needed care due to the expense being dumped in their laps.

No, our current proposals fall flat politically and technically. But, do not despair, fellow Republicans. There is a solution that will get enough votes to repeal and replace: Medicare for All, with built-in cost controls. That is a way out, say my GOP friends. Not so.

Obama stole a well-established Republican idea from the 1990s to come up with Obamacare (the Affordable Care Act), which is really just Romneycare recycled. We can do the same to the Democrats by adopting their program, Universal Medicare.

Forget promoting the “free market, more competition” model. It clearly does not work in health care for a variety of reasons, including lack of comparative data and the way health care decisions are made by third parties, including the very concept of insurance.

A study recently looked at our health system versus other developed nations. One key finding is that our prices are out of control, causing our per capita costs to be far greater than elsewhere. The best way to control prices is a single-payer system, like they have in Canada and much of Europe.

Financing Universal Medicare is more straightforward than under the ACA. It can be done through payroll taxes, as Medicare and Social Security are now, with the burden split between workers and employers. There would be no insurance premiums, so the additional expense would be minimal. Plus, Medicare administrative costs are 3 percent, rather than 30 percent for the private insurers. More on Medicare for All can be found at the web site of the highly respected advocacy group Physicians for A National Healthcare Program,

The Republican path to majority party status is clear. We just have to think out of the box and act decisively.

(Bernard is a retired senior executive, formerly with for-profit health-care firms, who has worked on planning and cost containment issues with several hospitals in West Virginia. He is currently a small business mentor and a Republican County Commissioner in Jasper County, Ga.)

Although we seem to be locked in a highly partisan environment, Jack Bernard reminds us that mere sound bites, such as “repeal and replace,” get us nowhere if we do not back them up with sound policy. Since “repeal and replace” comes from his party (Republican) he is all the more credible when he delves into the policy implications of what that would really mean.

As the intensity of the political campaigns heat up, the sound bite on health reform has been simplified. Repeal and replace proved to be too complex because there is no clear replacement for the Affordable Care Act around which Republicans have coalesced.

In the recent past we have heard Republican proposals to voucherize Medicare (shifting risk to patients), block grant Medicaid (shifting risk to budget-constrained states), and sell private insurance across state lines (a race to the bottom in insurance benefits). Many Republican candidates have recognized that these measures are not popular, and in the absence of any other serious proposals on which they agree, they have reduced the sound bite to “repeal.”

Now where do they really stand on policy? The status quo was terrible, and the Affordable Care Act does have several beneficial features that are popular. Yet, even with the Affordable Care Act, we’ll hardly depart from the status quo since 30 million people will remain uninsured, and inadequate, low actuarial value plans will become the new standard. Do they really support repeal with a return to the status quo?

This is where Jack Bernard’s policy wonkery comes in. Maybe you can use partisan sound bites to get elected, but then once you are in charge, it is imperative that the severely dysfunctional health care financing system be replaced with one that actually works. So here the sound bite “replace” could be driving policy.

Many conservatives have said that we are going to end up with single payer anyway. Why is that? It’s that “improved Medicare for all,” a single payer system, is not simply a sound bite. It is a serious policy proposal that really would work for all of us.

Revitalizing HMOs by relabeling them ACOs

Posted by on Thursday, Jul 26, 2012

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Aurora Health Care And Aetna Form Accountable Care Collaboration, Offer New Commercial Health Care Products

July 26, 2012

Aurora Health Care has joined with Aetna to bring employers a new type of commercial health plan designed to improve employees’ health care experience and health outcomes, while controlling costs.

The Aurora Accountable Care Network offers a price guarantee to employers built upon a health care model that improves quality, outcomes and the patient experience. This type of price guarantee is possibly the first of its kind among accountable care models. Employers will see real savings in what they spend on health care as a result of improved patient outcomes and greater efficiencies.

Mark T. Bertolini, Aetna chairman, CEO and president, said, “We are building on our strong provider relationships to establish a nationwide accountable network that offers better care at a lower cost for everyone.  Aurora Health Care has revolutionized health care in Wisconsin. Aetna’s industry-leading care management programs and consumer tools together with Aurora’s outstanding patient care model will lead to a better overall health care experience.”

“Aetna views accountable care organizations as a model for making health care work better for everyone,” said Bill Berenson, Aetna market president. “Aurora has demonstrated it can improve outcomes through how it integrates patient care and implements best practices. Together with Aurora, Aetna will offer more affordable and more personalized health benefits to Wisconsin employers and their employees. This is the future of health care.”

The Aurora Accountable Care Network achieves this level of health care quality and personalized service through Aurora’s integrated system of more than 1,500 physicians, 15 hospitals and 160 clinics in eastern Wisconsin and northern Illinois.

Accountable care organizations (ACOs) are supposedly a new model of health care delivery systems which are designed to reduce health care spending while improving the quality of care. Aurora Health Care is an established integrated delivery system that recently has been approved by CMS to participate in the “shared savings” program authorized by the Affordable Care Act.

Supporters of this concept have assured us that these entities are distinctly different from HMOs. But are they?

Aurora Health Care has now joined with for-profit, private insurer Aetna as part of Aetna’s plan to “establish a nationwide accountable network that offers better care at a lower cost for everyone.”

That’s exactly what we heard during the managed care revolution when the HMO explosion took place, abandoning the model of pure integrated health systems (e.g., Kaiser Permanente), and instead establishing entities, whether composed of groups or networks, dominated by private insurers.

How can this be considered a new model when it appears to be the same old, same old. They haven’t even bothered to rearrange the deck chairs.

Stuart Butler on the 30 million uninsured

Posted by on Wednesday, Jul 25, 2012

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

The New ACA Score And The Perils Of Letting Cost Estimates Drive Policymaking

by Stuart Butler
Health Affairs Blog, July 24, 2012

If you were expecting the Congressional Budget Office (CBO) recalculation of the Affordable Care Act (ACA) to rival the drama of the Supreme Court decision, you will have been disappointed.  But the new CBO re-estimate underscores the dangers of basing major policy changes on such forecasts.

While the Court caused political shockwaves by declaring the ACA’s “penalty” to be a “tax”, that in itself did not have major implications for the new score.  CBO projects a net reduction in total federal outlays of $84 billion over 10 years (the new total is $1,168 billion) and an increase in the uninsured of about 3 million, when compared with its earlier estimates.  Significant numbers, but not earth-shattering.  The Joint Committee on Taxation provided revenue estimates for the CBO forecast.

But CBO faced enormous challenges in estimating the impact of the ruling, and its seemingly precise estimate clouds the significant guesses it had to make.

The Challenge Facing CBO

Rather than the tax-not-penalty decision, the part of the Court’s ruling with the greatest budgetary implications concerned Medicaid.  It also gave CBO its biggest headache.  The Court struck down the provision requiring states to expand Medicaid coverage to households up to 133 percent of the poverty level.  So CBO had to figure how many states – indeed which states, given different Medicaid coverage pattern today in the states – would decline short-term federal funding for the expansion (what the Wall Street Journal called the “teaser rate”), knowing they would have to pay a portion of the cost in future years.  The governors of several states, including Texas, Florida and South Carolina, have already declared they would refuse the money.

So what could CBO do?  Take such declarations at face value?  Factor in a bit of politics, consult a political crystal ball, and predict what might actually happen in state houses next year? Give a range to show, say, the different effects of all states declining or all agreeing to expand Medicaid?

To compound the scoring challenge, CBO had to project what would happen to newly eligible Medicaid households in states that decline federal money to expand Medicaid.  Some, but not all, would be eligible for subsidies in the new ACA exchanges, depending on household income.  But how many would sign up (adding to subsidy costs, even though they would not have added to federal Medicaid costs)?

According to former CBO Director Douglas Holtz-Eakin, depending on your guess the potential range of budgetary effects would be large.  If the six states currently saying they will not expand Medicaid follow through with that threat, Holz-Eakin estimates the net budget impact would be $22-80 billion between 2014 (when the expansion occurs) and 2021.  But if all states decide the expansion is an offer they must refuse because of the long-term state cost, the impact could be as high $627 billion.

A False Sense Of Certainty

Faced with the uncertainty about state action, CBO declined to give a range (a bad thing).  Instead it avoided second-guessing states (arguably a good thing for people who wear green eyeshades rather than appear on political talk shows) and projected a number based on “the middle of the distribution of possible outcomes.” That’s defensible, in the same sense as a weather forecaster splitting the difference on the chances of thunderstorms next Friday, but it results in a seemingly precise number that is almost certainly wrong and yet gives a false sense of certainty to policymakers.

This case of CBO scoring highlights once again why it is so important for policy to be driven a bit less by budget estimators generating apparently precise numbers.  That leads to policies based on guesses needed for a computer algorithm rather than on judgment and public discourse about the nature and purpose of government.  But alas, Congress insists that CBO come up with one number for its deliberations, not a range or a zone of probability.  And so even though CBO wisely warns that its number “should not be viewed as representing a single definitive interpretation of how the ACA should or will be implemented in light of the Court’s decision,” regrettably it will be.

Posted response by Don McCanne:

The policies inherent in the Affordable Care Act do create uncertainty as to how many will remain uninsured. Nevertheless, the CBO projection of 30 million uninsured will be the number quoted in policy discussions, since it is the best we have, and it does provide a rough estimate of how short ACA falls in the goal of covering everyone.

To provide a perspective of the enormity of this policy failure, let’s assume that we chose a different set of policies that would cover the same total number of individuals, still leaving 30 million uninsured. Let’s say that we want to have 100 percent coverage in each state, beginning with the largest states since they would have the greatest health care burden in terms of the sheer numbers of patients. Let’s continue to cover 100 percent of each state until we run out of funds to pay for coverage for the last 30 million people – the residents of the least populated states.

Under such a policy, everyone would be covered except all of the residents of Alaska, Arkansas, Delaware, District of Columbia, Hawaii, Idaho, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Rhode Island, South Dakota, Vermont, West Virginia, and Wyoming.

Who could ever support such a ridiculous policy scheme? Yet since we have buried other ridiculous policies into a highly dysfunctional, fragmented, administratively wasteful ACA financing scheme, we are going to accept those policies as the best we can do? It’s okay to have 30 million uninsured as long as we don’t concentrate them in two-fifths of our states?

Stuart Butler implies that we need policies based on “judgment and public discourse about the nature and purpose of government.” If we were all sincere in such a discourse, and laid partisanship aside, we would end up with a decision to enact a single payer national health program that included everyone.

Stuart Butler has a valid point that the variables in the Affordable Care Act and its implementation are great enough that we cannot accurately predict the precise numbers of individuals who will remain uninsured. The information that the Congressional Budget Office relied on to come up with 30 million uninsured does give us a very rough estimate of the total, and enough confidence that we can say with certainty that at least tens of millions will remain uninsured.

So what is Stuart Butler’s point? He indicates that instead of using this precise number to establish policy, we should choose policies based on “judgment and public discourse about the nature and purpose of government.” Well, let’s use the less precise estimate of tens of millions uninsured. What then should be the role of government?

It is clear that the private sector has been incapable of insuring everyone, and that government involvement is required if universal coverage and access are to be our goals. It is also clear that the Affordable Care Act is not an adequate response on the part of government since that is what led to this estimate of the large numbers who will remain uninsured.

So what would Butler propose? In 1989, we thought we knew the answer when he coauthored the report from the Heritage Foundation which called for the principle that, “Every resident of the U.S. must, by law, be enrolled in an adequate health care plan to cover major health care costs,” and “The requirement to obtain basic insurance would have to be enforced,” and “If the family did not enroll… a fine might be imposed.” Yes, an individual mandate.

This did prove to be partisan since the concept was used in proposed Republican legislation designed to counter the health care reform proposal of Bill and Hillary Clinton. The Clinton effort fizzled, and the Republican proposals were never enacted. Little did we realize then that a couple decades later the partisan support for the individual mandate would flip from the Republicans to the Democrats.

In a USA TODAY op-ed this year, Butler indicated that his views had changed based on newer policy research, and that today the individual mandate “means the government makes people buy comprehensive benefits for their own good, rather than our original emphasis on protecting society from the heavy medical costs of free riders.” Sort of, you take care of your own needs but don’t turn to me for help when you can’t meet them – the perpetual conflict between individual responsibility and social solidarity.

He wrote, “health research and advances in economic analysis have convinced people like me that an insurance mandate isn’t needed to achieve stable, near-universal coverage. For example, the new field of behavioral economics taught me that default auto-enrollment in employer or nonemployer insurance plans can lead many people to buy coverage without a requirement.”

We know that default auto-enrollment does result in higher rates of participation, but we also know that an entirely voluntary program for purchasing our often unaffordable private health plans would leave far more uninsured than would the policies contained in the Affordable Care Act.

We should have that public discourse that Butler calls for – the one about what we, as a nation, want. Do we want absolutely everyone to be included in our health care system? Or do we want to continue with policies that provide the equivalent of covering everyone in the most populous states, but none of the residents of Alaska, Arkansas, Delaware, District of Columbia, Hawaii, Idaho, Kansas, Maine, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Mexico, North Dakota, Rhode Island, South Dakota, Vermont, West Virginia, and Wyoming?

Heritage Foundation: “A National Health System for America” 1/2/89

USA TODAY: “Don’t blame Heritage for ObamaCare mandate” by Stuart Butler

More Aetna abuses, but wait, there’s worse

Posted by on Monday, Jul 23, 2012

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Aetna sued over out-of-network pay and referrals

By Alicia Gallegos
American Medical News, July 23, 2012

The California Medical Assn. and more than 50 physicians are suing Aetna over alleged retaliation against doctors who refer patients for out-of-network care.

The medical society and doctors say Aetna is underpaying out-of-network physicians, refusing to authorize some out-of-network services and illegally terminating the contracts of doctors who make such referrals.

The insurer’s practices violate California law and interfere with doctors’ medical decisions, said Long X. Do, CMA legal counsel.

The plaintiffs claim some of Aetna’s insurance policies enable patients to receive out-of-network care. However, Aetna discourages such practices and regularly refuses to pay for them, the suit claims.

Similarly, doctors’ contracts with Aetna do not specifically forbid all out-of-network referrals, the suit said. Yet, when doctors make such referrals, Aetna frequently threatens them with a “rate adjustment” or termination from Aetna’s network, according to the suit.

In a statement, Aetna spokeswoman Anjanette Coplin called the suit baseless and denied the insurer is mistreating physicians.

“Doctors who entice patients to have procedures performed at out-of-network facilities that they own without the patient’s knowledge are putting profits over their patients,” she said. “The wildly inflated bills of these facilities drive up the out-of-pocket costs for unwitting patients and needlessly add to premium costs for everyone.”

The CMA is aware of Aetna’s lawsuits, but said its suit has nothing to do with them. CMA’s claim centers on Aetna’s policies and practices, Do said.


Silicon Valley Surgeons Risk ‘Moral Authority’ For 200% Returns

By Peter Waldman
Bloomberg, July 18, 2012

The anesthesiolgists’ ball in December 2010 was already raging when Dr. Thomas Elardo and his wife arrived. It was 11 p.m., and the Opera House in downtown Los Gatos, California, was packed with nurses and doctors dancing to ’80s covers by The Microbes, an all-doctor band. Elardo climbed the stairs to the mezzanine bar and was immediately gladhanded by Bobby Sarnevesht, a local entrepreneur, and orthopedist Samir Sharma, who pulled Elardo aside.

Elardo had known Sharma for years, but the orthopedist had never given him the time of day. That night was different — he had something to show Elardo. At the bar, Sharma flaunted a $960,000 check, Elardo recalls. Sharma said it was for his work as a surgeon and investor in an outpatient surgery center in Los Gatos, operated by Sarnevesht.

“They were saying, ‘This is the kind of money you can make. You’ve gotta come in!” recalls Elardo. “I was speechless.”

Founded by Sarnevesht and his mother, Julia Hashemieh, Bay Area Surgical Management has marshaled decades of doctor rage against insurance carriers into a profitable business.

By rejecting the discounted contracts that participating in-network providers sign with insurers, the surgery centers bill insurance companies at their own out-of-network rates, which are 5 to 35 times as much as the in-network facilities charge, and make a killing.

Knee arthroscopies that cost $3,000 in Aetna Inc. (AET)’s network earn nearly $20,000 in facility fees at Bay Area’s surgery centers, according to Aetna, the Hartford, Connecticut-based health insurer. A bunion repair that costs $3,700 in-network got almost $53,000 for Bay Area Surgical Group, one such center. A disc surgery for lower-back pain, called a laminectomy, costs about $6,000 in network yet reaps nearly $120,000 for Bay Area Surgical.

Fed up, Aetna sued Hashemieh and partners in February, claiming they gouge on rates, pay surgeons excessive compensation for referrals and defraud health plans.

Although it is always tempting to take on the abuses of private insurers such as Aetna, this time we should look further: the system by which we finance health care in the United States.

Perhaps the most important contribution of the private insurance industry in the past several decades has been the slowing of health care price increases through the process of provider contracting. Of course, public insurers such as Medicare are more effective, though through administered pricing rather than contracting. Nevertheless, health care prices would be even higher had the private insurers not engaged in contracting.

A problem that has never been satisfactorily resolved, in spite of many efforts, is what to do about charges by physicians and facilities that do not have contracts with the insurers – out-of-network providers. In some instances, the insurers pay nothing, except when required by law in certain emergency situations. In other instances, the insurers may pay at lower rates than they do for in-network providers, leaving the high balances as the responsibility of the patients. Often insurers will attempt to negotiate rates after the fact in order to prevent their clients from being stuck with these very high balances.

It is the latter situation that has become a problem. The Bloomberg article above (a very long, ugly story) goes into detail explaining how some entrepreneurial types in the health care delivery system have leveraged out-of-network care into a very lucrative operation. I dare say that Aetna looks like a saintly organization in comparison.

Why should we care? To quote Anderson, Reinhardt and colleagues, “It’s the prices, stupid!” In spite of the limited success of provider contracting, the private insurers have not been capable of adequately controlling price escalation, which is far greater than in all other nations – nations that depend on some sort of government role in establishing fair prices that cover costs and provide fair margins. We all pay more through higher insurance premiums when gougers are rewarded by the private insurers.

Seeing that everyone receives the care that they need, and controlling prices, are the most important functions that the private insurers should be carrying out. Yet they are doing neither competently. The defect is in the design of our health care financing system. The flaws in a system of competing private plans cannot be repaired. The private insurers will never have enough power, and even if they did, how would they use it? And those greedy health care providers who place business interests above professionalism will always be with us.

By replacing the private insurers with our own universal public financing program – an improved Medicare for all – we can include everyone, set prices at their proper level, and shut down the gougers. What are we waiting for?

Joseph Stiglitz’s “The Price of Inequality, ” with OECD confirmation

Posted by on Friday, Jul 20, 2012

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

The Price of Inequality

By Joseph E. Stiglitz
W. W. Norton & Company, June 2012

This book attempts to fathom the depths of one aspect of what has happened in the United States – how we became a society that was so unequal, with opportunity so diminished, and what those consequences are likely to be.


As we look out at the world, the United States not only has the highest level of inequality among the advanced industrial countries, but the level of its inequality is increasing in absolute terms relative to that in other countries.


Our political system has increasingly been working in ways that increase the inequality of outcomes and reduce equality of opportunity. This should not come as a surprise: we have a political system that gives inordinate power to those at the top, and they have used that power not only to limit the extent of redistribution but also to shape the rules of the game in their favor, and to extract from the public what can only be called large “gifts.” Economists have a name for these activities: they call them rent seeking, getting income not as a reward to creating wealth but by grabbing a larger share of the wealth that would otherwise have been produced without their effort. Those at the top have learned how to suck out money from the rest in ways that the rest are hardly aware of – that is their true innovation.


This book is not about the politics of envy: the bottom 99 percent by and large are not jealous of the social contributions that some of those among the 1 percent have made, of their well-deserved incomes. This book is instead about the politics of efficiency and fairness. The central argument is that the model that best describes income determination at the top is not one based on individuals’ contributions to society (the “marginal productivity theory”), even though, of course, some at the top have made enormous contributions. Much of the income at the top is instead what we have called rents. These rents have moved dollars from the bottom and middle to the top, and distorted the market to the advantage of some and to the disadvantage of others.


Health care for all

The two most important impediments to individuals’ achieving their economic aspirations are the loss of a job and an illness. The two together form a lethal combination, one often associated with bankruptcy. Health care in America has traditionally been provided by employers. This inefficient and antiquated system has contributed greatly to the reality that the United States has the most inefficient and poorest-performing, overall, health care system among the advanced industrial countries. The problem with our health care system is not that we spend too much; it’s that we don’t get value for our money and that too many people don’t have access to health care. Obama’s health care reform partially addressed the latter problem… but it did little to improve efficiency. Our high costs are due in part to rent seeking by insurance companies and the pharmaceutical industry. Other countries have curbed these rents. We have not. Other countries not as well-off as the United States have managed to provide universal access to health care. Most countries treat access to medicine as a basic human right. But even if one doesn’t approach the issue from this principled perspective, our failure to provide access to health care increases the inefficiency of our health care system.

Lack of access to health care contributes significantly to inequality, and this inequality in turn undermines the performance of our economy.


OECD Health Working Paper No. 58: Income-Related Inequalities in Health Service Utilisation in 19 OECD Countries, 2008-09

By Marion Devaux and Michael de Looper
OECD (Organisation for Economic Co-operation and Development) ,July 10, 2012

This Working Paper examines income-related inequalities in health care service utilisation in OECD countries. For doctor visits, horizontal equity was assessed, i.e. the extent to which adults in equal need of physician care appear to have equal rates of utilisation.

By Marion Devaux and Michael de Looper
OECD (Organisation for Economic Co-operation and Development) ,July 10, 2012

This Working Paper examines income-related inequalities in health care service utilisation in OECD countries. For doctor visits, horizontal equity was assessed, i.e. the extent to which adults in equal need of physician care appear to have equal rates of utilisation.

OECD Working Paper on Income-Related Inequalities in Health Service Utilization
Click on “PDF” for the 61 page paper.

Today’s comment is very brief in order to give you more time to read the excerpts from Nobel Prize-winning economist Joseph Stiglitz’s new book, “The Price of Inequality.” One of the prices we pay is our most expensive but poorest performing health care system. Supporting his theme is the coincidental release of a new OECD working paper showing that the United States has the most inequitable access to physicians of the 19 OECD nations studied.

When you read about rents and inequality in Stiglitz’s book, you’ll understand better why the United States is again first… this time in inequitable access to physician visits!

Medicare performs better than private plans

Posted by on Thursday, Jul 19, 2012

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Medicare Beneficiaries Less Likely To Experience Cost- And Access-Related Problems Than Adults With Private Coverage

By Karen Davis, Kristof Stremikis, Michelle M. Doty and Mark A. Zezza
Health Affairs, July 18, 2012

The 2010 survey results indicate that compared to people who are privately insured, Medicare beneficiaries are less likely to have cost-related access problems, high premium and out-of-pocket health care expenses as a share of income, and financial problems because of medical bills. And compared to nonelderly adults with employer-based coverage, Medicare beneficiaries are more likely to have access to a medical home—a primary care provider who knows their medical history well, is accessible, and helps coordinate their care. Studies show that patients with medical homes are less likely to report medical errors or gaps in the coordination of their care and are more likely to be up-to-date with their preventive care.

Given these findings, it is not surprising that Medicare beneficiaries are far less likely than privately insured adults to give their health insurance plan a fair or poor rating, while being far more likely to report excellent quality of care.

Among Medicare beneficiaries, those with Medicare Advantage are more likely than adults with traditional Medicare to give their insurance a fair or poor rating. Although Medicare Advantage enrollees are less likely to spend 10 percent or more of their income on premiums and out-of-pocket expenses, they are more likely to report cost-related access problems than adults with traditional Medicare. This may in part reflect beneficiaries’ experience with private health maintenance organization plans that offer lower premiums in return for limited access to a smaller network of providers.

The evidence reported here from surveys now spanning a decade shows that Medicare is doing a better job than employer-sponsored plans at fulfilling the two main purposes of health insurance: ensuring access to care and providing financial protection.

Summary by The Commonwealth Fund:

One of the goals of the Affordable Care Act was to protect private, employer-sponsored health plans – a sector that was considered to be functioning well. In so doing, a less expensive Medicare for all model was rejected. So how do the private plans compare to Medicare?

According to this report, “Medicare beneficiaries are less likely to have cost-related access problems, high premium and out-of-pocket health care expenses as a share of income, and financial problems because of medical bills. And compared to nonelderly adults with employer-based coverage, Medicare beneficiaries are more likely to have access to a medical home – a primary care provider who knows their medical history well, is accessible, and helps coordinate their care,” and are “far more likely to report excellent quality of care.”

Medicare is not perfect and does need improvement, but it performs far better than the best of the private plans – the employer-sponsored health plans. Individual and small group plans have an even worse performance.

Above all, “Medicare is doing a better job than employer-sponsored plans at fulfilling the two main purposes of health insurance: ensuring access to care and providing financial protection.”

Right now, efforts are being made to convert Medicare into a market of private plans. Why should we pay more for less health care choice, greater risk exposure, and poorer quality? Any sane individual who is paying attention should realize that we should be doing the opposite – improve Medicare and then provide it for everyone.

The Nation moves to right-center on health care

Posted by on Wednesday, Jul 18, 2012

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

The Battle for Healthcare Has Just Begun

By the Editors
The Nation, July 11, 2012

If you thought the battle over healthcare reform came to an end when the Supreme Court declared the Affordable Care Act’s individual mandate constitutional, think again. The fight is just beginning. On one side the Republican Party and its big money allies aspire to defeat President Obama, take control of Congress and repeal the largest piece of domestic legislation in forty-five years. Mitt Romney’s plan is even more regressive. He’d not only eliminate insurance for the 30 million Americans covered by the ACA; he would change the way the industry is taxed and regulated, turn Medicare into a voucher program and transform Medicaid into a block grant, which together would strip access to healthcare from as many as 28 million Americans who are currently insured.

On the other side are people-powered progressives determined to implement the law and strengthen its less than ideal aspects to achieve universal coverage (see Wendell Potter, page 4). Under the ACA, for example, states will be empowered to create state-based single-payer systems. Vermont has already passed such legislation, and advocates in California are pushing a similar plan, passed by the legislature twice, only to be vetoed both times by then–Governor Schwarzenegger.

But if the fast and furious attack from the right is any indication, we have our work cut out for us. As many as eight Republican governors—led by Tea Party ideologues like Florida’s Rick Scott, Wisconsin’s Scott Walker, South Carolina’s Nikki Haley, Texas’ Rick Perry and Louisiana’s Bobby Jindal—have refused to implement the law’s expansion of Medicaid to cover some of America’s poorest. In Florida, that would affect some 1.3 million people who make less than 133 percent of the federal poverty level (about $31,000 a year for a family of four). In Texas, where 25 percent of residents are uninsured—the highest rate in the nation—Perry’s intransigence would leave 1.8 million out in the cold.

This cruel, cynical agenda has been enabled by a cabal of groups bankrolled by the 1 percent, such as the Chamber of Commerce and Karl Rove’s Crossroads GPS. Even before the Supreme Court decision came down, these organizations had spent some $235 million on attack ads vilifying “Obamacare,” and they are on track to spend much more by November. Already the Koch-backed Americans for Prosperity has launched a $9 million campaign against the ACA and the Democrats who voted for it. Concerned Women for America has pledged another $6 million.

These ads and the rhetoric emanating from the Tea Party guvs are nothing but open fearmongering and baldfaced lies. They insinuate that the ACA would ration healthcare (in fact, the ACA rations it no more or less than the current system). Governor Scott justified his refusal to expand Medicaid by claiming it would add $1.9 billion to Florida’s budget (though the federal government funds 100 percent of Medicaid expansion in the first three years, and Florida’s own healthcare agency estimates it would cost the state far less). Not to be outdone, Rush Limbaugh hysterically called the ACA the “biggest tax increase in the history of the world” (when, in fact, it contains tax breaks for middle-class Americans).

These lies have done a great deal of damage. Many people are confused about what the act does and does not do, creating a debate that seems to take place in an alternate reality. The stakes in this fight, then, are profound: the health of millions of Americans, of our shared social safety net and—not least—of our democracy itself.

Originally posted as a reader comment:

It is disappointing to see that the editorial position of The Nation has framed the current status of the health care debate as, on the left, a determination to “implement” and “strengthen” the Affordable Care Act, and, on the right, an effort to “repeal” ACA.

The objection is not with the characterization of the right, but with the implication that the left has settled on a right-center approach designed by conservatives. Token mention is made of the Vermont and California efforts to enact single payer, but, in fact, states do not have the option of diverting federal funds from programs such as Medicare and Medicaid into a state-based single payer program, nor can they bypass federal requirements such as the ERISA restrictions, usurping funds from employer-sponsored self-insured plans.

All the tweaking in the world cannot repair the highly-flawed, fragmented, and egregiously administratively wasteful model of ACA. It needs to be replaced with a bona fide model of social insurance – the most appropriate for the United States being a single payer, improved and expanded Medicare that covers everyone.

Also, it is a mistake to be hung up on a left-right linear polarity when the issue of health care justice should be much more inclusive. In an article this week in the Des Moines Register, retired health executive Jack Bernard stated, “If we Republicans took the Medicare-for-all approach, it would thrust us into the vanguard of reform. Instead of the Democrats stealing our ideas, we could steal theirs.”

The Democrats did steal the Heritage model which was originally introduced by Republicans as a conservative response to the Clinton proposal. Democrats have now succeeded in enacting it, but what a terrible model. It will leave tens of millions uninsured while creating a new standard of underinsurance, imposing financial hardship on those with health care needs.

Everyone should read Jack Bernard’s article, and then we should see if we can get past the simplistic polarization to bring us together to improve our health as individuals and to improve the health of the nation.

Jack Bernard, “Head-in-the-sand ‘solution’ is killing GOP”:

The Nation editorial:

Single Payer Would Streamline Medical Practice

Posted by on Wednesday, Jul 18, 2012

By Ed Weisbart, M.D.

“Don’t ask me to do one more thing.”

This is the battle cry heard loud and clear from physicians across the country. Our fragmented way of paying for health care has each private insurance company demanding something just a little different from each other. One insurer wants documentation of our efforts at smoking cessation, another about how we’re treating diabetes this week, and another wants to know when the last mammogram was done. And they each promise to pay me a little bit more if I would give them the right answers.

Sure, these are all examples of good medical care, but many doctors today feel like we work in a discotheque, with a mirror ball reflecting hundreds of ever-moving spotlights that we’re supposed to focus on. Implicit in each of these pay-for-performance schemes is the assumption that we’ll only provide good medical care if we’re paid a little extra to pay attention to today’s featured special.

Turns out, there’s plenty of evidence that these well-intentioned programs actually erode the very quality of care they were intended to enhance. Anyone who has ever tried to raise more than one child at a time knows how precious your sanity feels when you’ve got a bunch of kids all demanding your attention. And that’s if they’re all good kids.

Now stretch the metaphor: Turn the out-of-control children into insurance companies (okay, not much of a stretch), realize that they’re trying to out-compete each other, and that they will never grow up and leave home. You’ll start to understand the demoralized nature of physicians today. It’s overwhelming, and there’s no end in sight. Very few of the discussions about health care reform have addressed this issue.

The Affordable Care Act offers little to simplify the unnecessarily complex demands today’s environment places on medical practice. By preserving the role of the private insurance industry in health care, the ACA guarantees that each physician remains at the mercy of a stream of uncoordinated demands. And that we have to continue to employ legions of staff to help our patients navigate safely through. We waste $215 billion a year just on that, according to MIT economics professor Gerald Friedman writing in Dollars and Sense, April 2012.

It makes much more sense to provide everyone in the country with a single health plan, comprehensive enough to meet our medical needs, fair enough to stop driving people into bankruptcy when they get sick, and American enough to offer us all complete choice among doctors and hospitals. We don’t have any of those things today, and the ACA is not bringing them to us.

Just fix the payment model, give us all an improved version of Medicare, and let doctors practice medicine with patients who chose them because they like them – not because they’re “in network” and affordable. Save lives, save money, and help doctors recover their sanity.

Dr. Ed Weisbart is a member of Physicians for a National Health Program – St. Louis. He resides in Olivette, Mo.

Jack Bernard’s message for his fellow Republicans

Posted by on Tuesday, Jul 17, 2012

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Head-in-the-sand ‘solution’ is killing GOP

By Jack Bernard, July 16, 2012

We Republicans have ourselves to blame for the Affordable Care Act, or Obamacare.

Our reaction to the Clinton health reform proposals in the early 1990s was to have conservative think tanks come up with a free competition model based on expansion of private insurance and Medicaid. That idea became Romneycare, which evolved into Obamacare.

It is our baby, ugly or not.

It is the height of hypocrisy for us now to criticize our own idea unless we have something better to replace it. And, the replacement needs to be comprehensive, not just a series of unacceptable statements and proposals based on doing away with traditional Medicare by turning it into a voucher program and gutting Medicaid by making it into a block grant.

Using vouchers for Medicare just dumps the cost problem into the lap of the powerless patient, rather than the federal government that has clout, making the cost escalation problem worse. The block grants for Medicaid idea just shifts the cost issue onto the states rather than the federal government, which once again solves nothing and only makes things worse.

States will just cut services and people from their Medicaid roles, creating more uninsured. Don’t Iowa hospitals serve enough uninsured in their emergency rooms now?

This gets us to what we as Republicans should do: throw out our rule book and be innovative. People my age will remember how we Republicans were 100 percent against recognizing China before Richard Nixon, the anti-communist crusader, came out for it. We must do the same with health care.

There is only one way to control health care costs and insure universal access — and that is by first admitting that the U.S. system has failed and then adopting ideas that have been proven to work elsewhere. We should take a look at how health care is financed and delivered in other developed nations with lower cost and better morbidity and mortality rates.

A Commonwealth Fund study was issued in May 2012 which did just that for 13 countries. The bottom line is that we spend 17.4 percent of our gross national product on health care, far more than other developed nations, which averaged 9.5 percent. Our per-capita spending was $7,960 versus $3,182 for the group as a whole.

Why? One key factor is prices. For example, U.S. pricing on the 30 most commonly prescribed brand name drugs is one-third higher than Canada and double France, both of which have a form of Universal Medicare.

From looking at the international data, if we Republicans really want to dump the Affordable Care Act, the way to go is Medicare for all. Studies show that the nations with universal health care have better overall health care outcomes than we do, not worse.

And, according to the respected Physicians for a National Health Program,, yearly savings generated under Medicare for all would be $400 billion. That would go a long way towards paying for universal coverage, versus the Affordable Care Act, which will increase systemic costs because it relies on private insurance.

The canard about waiting times to see doctors is just a tactic to scare the public. If you need a knee replacement for a knee that has been going bad for years, waiting a little longer for an operation should not be a major issue for the patient. Despite the scare tactics, no one who needs immediate care in Canada is ever left to sit in a line. In any case, there should be no waiting lists at all here. Canada spends just $4,363 per capita on health care versus our $7,960.

If we Republicans took the Medicare-for-all approach, it would thrust us into the vanguard of reform. Instead of the Democrats stealing our ideas, we could steal theirs. When it was implemented and turned out to be widely accepted, as was Medicare in the 1960s, we would be the party the public would look to for the future.

Of course, there is an alternative. We can stick our heads in the sand and push for infeasible actions. That approach is killing us regarding immigration and will work just as well for health care.

(JACK BERNARD of Monticello, Ga., is a retired health care executive who worked extensively with Iowa health care providers, including Iowa Health System. He now is a member of the Jasper County (Ga.) Board of Commissioners and Jasper County Board of Health. Contact:

This article should be distributed widely. Although it is written by a Republican, targeting his fellow Republicans, if his party can understand this message, then the Democrats and others who bailed on Medicare for all should be able to understand it as well.

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