Fiscal Commission wants price signals for Medicare?

Posted by on Friday, Sep 10, 2010

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.

About the National Commission on Fiscal Responsibility and Reform


President Obama created the bipartisan National Commission on Fiscal Responsibility and Reform to address our nation’s fiscal challenges. The Commission is charged with identifying policies to improve the fiscal situation in the medium term and to achieve fiscal sustainability over the long run. Specifically, the Commission shall propose recommendations designed to balance the budget, excluding interest payments on the debt, by 2015. In addition, the Commission shall propose recommendations that meaningfully improve the long-run fiscal outlook, including changes to address the growth of entitlement spending and the gap between the projected revenues and expenditures of the Federal Government.

The Commission will meet as a whole once a month while Congress is in session. The Commission will vote on a final report containing a set of recommendations to achieve its mission no later than December 1, 2010. The final report will require the approval of at least 14 of the Commission’s 18 members.


Republicans Dominate Medicare Discussions On White House Fiscal Commission

By Brian Beutler
September 9, 2010

The White House’s fiscal commission has become a target for progressive activists in large part because a number of reports and public statements indicate that the panel will recommend benefit cuts to Social Security.

But the commissioners are also grappling with another sensitive entitlement program: Medicare. For a number of reasons, the commission is farther from consensus on Medicare than it is on Social Security. But the ideological conservatism of the Republicans on the commission — and, indeed, of the commission as a whole — combined with Democratic fatigue over health care reform mean that the center of gravity of discussions is tilted to the right.

“[B]asically you’ve got some Dems saying they don’t want to jump back in the [health care reform] pool, so you’ve mainly got Republicans swimming in there on their own,” says one source familiar with the commission’s proceedings.

“There have been some discussions about cost-sharing. There have been some discussions about Medi-gap policies,” the source says.

At a staff level, this source says, the feeling is that “there needs to be more skin in the game and people need to pay more…the whole argument that people don’t understand how much health care costs and are wasteful.”

“A lot of discussion on the commission has been that people need to get better price signals and be smarter shoppers,” the second source said. “And that is very, very worrisome.”

Apparently President Obama’s National Commission on Fiscal Responsibility and Reform is considering changes to Medicare that would make beneficiaries “smarter shoppers” by adopting innovations that would require them to pay more out of pocket for health care.

Considerations include reducing or eliminating Medi-gap policies, increasing deductibles and coinsurance, and using vouchers that would establish financial incentives to choose more Spartan private plans.

Although the commission theoretically is politically balanced, all of the Republican members are right-wing conservatives, and the Democrats are split between progressives and deficit hawks who would rather reduce government spending than increase tax revenues. If you check the list of commission members (available at the fiscal commission link above) it is difficult to identify with certainty the five members necessary to block these deleterious “consumer-directed” policies.

Single payer supporters are already finding some resistance from colleagues to the “Medicare for all” label, especially with the continued failure to resolve the SGR (sustainable growth rate) issue. Although we speak of an “improved” Medicare, that distinction is not always clear and certainly would not mean much when holding up a further handicapped Medicare program as a model of reform.

Should the commission end up making these outrageous recommendations, hopefully the 310 million of us would respond by insisting that Medicare be protected and improved, as opposed to latching onto former Senator Alan Simpson’s infamous milk cow.

Is national health spending rising?

Posted by on Thursday, Sep 9, 2010

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.

National Health Spending Projections: The Estimated Impact Of Reform Through 2019

By Andrea M. Sisko, Christopher J. Truffer, Sean P. Keehan, John A. Poisal, M. Kent Clemens and Andrew J. Madison (from the CMS Office of the Actuary)
Health Affairs
September 9, 2010

Projected National Health Expenditures (NHE)

2010 – $2,600 billion (17.5% of GDP)
2019 – $4,571 billion (19.6% of GDP)


In this analysis, we have shown that the net impacts of key Affordable Care Act and other legislative provisions on total national health expenditures are moderate, but the underlying effects on payer spending levels and growth rates are much more pronounced and reflect the Affordable Care Act’s many substantive changes to health care coverage and financing. As the provisions are implemented over time, their actual impacts may well differ considerably from these estimates.

Many important details of the legislation will evolve through regulatory activity and become more concrete. Moreover, behavioral responses to reform provisions on the part of health care providers and consumers, employers, and insurers are difficult to anticipate. These will become more apparent only after the bulk of reforms have been implemented in 2014.

Report – free download for the next two weeks only:

What does this mean? Here are some of today’s headlines of articles covering this report:

Health Plan Won’t Fuel Big Spending, Report Says (New York Times)

Gov’t: Spending to rise under health care overhaul (Washington Post/AP)

Government Economists Say Health Overhaul Won’t Significantly Increase Spending (Kaiser Health News)

Health Outlays Still Seen Rising (Wall Street Journal)

Consumers to Pay Nine Percent More Out of Pocket (Fiscal Times)

Is health care spending rising or isn’t it? The confusion stems from the fact that the additional increase in projected national health expenditures (NHE) resulting from the enactment of the Patient Protection and Affordable Care Act (PPACA) is relatively modest when compared to the projection of NHE without enactment of PPACA. Without PPACA, NHE for 2019 was projected to be $4.48 trillion (19.3% 0f GDP), whereas now the projection is $4.57 trillion (19.6% of GDP).

Thus the conflicting reporting reflects the “I told you so” arguments on both sides. The opponents of PPACA are saying that the promises of lower costs are not true, and this is yet one more report that shows that costs will increase. The proponents of reform are saying that this report proves that many more individuals will be covered without a significant increase in costs. This is the wrong debate.

The fact is that national health expenditures had been predicted to increase at a rate well in excess of inflation, and that PPACA will do nothing to slow that increase, though it will not make it much worse. What PPACA is doing instead is that it is rearranging the financing of health care in a manner that will result in more Americans – but not all – having some sort of health care coverage, but it does so in a way that can have a significant negative impact on patients and providers.

How can so many more people be covered without spending much more money? There are some hints in this report.

“For example, higher projected spending by a greater number of insured people is somewhat offset by the projected impact of the Medicare savings provisions and relatively lower prices paid to providers for services to newly insured Medicaid beneficiaries.”

Providers will be paid significantly less for the large influx of Medicaid patients, because of the reductions in Medicare payments, and especially because of the reductions that will be dictated by the Independent Payment Advisory Board. This could be disruptive to the care provided by the physicians and hospitals that are targeted by these reductions.

” By 2018, however, we project out-of-pocket spending growth of 9.6 percent — four percentage points faster than our February 2010 projection. This effect is mainly attributable to the excise tax on high-cost employer-sponsored plans, which is expected to result in greater cost sharing as many affected employers scale back coverage to minimize their tax exposure.”

There are other measures in PPACA that will result in additional cost shifting to patients, such as the low actuarial value of the exchange plans with subsidies that are inadequate to prevent higher out-of-pocket spending. Making health care less affordable for those who need it does reduce spending, but at a terrible cost in impaired health outcomes.

Covering tens of millions more people for about the same spending, using our inefficient fragmented health care financing system, is being accomplished by making patients and their health care providers absorb the much higher costs. Just wait until we all feel the pain.

PacifiCare violated state law nearly 1 million times

Posted by on Wednesday, Sep 8, 2010

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.

California regulators seek up to $9.9 billion in fines from PacifiCare

By Duke Helfand
Los Angeles Times
September 7, 2010

California regulators are seeking fines of up to $9.9 billion from health insurer PacifiCare over allegations that it repeatedly mismanaged medical claims, lost thousands of patient documents, failed to pay doctors what they were owed and ignored calls to fix the problems.

In court filings and other documents, the California Department of Insurance says PacifiCare violated state law nearly 1 million times from 2006 to 2008 after it was purchased by UnitedHealth Group Inc., the nation’s largest health insurance company by revenue.

“This is about intentional disregard for the interests of doctors, hospitals and patients in California, and the pursuit of cutting costs at any means possible,” said Adam Cole, the insurance department’s general counsel. “It’s a story of intense corporate greed.”,0,6657147.story

The largest health insurer in the nation (in terms of revenue), UnitedHealth Group, through UnitedHealthcare’s subsidiary – PacifiCare, violated California state insurance laws nearly a million times! This is the industry that the Patient Protection and Affordable Care Act was designed to protect instead of replacing, even though that meant that not everyone would be insured and many more would be underinsured. This was a trade-off that resulted in a loss on both ends.

This is more than the gross incompetence of an insurer that has failed to provide the excessive administrative services for which we are being gouged involuntarily. As the insurance department’s general counsel said, “It’s a story of intense corporate greed.”

It’s time to throw these incompetent thieves out, fix Medicare, and then provide it for everyone.

Is primary care relinquishing acute care?

Posted by on Tuesday, Sep 7, 2010

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.

Where Americans Get Acute Care: Increasingly, It’s Not At Their Doctor’s Office

By Stephen R. Pitts, Emily R. Carrier, Eugene C. Rich and Arthur L. Kellermann
Health Affairs
September 2010


Historically, general practitioners provided first-contact care in the United States. Today, however, only 42 percent of the 354 million annual visits for acute care — treatment for newly arising health problems — are made to patients’ personal physicians. The rest are made to emergency departments (28 percent), specialists (20 percent), or outpatient departments (7 percent). Although fewer than 5 percent of doctors are emergency physicians, they handle a quarter of all acute care encounters and more than half of such visits by the uninsured. Health reform provisions in the Patient Protection and Affordable Care Act that advance patient-centered medical homes and accountable care organizations are intended to improve access to acute care. The challenge for reform will be to succeed in the current, complex acute care landscape.

When you say “my physician,” what do you mean? For most of us, that means the physician whom you call when you have a medical need. It’s the physician who will always be there for you, or who will at least ensure that a colleague is available when taking an off-call breather or when on vacation. Yet, as this study shows, personal physicians or their associates provide care for only 42 percent of acute problems. Increasingly, patients can no longer rely on their doctor’s office when they need acute care.

The policy community certainly recognizes the crisis in primary care. Much attention has been directed toward improving chronic care management within the primary care environment. Unfortunately, much of these efforts remain in the discussion phases, and only limited improvement has been made in the application of these relatively imprecisely defined concepts.

Yet what the primary care professional should be really good at – timely care of acute problems – has been almost completely ignored by the policy community. Physicians are too busy and don’t have time to take care of their patients. (Although that thought certainly can be expanded upon, the irony is inescapable.)

What are some of the solutions?

*  Emergency departments (EDs) already are bearing the largest portion of the overload. Queues in EDs are enough of a problem without adding to the waiting room backlog of many individuals who would be more appropriately cared for in a less intensive environment, such as a primary care practice. Adding to the problems with our overcrowded EDs is the burden of having to care for over one-half of all uninsured individuals with acute care problems.

*  Patients in the next largest sector directly access specialists for their acute problems. Sometimes this may be quite appropriate, yet many times it may result in more expensive care for problems that would be more appropriately managed in a less expensive primary care environment. Also some patients who should be cared for by specialists may not be able to access them for several reasons, and, once again, the primary care physician would be in a better position to enable that access for the patient.

*  Outpatient departments of integrated health systems appropriately may fulfill the role as the acute care provider as long as arrangements are made for access outside of clinic hours. These departments are usually associated with larger institutions, and, as such, would never be much more than a niche provider of acute care services.

*  Retail clinics are capable of providing only the most basic of acute care services, and further fragment the coordinated care that should be provided in the primary care environment. Further, retail clinics skim off the easy, cash paying “customers” (a more appropriate term than “patients” in this retail environment). The same is true of urgent care centers and their customers, though they are usually capable of caring for a greater variety of problems.

*  Concierge physicians do provide greater personal attention, but for very high fees that most of us cannot afford. To provide this higher level of accessibility, they sharply reduce the number of patients in their practices, further compounding the problem of the critical shortage of primary care physicians.

*  Community health centers (CHCs) fulfill an important role in primary care, especially because they usually provide access for underserved patients in underserved communities. They provide acute care services during clinic hours, though patients often must rely on EDs when the clinics are closed. Most CHCs continue to struggle with finances. Also, most have difficulties in obtaining the cooperation of an adequate variety of specialists in providing care for more complex problems.

Members of Congress are quite aware of the profound deficiencies in our primary care infrastructure, so they included some measures in the Patient Protection and Affordable Care Act (PPACA) designed to address this issue. Will they help?

Funds are being allocated for primary care training programs. That is certainly a step in the right direction, but the funds are quite limited and will hardly make a dent in the problem.

More funds are being allocated for community health centers, again certainly a beneficial measure, but one which falls far short of meeting the need.

Some Medicare funds are being shifted from other services to primary care but not enough to even begin to narrow the compensation gap between primary care and the surgical specialists. Why would medical students, saddled with education debt, choose primary care with its long hours and modest pay, when specialties promise higher pay and more free time?

PPACA contains measures to promote the medical home model – theoretically the ideal primary care model. Although medical home demonstration projects are under way, it will be a long time before the specifics of the model will be precisely defined and ready for universal application. Further, the logistics of permeating the nation with medical homes may be beyond the capabilities of our public and private stewards working within the limitations of our dysfunctional financing system. Though the medical home model shows great promise, we need a financing system that will make it much more feasible.

The great hope of PPACA has been pinned on accountable care organizations (ACOs). This Health Affairs article defines ACOs as “integrated or virtually integrated delivery systems that will provide care for a defined population in a range of settings, linked by health information technology.” The supporters of ACOs have described everything from full service integrated health care delivery systems to “virtual” systems that are not connected by much more than an information technology system.

Although the providers of health care may seek to create innovative ACO systems that theoretically would improve patient care, it is likely that the emphasis will be on, not just controlling, but actually reducing spending. The ghost of managed care past will be embellished through the “integrated and accountable” efforts of the insurers partnering with health delivery entrepreneurs. Only the patients, patient-oriented health care professionals, and the patient-oriented hospitals will be losers.

Whatever you need – preventive services, continuing care for your chronic condition, or timely management of an acute problem – wouldn’t it be nice if you always had available your own personal physician’s team to meet your needs? With our fragmented, dysfunctional system of financing health care, it is unlikely that in the future this will be more than a dream for the majority of us.

If we had our own Medicare-for-all monopsony (single purchaser of health care) it could become a reality for all of us. We would simply insist that a primary care system coordinating a full complement of specialized services is all that we’re going to pay for. The insurers and health profession entrepreneurs can take a hike.

A message from Sen. Mark Leno on the California single payer bill

Posted by on Friday, Sep 3, 2010

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.

A special message from Senator Mark Leno on SB 810, the California Universal Health Care Act:

September 3, 2010

Dear Friends,

By now most of you have heard the disappointing news that our bill, SB 810, the California Universal Health Care Act, was held on the Assembly Floor on the last night of session, effectively killing the measure until next year. Over my strong objections, Assembly leadership decided to hold the bill. Although we are greatly disappointed, we are determined to come back even stronger next year.

I want to thank and recognize the work of the California School Employees Association and California Nurses Association who worked hard to lobby members all year. I also want to recognize Health Care for All, California Physicians for a National Health Plan, Single Payer Now, California Alliance for Retired Americans, California Health Professional Student Alliance, League of Women Voters and the other dozen organizational members of our statewide alliance. Most importantly, I thank the thousands of advocates who made phone calls, requested meetings, attended rallies, and sent letters, faxes and emails, making it clear to legislators that the single payer health care movement is vibrant, strong and growing larger every day.

Our movement has always acknowledged that it is founded on a long-term vision and strategy. This setback does not change our work, it only emboldens it. For decades we have found the courage to speak out for single payer, even when others around us told us that now is not the right time. We have learned that fear and hesitation can only be overcome by courage and commitment – something with which our movement is rich. That is how we have come so far, and that is why we will win.

Without question, I commit to reintroducing this bill again next year, and to work ever harder with you to achieve the only real solution to our health care crisis – Medicare for All.

I encourage you to begin our work today to ensure the passage of this bill next session. Now is the time to educate your current representatives, and those who are seeking office, about the need for single payer universal health care and to ask for their support. More importantly, now is the time for you to educate your co-workers, neighbors, friends, and family members about why their elected officials should take a strong stance in support of Medicare for All.

We’ve always said that the closer we come, the harder our work will become. So often, it’s “two steps forward, one step back.” Let this temporary detour enliven us to work even harder to see single payer become a reality in California. With term limits, it is clear that each new class of representatives needs to be educated and reminded of how important this issue is to our state. Next year will bring a new governor and a new legislature – and consequently, new opportunities and challenges. To win, we must come closer together as allies, fight smarter, and work even harder.

As the author of SB 810, I believe deeply in you, this cause and this movement. Until every Californian has health care and no family faces medical bankruptcy, we will not be deterred. Until our state budget and entire economy are no longer being swallowed by health care costs, we will not cease. Until we have “Medicare for All,” we will not stop fighting. We’re the fastest growing grassroots movement in America, and we will win universal health care. Let’s dig deep, redouble our efforts and get back to work.


Senator Mark Leno

Uwe Reinhardt on the details of the medical loss ratio

Posted by on Friday, Sep 3, 2010

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.

On Health Care, the Devil’s in the Details

By Uwe E. Reinhardt
The New York Times
September 3, 2010

The recently passed Affordable Care Act requires heath insurance issuers to use at least some minimum fraction of revenue from the premiums it receives on medical services. While the idea might sound straightforward, this fraction, known as the “medical-loss ratio,” is open to all sorts of creative arithmetic, and you can bet that interest groups from every corner are trying to get the math to add up in their favor.

Under the new law,  health insurers are supposed to spend at least 85 percent of premiums collected from large groups of insured on something defined as “medical benefits and activities that improve health care quality.” For small groups and individually sold policies, the standard is lower, at 80 percent.

Put yourself in the shoes of the health care providers.

They would like to put as many of an insurer’s outlays – other than provider payments – as can be justified into the denominators as “selling or administrative expense.” That would put pressure on insurers to increase payments to providers or to spend less on administration to meet the ratio requirement. Therefore, providers typically plead for a very narrow definition of an insurer’s outlays for “health care quality improvement” that, by statute, are to go into the numerator.

Health insurers, on the other hand, would like to pack as many of their outlays as possible into the numerator of the ratio.

In a letter to the commissioners, the president of America’s Health Insurance Plans, which represents about 1,300 member companies that provide insurance for more than 200 million Americans, pleads for inclusion in “activities to improve health care quality” such items as fraud prevention and detection, utilization review, costs associated with administrative simplification and health-information technology expenses, and the cost of implementing the new International Classification of Diseases, or ICD-10, codes.

Finally, there are the commissions that insurers pay to brokers, who currently play an important role in the small-group and individual market for health insurers.

The commissions usually range between 4 and 8 percent of the premium, depending on the state, but sometimes are 20 percent of the premium in the first year of a policy before dropping to the normal range.

How these commissions are incorporated into the ratio can have a significant impact on the economics of insurance brokers, whose future role in health care is of great concern to the commissioners.

My response, also posted at the link here:

10.  Don McCanne, San Juan Capistrano, CA
September 3rd, 2010

Focusing on narrow issues such as whether the administrative cost of brokers’ fees somehow represents patient care or quality improvement as opposed to being an administrative expense distracts us from the much more important overriding issue of the profound administrative waste throughout our health care system that is related to the dysfunctional, fragmented manner in which we allocate health care spending.

The first consideration is the administrative cost of the private insurers. Should we really be allocating 15 to 20 percent of the insurance premiums to the private insurers for them to use for their own intrinsic purposes – funds that never make it to paying for health care? When you consider the very high health care expenditures in our nation, 15 to 20 percent is a huge allocation for non-medical purposes.

Another very important diversion of health care dollars is the cost of the administrative burden placed on hospitals and physicians merely to deal with our fragmented system of a multitude of public and private plans – especially in claims processing, including not only the protracted process of managing disputed claims, but also other administrative diversions such as negotiating and managing insurance company contracts.

This administrative burden on the providers has been estimated to consume about 12 percent of premium dollars. Thus the combined administrative costs merely for the insurance function will be about 27 to 32 percent of the insurance premium – a very high percentage of our very high priced system. That does not include all of the other essential administrative functions that hospitals and physicians face. What a waste!

It is unfortunate that consideration of a single publicly-financed and publicly-administered financing system was excluded before the reform negotiations began. Such a financing system – a single payer or an improved Medicare for all – would have dramatically reduced this profound administrative waste.

Even more important, a single financing system would have created our own public monopsony (single buyer of health care) in which we could ensure that we would be receiving maximum value in our health care purchasing – avoiding excessively high prices while ensuring that enough funds are available to maintain adequate capacity in the system. That is the cost control that we really need. And, oh yes… everyone is included!

Wasn’t that the goal of reform? Cover everyone and control costs?

Medicare then and now

Posted by on Friday, Sep 3, 2010

By Charles R. Mathews, M.D.

This pulmonologist was plying his profession in upstate New York some 44 years ago when his receptionist announced, “The White House is calling!” I assumed it was a hoax, since my only direct contact with that eminent residence had been limited to passing through as a tourist.

But my receptionist persisted and connected me to the caller, who inquired whether I’d be available for a “presidential meeting on Medicare’s implementation” to take place in Washington on June 15, 1966.

The invitation, which was shortly confirmed by telegram, was not to be declined. I was more than a bit surprised, since I’d been actively supporting the American Medical Association’s campaign to stave off the inroads of government into our medical domains, decrying and demonizing Medicare as “socialized medicine.”

But President Lyndon B. Johnson, the consummate politician, was able to draw me and many others into the orbit of his Great Society programs by dint of his overwhelming electoral triumph in 1964. His formidable political capital helped win passage of civil rights and anti-poverty legislation, aid to education, and, of most consequence to us physicians and our patients, Medicare and Medicaid.

About 200 of us from all 50 states attended the meeting. We were whisked into the East Room, where, because of its small size, we barely had room to breathe. (Take it from a lung doctor.) Minutes later, the president took the podium and delivered a moving half-hour address.

“For the first time in the history of America,” Johnson said, “every senior citizen will be able to receive hospital care – not as a ward of the state, not as a charity case, but as an insured patient.”

The changes had been breathtaking. Medicare had been enacted into law just one year before, on July 30, 1965, and here we were, assessing its progress. But certainly more remained to be done.

For example, the president noted that some 20 percent of the nation’s hospitals were not in compliance with the Civil Rights Act. Over 90 percent of hospitals in the South were still segregated.

“We believe the answer to that problem is a simple one,” LBJ said, noting that hospitals had been put on notice that their Medicare reimbursement payments would be contingent on their compliance with the Civil Rights Act’s ban on any discrimination based on race, color or national origin.

While the desegregation process was sometimes slow, “whites only” hospital wards were ultimately consigned to the dustbin of history, and Medicare had played an honorable part in their abolition.

Forty-five years have passed since Medicare became the law of the land. It’s hard to overstate the beneficial effect it’s had on the health and financial security of our nation’s seniors and their families. It remains absolutely essential for persons over 65 and for those with severe disabilities or end-stage renal disease.

But it faces new challenges. The basic Medicare program worked well for many years as an efficient, not-for-profit system with a standard benefit package for all enrollees. However, beginning with the passage of the Balanced Budget Act of 1997, the private, for-profit health insurance companies began to more aggressively bore their way into the program with the aim of siphoning off public and beneficiary dollars.

They’ve succeeded in doing so through their Medicare Advantage plans (which offer some additional benefits but which don’t improve overall quality, even as they rack up much higher overhead expenses than traditional Medicare) and through a prescription drug program that boosts insurance and drug company profits.

Partially as a consequence, health costs continue to skyrocket.

It is clear to me that President Johnson’s original vision of providing universal access to health care through an equitable, publicly financed plan is one that we must turn to again. It’s the only approach that is sustainable and just.

We need an improved Medicare for all. Research shows the $400 billion in savings we’d reap from eliminating all the excess paperwork and bureaucracy associated with the private insurance industry, plus the cost-control tools we’d acquire have like bulk purchasing of medications, would be enough to assure high quality, affordable and comprehensive care for everyone over the long haul.

It remains to be seen how long the health care oligarchs, particularly the private insurers and Big Pharma, can forestall this badly needed solution. They managed to do so this round of reform. But its day must come.

Charles R. Mathews is a Tallahassee, Fla., physician and a member of Physicians for a National Health Program (

Should we leave employers in charge of health benefits?

Posted by on Thursday, Sep 2, 2010

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.

Employer Health Benefits

The Kaiser Family Foundation and Health Research and Educational Trust
September 2, 2010

The average annual premiums for employer-sponsored health insurance in 2010 are $5,049 for single coverage and $13,770 for family coverage.

Twenty percent of covered workers are in plans with an annual total premium for family coverage of at least $16,524 (120% of the average premium).

Covered workers on average contribute 19% of the total premium for single coverage (up from 17% in 2009) and 30% for family coverage (up from 27% in 2009).

Fifty-one percent of workers with family coverage pay more than 25% of the total premium.

Among workers with a deductible, the average general annual deductible for single coverage is $675 for workers in PPOs, $601 for workers in HMOs, $1,048 for workers in POS plans, and $1,903 for workers in HDHP/SOs.

For the last two years we have asked employers about changes that they made to their health benefits in response to the poor economy. Among large firms (200 or more workers), 38% reported reducing the scope of benefits or increasing cost sharing, up from 22% in 2009, while 36% reported increasing their workers’ premium share, up from 22% in 2009.

Tracking whether and how worker out-of-pocket costs continue to grow will be an important focus for the survey over the next few years. The slow economic recovery and continuing high unemployment suggests that this trend of increasing out-of-pocket costs will persist, as workers have little clout to demand better benefits or lower costs in the current labor environment.

Full report (226 pages):

By design, the Patient Protection and Affordable Care Act (PPACA) will have the least impact on employer-sponsored health plans. Congress did not want to disturb these plans that seemed to be working reasonably well, in that they covered more of us than all other programs, and were already generously funded with employer contributions. This annual report on employer health benefits is even more relevant this year since Congress, through PPACA, has deemed that we will be living with these plans for decades to come.

The report brings us terrible news. Premiums continue to rise at intolerable rates, and more of the premium costs are being shifted to the employees. Employers also are requiring greater cost sharing on the part of their employees, especially in the form of higher deductibles. Employees are paying more for less protection.

With the poor economy employees need greater relief, yet employers are seeking relief for themselves by placing an even greater financial burden on their own employees.

This is a one-way trend. Employers will continue to seek ways to reduce the costs of their health benefit programs, and an ever increasing amount of the burden will be borne by the employees. Should we really be leaving these decisions in the hands of the employers?

Drew Altman, president and CEO of the Kaiser Family Foundation, said, “The new law helps a lot of people in a lot of ways… but in general it left employer-based coverage alone. That is what the politics of health care dictated and what the American people asked for.” (Kaiser Health News, Sep 2)

If Americans really prefer their employer-sponsored plans, then why are they so relieved when they get to go on Medicare? How much more burden will Americans have to bear before they change the politics and start demanding Medicare for all?

Democrats Block California Single Payer Bill

Posted by on Wednesday, Sep 1, 2010

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.

By Don McCanne
September 1, 2010

Speaker John Perez of the California State Assembly, on the very last day of the legislative session, pulled SB 810, the single payer bill, from the Assembly floor.

This highly unusual move of pulling a bill that had cleared all legislative hurdles except for the final Assembly floor vote was to protect Democrats from having to cast a health care reform vote in a difficult political environment three months before the next election.

Democrats feared a backlash from those who are opposed to the recently enacted federal health care legislation should they vote for the bill, and they feared offending their progressive base should they vote against the bill. Since a veto by Gov. Schwarzenegger was a given, it was decided that it would be safer to avoid the political risks by simply pulling the bill.

But did they really avoid that risk? Are the single payer advocates expendable? Don’t think so.

Fortunately, Senator Mark Leno is not to be deterred. He has vowed to reintroduce the bill in the next legislative session which begins in January.

The Democrats are worried about their political base, but maybe that’s not the framing we should be looking at. Perhaps the single payer advocates should be reassessing their own base instead.

Not all Democrats have been supportive of single payer, and several Republicans who are not part of the prevailing lock-step bloc do understand the benefits of the single payer model. The Patient Protection and Affordable Care Act is proof that we can’t rely on the Democrats to do the right thing. Most importantly, everyone understands the benefits of Medicare as a social insurance program (even if there is a fringe reactionary element that would emasculate it).

The Tea Party is proving that passionate voices can be heard. Maybe we can learn from them, though our message should contain more than simple platitudes. Our message needs to convey the principled substance of health care justice, and it needs to be loud, clear and highly infectious.

Private insurers shifting support to Republicans

Posted by on Monday, Aug 30, 2010

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.

Health Insurer Cash Shifts to Favor Republicans Before Election

By Drew Armstrong
August 26, 2010

Health insurers led by WellPoint Inc. are backing Republicans with campaign donations by an 8-to-1 margin, favoring the party that’s promised to repeal President Barack Obama’s health-care overhaul if it wins back Congress.

WellPoint, Humana, Aetna, Cigna and UnitedHealth Group Inc. have also been considering a $20 million-plus campaign fund to reward friends and punish enemies in Congress. That fund would target vulnerable Democrats who have spoken out against the industry, and would support candidates who are likely to argue for the industry’s positions during future debate on the health overhaul.

With private insurers supporting Republicans by an 8-to-1 margin, there is no question but that the insurers are supporting their own financial interests, regardless of the negative impact on people who need health care.

The Republicans remain opposed to all forms of social insurance that would make health care accessible and affordable for everyone (not that the Democrats did much better this time around). Instead Republicans support measures such as high-deductible health plans, health savings accounts, elimination of mandated benefits such as mental health and maternity care, and promoting interstate sale of less regulated, Spartan plans.

Insurers prefer these plans because they are the most profitable. Many individuals in the large healthy sector of our population tend to prefer these plans because the premiums are lower. Unfortunately for the sick, these plans shift a burdensome amount of the health care costs to the patients in need, not to mention the fact that the insurers have been relatively successful in avoiding these higher-cost individuals in the first place.

Republicans support these proposals because of their ideological stance, believing that each person should be responsible for their own welfare, making exceptions only for those who are the most destitute, not of their own making. They oppose the social solidarity of “collectivist” approaches such as universal insurance programs, whether public or private.

A distinction should be made between the current, lock-step, obstructionist, party-of-NO Republicans, and the nearly extinct species of progressive Republican – many of whom have become independent. It is this obstructionist Republican bloc that serves so well the interests of the private insurers.

It’s sad that the Democrats got into bed with these people. The Democrats ended up supporting the right-wing private insurance model of Mitt Romney and the Heritage Foundation to appease the Republicans and the private insurers. That resulted in the enactment of a terribly flawed program that will not adequately control costs, and will leave tens of millions uninsured and many more underinsured.

The insurers now want to send us more of these reactionary politicians. Aren’t there enough of us who care about the health of all of our people to step up and counter this? Or is it merely all words (for the pollsters), and no action (on behalf of those with health care needs)?

Where are our activists?

About this blog

Physicians for a National Health Program's blog serves to facilitate communication among physicians and the public. The views presented on this blog are those of the individual authors and do not necessarily represent the views of PNHP.

News from activists

PNHP Chapters and Activists are invited to post news of their recent speaking engagements, events, Congressional visits and other activities on PNHP’s blog in the “News from Activists” section.