GAO report on USPS Retiree Health Benefits Fund

Posted by on Friday, Dec 28, 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.

Status, Financial Outlook, and Alternative Approaches to Fund Retiree Health Benefits

GAO (U.S. Government Accountability Office), December 4, 2012

The Postal Service Retiree Health Benefits Fund (PSRHBF) covered about 49 percent of the U.S. Postal Service’s (USPS) $94 billion retiree health benefit liability at fiscal year-end 2012. USPS’s deteriorating financial outlook, however, will make it difficult to continue the current prefunding schedule in the short term, and possibly to fully fund the remaining $48 billion unfunded liability over the remaining 44 years of the schedule on which the 2006 Postal Accountability and Enhancement Act (PAEA) was based.

USPS is intended to be a self-sustaining entity funded almost entirely by postal ratepayers, but its financial losses are challenging its sustainability. GAO has testified that USPS should prefund its retiree health benefit liabilities to the maximum extent that its finances permit, but none of the funding approaches may be viable unless USPS has the ability to make the payments. USPS’s default on its last two required PSRHBF payments and its inability to borrow further make the need for a comprehensive package of actions to achieve sustainable financial viability even more urgent.

USPS agreed that comprehensive reform is necessary to achieve financial sustainability. It also recognized its obligation to provide effective, affordable health benefits to its employees and retirees, but said that it does not have the financial resources to make prefunding payments required by current law.

Linking health insurance to employment has contributed greatly to the dysfunction of health care financing within the United States. If it were a good method, you would think that the United States Postal Service would provide an exemplary model for such financing.

This GAO report confirms that none of the proposed funding approaches for the Postal Service Retiree Health Benefits Fund may be viable unless USPS has the ability to make the payments. The USPS has responded in writing that “it does not have the financial resources to make prefunding payments required by current law.”

It is long past time to take the employer out of health care coverage and financing decisions. Instead, we should establish our own single universal risk pool funded equitably through the tax system. Employers could get on with the task of managing their own businesses, while our public stewards would take charge of managing more efficiently and more assuredly health care financing for all of us.

New America Foundation implicitly endorses single payer

Posted by on Thursday, Dec 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.

Social Contract Budgeting: Prescriptions from Economics and History

By Peter H. Lindert, Distinguished Research Professor of Economics, University of California – Davis
New America Foundation, December 2012

America has yet to accept the insurance solution that has worked relatively well in other countries: let the government serve as a dominant payer, with mandatory universal coverage and mandated pure community rating. (Note that international experience recommends single-payer insurance, but is indifferent to government provision of health care.) Instead, American state and federal insurance systems embody an unavoidably messy political compromise, one in which the public is forced to buy coverage choosing from a menu of private insurers. As it stands, the government will act as single regulator, not as single payer. This has the political advantage of keeping government budgets from raising taxes to cover insurance, but the disadvantage of perpetuating, and still subsidizing, a costly private insurance industry.


New America Foundation
About New America

The New America Foundation is a nonprofit, nonpartisan public policy institute that invests in new thinkers and new ideas to address the next generation of challenges facing the United States.

With an emphasis on big ideas, impartial analysis and pragmatic solutions, New America invests in outstanding individuals whose ability to communicate to wide and influential audiences can change the country’s policy discourse in critical areas, bringing promising new ideas and debates to the fore.

This statement implicitly supporting single payer is of great importance because of its source. The New America Foundation was established to move beyond partisan politics. “The foundation’s mission is animated by the American ideal that each generation will live better than the last.”

In his article, “Social Contract Budgeting,” UC Davis Professor Peter Lindert discusses four fronts: education, health insurance, pensions, and broad taxes. Although he attempts to move beyond politics, most of us will still reflect on his concepts under the cloud of our own biases. As an example, although some of us are uncomfortable with the concept of a VAT (value added tax, a consumption tax), he discusses a variation in which the VAT can be progressively redistributive.

For those of us who have campaigned so long and so hard for health care justice, Lindert states what we perceive to be the obvious: we need to move beyond politics and “accept the insurance solution that has worked relatively well in other countries,” noting that “international experience recommends single-payer insurance.”

Bruce Bartlett’s Christmas gift to all of us

Posted by on Wednesday, Dec 26, 2012

Though it is not our policy to distribute a Quote of the Day message on Christmas Day, we have to make an exception this year and thank Bruce Bartlett for his Christmas present to PNHP and to all of us who dream of a future with health care justice throughout the nation.

A Conservative Case for the Welfare State

By Bruce Bartlett
The New York Times, December 25, 2012

(Bruce Bartlett held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Representatives Jack Kemp and Ron Paul.)

At the root of much of the dispute between Democrats and Republicans over the so-called fiscal cliff is a deep disagreement over the welfare state. Republicans continue to fight a long-running war against Social Security, Medicare, Medicaid and many other social-welfare programs that most Americans support overwhelmingly and oppose cutting.

Republicans in Congress opposed the New Deal and the Great Society, but Republican presidents from Dwight D. Eisenhower through George H.W. Bush accepted the legitimacy of the welfare state and sought to manage it properly and fund it adequately. When Republicans regained control of Congress in 1994 they nevertheless sought to repeal the New Deal and Great Society programs they had always opposed.

Republicans are now using the fiscal impasse to try to raise the age for Medicare and reduce Social Security benefits by changing the index used to adjust them for inflation. They know that such programs will be easier to abolish in the future if the number of people who qualify can be reduced and benefits are cut so that privatization becomes more attractive.

This is foolish and reactionary. Moreover, there are sound reasons why a conservative would support a welfare state.

One problem with this conservative view is its lack of an empirical foundation. Research by Peter H. Lindert of the University of California, Davis, shows clearly that the welfare state is not incompatible with growth while providing a superior quality of life to many of those left to sink or swim in America.

In a new paper for the New America Foundation, Professor Lindert summarizes his findings. He points out that there are huge efficiencies in providing pensions and health care publicly rather than privately. A main reason is that in a properly run welfare state, benefits are nearly universal, which eliminates vast amounts of administrative overhead necessary to decide who is entitled to benefits and who isn’t, as is the case in America, and eliminates the disincentives to work resulting from benefit phase-outs.

A 2003 study in the New England Journal of Medicine found that Canada’s single-payer health system had less than a third of the per-capita administrative cost of the United States system, with its many private insurance companies and overlapping government programs.

Americans believe that their health system is the best in the world, but in fact it is not.

The one area where the United States tops all other countries in terms of health is cost. According to the Organization for Economic Cooperation and Development, the United States spent more than any other country – 17.4 percent of gross domestic product on health in 2009. By contrast, Britain spent only 9.8 percent of G.D.P. on health.

Thus, for no more than the United States already spends through government, we could have a national health-insurance system equal to that in Britain. The 7.6 percent of G.D.P. difference between American and British total health spending is about equal to the revenue raised by the Social Security tax. So, in effect, having a single-payer health system like Britain’s could theoretically give Americans 7.6 percent of G.D.P. to spend on something else – equivalent to abolishing the payroll tax.

This is a powerful conservative argument for national health insurance.

Thank you, Bruce Bartlett, for perhaps the greatest Christmas gift of all – a rationale for why we all have to join together to provide health care for everyone.

(The 2003 NEJM article cited is that of PNHP co-founders Steffie Woolhandler and David Himmelstein, plus Terry Campbell of the Canadian Institute for Health Information.)

Rasmussen survey shows split on single payer

Posted by on Wednesday, Dec 26, 2012

40% Favor Single-Payer Health Care System, 44% Oppose

Rasmussen Reports, December 17, 2012

Forty percent (40%) of Likely U.S. Voters favor a single-payer system, according to a new Rasmussen Reports national telephone survey. Forty-four percent (44%) oppose the creation of such a system. Sixteen percent (16%) are undecided.

The question asked:

Do you favor or oppose a single-payer health care system where the federal government provides coverage for everyone?

(Conducted December 10-11, 2012. Margin of Sampling Error, +/- 3 percentage points with a 95% level of confidence.)

Rasmussen telephone surveys are noted for results demonstrating right-wing bias. Understanding that, it is interesting that the results of this poll demonstrated a near even split in public support for single payer.

Several surveys from other sources have demonstrated closer to sixty percent support for single payer. Considering the likely bias in this poll, there does not seem to be any significant decline in support for single payer even though the Affordable Care Act is already being implemented.

As people observe how many will be left uninsured and how ineffective the plans will be in protecting personal finances, it can be anticipated that support for single payer will continue to grow until it reaches a threshold where it finally becomes a political imperative.

A message of hope from our economists

Posted by on Sunday, Dec 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.

Statement on Healthcare

Econ4, December 2012


We are economists who think that the economy should serve people, the planet and the future.

We oppose treating health care as a commodity to be rationed on the basis of purchasing power or a privilege to be rationed on the basis of political power.

We call for a national health insurance system that provides universal access to essential health care.

We call for insurance for all Americans in a single risk pool – the efficient model already used by Medicare and the Veterans Administration – a system that can save billions of dollars while improving health and well-being.

We extend our support to all who are working to build an effective and accountable health care system that puts public health before private profit and secure health care for all regardless of income, age, or pre-existing conditions.

(Signed by over 100 economists)

Against a background of depressing news during this Holiday Season, this group of social-minded economists is sending us a message of hope for a better health care system for all of us.

The link above will lead you to a ten minute video featuring four of the over 100 economists that signed onto this message. It is a video that you likely will want to share with others.

Guns and health

Posted by on Friday, Dec 21, 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.

Press Conference

Wayne Lapierre, CEO & Executive Vice President
NRA (National Rifle Association), December 21, 2012

The ONLY thing that stops a BAD guy with a gun is a GOOD guy with a gun.


(There is a not-so-subtle message here about the health of the nation.)

Ron Pollack and Celinda Lake: carnival hawkers for big insurance

Posted by on Thursday, Dec 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.

Next Challenge for the Health Law: Getting the Public to Buy In

By Abby Goodnough
The New York Times, December 19, 2012

On its face, the low-key discussion around a conference table in Miami last month did not appear to have national implications. Eight men and women, including a diner owner, a chef and a real estate agent, answered questions about why they had no health insurance and what might persuade them to buy it.

But this focus group, along with nine others held around the country in November, was an important tool for advocates coming up with a campaign to educate Americans about the new health care law.

The sessions confirmed a daunting reality: Many of those the law is supposed to help have no idea what it could do for them.

There lies the challenge for Enroll America, a nonprofit group formed last year to get the word out to the uninsured and encourage them get coverage, providing help along the way. With the election over and the law almost certain to survive, the group is honing its fund-raising and testing strategies for persuading people to sign up for health insurance — a process that will begin in less than a year.

The group has raised only about $6 million so far — but financial backers include some major players in the medical industry: insurers like Aetna and Blue Cross Blue Shield, associations representing both brand name and generic drug manufacturers, hospitals and the Catholic Health Association.

Over the next two years, the group hopes to raise as much as $100 million for advertising, social media and other outreach efforts. “There are so many different groups that can play some role in this: hospitals, community health centers, pharmacies, tax preparers,” said Ron Pollack, chairman of Enroll America’s board. “Our job has got to be to try to galvanize each of those sectors, so there is a wide variety of ways people potentially can hear about this.”

In addition to holding focus groups in Miami, Philadelphia, San Antonio and Columbus, Ohio, Enroll America commissioned a nationwide survey to help hone its message. The survey, conducted in September and October by Lake Research Partners, a Democratic polling group, found that the vast majority of uninsured people are unaware of the new coverage options provided by the law.

They are also skeptical. Many who participated in the focus groups or survey reported bad experiences trying to get health insurance, and doubted that the law would provide coverage that was both affordable and comprehensive.

“It’s two major mountains that need to be climbed,” Mr. Pollack said. “People are unaware of the benefits that could be provided to them, and they have to overcome skepticism, based on their past experiences with trying to obtain insurance.”

But the survey found that even with federal subsidies, many uninsured people may balk at the cost of coverage. Only about a third of respondents leaned toward thinking monthly premiums of $210 for a single person earning $30,000 a year, for example, were affordable.

Those amounts became more acceptable when respondents were told it would “protect you from thousands of dollars of medical debt if you got sick” or “cover all of the basic care you need.”

In the end, Lake Research Partners recommended that Enroll America not cite specific dollar amounts at all when they talk to the uninsured about new coverage options. “Talking about ‘free or low cost’ plans may be more motivating,” the survey authors wrote in a report.…

From the days of the Clinton effort to reform health care, Ron Pollack of Families USA has opposed single payer reform as not being politically feasible, supporting instead reform based on private insurance plans. Likewise, Celinda Lake of Lake Research Partners has actively rejected single payer while using her polling and focus group activities to push the rhetoric of “Choice” to promote private insurers, glossing over the fact that private insurers take away choice of health care professionals and institutions. Both Pollack and Lake have had considerable influence in Democratic administrations.

Now that they got their wish and we have reform based on private insurance plans, they have a new hurdle and that is to try to sell the program to the public. They have formed a new organization, “Enroll America,” to do just that, and the private insurance industry is front and center in financing the organization.

Just as they concocted the “Choice” campaign to sell the legislation, they are now concocting the “Free or Low Cost” campaign to sell the uninsured on the new coverage options. When the survey found that many people may balk at the cost of coverage even with the subsidies, Lake recommended that Enroll America not cite specific dollar amounts at all when they talk to the uninsured about new coverage options.

Can you imagine? Just as they sold the nation on legislation using “Choice” for a program that takes away choice, they now are selling the nation on “Free or Low Cost” plans that the uninsured cannot afford to pay for. What chutzpah!

Where is the Occupy movement? Maybe we should occupy Enroll America and use it instead to enroll everyone in a single payer national health program – an Improved Medicare for All.

Cleveland Clinic CEO Cosgrove on single payer

Posted by on Wednesday, Dec 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.

Cleveland Clinic Diagnoses Health-Care Act

By Anna Wilde Mathews
The Wall Street Journal, December 18, 2012

Just over a year from now, the Affordable Care Act is set to unleash enormous change in the health-care sector, and Cleveland Clinic Chief Executive Delos “Toby” Cosgrove is preparing his institution by expanding its reach and striving to make caregivers more cost-conscious.

WSJ: Do you think employers will stop providing health insurance, even though they can pay a penalty under the health overhaul law?

Dr. Cosgrove: The first ones will be the small companies… Every CEO I’ve talked to knows how much he’d save between insuring his people and paying the federal penalty.

WSJ: What does that tell you?

Dr. Cosgrove: The first time some big player does that, it’s going to fall like dominoes. What that does is drive everybody to the exchanges.

WSJ: What does that mean to you?

Dr. Cosgrove: It’s going to be a faster move towards one payer. Increasingly, people think that in 10 years you’re going to have 75% of the health-care costs paid by the federal government.

WSJ: You think we’re moving toward a single-payer system?

Dr. Cosgrove:
Well, the question is how long…I don’t think in the next 10 years, but I think it probably is going to head in that direction.…

Cleveland Clinic President and CEO Delos “Toby” Cosgrove confirms what Physicians for a National Health Program has been saying all along. It’s not whether we’ll ever have single payer, it’s how long.

It’s our job to expedite it.

PacifiCare’s massive Medicare Advantage fraud

Posted by on Tuesday, Dec 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.

Risk Adjustment Data Validation of Payments Made to PacifiCare of California for Calendar Year 2007

Department of Health and Human Services
Office of Inspector General, November 2012

Under the Medicare Advantage (MA) program, the Centers for Medicare & Medicaid Services(CMS) makes monthly capitated payments to MA organizations for beneficiaries enrolled in the organizations’ health care plans. Subsections 1853(a)(1)(C) and (a)(3) of the Social Security Act require that these payments be adjusted based on the health status of each beneficiary. CMS uses the Hierarchical Condition Category (HCC) model (the CMS model) to calculate these risk-adjusted payments.

The diagnoses that PacifiCare submitted to CMS for use in CMS’s risk score calculations did not always comply with Federal requirements. For 55 of the 100 beneficiaries in our sample, the risk scores calculated using the diagnoses that PacifiCare submitted were valid. The risk scores for the remaining 45 beneficiaries were invalid because the diagnoses were not supported by the documentation that PacifiCare provided.

As a result of these unsupported diagnoses, PacifiCare received $224,388 in overpayments from CMS. Based on our sample results, we estimated that PacifiCare was overpaid approximately $423,709,068 in CY 2007. The confidence interval for this estimate has a lower limit of $288 million and an upper limit of $559 million.

The following are examples of HCCs that were not supported by the documentation that PacifiCare submitted to us for medical review:

*  For one beneficiary, PacifiCare submitted the diagnosis code for “spinocerebellar disease, other cerebellar ataxia.” CMS used the HCC associated with this diagnosis in calculating the beneficiary’s risk score. However, the documentation that PacifiCare provided described an evaluation for fever and cough. The documentation did not mention cerebellar ataxia or indicate that cerebellar ataxia had affected the care, treatment, or management provided during the encounter.

*  For a second beneficiary, PacifiCare submitted the diagnosis code for “malignant neoplasm of the prostate.” CMS used the HCC associated with this diagnosis in calculating the beneficiary’s risk score. However, the documentation that PacifiCare provided appeared to describe suture removal and left shoulder bursitis/tendonitis. The documentation did not mention prostate cancer or indicate that prostate cancer had affected the care, treatment, or management provided during the encounter.

*  For a third beneficiary, PacifiCare submitted the diagnosis code for “unspecified septicemia” (commonly referred to as “blood poisoning”). CMS used the HCC associated with this diagnosis in calculating the beneficiary’s risk score. However, the documentation that PacifiCare provided noted that the patient was admitted for a “left total knee revision arthroplasty.” The documentation did not mention blood poisoning or indicate that blood poisoning had affected the care, treatment, or management provided during the encounter.…

It has long been recognized that the private Medicare Advantage plans (offered as an option to the traditional Medicare program) have been cheating the taxpayers, initially by selectively enrolling the healthy while being paid at rates that include a mix of the sick, and, more recently, by gaming the process of risk adjustment (which seeks to correct for the health status of the beneficiaries actually enrolled by the private plans). This new report from the HHS Office of Inspector General is helpful because it provides a perspective of the enormity of the problem.

In one year alone (2007), one California insurer – PacifiCare (acquired by UnitedHealth Group in 2005) – used their Medicare Advantage program to cheat taxpayers out of almost half a billion dollars! Extrapolate that to all Medicare Advantage plans in all states for all years, and think of the impact this must have had on our Medicare budget.

The private insurers pride themselves on their innovations. Based on their past behavior, we can be assured that they will continue to innovate in opaque ways that cheat not only the taxpayers, but also the health professionals and institutions, and, most importantly, the patients. Without transparency, they will get away with it for extended periods of time, with new innovations introduced as they get tripped up on the old.

Although the Affordable Care Act calls for a reduction in overpayments to these plans, the legislation leaves them in place. That is a terrible mistake.

We need to shut down the Medicare Advantage plans, and, while we’re at it, shut down all private insurers and replace them with an improved Medicare for everyone. We may not be able to do that before we reach “The Cliff,” but we should start working on it immediately.

Enough specialists for Medicare, but not Medicaid

Posted by on Monday, Dec 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.

Healthcare crisis: not enough specialists for the poor

By Anna Gorman
Los Angeles Times, December 15, 2012

By the end of the decade, the nation will be short more than 46,000 surgeons and specialists, a nearly tenfold increase from 2010, according to the Assn. of American Medical Colleges. Healthcare reform is expected to worsen the problem as more patients — many with complex and deferred health needs — become insured and seek specialized treatment.

Many of the newly insured will receive Medi-Cal, the government plan for the needy as administered through the state of California. Clinics already struggle to get private specialists to see Medicaid patients because of the low payments to doctors. Last week, an appellate court decision that authorized the state to move forward with 10% cuts in Medi-Cal reimbursement, which could make finding doctors for those patients even more difficult.

“Specialists are paid so poorly that they don’t want to take Medi-Cal patients,” said Mark Dressner, a Long Beach clinic doctor and president-elect of the California Academy of Family Physicians. “We’re really disappointed and concerned what it’s going to do for patient access.”

In Los Angeles County, the sheer volume of poor or uninsured patients needing specialist services has long overwhelmed the public health system, creating costly inefficiencies and appointment delays that can stretch as long as a year and half.

Patients’ conditions often must be dire for them to see a neurologist, cardiologist or other specialist quickly. Community clinics try to bypass the backed-up formal government referral system by pleading, cajoling and negotiating to get less critically ill patients moved up on waiting lists.

At times, clinic staff members are forced to work against one of their key missions by sending patients to emergency rooms to increase the odds of their seeing a specialist more quickly.,0,542244…

My career in private practice began with the introduction of Medicare and Medi-Cal (Medicaid). At that time, I had no problems referring Medicare and privately insured patients to specialists, but the majority of them refused to see my Medi-Cal patients. The stigma of “welfare patient” was there right from the beginning.

Quite a few years later, my Medicare patients continued to be accepted without question, but some of the managed care patients were rejected, and, of course, Medi-Cal patients continued to be rejected, except by a few very dedicated specialists. Eventually with EMTALA, at least I could force unwanted referrals for patients requiring specialized emergency services by sending them directly to the Emergency Department. What a terrible way to practice medicine.

As stated in my last message, there will be about 10,000,000 Medi-Cal patients in California, once the Affordable Care Act is fully implemented. Can you imagine the specialists suddenly opening their doors and welcoming these patients into their practices?

I’ll say it once again. If we had an improved Medicare single payer system that treated everyone equitably, we would not have this problem.

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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.

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