Why does Anthem Blue Cross need a 39% premium increase?

Posted by on Tuesday, Feb 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.

Anthem Blue Cross dramatically raising rates for Californians with individual health policies

By Duke Helfand
Los Angeles Times
February 4, 2010

California’s largest for-profit health insurer is moving to dramatically raise rates for customers with individual policies, setting off a furor among policyholders and prompting state insurance regulators to investigate.

Anthem Blue Cross is telling many of its approximately 800,000 customers who buy individual coverage — people not covered by group rates — that its prices will go up March 1 and may be adjusted “more frequently” than its typical yearly increases.

The insurer declined to say how high it is increasing rates. But brokers who sell these policies say they are fielding numerous calls from customers incensed over premium increases of 30% to 39%, saying they come on the heels of similar jumps last year.

Insurers are free to cherry-pick the healthiest customers in the lightly regulated individual market. They can raise rates at any time as long as they notify the state Department of Insurance and prove that they are spending at least 70% of premiums on medical care.

Many policyholders say the rate hikes are the largest they can remember, and they fear that subsequent premium growth will narrow their options — leaving them to buy policies with higher deductibles and less coverage or putting health insurance out of reach altogether.

The insurer said it had a team of workers to help customers balance costs and insurance.

“Anthem offers a variety of health benefit plans,” the company said, “and we are dedicated to working with our members to find health coverage plans that are the most appropriate and affordable for their needs.”

http://articles.latimes.com/2010/feb/04/business/la-fi-insure-anthem5-2010feb05

And…

Letter from Kathleen Sebelius, Secretary of Health and Human Services, to Leslie Margolin, President, Anthem Blue Cross

U.S. Department of Health & Human Services
February 8, 2010

Excerpt:

One of the biggest pressures facing families, businesses and governments at every level are skyrocketing health insurance costs.  With so many families already affected by rising costs, I was very disturbed to learn through media accounts that Anthem Blue Cross plans to raise premiums for its California customers by as much as 39 percent. These extraordinary increases are up to 15 times faster than inflation and threaten to make health care unaffordable for hundreds of thousands of Californians, many of whom are already struggling to make ends meet in a difficult economy.

Your company’s strong financial position makes these rate increases even more difficult to understand. As you know, your parent company, WellPoint Incorporated, has seen its profits soar, earning $2.7 billion in the last quarter of 2009 alone.

http://www.hhs.gov/news/press/2010pres/02/20100208c.html

And…

‘A Wasted Opportunity’

By Joseph Rago
Wall Street Journal
February 7, 2010

Mrs. (Angela) Braly is the CEO and president of WellPoint, the largest U.S. commercial health insurer by membership. Her company’s affiliated health plans in 14 states cover 34 million people—or roughly one out of nine Americans. It contracts with 82% of the nation’s primary-care physicians, 84% of specialists, and 94% of hospitals. That scale lands her on the most-wanted list in President Obama’s Washington.

The tragedy, as she sees it, is what “a wasted opportunity” it all turned out to be. “Health-care reform” soon became “health-insurance reform” exclusively. “It was a pivot that was—unfortunate,” she says, “because it is not going to solve the longer-term problem.”

The solution is to “reintroduce the consumer to the health-care equation,” and on that front, she believes, insurers “are actually the part of the health-care delivery system that is there to create the value.” Mrs. Braly thinks patients will make more cost-conscious decisions if they have the incentives and the tools—namely, the information about cost and quality that is the basis of any ordinary market.

Mrs. Braly concedes that some people with pre-existing conditions can find it difficult to find affordable coverage, especially if they lose their job, get divorced, move, etc. “It’s when people have no option that we’re really in trouble and need to find a solution,” she says. But a better alternative to central insurance planning is public-private partnerships to create insurance pools for those with high risks. “That was a great idea that got pushed aside, and I think we need to revisit that concept.”

http://online.wsj.com/article/SB10001424052748704259304575043861057904360.html?mod=rss_opinion_main

WellPoint’s California subsidiary, Anthem Blue Cross, has provoked appropriate outrage in response to its announcement of premium increases as high as 39 percent. Why would they risk creating this potential public relations nightmare when Congress is considering major increases in regulatory oversight of their industry?

Keep in mind that Anthem Blue Cross has been very successful in keeping its individual insurance products competitive by selling only to the healthy by subjecting applicants to medical underwriting. With the unabated rise in health care costs, the upward pressure on premiums has been moderated by introducing numerous innovations, especially increased cost sharing.

Currently the most important tool they have to limit their exposure to health care costs is to switch their clients to plans with high deductibles  (often $5000 or more) and high coinsurance (typically 40% of all allowed costs over the deductible). You can confirm these numbers at eHealthInsurance.com.

By jacking premiums up to intolerable levels for low deductible and low coinsurance plans, they force their clients to choose these high cost sharing plans. Once enrollment drops in the low cost sharing plans, high cost individuals remain, driving premiums up even further resulting in the death spiral. At that time they can withdraw the low deductible plans from the market and require that their clients choose either the high cost sharing plans or drop their coverage altogether.

Another factor that has driven premiums up now is the high unemployment rate that has caused many individuals to drop their coverage, especially those who are relatively healthy, leaving in the plans those who try to hang on because of their greater health care needs. Of course, that adds to the death spiral.

Angela Braly, president, chairman, and CEO of WellPoint, supports greater patient cost sharing to “reintroduce the consumer to the health-care equation.” Patients will buy less health care, no matter how beneficial, when they are using their own money. That also happens to work out well for WellPoint since they will spend less on health care.

Angela Brady also wants those who need health care to be covered by public high-risk pools, while the healthy are covered by her private plans. That too allows WellPoint to spend less on health care, while we taxpayers foot the larger bills.

It would seem that the outrageous premium increases by Anthem Blue Cross would cause the administration to rethink a strategy of reform based on private insurance plans. But no. Instead HHS Secretary Kathleen Sebelius responds with a tisk, tisk, as Congress and the administration continue to move forward with locking us into this perverse system.

We need to respond with more than a tisk, tisk. We need to show up by the millions on February 25 (President Obama’s televised bipartisan health session) and demand the enactment of an improved Medicare for all of us.

Canadian medical travel executive on Premier Williams’ care in the U.S.

Posted by on Monday, Feb 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.

Newfoundland premier Williams out of ICU, recovering well from heart surgery

The Vancouver Sun
February 8, 2010

Premier Danny Williams, who had heart surgery at a U.S. hospital last week, is recovering very well from the operation, a spokeswoman said Monday.

Elizabeth Matthews said the Newfoundland and Labrador premier was released from intensive care on Friday and is expected to be discharged from hospital sometime this week.

Williams’ decision to have the surgery performed at an undisclosed U.S. hospital, because the procedure wasn’t available in his home province, touched off a mini-firestorm, with some critics in Canada and the United States pointing to it as proof of problems in Canada’s health-care system.

Last week, deputy premier Kathy Dunderdale said the criticism of Williams was unwarranted and an invasion of his privacy. She said the premier would address the issue after his return home.

http://www.vancouversun.com/Newfoundland+premier+Williams+recovering+well+from+heart+surgery/2537244/story.html

And…

Danny Williams and the best health care in the world

By Mark Watson
The North Star National
February 7, 2010

Danny Williams, premier of Newfoundland and Labrador, Canada, underwent heart surgery in an undisclosed United States hospital on Thursday.

According to Deputy Premier Kathy Dunderdale, Williams received treatment from a “renowned expert in the procedure” that the premier needed.

Does Williams’s decision to travel to America for his heart surgery suggest that the procedure he needed was unavailable in Canada, or does it mean that the wait time required for getting the treatment was too long for him to survive before eligible for the procedure?

President Obama has extolled the virtues of the Canadian single-payer medical plan repeatedly in the past.

Perhaps this would be a good time for Obama and other Democratic leaders pushing hard to implement their so-called health care reform to rethink their plans.

If a Canadian-style single-payer system isn’t good enough for a Canadian premier, how long will it be until a universal medical coverage plan in America will not have sufficient resources for a member of Congress?

The fact that the Premier had to seek treatment outside his own country is an indictment of the Canadian health care system, nothing more, nothing less.

Response to Mark Watson by T. Rand Collins PhD MD
February 8, 2010

There is a great deal of sniping back and forth across the border from those who would use both systems’ problems for their own ends. Sadly, both systems are broken, but in different ways. America has excellent health care and world-class technology, but a significant part of the population cannot afford it. And another part of the population can just barely afford it, surrendering the equivalent of their mortgage each month just to be protected against a medical catastrophe. I talked in November to the owner of a clothing store in the Miami Trade Center, who told me that she was paying ~$2,000 per month for health care – and Mark Watson is knocking Obama’s efforts to make sure his people can go to the doctor?

Canadians are privileged to get complete care for a nominal cost. It may be slow, and it may have problems, but health care is a right, not a privilege.

I am, ironically, as Senior Vice President of International Health Care Providers, an Ontario-based medical travel firm, one of those who help Canadians find health care options in the US. But that doesn’t mean that I don’t believe in the Canadian system. Canada needs a private option, which is what the world’s most successful medical systems have – a combination of private AND public options for health care.

American arch-conservatives cry “Socialism” whenever government takes part in providing services or setting regulatory standards. Besides the fact that most Americans cannot define socialism (and more than a few can’t spell it), there are some things that are too important to be left to private interests whose primary interests lie in keep the shareholders happy.

Even a good concept like health care as a right for all can have times when those who manage it are short-sighted and unresponsive. Democracy was a good idea, but under Bush, who will go down in the books as the least competent president in the history of this country, freedom of speech and freedom from government spying were severely threatened.

I have dual citizenship in the US and Canada and have practiced medicine in both countries, and, were I pushed to choose, I would definitely opt for the Canadian system.

http://www.northstarnational.com/2010/02/07/4240/

International Health Care Providers
http://www.ihcproviders.com/ourteam.php

It is a relief to know that Premier Danny Williams (Newfoundland and Labrador) is doing well after his heart surgery here in the United States. This news is a refreshing and reassuring breather after having been inundated with the callous releases from right-wing extremists celebrating Premier Williams’ medical misfortune, used to both denigrate the Canadian health care system, and tout the quality of the U.S. system (for some).

The North Star National article by Mark Watson is but one of those insensitive and distorted reports and certainly would not be worth including as a Quote of the Day, except that it provoked the response of an executive of a Canadian medical travel firm who also happens to be a physician who has practiced in both the United States and Canada.

We do not agree with Dr. T. Rand Collins that Canada needs a “private option.” That would create a two-tiered system with even longer queues in the public sector. They simply need to continue moving forward with their ongoing efforts in queue management.

Considering that Dr. Collins’ firm is in the business of bypassing Canadian queues by arranging for care in the United States, his fundamental assessment of the systems of both nations is certainly noteworthy. As he says, “… were I pushed to choose, I would definitely opt for the Canadian system.”

Gov. Crist’s lesson on unsound policies for health reform

Posted by on Friday, Feb 5, 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.

Gov. Crist’s victory for unaffordable underinsurance

Quote of the Day
May 23, 2008

From the Sun-Sentinel.com:

Delivering on Gov. Charlie Crist’s top election-year priority, the Florida Legislature on (May 2, 2008) approved a health insurance package to extend no-frills coverage to the state’s 3.8 million uninsured. Crist called the health-care package “historic legislation” that will be a model for the rest of the nation.

From the Comment (Don McCanne):

Some model. It would reduce insurance premiums by stripping down benefits through measures such as limiting hospitalization and specialized services and by capping payments. Since this “doesn’t cost taxpayers a dime,” the premiums would still be unaffordable for most individuals currently without coverage. Obviously this model will not work for individuals who have health care needs.

http://www.pnhp.org/news/2008/may/gov-crists-victory-for-unaffordable-underinsurance

And…

Florida’s health plan for the uninsured has few takers

By Doug Trapp
American Medical News
February 1, 2010

Florida Gov. Charlie Crist didn’t establish a specific enrollment goal for Cover Florida, the state’s unsubsidized private insurance program for the uninsured, when he announced the start of enrollment in January 2009. But in a state with approximately 3.8 million uninsured adults, the fact that only 5,246 people signed up for one of the 27 plans in the program’s first 11 months appears to have defied all expectations.

The authorizing legislation instructed participating insurers to offer at least two types of plans: one with catastrophic and emergency department coverage, and one without.

Plan subscribers… must wait 12 months before their preexisting conditions are covered. Also, insurers balance the risk of covering such conditions by setting benefit limits as low as $25,000 each year and $50,000 in a lifetime for catastrophic plans, for example.

United HealthGroup — one of the two companies offering statewide Cover Florida plans — does not know why plan enrollment has been low, said spokesman Roger Rollman. Blue Cross and Blue Shield of Florida — the other company offering a statewide plan — directed questions to the state.

http://www.ama-assn.org/amednews/2010/02/01/gvsd0201.htm

Today’s message is not meant to be an “I told you so,” even if I did tell you. The point of the message is that health policy science has advanced to a level that the consequences of policies in various reform proposals are fully predictable. “Well, let’s try this and see how it goes” is no longer acceptable, especially for our entire $2.5 trillion health care industry.

Gov. Charlie Crist has provided us with a very valuable lesson with his “‘historic legislation’ that will be a model for the rest of the nation.” His “Cover Florida” program has left 99.9 percent of the uninsured without any coverage, while providing the other 0.1 percent with coverage that won’t work if you need health care.

This may an extreme example, but the cardinal principle is crucial. It is unsound to throw together a bunch of policies chosen based on political considerations, and then pretend that the flaws will be fixed later. You start with a core structure based on sound policies that have been proven to work.

The hybrid model before Congress, using private health insurance plans and public programs, is the most expensive model of reform, even though an important stated goal, when this process began, was to slow the increases in health care spending. The feeble measures included in the bill that allegedly would control costs do not pass basic tests of health policy science.

The hybrid model also was supposed to cover everyone, but health policy science has demonstrated that this model can’t do that. Tens of millions will be left without coverage, a number sure to increase with time.

Charlie Crist’s silly program may be an embarrassment, but that does not compare with the shame that members of Congress should be experiencing simply because they would bankrupt, maim, and kill people by walking away from sound health policy science, while they pursue what they believe will be a political victory. What a terrible, terrible shame.

CMS health spending projections

Posted by on Thursday, Feb 4, 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 Spending Projections Through 2019: The Recession’s Impact Continues

From the Office of the Actuary, Centers for Medicare and Medicaid Services
Health Affairs
February 4, 2010

Projections for 2010:

National Health Expenditures (NHE): $2,569.6 billion

NHE per capita: $8,289.9

NHE as percent of GDP: 17.3%

NHE projected average annual growth, 2009-2019: 6.1%

Abstract:

The economic recession and rising unemployment—plus changing demographics and baby boomers aging into Medicare—are among the factors expected to influence health spending during 2009–2019. In 2009 the health share of gross domestic product (GDP) is expected to have increased 1.1 percentage points to 17.3 percent—the largest single-year increase since 1960. Average public spending growth rates for hospital, physician and clinical services, and prescription drugs are expected to exceed private spending growth in the first four years of the projections. As a result, public spending is projected to account for more than half of all U.S. health care spending by 2012.

http://content.healthaffairs.org/cgi/content/full/hlthaff.2009.1074v1

Woolhandler and Himmelstein: Paying For National Health Insurance — And Not Getting It (Health Affairs, July/August 2002):
http://www.pnhp.org/publications/payingnotgetting.pdf

Same story every year. Health care spending continues to increase at rates well in excess of inflation, and health care continues to represent an increasing percentage of our gross domestic product.

One important technical point. The CMS authors report that public spending will soon account for more than half of all U.S. health care spending. But they leave out two important taxpayer sources of health care financing: 1) tax subsidies in the form of tax deductions for employer-sponsored plans, and 2) the purchase of health benefit programs for public employees. In their classic paper (link above), Woolhandler and Himmelstein demonstrated that this results in a figure of government spending about fifteen percentage points higher than the numbers reported in this annual CMS report.

Using a back-of-the-envelope update, the government is already using taxpayer funds to finance about two-thirds of our national health expenditures (NHE). In a financing system that only Americans would design, a significant portion of those funds, without much transparency, are funneled through to the inefficient, wasteful private insurance plans and recategorized as private spending.

Taxpayers should be outraged. We hold the stewards of our public funds to a higher standard for responsible spending than we do for those who are shuffling funds around in a market economy.

We should be receiving much greater value for our health care spending, but we won’t under the proposal before Congress. It has been designed to funnel even more taxpayer funds to the private insurance industry, with the guarantee that they can draw off for themselves fifteen to twenty percent of the funds they receive.

With that model of a financing system, we can anticipate that we will receive the same depressing report from CMS each year until finally our finances and our health are ruined by the imposition of the forces of Stein’s Law. With a single payer national health program – an improved Medicare for all – it doesn’t have to be that way.

Higher Medicare managed care copayments cause increased hospital use

Posted by on Wednesday, Feb 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.

Increased Ambulatory Care Copayments and Hospitalizations among the Elderly

By Amal N. Trivedi, M.D., M.P.H., Husein Moloo, M.P.H., and Vincent Mor, Ph.D.
The New England Journal of Medicine
January 28, 2010

We examined the consequences of increasing copayments for ambulatory care in a large, nationally representative sample of elderly Medicare enrollees in managed-care plans. As compared with matched control plans in which copayments for ambulatory care were unchanged, Medicare plans that increased these copayments by an average of 95% for primary care and 74% for specialty care had a reduction in the number of outpatient visits but an increase in hospital admissions, in the number of days of hospital care, and in the proportion of enrollees who used hospital care. According to our estimates, for every 100 elderly enrollees exposed to this level of increased cost sharing for ambulatory care, there would be 20 fewer outpatient visits during the first year after the increase but more than 2 additional admissions for acute care and approximately 13 additional inpatient days in the year after the increase. The effects of copayment increases on the subsequent use of inpatient care were magnified for enrollees living in areas with low income and low educational levels, for black enrollees, and for enrollees who had hypertension, diabetes, or a history of acute myocardial infarction as compared with the effects observed for the entire study cohort.

http://content.nejm.org/cgi/content/full/362/4/320

Cracks in the moral hazard foundation:
http://www.pnhp.org/news/2007/september/cracks-in-the-moral-hazard-foundation

This is an important study. It demonstrates, once again, that requiring already insured patients to pay more out of pocket if they access care can have a detrimental impact on both their health and on total health care spending. This is the opposite of what we should be striving for as we attempt to reform health care. Yet Congress and the administration are including this ill-considered policy of cost sharing in the unfounded belief that it would be a harmless method of slowing health care spending.

In order to reduce premiums for private insurance plans offered by the proposed insurance exchanges, the current legislation calls for plans with actuarial values 50 to 100 percent lower than typical employer-sponsored plans (with limited exceptions). These lower values are achieved partly by requiring patients who need to use health care to pay an even larger amount out-of-pocket in the form of deductibles, copayments, and coinsurance.

Those who defend cost sharing usually cite the RAND HIE – an experiment that supposedly demonstrated that patients were not harmed by not receiving care that required out-of-pocket spending – the moral hazard argument. One problem with that study was that it was limited to the relatively healthy workforce, their young, healthy families, during a short, healthy interval in their lives. The conclusions of the study do not have external validity for an entire population, with all their ills, covered in a universal program. The study was further flawed by the fact that participants were allowed to drop out at any time and return to their prior insurance, and the cost-sharing wing did so at an eighteen-fold rate over the control wing. These individuals, many of whom were no doubt facing higher costs, were excluded from the results of the study. How can they possibly claim that the cost-sharing group fared no worse than the control group? (See the “Cracks in the moral hazard foundation” link above for further information.)

The problem of ever-increasing health care costs must be addressed, but assessing financial penalties (cost sharing) against individuals for having  accessed necessary health care is one of the very worst ways to do it. This and other studies demonstrate that it can actually increase total health care spending, not to mention impairing health outcomes.

A single payer system – an improved Medicare for all – uses much more effective policies to control health care spending while removing financial barriers to the care that patients need. Aren’t you tired of hearing the President and members of Congress tell us that single payer is the program that would work, but we’re not going to do it?

Stein’s Law – hitting the wall

Posted by on Tuesday, Feb 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.

Herb Stein’s Unfamiliar Quotations

By Herbert Stein
Slate
May 16, 1997

If something cannot go on forever, it will stop.
–Stein’s Law, first pronounced in the 1980s

This proposition, arising first in a discussion of the balance-of-payments deficit, is a response to those who think that if something cannot go on forever, steps must be taken to stop it–even to stop it at once.

http://www.slate.com/id/2561/

And…

Huge Deficits May Alter U.S. Politics and Global Power

By David E. Sanger
The New York Times
February 1, 2010

… as Prof. James K. Galbraith of the University of Texas puts it, “Forecasts 10 years out have no credibility.”

Simply projecting that health care costs will rise unabated is dangerous business.

His greatest hope, Mr. Galbraith said, was Stein’s law, named for Herbert Stein, chairman of the Council of Economic Advisers under Presidents Richard M. Nixon and Gerald R. Ford.

Stein’s law has been recited in many different versions. But all have a common theme: If a trend cannot continue, it will stop.

http://www.nytimes.com/2010/02/02/us/politics/02deficit.html?hp

And…

The Long-Term Outlook for Health Care Spending

Congressional Budget Office
November 2007

Projections of Health Spending

Over the past 30 years, total national spending on health care has more than doubled as a share of GDP. Under the assumptions described (in this CBO report), according to CBO’s projections, that share will double again by 2035, to 31 percent of GDP. Thereafter, health care costs continue to account for a steadily growing share of GDP, reaching 41 percent by 2060 and 49 percent by the end of the 75-year projection period.

http://www.cbo.gov/ftpdocs/87xx/doc8758/Intro.shtml
Graph: http://www.cbo.gov/ftpdocs/87xx/doc8758/Figure4.gif

And…

GOP House Issues Conference

January 29, 2010

Congressman Paul Ryan (speaking to President Obama):  … Medicare, as you know, is a $38 trillion unfunded liability…

http://www.whitehouse.gov/the-press-office/remarks-president-gop-house-issues-conference

At over $2.5 trillion (almost 18 percent of our GDP), the level of health care spending in the United States this year is almost intolerable. Yet we hear predictions that health care will represent half of our GDP by 2082, and that Medicare will accumulate a deficit of $38 trillion.

Thank goodness for Stein’s Law. We will never see these numbers for the simple reason that this rate of increase cannot go on forever. It will stop once it hits the wall.

Herbert Stein, being from the Chicago School of Economics (think Milton Friedman), did not believe that steps must be taken to intervene since the problem would take care of itself. Although that is true, the problem with this sterile, amoral view, common amongst those of the Chicago School, is that it ignores the consequences of a spontaneous economic process devoid of the input from the heart and soul of beneficent public stewards.

To be clear, in the economics of health care, Stein’s Law does not represent one point in the expansion of health care spending at which everything stops and the health care system collapses. Nor does it represent a single point at which expansion stops and spending becomes static. Rather it represents a multitude of various walls for various payers, including individuals, employers and the various levels of government, each of which has its own wall as a barrier represented by Stein’s Law.

In our fragmented system of financing health care, Stein’s Law is already in play. Tens of millions are no longer able to afford health insurance. Tens of millions more are no longer able to afford adequate insurance products and must face the financial hardships of the underinsurance products that have been the response of competing insurers in our market economy in health care. The rate of employer-sponsored coverage has been declining because too many businesses, especially small businesses, have already hit the wall. Many states are struggling with the need to reduce Medicaid payments to providers in order to try to include more under the umbrella, while watching the safety-net of providers crumble from protracted financial losses. Even the federal government is struggling to find ways to fill the void in the face of massive budget deficits.

With Stein’s Law, we can predict that the rate of spending increases will very soon slow down, but under our current financing system, that will inevitably result in more financial hardship, suffering, and even death as health care access becomes ever less affordable.

Suppose the Senate bill passes, along with the reconciliation tweaks, then what will happen? Since our beneficent stewards in Congress neglected their duties, failing to adopt policies that would slow the growth in health care spending, health care costs will continue to test Stein’s Law.

Some of the multitude of walls will move, but none of them will go away. The states will see their walls move further out with the infusion of Medicaid funds. The federal government will see its wall move closer, signaled by the shrill cacophony of the budget hawks. Employers will not see their wall move much, but they will continue to barrel forward, eventually hitting it one by one.

But what about our hard-working, middle-income Americans? The wall will be moved much closer. For several reasons, mostly related to costs, there will be an attrition of employer-sponsored plans. Since the subsidies to purchase private plans will be less than the employer contributions, fewer individuals and families will be able to afford the plans. To slow the rise in premiums, more benefits will be stripped out. The Obama administration would accelerate this deterioration in benefits by imposing an excise tax on the plans as “the most effective way to control costs.” The Obama/Orszag policy of controlling costs by erecting financial barriers to necessary health care is a very sick policy indeed. The legislation before Congress adds afterburners to middle-income Americans only accelerating their trip to Stein’s impenetrable wall.

When our economic models have immoral consequences, we should abandon the amoral models of the Chicago School, and move to normative economics. It is not a sin for an economist to have a heart.

Under a single payer national health program – an improved and expanded Medicare for all – Stein’s wall will still be there. But instead of letting the entire system crash into the wall, our own beneficent public stewards – if we elect ones with a heart – will be there to make sure that everyone receives the care that they need. The resources that we use may take us up to the wall, but we won’t be crashing into it.

Every other industrialized nation has an impenetrable Stein wall, but by using normative economics, they don’t sacrifice their citizens by slamming them into that wall.

The President at the GOP House Issues Conference

Posted by on Monday, Feb 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.

Remarks by the President at GOP House Issues Conference

The White House
January 29, 2010

Congressman Price (Dr. Tom Price from Georgia):  Mr. President, multiple times, from your administration, there have come statements that Republicans have no ideas and no solutions.  In spite of the fact that we’ve offered, as demonstrated today, positive solutions to all of the challenges we face, including energy and the economy and health care, specifically in the area of health care — this bill, H.R.3400, that has more co-sponsors than any health care bill in the House, is a bill that would provide health coverage for all Americans; would correct the significant insurance challenges of affordability and preexisting; would solve the lawsuit abuse issue, which isn’t addressed significantly in the other proposals that went through the House and the Senate; would write into law that medical decisions are made between patients and families and doctors; and does all of that without raising taxes by a penny.

But my specific question is, what should we tell our constituents who know that Republicans have offered positive solutions to the challenges that Americans face and yet continue to hear out of the administration that we’ve offered nothing?

The President:  It’s not enough if you say, for example, that we’ve offered a health care plan and I look up — this is just under the section that you’ve just provided me, or the book that you just provided me — summary of GOP health care reform bill:  “The GOP plan will lower health care premiums for American families and small businesses, addressing America’s number-one priority for health reform.”  I mean, that’s an idea that we all embrace.  But specifically it’s got to work.  I mean, there’s got to be a mechanism in these plans that I can go to an independent health care expert and say, is this something that will actually work, or is it boilerplate?

If I’m told, for example, that the solution to dealing with health care costs is tort reform, something that I’ve said I am willing to work with you on, but the CBO or other experts say to me, at best, this could reduce health care costs relative to where they’re growing by a couple of percentage points, or save $5 billion a year, that’s what we can score it at, and it will not bend the cost curve long term or reduce premiums significantly — then you can’t make the claim that that’s the only thing that we have to do.  If we’re going to do multi-state insurance so that people can go across state lines, I’ve got to be able to go to an independent health care expert, Republican or Democrat, who can tell me that this won’t result in cherry-picking of the healthiest going to some and the least healthy being worse off.

So I am absolutely committed to working with you on these issues, but it can’t just be political assertions that aren’t substantiated when it comes to the actual details of policy.  Because otherwise, we’re going to be selling the American people a bill of goods.  I mean, the easiest thing for me to do on the health care debate would have been to tell people that what you’re going to get is guaranteed health insurance, lower your costs, all the insurance reforms; we’re going to lower the costs of Medicare and Medicaid and it won’t cost anybody anything.  That’s great politics, it’s just not true.

So there’s got to be some test of realism in any of these proposals, mine included.  I’ve got to hold myself accountable, and guaranteed the American people will hold themselves — will hold me accountable if what I’m selling doesn’t actually deliver.

http://www.whitehouse.gov/the-press-office/remarks-president-gop-house-issues-conference

The President enters the Republicans’ den, and politics broke out. At least that’s the impression you might have from the media coverage of the President’s appearance at the GOP House Issues Conference. But this was not simply an exchange of partisan political rhetoric; it was a plea by President Obama to set aside rhetorical grandstanding and to join together in a fair, credible, and objective discussion of the impact of the actual policies under consideration.

Did that happen? It is puzzling how Congressman Tom Price, a physician, could state directly to the President that their Republican bill “would provide health coverage for all Americans.” That goes beyond political grandstanding for the benefit of the television cameras. That is shameless, arrogant lying to the President of the United States and to the American people. It is impossible to have a constructive dialogue with liars.

President Obama is right when he states that these proposals must pass the test of realism, while at the same time holding himself accountable. But realism alone isn’t enough. The policies must be effective and efficient. Yet the President and Congress abandoned those health care reform policies that pass the tests with the highest scores, and accepted flawed, lower-scoring policies that were believed to comply better with the political tests, though that political support is waning.

When objectivity and realism demonstrate that the Democratic proposal falls far short, and when better, proven policies would bring affordable care to everyone, we should hold the President and Congress accountable. But we should also support them politically when they throw the liars out so they can get on with the reform that we need.

One more lie. Congressman Price said that H.R.3400 “has more co-sponsors than any health care bill in the House.” It has 52 cosponsors. Congressman John Conyers’ H.R. 676, “United States National Health Care Act or the Expanded and Improved Medicare for All Act,” has 87 cosponsors.

More importantly, Conyers’ bill is based on sound health policy that would actually work, whereas Price’s bill is based on feeble policies that will have almost no impact on the problems we face in health care. But their bill does provide them with rhetoric they can use for political grandstanding, even if based on lies (e.g., “provides health coverage for all Americans”).

“People should go where they are not supposed to go, say what they are not supposed to say, and stay when they are told to leave.” –Howard Zinn

Well, that quote pretty well sums up “what to do”.  But my biggest challenge is “how”.  Specifically, how do I neutralize some pretty powerful fear?

I was scared Friday when I joined Margaret Flowers to attempt to deliver a message to the President.  My thoughts raced.  We’re talking secret service.

“How do I get myself into these things?”
“This is crazy.”
“This is pointless.”
“I can’t even make sensible statements; I know what I want to say but I’m so nervous.”
“Other people are so much more knowledgeable and speak so much more eloquently.”
“But I am doing it!”

We stood in front of the Harbor Hotel in Baltimore clutching a banner that read “Letting you know.  Medicare for all” and Margaret’s letter for the President written in response to his appeal for solutions to health reform.  The hotel manager, police and secret service surrounded us and asked us to move.

If you watch the video, you’ll see that there was a point, a moment, which felt suspended in time, when Margaret looked at me and I looked at her and we both knew “we ain’t goin’ across the street.”

The feeling associated with that awareness was not fear, or anger, or self-righteous indignation.  It was a feeling of quiet liberation.  The things I was saying to myself, thoughts powerful enough to imprison me in a jailhouse of fear, had been neutralized.  In their place was a calm determination to trust my intuition.

My gut told me “so be it.  You’re doing the best you can.  This is a no-brainer.  Gotta do it.  Margaret and I have been needing some quiet time to catch-up; might as well be in a police station.”

My gut has a great sense of humor.

Fear overcomes me when I listen to my head; calm enfolds me when I listen to my gut.

So, for what it is worth, here are few tips for “doing cd for Single Payer”:

1. Ignore your head.  That means, all those familiar thoughts that leave you feeling fearful and bad.

2. Listen to your gut.  You know it’s your gut talking if you start feeling calmness, clarity, and quiet determination.

3. We need people engaging in “gut-driven” cd to right all kinds of wrongs.  Be authentic; for many of us, the gut issue is Medicare For All.  If yours is the environment, then do cd for that.

4. Don’t try this alone.  Take a friend. Or several.

5. Do the best you can.  Speak from your heart.  Once you’re in handcuffs, the worst is over.  The “authorities” aren’t your enemy; most will treat you respectfully and the ones who don’t are just having a bad day.  Don’t take it personally.

6. I like to take a “token” with me, tucked in my pocket with my driver’s license. For me, it’s a picture of my grandchildren and the holy card from my father’s funeral.  It reminds me that he would be proud of me and that I’m doing this for the people who inspire me–my family and my patients.

7. If you have the choice of doing cd in the winter or the summer, definitely choose summer!  Wear layers either way because it’s cold in jail.

Remember that we all have talents to contribute.  Without Bill Hughes taking the video, our action wouldn’t have been as fruitful.  Without Kevin Zeese, we’d have worried about our families and “legal stuff.”  Without Mark Almberg, we wouldn’t have a press release.  Without researchers like David Himmelstein and Steffie Woolhandler, we wouldn’t have compelling data to support us.  We draw support from each other.

As Margaret Mead said:  Never doubt that a small group of thoughtful committed citizens can change the world. Indeed, it is the only thing that ever has.”

Uwe Reinhardt – No “simple” health reform

Posted by on Friday, Jan 29, 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.

No Such Thing as ‘Simple’ Health Reform

By Uwe Reinhardt
The New York Times
January 29, 2010

Even before Senator-elect Scott Brown’s stunning victory in the Massachusetts special election, there was no shortage of advice on simpler approaches to health reform that the president and his Congressional allies could have used in place of the bills now before Congress.

Although the current reform bills undoubtedly are burdened with many tangential items, one can easily underestimate how quickly any kind of health reform will become complex.

(He quotes Peggy Noonan who advocates for “small, discrete steps” such as “a simple bill that mandated insurance companies offer coverage without respect to previous medical conditions.”)

In the eyes of people unfamiliar with economics, the step she (like others before her) proposes may seem small.

She seems completely unaware that, to be implemented, that step has to be accompanied by (1) a mandate to be insured or, at the least, very powerful financial incentives to be insured. And if government imposes such a mandate on citizens, it must be ready (2) to subsidize low-income families in the acquisition of the mandated insurance. Already we have a bill requiring many pages.

(He quotes from Sen. Tom Coburn’s summary of his bill calling for guaranteed coverage, and affordable premiums through risk adjustment.)

The European systems Mr. Coburn has in mind are the Swiss and Dutch health systems, because we are referred to a paper on these systems.

It should be noted that the Dutch and especially the Swiss systems are subject to heavy government regulation — far heavier than is foreseen in the Senate health reform bill passed in late December.

For example, health insurance is mandatory in both countries. Both countries prescribe purely community-rated insurance premiums which, unlike the Senate bill, cannot take the age of the insured into account. And both countries extend sizable public subsidies toward the purchase of private health insurance.

In short, as Senator Coburn’s bill illustrates, “simply” to pass a bill that imposes community rating on health insurers, as Ms. Noonan suggests, is anything but simple. It opens a veritable Pandora’s box of additional, required legislation which, once fully fleshed out, would pretty much constitute the core of the insurance-reform bill currently in the Senate bill.

http://economix.blogs.nytimes.com/2010/01/29/no-such-thing-as-simple-health-reform/

Posted response of Don McCanne, San Juan Capistrano, CA (Response #23)

Once Congress decided to build on our existing, fragmented, dysfunctional system of financing health care, it became necessary to create the complex legislation that was generated in both the House and the Senate, precisely because of the reasons Prof. Reinhardt describes.

Congress and the administration began with the most expensive system in existence and then attempted to apply social insurance principles to our hybrid model, allegedly with the goal of covering everyone with a system with sustainable spending. The health policy literature is replete with simulations and real-life studies demonstrating that this is by far the most expensive model of reform, and it falls short on universality, equity, and efficiency.

The least expensive and most effective models are a government-owned health service (socialized medicine, not America’s first choice), or a bona fide social insurance program used to finance the largely private health care delivery system. Although there is no perfect system, a government social insurance program (like Medicare) does have an advantage over social insurance programs using a market of private plans in that administrative costs are lower and mechanisms to moderate spending increases are more effective. Also, the Swiss and Dutch private insurance-based programs still leave uninsured about 1.5 percent of their populations.

President Obama this week told the nation that he was eager to see a better approach to cover everyone and bring down costs, though in his prior comments he has revealed that he already knows how to do that. And what is that?

During this break in the negotiations on reform, we really should take a serious look at an improved Medicare program that would cover everyone. It is the least expensive model of reform. It has the greatest administrative efficiency. It would truly cover everyone automatically. And even for those who do not support social solidarity, it would finally control our intolerable growth in health care spending through the proven mechanism of a single payer monopsony.

President Obama is eager to see a better approach

Posted by on Wednesday, Jan 27, 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.

State of the Union Address

President Barack Obama
The White House
January 27, 2010

But if anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know.  (Applause.)  Let me know.  Let me know.  (Applause.)  I’m eager to see it.

http://www.whitehouse.gov/the-press-office/remarks-president-state-union-address

And…

Illinois AFL-CIO

Barack Obama
June 30, 2003

I happen to be a proponent of a single payer universal health care program. (applause) I see no reason why the United States of America, the wealthiest country in the history of the world, spending 14 percent of its Gross National Product on health care cannot provide basic health insurance to everybody. And that’s what Jim is talking about when he says everybody in, nobody out. A single payer health care plan, a universal health care plan. And that’s what I’d like to see. But as all of you know, we may not get there immediately. Because first we have to take back the White House, we have to take back the Senate, and we have to take back the House.

http://www.pnhp.org/news/2008/june/barack_obama_on_sing.php

Well?

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