The Emperor’s New Clothes

Posted by on Friday, Nov 27, 2009

In the Hans Christian Anderson fairy tale, The Emperor’s New Clothes, two weavers promise an Emperor a new suit of clothes invisible to those unfit for their positions or incompetent. When the Emperor parades before his subjects in his new clothes, they all pretend they see the new finery, fearing exposure as the incompetents that they are. It takes a child to cry out, “But he isn’t wearing anything at all!”

As the Democratic Party races to claim a “health insurance reform” victory before the Christmas recess, I am reminded of this cautionary tale.

In place of the invisible clothes, we have the invisible reforms. In place of the weavers, we have the lobbyists. In place of the loyal subjects, we have the members of the Progressive Caucus. And in place of the child, we have all the Single Payer Advocates.

Please, President Obama, DON’T be that Emperor.

Dr. Paris is a member of Physicians for a National Health Program

Three Little Pigs: The Compromise

Posted by on Wednesday, Nov 25, 2009

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.

Big Bad Wolf: “… and I’ll huff and I’ll puff… ”

Pig with the feasible compromise: “Oops!”

By Clay Bennett
Chattanooga Times Free Press
Thursday, Nov. 19, 2009

http://www.timesfreepress.com/news/2009/nov/19/compromise/?opinioncartoons

Jonathan Gruber on affordability

Posted by on Tuesday, Nov 24, 2009

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.

For Public, Affordability A Key Issue In Health Bill

By Julie Rovner
NPR
November 24, 2009

Lawmakers debating health care on Capitol Hill have spent months worrying about the potential cost. But mostly it’s been the total cost of the bill, not how much individual families who could soon be required to buy insurance for the first time might have to pay.

That could be a costly miscalculation, says health economist Jonathan Gruber of the Massachusetts Institute of Technology. “Let’s put it this way: It is 10 times as important as the public option and has received one one-hundredth of the coverage,” he says.

Gruber says economists have different ways of defining exactly what is and is not affordable for people. One way is by looking at disposable income, or whether people have money left over after paying for other necessities. “We think no one should have to go without food or shelter to have health insurance,” he says.

Another test is whether people would buy something voluntarily. “And if they would then clearly it’s affordable,” Gruber says.

But there’s also a third test — and it’s that affordability is in the eye of the beholder. And for a lot of beholders in the real world, health insurance costs are quickly becoming unaffordable.

(Under the proposed legislation) no family would have to spend more than 10 percent of its income on health insurance premiums; poor families wouldn’t have to spend more than 2 percent on premiums.

But premiums are only the start of what people spend on health insurance. There are also deductibles, copayments and other out-of-pocket costs. And Gruber says that when it comes to that sort of spending, the House bill is far more generous than the Senate bill.

For example, someone making two times the poverty level, or about $22,000 a year, in the House bill would get “something like a $500 deductible plan,” he says. “On the other hand in that same range in the Senate … now we’re talking a $2,500 deductible plan.”

Gruber says he’s a “big believer” in the concept that people should pay more for their health care so they’ll know what it really costs and have an incentive to save money. “I’m a believer in consumer skin in the game,” he says. “But a $2,500 deductible is a lot to ask for someone making $22,000 a year.”

And it brings Gruber to the ultimate test of affordability, which he says is a political test — “which is, do people revolt if you say, ‘I’m going to mandate you to pay this much’?”

http://www.npr.org/templates/story/story.php?storyId=120723411

And…

A Milestone in the Health Care Journey
By Ronald Brownstein
The Atlantic
November 21, 2009

When I reached Jonathan Gruber on Thursday, he was working his way, page by laborious page, through the mammoth health care bill Senate Majority Leader Harry Reid had unveiled just a few hours earlier. Gruber is a leading health economist at the Massachusetts Institute of Technology who is consulted by politicians in both parties. He was one of almost two dozen top economists who sent President Obama a letter earlier this month insisting that reform won’t succeed unless it “bends the curve” in the long-term growth of health care costs. And, on that front, Gruber likes what he sees in the Reid proposal. Actually he likes it a lot.

“I’m sort of a known skeptic on this stuff,” Gruber told me. “My summary is it’s really hard to figure out how to bend the cost curve, but I can’t think of a thing to try that they didn’t try. They really make the best effort anyone has ever made. Everything is in here….I can’t think of anything I’d do that they are not doing in the bill. You couldn’t have done better than they are doing.”

http://politics.theatlantic.com/2009/11/a_milestone_in_the_health_care_journey.php

Regular readers of these messages are no doubt saturated with the concerns expressed about affordability of health care for individuals and families. For those who have or will have health care needs, even with subsidies, the premiums, deductibles, other cost sharing, out-of-network costs, and the costs of services that are not a benefit of the plans will be unaffordable for all but the relatively wealthy.

Today’s message is significant because MIT economist Jonathan Gruber, one of the most influential proponents of the current legislation, also understands that the issue of affordability has not received the attention it deserves. As he points out, a $2,500 deductible is a lot to ask of an individual making $22,000 a year. He wants them to have “skin in the game,” but even he understands that you can’t ask for their entire hide.

So how would he suggest that we reduce out-of-pocket costs so that health care is affordable? It appears that he would use the measures in the Senate bill to bend the cost curve so excessive costs allegedly aren’t passed on to patients. It seems to matter little to him that the CBO was unable to project a bend in the curve when it did its analysis.

Of course, Gruber is also an advocate of “let’s pass this bill now and then we can fix it later on” – a tacit acknowledgment that affordability will remain a crucial issue.

Gruber says that he can’t think of anything more to do that isn’t in the Senate bill. But you readers know better. We need to dump this plan and immediately go to work on one that will make health care affordable for everyone – an equitably-financed, single payer, improved Medicare for all. Do really we need to wait for Gruber’s ultimate test for affordability – a revolt?

Uwe Reinhardt on the economists’ letter to President Obama

Posted by on Monday, Nov 23, 2009

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.

November 23, 2009

The Quote of the Day for November 18 (www.pnhp.org) was a letter to President Obama from twenty-three prominent economists urging that four specified elements to control costs be included in the health reform legislation. Following is my original response to the letter, discussing each of the four elements. Princeton economist Uwe Reinhardt, one of the signers of the letter, has responded to my comments.

Comment on economists’ letter by Don McCanne, MD with response by Uwe E. Reinhardt, PhD (highlighted in red):

For socially conscious health care reform advocates, the primary goal of reform is to see that every individual receives the health care that he or she needs. But what has really driven the reform process has been the concern over the very high costs of health care that have challenged individuals, employers and the stewards of our government health programs.

In this late phase of the reform process many have expressed doubts over the adequacy of the various policies in the reform proposal that allegedly are designed to control health care costs well into the future. In response, twenty-three of the nation’s most distinguished economists have signed on to this letter addressed to President Obama expressing support for four elements that they believe are of critical importance and should be included in the reform legislation. Let’s look closer at these four elements.

Deficit neutrality

The economists call for budget neutrality initially, to be followed by deficit reduction. Of course they are referring only to the federal government budget and not to private sector spending. The great risk of limiting consideration to public spending is that, in the absence of effectively controlling actual health care costs, the government budget can be controlled only by shifting the costs to the private sector. Individuals and businesses certainly do not want to see an increase in their health care spending, especially while the government is reducing its spending in the later phase, that of deficit reduction.

UER responds: Economists have trouble with the cost-shift argument. It assumes, implicitly, that health care costs are dictated by God and not subject to management by humans. If that were so, then, yes, whatever God-given cost is not paid by government will have to be paid by the private sector.

Economists do not share that religion. We believe that health-care costs are not God-given, but determined by the behavior of humans. There is no law in either the Bible or in economics according to which the private sector must pick up whatever health-care costs government does not pay. If the private sector were able and willing to say no to the alleged cost shift, then the providers of health care would have no choice but to manage their costs against whatever revenue they manage to extract from the rest of society.

Of course, if the private insurance sector tells us that it is powerless to resist the cost shift, then they are telling us that they cannot resist any cost increase shoved their way by providers for whatever reason. In that case, costs will keep going up in the private sector until it collapses of its own weight.

The next decade will tell.

Isolating health care spending for budget neutrality while continuing with deficits in other government programs (war, financial institution bailouts, interest on the debt, expanding our prison population, etc.) does not seem just. Appropriate use of debt is fundamental to any business, and there is no reason that reasonable debt should not be a part of the government’s management of its financial obligations to health care.

Current operations should be financed out of tax revenues. Longer-term investments (e.g., in infrastructure) can and should be debt financed. A part of health care, especially if rendered to young people, can be viewed as an investment. Conducting war may or may not be investment. WWII certainly was a highly productive investment. One has to debate fiscal policy along these lines.

That said, our total government debt is the result of prior devious efforts to reduce revenues (i.e., taxes) in order to force the reduction in funding of government programs. With inadequate revenues and with exploding debt, deficit hawks in Congress can be relied upon to underfund crucial programs such as health care, but theirs is a pathological process since they only look at spending and refuse to consider revenues.

Agreed. Republicans collectively have lost the moral ground on deficit financing. They have been promiscuous and utterly shameless on this score, starting, alas, with Ronald Reagan.

Those who argue that taxes collected for government health care spending remove money from the economy are flat out wrong. Health care is one of the most important and beneficial components of our economy, constituting over 17 percent of our GDP (Gross Domestic Product). Those taxes are moved back into our economy.

That, too, is a valid point. I have written a NYT blog post on it. It is ludicrous to say that producing another SUV is good job creation but giving health care to the hitherto uninsured is not.

Those who scream that we are being taxed to death need another dose of reality. The average total tax revenues of OECD nations (Organization for Economic Cooperation and Development) was 35.9 percent of GDP in 2006. For the United States, the total tax revenue was 28.0 percent of GDP, placing us near the bottom of OECD nations. (OECD Tax Database)

Suppose we increased our tax revenues to the average of OECD nations, which would still be far, far short of those nations with more highly socialized systems. At 7.9 percent (35.9 average minus 28.0 U.S.) of our GDP of about $13.8 trillion, that would increase government revenues by about $1.1 trillion in a single year, ten times the amount they are considering for health care reform. Our entire federal spending is about $3 trillion. We could eliminate entirely the deficits and provide surpluses while keeping tax revenues at well below the OECD average, if only the deficit hawks would look at the revenue side of the ledger.

Excise tax on high-cost insurance plans

Why would any health insurance plans have very high premiums? One reason is that insurers use medical underwriting to assess high premiums for individuals with preexisting disorders. It would be unfair to tax those premiums for an individual with other burdens, but with adequate regulatory reform medical underwriting should be eliminated anyway.

The more common reason for high premiums is that the plan covers other services and products such as dental care, eye care, maternity benefits, mental health services, and pharmaceuticals. Applying an excise tax to these premiums would result in eliminating such benefits from the plans and shifting these expenses to the individual in the form of greater out-of-pocket spending. The proposals under consideration place a cap on out-of-pocket expenses for covered services, but that cap is unaffordable for many, and these expenses would not apply to the cap. Thus they would impose an even greater financial burden.

Since the excise tax would discourage access to these important health care services, it should be rejected as the flawed policy concept that it is.

Valid points. A better approach would have been to say: Up until an income of $75,000 we do not add employer-paid health insurance to your W-2. From $75,000 to $150,000, we add 50% to your W-2, etc. But that is not in the cards. Besides, in implementation, the actuarial adjustments Don calls for most probably will be made.

Medicare Commission

Although the Medicare Commission purportedly would be to improve quality and value, its primary purpose would be to limit spending within the Medicare program. Medicare has already served as a leader in innovations to reduce health care spending, with the private insurance industry following. In fact, many providers believe that Medicare has been too aggressive, often resulting in lower reimbursement rates than in the private sector. Granting the Commission more power to use newer innovations to further reduce spending will inevitably increase the animosity held towards Medicare by the providers. A decline in willingness to accept Medicare beneficiaries could further impair access.

This is not to say that the concept of a commission is a bad idea. If the commission worked with the entire health care delivery system in applying potentially beneficial innovations, higher quality and greater value are possible. If the commission became too aggressive, the push-back by providers and their patients would moderate their excesses.

If the power of the Medicare Commission were limited only to Medicare, then there is a potential that cost-cutting aggressiveness might threaten to convert Medicare into a quasi-welfare program not unlike Medicaid, a transformation that would not please our Medicare beneficiaries. It is more likely that the Commission simply would be enmeshed in studies of relatively ineffectual measures that would have little net impact on costs.

We would need a universal Medicare for all program for the Commission to have a real impact that would be both beneficial and cost saving.

The idea here is not to shoot for the unattainable best, but for the attainable second best. If the choice is between letting Congress be in charge of Medicare spending or a Commission, I’d opt for the latter.

Delivery system reforms

These economists recommend that we reward health professionals for providing better care. The problem is that we don’t know how to do that. They recommend funding research into what tests and treatments work and which ones do not, as if that isn’t what research has been all about anyway. Maybe it would be helpful to directly compare expensive patent drugs to generics, but the overall spending impact will be modest since this year’s patented drugs are next year’s generics.

They also recommend bundled payments, accountable care organizations, plus penalties for re-admissions, hospital acquired infections and other PACs (potentially avoidable costs). In my message two days ago (November 16) I already discussed the reasons why these measures cannot be relied upon to reduce health care costs.

Is this really the best that these noted economists can come up with? They have made the same mistake as the politicians. Their perception of reform is to build on our existing dysfunctional financing system (an egregiously flawed concept that you would think our leading economists would understand).

If we had an improved Medicare for all we could have 1) deficit neutrality through global budgeting, 2) rational tax policies that are equitable, 3) public administration using the guidance of commissions as appropriate, and 4) our own beneficent monopsony that can realign incentives to promote the delivery system reform that we need. And, oh yes, every single person would be included. It doesn’t take an economist to understand that.

Economists do understand this: Until yesterday (November 20), three Democrats in the Senate have been able to toy shamelessly with the prestige of their President and of the Senate leadership on the decision whether or not even to allow an admittedly limited health-reform bill to be debated on the Senate floor. That is the reality of America.

And in the great wisdom Americans claim uniquely for themselves, they are likely to punish the legislators who gave them at least this much—the previous Administration and Congress having given them nothing.

Don is a Mensch, but a dreamer. Let’s face it, this very limited bill, should it pass into law, is the very best Americans can hope for. This country will never have a sensible, efficient health-care system, and perhaps not even a totally humane one. For better or for worse, we must get used to it.

The trouble with economists is that we understand America – one reason, perhaps, why they call ours a “dismal science.”

Are we going to accept this… proud to be Menschen while supporting only a dream?

We can have a sensible, efficient, and humane health care system for all, but the current process is not going to bring it to us. We need to change the process, but we’re not going to do that by sitting around and dreaming of what could be.

A vital message from Spain

Posted by on Saturday, Nov 21, 2009

Dear colleagues at Physicians for a National Health Program:

As you may know, the Federation of Associations for the Defense of Public Health (FADSP) is an organization of Spanish health professionals which for more than 25 years has sought to protect and improve our national health system, of which we have reason to be proud.

Through educational programs and other activities, the FADSP strives to strengthen and safeguard our integral and comprehensive public health system. We advocate sound public health policy and the effective practice of primary care, specialist care and hospital care; the use of all kinds of modern diagnostic, therapeutic and surgical procedures; and the provision of rehabilitation services for the benefit of all of our citizens, regardless of their level of income, their profession, cultural level or regional origin.

This does not mean that our system is perfect, of course, or that it lacks important areas for improvement. But its achievements are many and it is highly cost-effective: our country dedicates only 6 percent of our GDP to keep the system running.

Our health system is basically free at the time of use, except for a prescription co-payment of 40 percent. The co-payment is waived for seniors.

The funds for financing the system come from taxes, particularly income taxes, so the burden on each individual depends on their income level. This allows the wealthy to show solidarity with the weak, those who have jobs to express solidarity with those who are unemployed, the younger to help the older, and those who enjoy good health to assist the sick.

Doctors, nurses and other health professionals are public employees, although they can practice privately in the afternoons. They perform their work in primary care centers in towns, villages and cities all over the country or in modern hospitals that possess the latest medical technology and that meet the highest world standards.

The impact of all this on the health of the Spanish people is positive and rewarding. Among other indices, Spain has one of the highest life expectancy rates in the world and is among the lowest in infant mortality.

Despite these achievements, our national health system, like others around the world, is subject to pressure of all kinds by institutions, individuals and sometimes even governments who, under the mantle of pro-market ideology, want to erode, weaken and eventually destroy our system and replace it with a private, for-profit health care market.

They push forward their policies in many different ways, claiming the public system is intrusive, expensive and inefficient. They charge our system is manipulative, limiting the individual freedom of doctors and patients, and that it undermines the doctor-patient relationship.

They also advance their agenda by working to cut the funding to the system, thereby hindering its activities, and by splitting or fragmenting its programs, fostering problematic gaps between the funding mechanism and providers.

The fact is, dear colleagues, that the adversaries of our national health system in Spain represent the same social forces in the U.S. opposing the fundamental reform that your organization advocates, single payer.

We in Spain are struggling to protect a national health system, while you are struggling to establish one. We both are fighting hard in the belief that citizen involvement is vital to success.

A public health care system is efficient and cheaper to run. It gives health professionals and patients a better life and removes the worries of economic problems in the event of illness. It makes a major contribution to social and individual happiness.

We can be confident in the prospects for our success, because all sensible ideas that are fair and beneficial to the vast majority of the people eventually end up winning.

You have a long road before you, but we wish you every success as a sister organization. We extend our best wishes to all of our professional colleagues in your country and to the American people, the main protagonists and ultimate beneficiaries of your goal.

Health!

Federation of Associations for the Defense of Public Health

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The Federation of Associations for the Defense of Public Health hosted the annual session of the International Association of Health Policy in conjunction with its own meeting this September in Madrid and Toledo, Spain. FADSP invited Physicians for a National Health Program to the meeting to participate in a discussion of how physician advocacy can intervene in our time of global crisis. In the past FADSP has participated in PNHP events. We look forward to continuing this vital dialogue within our common struggle. We have so much to learn from years of effective advocacy by FADSP.

Thank you, FADSP, for the indispensable insight and essential confidence expressed in this wonderful letter of solidarity. Together we shall overcome! ~ Andy Coates

Health IT savings projections are baseless

Posted by on Friday, Nov 20, 2009

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.

Hospital Computing and the Costs and Quality of Care: A National Study

By David U. Himmelstein, MD, Adam Wright, PhD, Steffie Woolhandler, MD, MPH
The American Journal of Medicine
November 20, 2009

BACKGROUND

Many believe that computerization will improve health care quality, reduce costs, and increase administrative efficiency. However, no previous studies have examined computerization’s cost and quality impacts at a diverse national sample of hospitals.

DISCUSSION

We used a variety of analytic strategies to search for evidence that computerization might be cost-saving. In cross-sectional analyses, we examined whether more computerized hospitals had lower costs or more efficient administration in any of the 5 years. We also looked for lagged effects, that is, whether cost-savings might emerge after the implementation of computerized systems. We looked for subgroups of computer applications, as well as individual applications, that might result in savings. None of these hypotheses were borne out. Even the select group of hospitals at the cutting edge of computerization showed neither cost nor efficiency advantages. Our longitudinal analysis suggests that computerization may actually increase administrative costs, at least in the near term.

The modest quality advantages associated with computerization are difficult to interpret. The quality scores reflect processes of care rather than outcomes; more information technology may merely improve scores without actually improving care, for example, by facilitating documentation of allowable exceptions.

Why has information technology failed to decrease administrative or total costs? Three interpretations of our findings seem plausible. First, perhaps computerization cannot decrease costs because savings are offset by the expense of purchasing and maintaining the computer system itself. Although information technology has improved efficiency in some industries (eg, telecommunications ), it has actually increased costs in others, such as retail banking.

Second, computerization may eventually yield cost and efficiency gains, but only at a more advanced stage than achieved by even the 100 “Most Wired” hospitals.

Finally, we believe that the computer’s potential to improve efficiency is unrealized because the commercial marketplace does not favor optimal products. Coding and other reimbursement-driven documentation might take precedence over efficiency and the encouragement of clinical parsimony. The largest computer success story has occurred at Veterans Administration hospitals where global budgets obviate the need for most billing and internal cost accounting, and minimize commercial pressures.

CONCLUSIONS

Whatever the explanation, as currently implemented, health information technology has a modest impact on process measures of quality, but no impact on administrative efficiency or overall costs. Predictions of cost-savings and efficiency improvements from the widespread adoption of computers are premature at best.

http://www.amjmed.com/home

PNHP press release:
http://www.pnhp.org/news/2009/november/projections-of-savings-from-health-it-are-baseless-harvard-researchers-say

VA’s VistA:
http://www.innovations.va.gov/

As currently implemented, health information technology (HIT) has no significant impact on administrative efficiency or overall costs, even in the “100 Most Wired” hospitals. Members of Congress should quit pretending that expanding HIT will produce savings that will help pay for the increased spending called for in their legislation.

This should not be interpreted as a blanket condemnation of HIT. The system used by the Veterans Administration hospitals has improved quality, though their system was designed specifically to enhance patient care. Profitable, proprietary, commercial HIT systems are usually designed to improve billing and cost accounting (and to make money for the vendors), whereas patient care information management in these proprietary systems is designed to mesh with these business functions that are given a higher priority.

We should really think about whether we want to continue to use our public funds to promote private, entrepreneurial HIT systems that have a business orientation, or if we should use those funds for further development of less expensive, open-source HIT systems designed specifically to enhance the quality of patient care, just as the VA health system has done. Their award-winning system, VistA, is available for use in the private sector (VA’s VistA – link above). Isn’t it more logical to look at a system that actually works, and one that that’s already paid for and that we own?

The following is from the PNHP release (link above):

Dr. Steffie Woolhandler, professor of medicine at Harvard and study co-author, said several factors may explain why health IT has failed to reduce administrative costs.

“Any savings may have been offset by the costs of purchasing and running new computer systems,” she said. “In addition, most software is designed around the accounting and billing needs of hospitals, not the clinical side.”

She noted that a computer success story in recent years has been at the Veterans Administration, where global budgets eliminate most billing and internal cost accounting, allowing physicians to focus instead on delivering care.

“The VA system now has our nation’s highest quality and patient approval ratings,” Woolhandler said. “Congress should take note: to get the most benefit from our health care dollars and from health IT, we should adopt a single-payer, Medicare-for-all program. Nothing short of that will allow us to reap the full potential of computerization or to provide comprehensive, quality and affordable care to all.”

One of my professors years ago was a round little man who liked to warn us, with a twinkle in his eye, “Making predictions is very difficult, especially predictions about the future.”  Will a bill pass, in what form, and then what will the long term implications be?  It’s hard to predict.
The incomparable Dr John Geyman, former president of PNHP, makes a strong case in Tikkun “The Affordable Health Care for America Act (HR 3962) :Enough Reform to Succeed?” His argument is that whatever bill this Congress is able to pass will likely set the cause of single payer healthcare back because it “would leave in place an inefficient, exploitive insurance industry that is dying by its own hand, even as [the bill] props [the industry] up with enormous future profits through subsidized individual and employer mandates.”  His comments follow up on those of Marcia Angell on the Huffington Post “Is the House Health Care Bill Better than Nothing?” and others that readers on this site have seen.
Not everyone on the Left agrees. Sam Stein’s piece in the Huffington Post is called “Goldman To Private Insurers: No Health Care Reform At All Is Best.” Goldman’s analysis for the health insurance behemoths is that no reform would benefit them the most, and if we end up with a version close to the House bill, that would cause the industry the most financial difficulty.  Jonathan Cohn in The New Republic asks “The House Bill Is “Worse Than Nothing”? Really?”
Sorting all this out is tough and can be frustrating because there is so much wishful, non-reality-based thinking going on. It is clear that many of the supporters and opponents of the bills, both in Congress and the general public, are clearly deluded, and single payer is what has them flummoxed.
On the Left I keep talking to supporters of the public option who claim to be “single payer at heart”, and they believe that whatever passes will be the camel’s nose under the tent, the slippery slope to single payer.  Seems delusional. If only they are right….
Speaking of the Right, many of them also believe that any bill this Democratic Congress will pass will become the same camel’s nose, the same slippery slope to socialism.  Could they be right, too?
There is still work to do. The handwriting was on the wall Saturday 10/31 when anti-abortion Democrats had enough political oomph to get their Stupid Amendment debated and passed while the Progressive Caucus couldn’t muster enough support to bring either the Kucinich or Weiner Amendments to the floor.
No matter what happens, one thing is certain:  we have to continue to build our movement.  Next time around we have to get all those Representatives and Senators who plan to vote for reform this time, to vote for real single payer reform.  And that would prove the delusional ones were right after all.
Links: HCHP Blog  http://hchp.wordpress.com/ HCHP website: http://hchp.wordpress.com/

Health Care, Essential to Democracy

Posted by on Thursday, Nov 19, 2009

Posted at MichaelMoore.com
November 19th, 2009

Health Care, Essential to Democracy
by Katie Robbins and Andy Coates

Two weekends ago, after the bait and switch of a vote on single-payer for a vote on an anti-abortion amendment, we felt wizened to the possibility of unknown threats in the legislative churn on health reform. As insurance and pharmaceutical companies, Catholic bishops, and the right wing throw in dollars, lobbyists, and pressure for no votes on the final bill, it is clear we who are in the business of protecting and improving our rights to access to health care, including abortion, must remain vigilant and ready to challenge these threats.

First, a little history is in order. In mid-July Rep. Kucinich passed in the Education and Labor Committee an amendment to the House bill for health insurance reform that would make single-payer easier to enact at the state level. On July 31st Rep. Weiner and 6 other members of Energy and Commerce Committee brought to committee an amendment to that would substitute the text of HR 676, the national single-payer bill, for the House bill. Speaker Nancy Pelosi offered a floor vote on single payer — if Rep. Weiner would withdraw the amendment from committee.

Single-payer advocates embraced these efforts wholeheartedly. And we counted upon our champions in the House of Representatives to stand with us.

Vigorous activity ensued, a fourteen week campaign involving millions of people in phone calls, petitions, forums, local protests and vigils, emails and faxes, op-eds and letters-to-the-editor and personal visits. There were conscientious objectors. 158 single-payer supporters were arrested performing acts of civil disobedience, peaceful sit-ins to register their outrage in the offices of health insurance companies and Congress across the nation.

As the grassroots clamor rose, Reps. Weiner and Kucinich sought to surf the wave. The crescendo grew and grew, until one day before the House vote on health insurance reform.

And then — poof! — single payer was back off the table.

Rep. Kucinich’s state-based amendment was out of the bill, “dead as a doornail.” And Speaker Pelosi explained that the substitute amendment couldn’t possibly have a debate and vote, for if it did, amendments to restrict health care for women and undocumented immigrant workers would also get to the floor. Congressional leaders suddenly opined that a losing vote for a single-payer amendment would be “tantamount to driving the movement off a cliff.” Even the President weighed in to discourage a vote on single payer. Rep. Weiner withdrew the amendment.

Yet the next day the Speaker allowed the anti-abortion amendment to the floor, where it passed and was added to the bill. In the end, the only progressive Democrats to vote against the House bill, abortion ban and all, were Reps. Kucinich and Massa, both single-payer supporters.

The people expected universal health care, and the House of Representatives delivered an anti-abortion bill.

Worse, the Democratic Party traded away fundamental women’s rights for a Massachusetts-style mandate, a law to criminalize the uninsured and subsidize unaffordable private insurance premiums with tax money, something we know already will not reduce costs and will not cover everyone, will not lessen disparities and will not improve the health of the nation.

It is astounding to think the Democratic Party has made a bid for the United States to join a few shameful nations that severely restrict women’s access to abortion. Earlier this year we watched, with great dismay, when Mr. Obama chose not to strike the Hyde Amendment from his federal budget proposal. The President has now gone farther, re-affirming the prohibition of federal funding for abortion as a “principle.”

Reproductive rights cannot be bargained away for any reason. Autonomy over our bodies is essential to health care and to democracy.

No nation on earth can call itself a democracy without equal and full access to health care. No nation on earth can call itself a democracy without allowing full personal autonomy over all health decisions, including abortion. These values are severely threatened under the proposed legislation. It is time for protest.

As single payer advocates, we firmly believe that health care decisions must be made between the provider and the patient, with full protection of privacy. Women must be able to access abortion if determined necessary — by either the patient or the doctor.

We call upon the President and the Congress to start from scratch and ask you to join us. Senator Bernie Sanders will introduce a single payer bill in the United States Senate in the coming weeks. Demand that your Senator vote for this bill. In addition, join the National Organization for Women, strong single-payer advocates, in organizing days of action in DC and Pennsylvania to protest the Stupak-Pitts amendment.

The solution to the health care crisis must provide personal freedom from a dysfunctional and unsustainable system that ties health care to the employer and to the spouse. When Medicare was enacted, it reduced poverty in those over 65 by 60%. By this measure, a universal, single-payer system would also provide economic freedom, by raising over 22 million people out of poverty, while providing each of us with full and necessary access to health care. Nothing less will do.

Katie Robbins is National Organizer of Healthcare-NOW! Andy Coates, MD, is a member of Physicians for a National Health Program.

For more information on joining the fight to demand reproductive freedom and single-payer health care, visit:
now.org
pnhp.org
healthcare-now.org

Mercer – Employers hold line on costs?

Posted by on Thursday, Nov 19, 2009

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.

In a tough year, employers hold the line on health benefit cost increases

Mercer
November 18, 2009

* Employers hold cost growth to 5.5 percent in 2009, the lowest increase in a decade

* Growth in use of wellness or health management programs accelerates as large employers look to hold down cost without cost-shifting

* Small employers added consumer-directed health plans in 2009, helping to push up enrollment in these high-deductible plans to 9 percent of all covered employees

However, benefit cost growth outpaced inflation in 2009 by a widening margin.

The ongoing workforce health management (or “wellness”) movement gained considerable momentum in 2009, as offerings of virtually every type of health management program – from health risk assessments to disease management programs to behavior modification programs – rose significantly. While not conclusive, survey results suggest these programs are having an impact: Medical plan cost increases in 2009 were about two percentage points lower, on average, among employers with extensive health management programs than among those employers offering limited or no health management programs. And nearly three-fourths of employers that have measured the return on their investment in health management programs say they are satisfied with the year-over-year savings, lower utilization rates or improved health risks. However, only about a third of all large employers have formally measured ROI.

“A lot more employers were willing to place their bet on health management in 2009,” said Linda Havlin, a worldwide partner and Mercer’s global health and benefits intellectual capital leader. “But they will want to see continual gains. Measuring health management ROI is inherently challenging and continues to evolve.”

Small employers held down cost increases by sharply raising deductibles for in-network PPO services. Consistent with past years, employers kept premium contributions relatively stable, choosing to keep the cost of coverage affordable while shifting the burden to those who use health services.

While growth in CDHP offerings in 2009 was evident only among small employers, the plans are still more common among larger employers: CDHPs are offered by 20 percent of employers with 500 or more employees, and 43 percent of those with 20,000 or more employees.

http://www.mercer.com/summary.htm?idContent=1364345

In their just released 2009 report on employer-sponsored health benefit programs Mercer seems to be celebrating the fact that this year employers have held the line on benefit cost increases. Is their optimism warranted?

Overall, the cost growth for 2009 is 5.5 percent, the lowest increase in a decade. However that increase outpaced inflation by a widening margin. The gap means that health care continues to consume an increasing percentage of wages, whether paid by the employee directly or through forgone wage increases.

Mercer cites two mechanisms for slowing cost increases: 1) small employers simply shifted more costs to the employees by raising deductibles, and 2) larger employers expanded their wellness and health management programs.

Since high deductible plans have lower premiums, small employers were able to avoid the full increases in health care costs, but their employees were further burdened by greater out-of-pocket expenses. Many large employers already offer high deductible plans and have been benefiting from this cost shift to the employee. Although Mercer frames this as being beneficial since it slows the increase in employers’ costs, it is detrimental for their employees since it expands the incidence of underinsurance.

Mercer suggests that wellness programs may have been the primary reason for the slowing of costs for large employers, but is that a valid conclusion? Most wellness interventions would demonstrate benefits in the out-lying years, but the early impact would be negligible on changing the need for health care services. Although many employers express satisfaction with these programs, most of them have not made any effort to measure the actual impact.

There is a far more logical explanation for the two percentage point advantage that they report in their health care costs. The health insurance underwriting cycle is a pattern of repeated larger gains and smaller gains that are due in part to periods of aggressive marketing by the insurers to gain greater market share. In those aggressive years, lower returns are the trade off. Once market share is established, premiums are pushed up to provide greater profit margins.

Insurers and plan administrators have found a new niche in wellness services. They are heavily marketing these products now and so are expected to be in the trough of the underwriting cycle. Once the market for these products stabilizes, we can expect the cycle to move into a peak, catching employers off guard when their health benefit program costs sharply increase in spite of having instituted these wellness programs. It is likely that the response of the employers will be to change their benefit designs which inevitably will result in even more underinsurance.

The point is that health care costs are continuing to increase at intolerable rates and that the purported slowing noted in this report is merely an artifact of the underwriting cycle combined with an expansion of underinsurance.

In an improved Medicare for all program underinsurance and underwriting cycles wouldn’t even exist, but Congress is insisting that we build on our current dysfunctional financing system, in spite of its perversities. How smart is that?

Leading economists’ advice to President Obama on controlling costs

Posted by on Wednesday, Nov 18, 2009

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.

Letter to President Barack Obama urging four elements be included in health reform legislation to control costs

By Alan M. Garber, Victor R. Fuchs, Kenneth J, Arrow

November 17, 2009

President Barack Obama
The White House
Washington, DC 20500

Dear Mr. President,

As the full Senate prepares to debate comprehensive health reform legislation, we write as economists to stress the potential benefits of health reform for our nation’s fiscal health, and the importance of those features of the bill that can help keep health care costs under control. Four elements of the legislation are critical: (1) deficit neutrality, (2) an excise tax on high-cost insurance plans, (3) an independent Medicare commission, and (4) delivery system reforms.

Including these four elements in the reform legislation – as the Senate Finance Committee bill does and as we hope the bill brought to the Senate floor will do – will reduce long-term deficits, improve the quality of care, and put the nation on a firm fiscal footing. It will help transform the health care system from delivering too much care, to a system that consistently delivers higher-quality, high-value care. The projected increases in federal budget deficits, along with concerns about the value of the health care that Americans receive, make it particularly important to enact fiscally responsible and quality-improving health reform now.

In developing our analysis and recommendation, we received input and suggestions from Administration officials, including the Office of Management and Budget and others, as well as from economists who disagree with the Administration’s views.

The four key measures are:

* Deficit neutrality

Fiscally responsible health reform requires budget neutrality or deficit reduction over the coming years. The Congressional Budget Office (CBO) must project that the bill be at least deficit neutral over the 10-year budget window, and deficit reducing thereafter. Covering tens of millions of currently uninsured people will increase spending, but the draft health reform legislation contains offsetting savings sufficient to cover those costs and the seeds of further reforms that will lower the growth of spending. Deficit neutrality over the first decade means that, even during the start-up period, the legislation will not add to our deficits. After the first decade, the legislation should reduce deficits.

* Excise tax on high-cost insurance plans

The Senate Finance Committee’s bill includes an excise tax on high-cost health insurance plans. Like any tax, the excise tax will raise federal revenues, but it has additional advantages for the health care system that are essential. The excise tax will help curtail the growth of private health insurance premiums by creating incentives to limit the costs of plans to a tax-free amount. In addition, as employers and health plans redesign their benefits to reduce health care premiums, cash wages will increase. Analysis of the Senate Finance Committee’s proposal suggests that the excise tax on high-cost insurance plans would increase workers’ take-home pay by more than $300 billion over the next decade. This provision offers the most promising approach to reducing private-sector health care costs while also giving a much needed raise to the tens of millions of Americans who receive insurance through their employers.

* Medicare Commission

Rising Medicare expenditures pose one of the most difficult fiscal challenges facing the federal government. Medicare is technically complex and the benefits it underwrites are of critical importance to tens of millions of seniors and Americans with disabilities. We believe that a commission of medical experts should be empowered to suggest changes in Medicare to improve the quality and value of services. In particular, such a commission should be charged with developing and suggesting to Congress plans to extend the solvency of the Medicare program and improve the quality of care delivered to Medicare beneficiaries. Creating such a commission will make sure that reforming the health care system does not end with this legislation, but continues in future decades, with new efforts to improve quality and contain costs.

* Delivery system reforms

Successful reform should improve the care that individual patients receive by rewarding health care professionals for providing better care, not just more care. Studies have shown that hundreds of billions of dollars are spent on care that does nothing to improve health outcomes. This is largely a consequence of the distorted incentives associated with paying for volume rather than quality. Health care reform must take steps to change the way providers care for patients, to reward care that is better coordinated and meets the needs of each patient. In particular, the legislation should include additional funding for research into what tests and treatments work and which ones do not. It must also provide incentives for physicians and hospitals to focus on quality, such as bundled payments and accountable care organizations, as well as penalties for unnecessary re-admissions and health-facility acquired infections. Aggressive pilot projects should be rapidly introduced and evaluated, with the best strategies adopted quickly throughout the health care system.

As economists, we believe that it is important to enact health reform, and it is essential that health reform include these four features that will lower health care costs and help reduce deficits over the long term. Reform legislation that embodies these four elements can go a long way toward delivering better health care, and better value, to Americans.

Sincerely,

Dr. Henry Aaron, The Brookings Institution
Dr. Kenneth Arrow, Stanford University, Nobel Laureate in Economics
Dr. Alan Auerbach, University of California, Berkeley
Dr. Katherine Baicker, Harvard University
Dr. Alan Blinder, Princeton University
Dr. David Cutler, Harvard University
Dr. Angus Deaton, Princeton University
Dr. J. Bradford DeLong, University of California, Berkeley
Dr. Peter Diamond, Massachusetts Institute of Technology
Dr. Victor Fuchs, Stanford University
Dr. Alan Garber, Stanford University
Dr. Jonathan Gruber, Massachusetts Institute of Technology
Dr. Mark McClellan, The Brookings Institution
Dr. Daniel McFadden, University of California, Berkeley, Nobel Laureate in Economics
Dr. David Meltzer, University of Chicago
Dr. Joseph Newhouse, Harvard University
Dr. Uwe Reinhardt, Princeton University
Dr. Robert Reischauer, The Urban Institute
Dr. Alice Rivlin, The Brookings Institution
Dr. Meredith Rosenthal, Harvard University
Dr. John Shoven, Stanford University
Dr. Jonathan Skinner, Dartmouth College
Dr. Laura D’Andrea Tyson, University of California, Berkeley

Letter:
http://iis-db.stanford.edu/pubs/22739/Economist_Letter_to_the_President.pdf

The source of the letter:
http://bit.ly/13omUB

OECD Tax Database (Table 0.1):
http://www.oecd.org/document/60/0,2340,en_2649_34533_1942460_1_1_1_1,00.html

Bundled payments and ACOs:
http://www.pnhp.org/news/2009/november/rand-and-br-on-savings-through-bundled-payments

For socially conscious health care reform advocates, the primary goal of reform is to see that every individual receives the health care that he or she needs, But what has really driven the reform process has been the concern over the very high costs of health care that have challenged individuals, employers and the stewards of our government health programs.

In this late phase of the reform process many have expressed doubts over the adequacy of the various policies in the reform proposal that allegedly are designed to control health care costs well into the future. In response, twenty-three of the nation’s most distinguished economists have signed on to this letter addressed to President Obama expressing support for four elements that they believe are of critical importance and should be included in the reform legislation. Let’s look closer at these four elements.

* Deficit neutrality

The economists call for budget neutrality initially, to be followed by deficit reduction. Of course they are referring only to the federal government budget and not to private sector spending. The great risk of limiting consideration to public spending is that, in the absence of effectively controlling actual health care costs, the government budget can be controlled only by shifting the costs to the private sector. Individuals and businesses certainly do not want to see an increase in their health care spending, especially while the government is reducing its spending in the later phase, that of deficit reduction.

Isolating health care spending for budget neutrality while continuing with deficits in other government programs (war, financial institution bailouts, interest on the debt, expanding our prison population, etc.) does not seem just. Appropriate use of debt is fundamental to any business, and there is no reason that reasonable debt should not be a part of the government’s management of its financial obligations to health care.

That said, our total government debt is the result of prior devious efforts to reduce revenues (i.e., taxes) in order to force the reduction in funding of government programs. With inadequate revenues and with exploding debt, deficit hawks in Congress can be relied upon to underfund crucial programs such as health care, but theirs is a pathological process since they only look at spending and refuse to consider revenues.

Those who argue that taxes collected for government health care spending remove money from the economy are flat out wrong. Health care is one of the most important and beneficial components of our economy, constituting over 17 percent of our GDP (Gross Domestic Product). Those taxes are moved back into our economy.

Those who scream that we are being taxed to death need another dose of reality. The average total tax revenues of OECD nations (Organization for Economic Cooperation and Development) was 35.9 percent of GDP in 2006. For the United States, the total tax revenue was 28.0 percent of GDP, placing us near the bottom of OECD nations. (OECD Tax Database – link above)

Suppose we increased our tax revenues to the average of OECD nations, which would still be far, far short of those nations with more highly socialized systems. At 7.9 percent (35.9 average minus 28.0 U.S.) of our GDP of about $13.8 trillion, that would increase government revenues by about $1.1 trillion in a single year, ten times the amount they are considering for health care reform. Our entire federal spending is under $3 trillion. We could eliminate entirely the deficits and provide surpluses while keeping tax revenues at well below the OECD average, if only the deficit hawks would look at the revenue side of the ledger.

* Excise tax on high-cost insurance plans

Why would any health insurance plans have very high premiums? One reason is that insurers use medical underwriting to assess high premiums for individuals with preexisting disorders. It would be unfair to tax those premiums for an individual with other burdens, but with adequate regulatory reform medical underwriting should be eliminated anyway.

The more common reason for high premiums is that the plan covers other services and products such as dental care, eye care, maternity benefits, mental health services, and pharmaceuticals. Applying an excise tax to these premiums would result in eliminating such benefits from the plans and shifting these expenses to the individual in the form of greater out-of-pocket spending. The proposals under consideration place a cap on out-of-pocket expenses for covered services, but that cap is unaffordable for many, and these expenses would not apply to the cap. Thus they would impose an even greater financial burden.

Since the excise tax would discourage access to these important health care services, it should be rejected as the flawed policy concept that it is.

* Medicare Commission

Although the Medicare Commission purportedly would be to improve quality and value, its primary purpose would be to limit spending within the Medicare program. Medicare has already served as a leader in innovations to reduce health care spending, with the private insurance industry following. In fact, many providers believe that Medicare has been too aggressive, often resulting in lower reimbursement rates than in the private sector. Granting the Commission more power to use newer innovations to further reduce spending will inevitably increase the animosity held towards Medicare by the providers. A decline in willingness to accept Medicare beneficiaries could further impair access.

This is not to say that the concept of a commission is a bad idea. If the commission worked with the entire health care delivery system in applying potentially beneficial innovations, higher quality and greater value are possible. If the commission became too aggressive, the push-back by providers and their patients would moderate their excesses.

If the power of the Medicare Commission were limited only to Medicare, then there is a potential that cost-cutting aggressiveness might threaten to convert Medicare into a quasi-welfare program not unlike Medicaid, a transformation that would not please our Medicare beneficiaries. It is more likely that the Commission simply would be enmeshed in studies of relatively ineffectual measures that would have little net impact on costs.

We would need a universal Medicare for all program for the Commission to have a real impact that would be both beneficial and cost saving.

* Delivery system reforms

These economists recommend that we reward health professionals for providing better care. The problem is that we don’t know how to do that. They recommend funding research into what tests and treatments work and which ones do not, as if that isn’t what research has been all about anyway. Maybe it would be helpful to directly compare expensive patent drugs to generics, but the overall spending impact will be modest since this year’s patented drugs are next year’s generics.

They also recommend bundled payments, accountable care organizations, plus penalties for re-admissions, hospital acquired infections and other PACs (potentially avoidable costs). In my message two days ago I already discussed the reasons why these measures cannot be relied upon to reduce health care costs (Bundled payments and ACOs – link above).

Is this really the best that these noted economists can come up with? They have made the same mistake as the politicians. Their perception of reform is to build on our existing dysfunctional financing system (an egregiously flawed concept that you would think our leading economists would understand).

If we had an improved Medicare for all we could have 1) deficit neutrality through global budgeting, 2) rational tax policies that are equitable, 3) public administration using the guidance of commissions as appropriate, and 4) our own beneficent monopsony that can realign incentives to promote the delivery system reform that we need. And, oh yes, every single person would be included. It doesn’t take an economist to understand that.

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.