What will employers do under PPACA?

Posted by on Wednesday, May 26, 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.

The Impact of Health Care Reform on Employers

Towers Watson
May 25, 2010

Although U.S. employers view controlling health care costs as their highest health care reform priority, few believe that the recently enacted Patient Protection and Affordable Care Act (PPACA) will stem the tide of rising costs, according to a May 2010 survey by Towers Watson.

In order to cope with anticipated cost increases, many employers plan on:

* Passing on increases to employees (88%)
* Reducing health benefits and programs (74% )
* Absorbing costs in the business (33%)
* Passing on increases to customers (20%)

More than three in four employers (85%) believe that health care reform will reduce the number of large organizations offering employer-sponsored retiree medical benefits. And 43% of employers that currently offer retiree medical plans plan to reduce or eliminate them.

Fifty-eight percent of employers surveyed believe health care reform will drive large employers to adopt total replacement consumer-driven health plans (CDHP) for their active employees.

Press release:

Key findings:

Report (8 pages):

Although we have seen many employer surveys in the past, this one is especially important because it represents the views of employers’ human resources professionals who face the reality that the Patient Protection and Affordable Care Act (PPACA) is now law. Since PPACA was designed to perpetuate the role of employer-sponsored health plans, we need to look at the likely responses of employers.

Most employers (90 percent) believe that PPACA will increase their organization’s health care benefit costs. What is alarming is that employers do not intend to pass those cost increases on to their customers as they would with any other overhead increases, but instead they intend to pass them on to their employees in the form of increased premiums and cost sharing, and a reduction in benefits (which also results in higher out-of-pocket expenses for the employees).

More specifically, 58 percent of employers believe that large employers will adopt total replacement consumer-driven health plans (CDHP) for their active employees. “Total replacement” means that employees would be offered no option other then the high-deductible consumer-driven health plans. That could be disastrous for employees with modest incomes who develop significant health problems.

And future retirees can pretty much forget about receiving any retiree health benefits. Employers indicate that they are likely to take advantage of the fact that retirees under age 65 will be able to purchase plans in the exchanges without being excluded because of preexisting conditions.

This is the insurance that President Obama, during his campaign, promised that you could keep if you wanted to. What he didn’t tell you is that, in most instances, you will not be permitted to drop that plan and select another one in the state insurance exchanges. As long as the employer’s plan has an actuarial value of 60 percent (you pay an average of 40 percent of the medical bills), you are prohibited from selecting a better plan in the exchanges.

Once again, we can still fix this. We can enact a single payer national health program – health care for everyone, without financial barriers.

Bust trusts or bust phony competition?

Posted by on Tuesday, May 25, 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.

Antitrust and Healthcare

Remarks by Christine A. Varney, Assistant Attorney General, Antitrust Division, U.S. Department of Justice
American Bar Association/American Health Lawyers Association
May 24, 2010


The Patient Protection and Affordable Care Act (the Affordable Care Act), called for by the President and enacted by Congress on March 21, relies, in part, on the belief that robust competition and expanded choice will expand coverage while containing cost.

Yet, like many reforms driven by the power of competition to create consumer welfare, the success of these legislative and regulatory efforts will depend as much upon healthy competitive markets free from undue concentration and anticompetitive behavior as it will upon regulatory change. In short, enactment of the Affordable Care Act makes effective antitrust policy more important than ever.

The repeal of the antitrust exemption in the McCarran-Ferguson Act as it applies to the health insurance industry would give American families and businesses, big and small, more control over their own health care choices by promoting greater insurance competition and outlawing anticompetitive health insurance practices like price fixing, bid rigging, and market allocation that drive up costs for all Americans.

Two significant aspects of the Affordable Care Act are the establishment of new competitive marketplaces — known as Exchanges — for individuals and small employers to purchase health insurance, and the formation of Accountable Care Organizations (ACOs) and other initiatives to provide for more efficient delivery and payment of Medicare services and Medicaid pediatric services. There can be no doubt that the success of the Exchanges and the ACOs will depend, in large part, on effective competition, both among health care insurers and providers.

The ultimate goal of health care reform is to harness the power of competition, together with regulation, to expand coverage, improve quality, and control the cost of health care for all Americans. The role of antitrust is to ensure that competition is preserved and protected, so that it is there to be harnessed.

I. Enforcement

The goals of health care reform cannot be achieved if mergers between significant insurers in a particular market substantially reduce competition; nor can those goals be realized if dominant insurers use exclusionary practices to blockade entry or expansion by alternative insurers. The same is true if health care providers use supposedly quality-improving or cost-reducing measures simply to raise prices.

Over the last ten years in numerous investigations across the country, the Division has found that many providers give the best discounts only to insurers with significant market share. Thus, new entrants cannot negotiate for competitive provider discounts because they have few enrollees, and they cannot win new enrollees because they do not have competitive discounts. This situation makes it difficult for insurers to enter new geographic areas or for insurers with small enrollment to expand within existing markets.

The Division is committed to vigorously, but responsibly, scrutinizing mergers in the health care industry that appear to present a competitive concern. If we determine that our initial concerns were well founded, we will not hesitate to block the merger or to require the settlement concessions necessary to protect consumers. On the other hand, if we find that the merger may not substantially lessen competition, we will promptly close the investigation and allow the parties to try to show, through the competitive process, that better business methods can deliver more efficient medical care and medical insurance to American consumers.

II. Competition Advocacy

It is important to keep in mind that successful antitrust enforcement also includes effective competition advocacy. (Examples of DOJ competition advocacy are given for Michigan and California.)

III. Entry Project

First, and foremost, we confirmed that the biggest obstacle to an insurer’s entry or expansion in the small- or mid-sized-employer market is scale.  New insurers cannot compete with incumbents for enrollees without provider discounts, but they cannot negotiate for discounts without a large number of enrollees. This circularity problem makes entry risky and difficult, helping to secure the position of existing incumbents.

Second, we concluded that it may be easier to enter less concentrated markets, with competition between several large but relatively equal-sized insurers, than it is to enter a market with one or two dominant plans. This is a vitally important finding because it illustrates that a critical economic assumption in antitrust analysis — namely, that the higher profits often associated with concentrated markets will attract new entrants who will help restore competitive pricing — is sometimes made without an adequate evidentiary basis. Indeed, this assumption fails to account for barriers to entry, including barriers based on the inability of entrants to achieve economies of scale that will allow them to compete with incumbents.

One partial explanation for the presence of this phenomenon in health insurance markets comes from our third finding, which is that new entrants or niche players are more likely to receive provider discounts comparable to their competitors’ in less concentrated markets than they are in markets dominated by one or two plans.

Finally, our interviews reconfirmed that brokers typically are reluctant to sell new health insurance plans, even if those plans have substantially reduced premiums, unless the plan has strong brand recognition or a good reputation in the geographic area where the broker operates.

IV. Innovation and Efficiency in Health Care Delivery

It is important to keep in mind that not all provider networks involve sufficient financial, clinical, or other economic integration to apply the rule of reason to joint price negotiations with payers. For example, an arrangement among competing providers simply to engage in joint billing, joint collection services, or even joint purchasing of medical supplies or services is generally not the type of economic integration needed to allow providers jointly to set their reimbursement rates under the rule of reason. Rather, such steps simply reflect an effort to coordinate and share some administrative expenses or to receive volume purchasing discounts.

The economic integration that justifies application of the rule of reason to joint price negotiations with payers requires the sharing of some form of financial risk, such as an agreement by providers to accept a capitated rate, a predetermined percentage of revenue from a health plan, or sufficient clinical integration to induce the group’s members to improve the quality and efficiency of the care they provide. While there is no particular formula that can cover all types of legitimate clinical integration, the key is that there must be sufficient clinical integration to motivate the kinds of changes that can achieve real cost-containment or other performance benchmarks.

The Affordable Care Act’s development of ACOs is a good example of how providers might work together to deliver more efficient, high-quality care without inhibiting competition, so long as their collaborations are properly constructed. For example, the ACO encourages competing physicians, and possibly other providers, to coordinate care for a defined Medicare population through redesigning care protocols, utilizing health IT, investing in infrastructure, and meeting quality targets. If the ACO meets quality-of-care and cost targets, it can share the savings with HHS.

Properly constructed, ACOs have the potential to improve health care delivery and drive down costs. Thus, as reform moves forward, the Justice Department will work closely with HHS and providers to offer whatever guidance may be needed to ensure that providers pursue beneficial integrated ACOs without running afoul of the antitrust laws.

In conclusion, let me say that I hope I have made clear that the Justice Department believes that antitrust has — and will continue to have — an essential role to play in health care. If health care reform is to harness the power of competitive markets to produce more and more efficient systems, then we must be up to the challenge of ensuring that our health care markets are, in fact, as competitive as possible — protected from undue concentration or anticompetitive conduct with vigorous but responsible enforcement and effective competition advocacy. In this dynamic environment, a successful effort will require more than “business as usual.” It will require that we provide clear and accessible guidance to health care consumers, providers, and payers so that there is the predictability needed for health care reform to succeed. I think you will find the Department of Justice generally, and the Antitrust Division specifically, up to the task of ensuring that reform is achieved, competition is maintained, and consumers are benefited.


According to Christine Varney, “The Patient Protection and Affordable Care Act (the Affordable Care Act), called for by the President and enacted by Congress on March 21, relies, in part, on the belief that robust competition and expanded choice will expand coverage while containing cost.”

This is a remarkable statement. Think about it. The President and Congress believe that competition between private health plans will contain costs when decades of experience with the private insurance industry has proven that this is a false belief. Competing private plans have failed miserably in controlling costs.

And the promise of competition within the state insurance exchanges? Private insurers currently have free rein of the markets with virtual unlimited ability to compete. Yet we’ve seen consolidation and concentration within markets, as less dominant companies withdraw. It is likely that only a few major players will be interested in participating in the exchanges. A small player would be unlikely to attract an adequate number of physicians and hospitals to be included in their networks, and consequently would be unable to attract enough individuals to sign up with a plan with such sparse networks. The belief that the state exchanges will promote robust competition between private insurers, which the free market hasn’t done, is a pipe dream.

Now think about costs under the Medicare program. Although a non-competitive government program, Medicare has been far more effective in controlling costs than have the private insurance plans. In fact, the private insurance industry has often followed Medicare’s lead in innovations in the financing of health care.

The attempt to introduce private competition into the Medicare program has been a dismal failure. The care covered by the private plans (Medicare plus Choice, and then Medicare Advantage) has cost more than care provided in the traditional Medicare program for individuals with comparable health care needs. The private plans have been totally unsuccessful in their efforts to compete on a cost basis with our public program – Medicare.

Now back to that remarkable statement – the one that says that the President called for and Congress enacted the Affordable Care Act on the belief that robust competition would contain costs. What a sham! President Obama has known all along that the private insurance industry has failed and that it would take a single payer national health program to cover everyone while controlling costs. He has said as much. The members of Congress know that as well. Why else would they keep saying that if this doesn’t work (which policy science tells us it can’t) then we’ll have single payer?

The last thing we need is the Department of Justice providing antitrust oversight of a dysfunctional private insurance market when the obvious solution is to establish our own public monopsony which controls costs through global budgeting and other proven single payer mechanisms. A monopsony eliminates the need for competition to control costs. That would be detrimental in the private sector, but it would be highly beneficial when it is our own public program.

If we get rid of the private, anti-competitive insurance trusts, then we don’t even need the Department of Justice trust busters on the scene.

UnitedHealthcare agrees to offer junk insurance to millions of restaurant workers

Posted by on Monday, May 24, 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.

NRA partners with UnitedHealthcare

By Paul Frumkin
Nation’s Restaurant News
May 21, 2010

The National Restaurant Association said it has partnered with insurance giant UnitedHealthcare in an effort to make health care coverage more accessible and affordable for foodservice operators and their employees.

The initiative, called “Restaurant Health Care Alliance,” could help provide coverage for the 4 million to 6 million restaurant employees who currently are without insurance, according to Dawn Sweeney the NRA’s president and chief executive. The industry employs about 13 million people.

While details of the plans have not been hammered out, the NRA and UnitedHealthcare said they intend to provide a range of options that will be tailored to the restaurant industry.

“We’re looking at developing a continuum of products,” Sweeney said Friday during a press conference in Chicago announcing the alliance. She said plans could range from discount cards for those employees “who aren’t ready to purchase full health insurance all the way to comprehensive coverage.” Prices could start as low as $100 a month, she added.

Mike Gibbons, the NRA’s chairman of the board, noted that the partnership with UnitedHealthcare would help alleviate the financial burden that national health care reform will put on the restaurant industry.

“The cost of health care reform could be potentially devastating,” he said. “The alliance will give lower cost health care alternatives.”


You would think that now that the Patient Protection and Affordable Care Act (PPACA) is law, UnitedHealthcare, the nation’s largest insurer in terms of revenues, would shape up its act by offering expansions of coverage compliant with the alleged intent of the law to provide adequate health insurance for everyone. That’s what you might think, but you’d be wrong.

The National Restaurant Association (NRA) actively opposed PPACA. It’s not too difficult to understand why. There are close to a million businesses in the restaurant industry, most of which operate on fairly narrow profit margins. Because of their sensitivity to overhead expenses, they have left millions of their food services workers with out any health care coverage whatsoever.

Congress recognized that requiring small businesses to offer all employees insurance coverage would create a significant financial burden for many of them. Thus they exempted businesses with less than 50 employees from the penalty for not providing coverage. But those with 50 or more employees will have to provide “minimum essential coverage” to avoid the penalty. That is defined in the law as providing an actuarial value of 60 percent, though NRA is continuing to lobby for regulations that would keep the more specific requirements to a minimum.

With the potential of gaining millions of new insurance customers from the restaurant industry alone, UnitedHealthcare is quite willing to craft the inexpensive products that the restaurant industry is seeking in response to the requirements imposed by PPACA. But discount cards? That’s not even insurance! The other “lower cost health care alternatives” at best would be underinsurance products that will not protect restaurant employees nor their families who may develop health problems. Junk insurance is what they’re selling!

This is UnitedHealthcare in action after PPACA has become law. It is clear that they have no intent to follow any other path than business as usual. Let’s not go that route, but instead let’s blaze a path to a single payer national health program. Then all restaurant workers (and everyone else) would have the health care that they and their families might need.

Complex eligibility variables create inequities

Posted by on Friday, May 21, 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.

‘Broad’ health care tax cut for small business leaves out some companies

By Ricardo Alonso-Zaldivar
Los Angeles Times
May 19, 2010

When the administration unveiled the small business tax credit earlier this week, officials touted its “broad eligibility” for companies with fewer than 25 workers and average annual wages under $50,000 that provide health coverage.

Lost in the fine print: The credit drops off sharply once a company gets above 10 workers and $25,000 average annual wages.

It’s an example of how the early provisions of the health care law can create winners and losers among groups lawmakers intended to help — people with health problems, families with young adult children and small businesses. Because of the law’s complexity, not everyone in a broadly similar situation will benefit.


We could have had a health care financing system that automatically included everyone. Instead we enacted a complex, fragmented system with so many eligibility and payment variables for a large variety of plans and programs that it is impossible to fit everyone into a slot. Not only is this the most expensive way to pay for health care, it also ends up being inequitable since individuals with similar circumstances can end up having quite different financial obligations, or even end up with one covered and the other not.

It doesn’t have to be this way. We can still enact a single payer national health program that would cost less and actually work for everyone.

Non-profit Detroit Medical Center selling out to for-profit Vanguard

Posted by on Thursday, May 20, 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.

Can Health Care Save Detroit?

By Noah Ovshinsky
May 20, 2010

A few weeks ago, officials with the Detroit Medical Center, the city’s largest health system, made an announcement that was as startling as it was welcome: that they intended to sell the nonprofit to an investor-owned company. As part of the deal, Nashville-based Vanguard Health Systems promised to spend $850 million on much-needed capital improvements.

The Detroit Medical Center, or the DMC as it’s called locally, is the city’s primary safety net, providing more uncompensated care than any other health system in the state. That commitment comes at a cost. While the DMC has turned a profit for six years in a row, officials say the health system’s payer mix makes raising money on Wall Street all but impossible. As a result, the facilities are showing their age.

Without selling hospitals, turning away needy patients or cutting services, experts say they don’t see how Vanguard will get a good return on its investment.



Vanguard, DMC Announce Letter of Intent

Vanguard Health Systems
March 19, 2010

The Detroit Medical Center (DMC) Board of Trustees and Vanguard Health Systems Inc. announced today that they have signed a letter of intent for DMC to become part of the Vanguard system and for Vanguard to invest $850 million in capital improvements to DMC’s eight-hospital system.

Charles N. Martin, chairman and chief executive officer of Vanguard Health Systems, said… “We are very excited about entering the Detroit market and look forward to working with the DMC management team, who has an outstanding record of delivering care and managing financial challenges.”

(Do not rely on any forward-looking statements as such statements are subject to numerous factors, risks and uncertainties that could cause Vanguard’s actual outcomes, results, performance or achievements to be materially different from those projected. These factors, risks and uncertainties include, among others, Vanguard’s ability to negotiate a definitive agreement for the acquisition of the DMC System and to successfully consummate the acquisition and integrate its operations; Vanguard’s high degree of leverage and interest rate risk; Vanguard’s ability to incur substantially more debt; operating and financial restrictions in Vanguard’s debt agreements; Vanguard’s ability to generate cash to service its debt; potential liability related to disclosures of relationships between physicians and Vanguard’s hospitals; Vanguard’s ability to grow its business and successfully implement its business strategies; Vanguard’s ability to successfully integrate any future acquisitions; the potential that acquisitions could be costly, unsuccessful or subject Vanguard to unexpected liabilities; post-payment claims reviews by governmental agencies that could result in additional costs to Vanguard; conflicts of interest that may arise as a result of Vanguard’s control by a small number of stockholders; the highly competitive nature of the healthcare business; governmental regulation of the industry including Medicare and Medicaid reimbursement levels; changes in Federal, state or local regulation affecting the healthcare industry; the possible enactment of Federal or state healthcare reform; pressures to contain costs by managed care organizations and other insurers and Vanguard’s ability to negotiate acceptable terms with these third party payers; the ability to attract and retain qualified management and personnel, including physicians and nurses; claims and legal actions relating to professional liabilities or other matters; the impacts of weakened economic conditions and volatile capital markets on Vanguard’s results of operations, financial position and cash flows; Vanguard’s failure to adequately enhance its facilities with technologically advanced equipment could adversely affect its revenues and market position; Vanguard’s exposure to the increased amounts of and collection risks associated with uninsured accounts and the co-pay and deductible portions of insured accounts; Vanguard’s ability to maintain or increase patient membership and control costs of its managed healthcare plans; the geographic concentration of Vanguard’s operations; the technological and pharmaceutical improvements that increase the cost of providing healthcare services or reduce the demand for such services; the timeliness of reimbursement payments received under government programs; the potential adverse impact of known and unknown government investigations; and those factors, risks and uncertainties detailed in Vanguard’s filings from time to time with the Securities and Exchange Commission, including, among others, Vanguard’s Annual Reports on Form 10-K and its Quarterly Reports on Form 10-Q.)


Non-profit Detroit Medical Center (DMC) is the city’s primary safety net, providing more uncompensated care than any other health system in Michigan. In spite of difficult economic conditions, DMC has been profitable for the past six years. Even Vanguard’s chairman states that the DMC management “has an outstanding record of delivering care and managing financial challenges.” So why is DMC selling to an out-of-state, for-profit hospital chain?

The reason given is that highly-leveraged (i.e., debt laden) Vanguard intends to infuse funds for capital improvements. But why should DMC relinquish its tax-favored status that helps to ensure that retained profits can be moved to the capital budgets, as with other non-profits? With Vanguard ownership, not only will they lose revenue in taxes, they also will have to divert more revenue to servicing Vanguard’s massive debt.

This says nothing about the fundamental business differences between non-profit hospitals with a sole mission to provide patient care and for-profit hospitals with an SEC-mandated mission to enhance investor value.

Nobody reads the fine print of the “forward-looking statements” disclaimers, but they are customized to provide the type of transparency that we clamor for today. If you think that transferring a major non-profit center that is successfully providing much needed safety-net services to a highly-leveraged, for-profit, out-of-state hospital chain is a good deal, then you should read the fine print of the “forward looking statements” above.

Congressman John Conyers’ Medicare for All bill, H.R. 676, calls for conversion of the for-profit, investor-owned components of our health care system into non-profits. It would be sad indeed if this important center in his own home city of Detroit were to undergo the opposite conversion, placing the demands of rich investors ahead of the needs of low-income patients.

Hospitals abusing electronic patient dat

Posted by on Wednesday, May 19, 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.

Hospitals criticized over offers to earn or save money by sharing electronic patient data

By Jason Roberson
The Dallas Morning News
May 18, 2010

The $45 billion set aside for electronic health records in the federal government’s 2009 stimulus package created a carrot-and-stick approach to lure providers into the electronic age. Physician practices could be paid up to $44,000 over five years, and hospitals could get a maximum of $15.9 million to install systems that comply with federal rules.

On the other hand, the government would penalize providers that don’t participate, reducing their Medicare and Medicaid payments by 1 percent beginning in 2015. In later years, the penalty grows to 3 percent.

Electronic records are expected to allow doctors to coordinate care for the sickest patients, eliminate paper-transcribing errors that lead to inaccurate prescriptions, and avoid duplicate lab and imaging tests.

But with the promises of efficiency come questions of privacy.

The vendor that Dallas-based Tenet Healthcare Corp. uses has been criticized for sharing patient data with drug companies. The vendor that Fort Worth’s Cook Children’s Health Care System uses is considering offering physician customers discounts for sharing patient data.

Texas Health Resources Inc., an Arlington-based hospital system, and Children’s Medical Center Dallas announced April 27 that patients seen at one hospital will have their records available electronically at the other if they need to be admitted.

This summer, Parkland Health & Hospital System, which operates Dallas County’s public hospital, is expected to join them. That means a patient’s medical records will be seamlessly, electronically transferable to three of North Texas’ largest hospitals.

Cerner Corp. – a Kansas City-based electronic health record vendor with 200 Texas customers, including Tenet Healthcare – shares unidentifiable patient records with drug companies and researchers looking for patients to participate in clinical trials, says a company spokeswoman.

Doctors long have made extra money by referring patients to clinical drug trials. Cerner says it simplifies and cleans up the process by acting as a middleman of sorts between doctors and drug companies.

But Dr. Deborah Peel, an Austin psychiatrist and founder of the nonprofit advocacy group Patient Privacy Rights, questions whether a patient’s most confidential information in their medical records, such as psychological treatment or HIV testing, will be secure at those hospitals.

Cook Children’s electronic records system is different from most others in hospitals. Rather than pay $50 million to $120 million installing software for its 400 physicians in 55 locations, it paid less than $1 million for an online record-keeping service.

But the key difference, Peel said, is that the damage of illegally accessed electronic records is more extensive.

“Once your information is released, it’s like a sex tape that lives in perpetuity in cyberspace,” Peel said. “You can never get it back.”


“… a sex tape that lives in perpetuity in cyberspace…” Certainly very few if any readers of these comments have personal sex tapes that could live in perpetuity once released in cyberspace, but we all have personal medical data that we would just as soon not share with the world, even if we are revealed as living a perhaps boring life of relative purity. Even that is no one else’s business.

Yet the federal government is going to penalize Medicare and Medicaid providers that do not covert their patient data into electronic form. Promises of system security provide little reassurance when people with other interests, whether for business purposes or for more nefarious intent, have access to those records. As mentioned in this article, hospitals are already taking liberties with private patient data.

How well does controlled access work? Rupert Murdoch controls Internet access to certain articles in The Wall Street Journal, limiting them to paid subscribers.

Try this experiment. Log onto The Wall Street Journal at http://online.wsj.com/home-page. Go to the section labeled subscriber content. Click on any article. You will see only the opening preview of the article, but then must subscribe to see the full article. But wait. Cut the precise title of the article and paste it into a Google search box. The first item that comes up in the Google search is likely a selection that lists the same title, with a WSJ link. Click on it and you have – voila – the full article, which already has been released into cyberspace.

Admittedly, electronic health systems vendors will use a higher level of security for patent records, but they are no more secure from hackers than are Murdoch’s subscriber-only articles secure from theft by those of us with only the simplest of computer skills.

At this stage, infallible cybersecurity is only a wish, especially for a system that will eventually have over 300 million patient records with variable degrees of interconnectivity. It is premature for the government to start penalizing us for declining to expose patient data to this potential threat.

Looking for the magic in information systems has been yet one more unfortunate diversion from achieving the most consequential goal of all – affordable health care for everyone through an improved Medicare for All. Let’s work on that first.

J.R. Slosar’s “The Culture of Excess”

Posted by on Tuesday, May 18, 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.

The Culture of Excess

How America Lost Self-Control and Why We Need to Redefine Success

By J.R. Slosar

From the Introduction

The first chapter provides a background of definition and symptoms of narcissism and its application to our culture and society. The complexity of the concept is presented from history, research, and application. Chapter 2 separates out the factors in the economic marketplace that contribute to cultural narcissism. Chapter 3 focuses on coping with the impact of the factors of cultural narcissism, and explores reality and loss, rigidity and self-destruction, and perfectionism and deception. The fourth chapter looks at our avoidance and anxiety of numbers, math or quantitative analysis, a cultural weakness that opens the door to faulty comparisons and poor decisions. A different perspective is offered in Chapter 5, as our health care system is offered as a primary example of how our society sanctions cultural narcissism and self-defeating behavior. Chapter 6 focuses upon changes in reality and hero images as representative of today’s cultural narcissism. An analysis of sports as a dramatic seeking of reality is discussed. Chapter 7 discusses identity theory and development with the focus on today’s youth and how they see and present themselves. Finally, the last chapter summarizes, integrates, and offers structural recommendations to help change directions and return to a more balanced and realistic appraisal of our economic system and our day-to-day lives and decisions.

From Chapter 5 – Health Care: Waste, Excess and Brokers

The dramatic insistence on free market principles and competition determines the way  health care is delivered today. The entire process exemplifies the culture of excess and cultural narcissism. The excess comes from the tremendous waste of money and resources. This is coupled with the ability of brokers and corporate entities to overcharge and take out money at everyone else’s expense. These are the entitled “me” in the equation. The rest of us continue to pay more and more and even get less and less. Or, many just cannot afford health care at all. Facts and meaningful comparisons are dismissed and not considered by the fear of an alternative labeled as Socialism.

From Chapter 8 – Generation We

To address current trends, our culture must develop a new generation that will move toward a different concept and process of attaining success or “making it.” This new concept is based on connectedness with culture and has a broader perspective of inclusiveness. It also involves having less sense of entitlement, more realistic expectations, and more willingness to regulate one’s own behavior and the marketplace we live in. These are the components need to develop a Generation of We. To effect these changes will mean challenging basic economic assumptions and the elevated status of established economic theories and principles. In turn, we must challenge our current definition of success. The transition from a “me” society to a “we” society can be framed as the classic dichotomy of individualism versus collectivism. But it is a larger and more complex issue than that.

The literature in social psychology is extensive in arguing about the issue of what comes first in order to change. Is it necessary to change behavior first, for change to occur – or is it necessary to change attitude before behavior change can occur? The dichotomy of behavior versus attitude for individuals to change is also applicable to our culture. Changes in individual behavior will principally follow changes dictated by policy. Our mass consumption society will only redirect when forced to. Narcissistic entitlement is too high – self-control is pummeled and expectations of voluntary change are naive. The cycle and patterns  of the culture of excess are too ingrained. As a result, regulation in policy will be an important factor in the change process, and replace the conscious efforts of deregulation and no regulation. As discussed earlier, the cultural deregulation and no regulation movement has deregulated our inner mechanisms of individual self-control. Changes in attitude and thinking will also be related to policy; however, confrontation must occur between current attitudes and thinking that is “me based.” Challenging some existing and entrenched beliefs about economics and economic growth will be necessary for change to occur.


When you look at different models of health care delivery and its financing, the logic of single payer prevails. President Obama has stated such, and even many conservatives agree, though ideologically opposed. So it has been difficult for those of us who support health care justice to understand why there has not been an adequate national grassroots uprising demanding the enactment of an improved Medicare for all. Dr. Slosar’s book provides some insight as to why.

In “The Culture of Excess,” Dr. Slosar gives us the perspective of the discipline of psychology, both as applied to individuals and as applied to our culture. He explains how cultural narcissism has permeated our society and has led to the culture of excess. As the “me” society has dominated over the “we” society, narcissism has suppressed the support for collective solutions to our social problems. Within that framing, it is easier to understand why a near-perfect “we” solution for health care reform – single payer Medicare for all – was rejected in favor of the highly-flawed “me” solution – the individual private insurance plans.

Although the process will not be easy, Dr. Slosar shows us why addressing our cultural narcissism must be an integral part of achieving health care justice for all. In a Generation We, everyone will have the health care that they need.

Gingrich predicts nationalized health care

Posted by on Monday, May 17, 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.

Gingrich in Va.: A Republican Congress could defund health care law

By Rosalind Helderman
The Washington Post
May 14, 2010

(Former House Speaker Newt) Gingrich’s comments came at a health-care industry sponsored conference held by Center for Health Transformation, a project of his consulting firm.

Gingrich argued the federal law has been intentionally designed to encourage businesses to drop health care for their employees, incurring a new fine in the law for not offering insurance. Employees will then enter new individual health exchanges, Gingrich argued, but find them so expensive that they will clamor for a nationalized health care system.


Although we don’t agree with Newt Gingrich’s solution for our health system’s problems (computerize and privatize the entire system), we do agree with him and the multitude of other conservatives who state that the intolerable costs of health care eventually will drive the nation to demand a nationalized health care system. It’s just too bad that so much more suffering will take place before we arrive there.

British Medical Association opposes for-profit commercialization

Posted by on Friday, May 14, 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.

Our Principles

British Medical Association (BMA)

The BMA is against the increasing commercialisation of patient care. We want to see the NHS restored as a public service working co-operatively for patients, not a market of commercial businesses competing with each other. That’s why we’re campaigning for an NHS which:

1. Provides high quality, comprehensive healthcare for all, free at the point of use

2. Is publicly funded through central taxes, publicly provided and publicly accountable

3. Significantly reduces commercial involvement

4. Uses public money for quality healthcare, not profits for shareholders

5. Cares for patients through co-operation, not competition

6. Is led by medical professionals working in partnership with patients and the public

7. Seeks value for money but puts the care of patients before financial targets

8. Is fully committed to training future generations of medical professionals


Who could understand better the British National Health Service than the physicians of the British Medical Association? Their experience has led them to take a strong stand against for-profit commercialization of health care. Are physicians in the United States fundamentally that much different from those in Great Britain? Don’t think so.

Canadian private, for-profit hospital files for bankruptcy

Posted by on Thursday, May 13, 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.

Bankrupt beacon of privatized health-care

By Gillian Steward
May 11, 2010

A Calgary for-profit hospital, once a beacon of hope for medical entrepreneurs across the country, declared bankruptcy last week. And who will have to pick up the pieces? None other than the public health-care system and ultimately Alberta taxpayers.

For years, critics predicted that this experiment in privatized health care would prove unreliable and expensive. But no one imagined a scenario in which publicly funded Alberta Health Services would go to court in a bid to keep the lights on over the operating tables in an investor-owned hospital. No one imagined that AHS would be paying receivership fees in order to keep the doors open. But this is, in fact, what has happened because Calgary’s public health-care system is so reliant on private partners.

The private hospital, Health Resource Centre, was once the focal point of premier Ralph Klein’s health-care strategies. It was for the benefit of HRC and its bevy of investors and orthopedic surgeons that in 2000 the Alberta government passed the Health Care Protection Act, which allowed private surgical clinics to keep patients overnight, thus allowing HRC to perform hip and knee replacements that had previously been permitted only in public hospitals.

The Klein government had already closed three public hospitals in Calgary as it pared its budget in order to eliminate the deficit. So there was indeed a shortage of operating theatres, a shortage HRC was quite prepared to fill. It had taken over space in one of the hospitals that had been closed and sold off. And it had been lobbying government ministers and local health authority administrators in an effort to secure contracts to provide surgeries for publicly insured patients who could not be accommodated in the public hospitals.

In 2004, HRC finally hit pay dirt. The regional health authority awarded it a two-year contract worth $20 million for the provision of 2,500 hip and knee surgeries. The health authority acknowledged that it was paying 10 per cent more than what it would cost if the surgeries were done in a public hospital but, given the shortage of operating theatres, it didn’t have much choice.

The contracts continued and HRC became so successful that it decided to expand and rent expensive space in a new development. That’s when HRC ran into trouble. Before it had even moved in, the developer claimed HRC had defaulted on payments. HRC claimed that Alberta Health Services had cut back on promised contracts, and declared bankruptcy.

AHS then went to court to try and save HRC, for without it there are not enough operating theatres to accommodate all the patients scheduled for surgery.



Clinic rescue costs $2.8M

By Colette Derworiz
Calgary Herald
May 12, 2010

Alberta Health Services will spend at least $2.8 million to keep a financially troubled private surgical centre operating for the next eight months, sparking outrage the Stelmach government is using taxpayer money to prop up a for-profit enterprise.

Health Resource Centre — a private facility owned by Networc Health Inc. — will stay open to perform publicly funded knee and hip replacement surgeries after the Edmonton-based medical superboard took the unusual step of filing legal action to fend off a possible bankruptcy.

But the intervention comes with a price tag for taxpayers after AHS ended up buying $1.3 million of the company’s outstanding bank loans (at full value) to bolster the superboard’s legal standing in the case as a secured creditor.

In addition, AHS agreed to pay $600,000 in interim receivership costs and the clinic’s monthly rent — which will work out to nearly $960,000 from now until January — to Northwest Healthcare Properties, the landlord

“You have to wonder how many times taxpayers have to pay for the same service,” said Liberal MLA Kevin Taft. “Taxpayers seem to be on several hooks at once for this debt. It’s expensive for the taxpayers, unnerving for the patients and it’s gotta be difficult for the staff. This is just lose, lose, lose.”

Proponents of public health care said it’s an expensive lesson.

“AHS paying $100,000 a month on a building they sold for a song just rubs salt in the wounds of the paying public,” said David Eggen of Friends of Medicare.

Dr. Tom Noseworthy, a health policy expert at the University of Calgary, said the region “needed some breathing room” to continue delivering the surgeries.

“For practical purposes, that private enterprise has become an extension of their business, or shall we say, our business,” he said. “Private health-care delivery is never cheaper, it’s never of better quality and you don’t get better outcomes. I don’t know how many times we have to say that.”



Calgary Herald

July and August 2005

Premier Ralph Klein:  “Let me be blunt. We have unacceptable waiting lists in our publicly funded, rationed health-care system, and all the money in the world is not going to eliminate them.”

Don McCanne:  “Ralph Klein states that ‘all the money in the world’ is not going to eliminate waiting lists, unless the source of the funds is private instead of public. What nonsense.”


Right-wing ideologues, such as former premier Ralph Klein of Alberta, have continued to push for more privatization of Canada’s health care system. They claim that the private sector provides greater access and higher quality at a lower cost. As if they didn’t have enough contrary evidence from the United States, they have continued with their experiments in privatization.

The experience with Health Resource Centre – a private, for-profit hospital – reinforces the proponents of the public system who use health policy science to sound the alarms over the ill-advised march toward further privatization.

The current saga began with Premier Klein’s notion that public hospitals had to be shut down because the taxpayers couldn’t afford them, yet private hospitals should position themselves to address the problem of excess queues which were further exacerbated by the failure of the government to appropriately adjust capacity in the system. He seems to imply that private funds manifest some sort of magical quality that public funds lack.

The results of this experiment would suggest the opposite. The for-profit Health Resource Center not only provided the same orthopedic services at a 10 percent greater cost, the center is now going to cost the taxpayers much more money in an effort to bail it out. This could have been prevented if Klein and others of his ilk had provided appropriate stewardship of the public program. Tweaking a public system is far less expensive than establishing a parallel private system.

Dr. Tom Noseworthy, health policy expert at the University of Calgary, states it well when he says, “Private health-care delivery is never cheaper, it’s never of better quality and you don’t get better outcomes. I don’t know how many times we have to say 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.