As we know, the House passed its health care reform bill on October 29, 2009 after many months of contentious debate. By a narrow margin, 220-215, the 1,990 page, almost 20 pound bill was passed. It laid out the most liberal health care reform that might be expected out of Congress this year, since any bill that may clear the Senate will certainly be more restrictive.
In order to answer our question as to the value of the House bill, we need to re-state the original major goals of reform: (1) contain skyrocketing costs of health care and health insurance; (2) expand access to care by including everyone; and (3) improve the quality of care.
At a gross cost of $1.055 trillion over ten years, the House bill would do some good things, including reduction of the uninsured by up to 30 million; helping many Americans to pay for insurance through government subsidies; helping small business to provide coverage to their employees; expanding Medicaid and community health centers; establishing a new Center for Comparative Effectiveness Research to study and recommend the most effective treatments; initiating limited reforms of the health insurance industry, such as termination (four years hence) of its common practice of denying coverage based on health status and pre-existing conditions; phasing out government overpayments to private Medicare Advantage plans; revoking a decade-old anti-trust exemption for insurance companies; and creating a new long-term care program (CLASS ACT) to supplement Medicaid and/or private long-term care insurance.
However, the negatives far outweigh the positives, and adopting this bill would delay real reform for years to come. Despite a chorus of accolades about the bill by its supporters, even comparing it with the historic importance of Social Security and Medicare, this monster bill instead bears the heavy imprint of corporate stakeholders who themselves are largely responsible for out-of-control health care costs. After months of lobbying and campaign contributions to legislators crafting the legislation, their multiple conflicts of interest and political compromises, this bill ends up being a bailout for the insurance industry and a bonanza for stakeholders in the medical industrial complex.
Here are some of the major problems with the bill:
• It will not “bend the cost curve” for many reasons—with the exception of a provision that the government negotiate drug prices with manufacturers (as the VA does so effectively), there are no real restraints on the prices of health insurance or health care services; insurers have already warned that premiums will continue to surge in future years; perverse incentives would remain in the system to continue providing large amounts of inappropriate and unnecessary services, especially by specialists in more highly reimbursed areas; and recommendations based on studies by the new Center for Comparative Effectiveness Research could not be used to mandate coverage or reimbursement policies.
• As the crisis in declining access to care only grows (with already 46 million uninsured and at least another 30 million underinsured), expansion of Medicaid, subsidies, and limited restrictions on insurers would not take place for four more years. And as many states struggle with their deficits during the recession, access and benefit levels available to patients on Medicaid will be seriously jeopardized in many parts of the country. Meanwhile 45,000 Americans are dying each year as a result of being uninsured—one every 12 minutes.
• Because of a number of small-print provisions in the bill, bought by industry interests and crafted by their representatives, we would see a growing epidemic of underinsurance among the newly insured. These are some of the reasons: low requirements for actuarial value, the proportion of health care costs that insurers are required to pay for care (probably ending up as low as 65 or 70 percent when further compromises are made with the Senate); restricted levels of benefits to be covered (the minimal essential benefits package would be in four tiers, has yet to be developed, and we can expect that it will fall far short of all necessary care); in a last-ditch effort to pass the bill and assuage pro-life legislators, new anti-choice language was added by the Stupak amendment that would deny coverage of abortion care to millions of women; and coverage shortcomings of private plans already in force will be grandfathered in without reform.
• Even after the expenditure of more than $1 trillion, the bill would still leave some 18 million Americans uninsured.
• The public option, diminished as it has been to the point where it could only include 2 percent of Americans by 2019, would not have enough market clout to “keep the insurers honest.” The Congressional Budget Office (CBO) has already concluded that the public option would not offer real competition to private insurers, and that its premiums would even have to be higher than private premiums. It would not be available until 2013 through the new Health Insurance Exchange, and then only to the uninsured and some employees of small businesses without coverage. Moreover, such Exchanges have no track record of success. After 15 years of experience in California, that Exchange failed, mostly due to lack of pricing power and adverse selection by attracting sicker enrollees.
• The CBO has projected that rising insurance costs could mean that middle-income families would spend 15 to 18 percent of their income on premiums and co-payments.
• This bill would not reverse the unraveling of the employer-sponsored insurance system because of rising health care costs that outpace the rest of our economy; despite subsidies to small business, employer-sponsored insurance would remain unsustainable.
• This bill would only add to the already large burden of complexity and bureaucracy, together with their additional costs. At the same time, it would forego savings of some $400 billion a year that could otherwise be achieved through a simplified, more efficient single-payer system.
So in sum, this bill, while well intentioned, is fatally flawed. It would not effectively address the three major system problems demanding urgent reform, and would delay real reform by letting much of our population falsely think that reform is at hand. It would leave in place an inefficient, exploitive insurance industry that is dying by its own hand, even as it props it up with enormous future profits through often subsidized individual and employer mandates.
The most fundamental single question about how to reform our health care system should be whether or not we abandon our multi-payer, mostly investor-owned financing system or move to a not-for-profit single-payer system, Medicare for All, which this year’s political process has carefully kept off the table. The lesson of history in this country tells us that, as long as we retain private health insurance at the core of our health care system, we can never achieve universal access to affordable, comprehensive high-quality care.
Dr. John Geyman is professor emeritus of family medicine at the University of Washington School of Medicine in Seattle, a past president of Physicians for a National Health Program and author of “Do Not Resuscitate: Why the Health Insurance Industry Is Dying, and How We Must Replace It.”
Buy John Geyman’s Books at: www.commoncouragepress.com
This article originally appeared in Tikkun magazine on Nov. 16, 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.
Downwardly Mobile – The Accidental Cost of Being Uninsured
By Heather Rosen, MD, MPH; Fady Saleh, MD, MPH; Stuart Lipsitz, ScD; Selwyn O. Rogers Jr, MD, MPH; Atul A. Gawande, MD, MPH
Archives of Surgery
The Centers for Disease Control and Prevention estimate that in 2004, there were 112 012 deaths related to unintentional injuries alone in the United States. Unintentional injury is within the top 10 causes of death for every age group and is the leading cause of death among persons aged 1 to 44 years.
Uninsured trauma patients in the NTDB (National Trauma Data Bank) had a statistically significant higher adjusted odds of mortality compared with insured trauma patients. Our subgroup analyses strongly corroborated these findings. In younger patients (aged 18-30 years), the adjusted odds of mortality after trauma remained higher for uninsured patients compared with insured patients, indicating that the differences persist in a relatively healthy cohort. In the subgroup analyses of head-injured patients and those with 1 or more comorbidities in the NTDB, the adjusted odds of mortality in the uninsured population remained significantly high.
Most recent research has concentrated on decreased (or lack of) access to care as a result of being uninsured. However, we found that, even after admission to a hospital, trauma patients can have worse outcomes based on insurance status. This concerning finding warrants more rigorous investigation to determine why such variation in mortality would exist in a system where equivalent care is not only expected but mandated by law.
We can only speculate as to the mechanism of the disparities we have exposed; the true causes are still unclear. Although the lack of insurance may not be the only explanation for the disparity in trauma mortality, the accidental costs of being uninsured in the United States today may be too high to continue to overlook.
Uninsured trauma patients are more likely to die than insured patients in spite of the fact that treatment is mandated by law. This study did not explain the reasons for the differences.
Delay? Different care? Lower health literacy? Or was there simply less enthusiasm on the part of the providers of care once it was realized that they would not be compensated for their efforts?
This study and several others have demonstrated that death can be a consequence of being uninsured. But there are other important consequences as well. Access to health care that can maintain or improve quality of life is impaired, with consequent adverse outcomes. Financial hardship is almost a given in uninsured individuals with significant health problems.
Instead of searching for alternative explanations for adverse outcomes in the uninsured, we should admit that being uninsured is bad for your health and bad for your finances, and then do something about it. Individual responsibility alone is not enough. Social solutions are required.
This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.
Health Care Reform: Creating a Sustainable Health Care Marketplace
By Hewitt Associates
Establishing bundled payments would create more incentives for efficient treatments and could be adjusted based on outcomes. Health care reform proposals are moving toward bundled payments. Both the House and the Senate include provisions that focus on improved quality of care and patient outcomes.
The pilot program may cover the following services: acute-care inpatient hospitalizations; physician services delivered inside and outside of the acute-care hospital setting; outpatient hospital services, including emergency department visits; services associated with acute-care hospital readmissions; home health; skilled nursing; inpatient rehabilitation; and long-term care. The episode of care established in the pilot program would start three days prior to a qualifying admission to the hospital and span the length of the hospital stay and 30 days following the patient discharge.
The pilot program’s bundled payment would be made to a Medicare provider or another entity composed of multiple providers to cover the costs of acute-care inpatient and outpatient hospital services, physician services, and post-acute care. The bundled payment for each of the eight selected conditions would be based on the average hospital, physician, and post-acute-care payments made over the hospitalization period for the patient.
CBO does not score savings for this provision, mainly because the language above suggests that Medicare will pay the same as it would otherwise have paid, instead of some lower amount per episode. Over time, however, we believe substantial savings can be achieved by both removing the financial incentive to provide marginally effective services, as well as through the active management of the rate of increase in the bundled reimbursement rate.
Controlling U.S. Health Care Spending — Separating Promising from Unpromising Approaches
By Peter S. Hussey, Ph.D., Christine Eibner, Ph.D., M. Susan Ridgely, J.D., and Elizabeth A. McGlynn, Ph.D.
The New England Journal of Medicine
November 11, 2009
We identified 8 options that evidence suggests have the potential to reduce spending and are broadly applicable to the United States. For these options, we developed high and low estimates of cumulative cost savings over 10 years. The graph (clink on link below) lists the options, ranked according to their savings potential, and shows the percentage change in spending that we estimate could be achieved if that policy alone were implemented.
Among the most promising options are those related to changing the payment methods for health care services. (In the graph, bundled payment stands out as the option that would have by far the greatest impact in reducing spending.)
A “bundled-payment” approach would provide a single payment for all services related to a given treatment or condition, causing providers to assume risk for preventable costs; this approach has proved effective in limited demonstration projects. Bundled payment provides a mechanism for reducing both the volume of services and the prices charged for them. We estimate that under optimistic scenarios and with broad use of the Prometheus model of bundled payment for six chronic conditions and four acute conditions or procedures requiring hospitalization, national health care spending could be reduced by 5.4% between 2010 and 2019. This estimate assumes that providers can achieve a reduction of 25 to 50% in the costs associated with avoidable complications by providing higher-quality, more collaborative care.
Building a Bridge from Fragmentation to Accountability — The Prometheus Payment Model
By François de Brantes, M.S., M.B.A., Meredith B. Rosenthal, Ph.D., and Michael Painter, J.D., M.D.
The New England Journal of Medicine
September 10, 2009
Most experts agree that some sort of bundled, episode-based payment would help to move the system in the right direction. Our own approach, the Prometheus Payment model, for instance, bundles services and provides a budget with three components: evidence-informed base payment with patient-specific severity adjustments and an allowance for potentially avoidable complications.
The model encourages two behaviors that fee for service discourages: collaboration of physicians, hospitals, and other providers involved in a patient’s care; and active efforts to reduce avoidable complications of care (and the costs associated with them). It accomplishes these goals by paying for all the care a patient needs over the course of a defined clinical episode or a set period of management of a chronic condition, rather than paying for discrete visits, discharges, or procedures.
When incentives are used to drive changes in behavior, it is important that people and organizations are held accountable only for the variables that are actually under their control. That’s why, in designing the Prometheus model, we decided to focus on the potentially avoidable costs of patient care. We separated the costs attributable to patient-related factors from those attributable to providers’ actions. These latter costs are critically important in terms of accountability. In Prometheus, these potentially avoidable costs are called PACs and are recognized as the result of “care defects” — problems necessitating technical care that are under the professionals’ control and that, with the best professional standards, could have been avoided. PACs might include the cost of hospitalization of a patient with uncontrolled diabetes or the readmission for a wound infection of a patient who had recently been discharged after cardiac bypass surgery.
Unlike the current payment system, Prometheus provides larger profit margins for providers who can eliminate these complications, since they keep any unused PAC allowance — they profit by delivering optimal care, not a greater volume of care.
One lesson from our pilots is that hospital-centric provider organizations can expect increased internal tension when they implement an episode-of-care payment system. Prometheus does provide a sort of bonus to the hospital and physicians for working together to avoid readmission. However, physician groups that are paid under the model for managing chronic conditions have substantial opportunities to increase the profits that come from avoiding expensive hospitalizations. This incentive can highlight potential conflicts between the financial interests of physicians and those of hospitals and cause us to question the proposition that hospital-centric provider organizations will deliver the best results for the country.
The Prometheus model, by contrast, can be implemented in a fragmented, largely fee-for-service delivery system if the payer retains the role of financial integrator. Over time, as providers collaborate to improve patient care and optimize their margins, they could more formally integrate into accountable organizations. However, it will and should be their choice to do so.
Peter Hussey and his colleagues at RAND, in their NEJM article, try to make the case that a “bundled payment” approach would be one of the most promising options for controlling health care spending. The Prometheus model of bundled payment, described the other NEJM article cited above, would shift the risk for preventable costs from the payer to the providers of health care services.
Here’s how it would work. The payer (e.g., Medicare) would determine what the costs of all services would be for a given clinical problem under the current system (fee-for-service plus DRGs). All services would be bundled under a single fee that would be discounted by about five percent. That discount represents current preventable costs such as “excessive” days of hospitalization, “unnecessary” imaging studies, “preventable” complications such as wound infections, and “unnecessary” re-hospitalizations for “inadequate” post-discharge followup. If the medical team of professionals and institutions failed to prevent these or other “additional” costs, the team would bear the loss.
Well fine. But how many of these costs are truly preventable? At the time that services are rendered, almost all decisions are clinically appropriate. It is only in retrospect that an occasional decision might have been changed, but most would not have been. Then there is the fallibility of the human mind. Just as no person could be expected to have a perfect score on every exam taken throughout life, no health care professional can be expected to have a perfect score on all clinical decisions, especially when the perfect response is often still an unknown.
Another problem is that bundling requires organizing individuals and institutions together based on a single clinical entity. The composition of the team would vary depending on the nature of the clinical problem. The team would accept the one bundled payment but then internal disputes over the distribution of the funds certainly would be inevitable. Although the payer is relieved of the administrative services of allocating these funds, the process does not bode well for creating a harmonious, collaborative environment for high quality patient care. Those who believe that these arrangements could evolve into “accountable care organizations” are delusional.
In spite of RAND’s optimism, “bundling payments” will not reduce costs. It will only reduce prices, while actually increasing costs by introducing yet greater administrative complexity.
Purists in written composition might contend that I’ve overused “quotation marks” in my comments. My defense is that health care reform should not be based on “quotation marks” and a “wink.” It should be based on sound health policy science (no quotation marks).
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.
Republicans: Get out of the way of progress
North County Times
November 13, 2009
I am a retired lifelong conservative Republican, planning to change my registration to Independent. Why? Because of obstructionist practices of the Republicans, such as Saturday night’s vote in the House. Only one Republican voted for the House Bill 3962. All the rest played strict partisan politics.
We need change in our broken health insurance system in America. The best change would be a switch to single-payer — but in the interest of making progress, I implore my Representative, Darrell Issa, to stop playing partisan politics.
I also implore my senators, Dianne Feinstein and Barbara Boxer, to vote in favor of health care reform in the upcoming Senate votes. Again, single-payer is the best way to go, but any change from the present system will be welcome.
We have the most expensive health care system in the world, but our health outcomes are well down among developed nations. Why do our politicians not respond to their constituents? Are some in the pockets of the insurance and pharmaceutical companies? Do the wishes of majorities not count with them?
Estonia: health care reforms
European Federation of Public Service Unions
In Estonia public health insurance is a social insurance and relies on the principle of solidarity. The purposes of health insurance are to: cover the costs of health services provided to insured people, prevent and cure diseases, finance the purchase of medicinal products and medicinal technical aids and provide benefits for temporary incapacity for work and other benefits. The health insurance is organised by the Health Insurance Fund (EHIF), which covers the costs of health services required by people in the event of illness, regardless of the amount of social tax paid in respect of the person concerned. The Fund uses the social tax paid for the working population also to cover the cost of health services provided to people who have no income from work activities. Employers are required to pay social tax for all people employed, at a rate of 33% of the taxable amount, of which 20% is allocated for pension insurance and 13% for health insurance.
How about that! A conservative Republican who has decided that single payer is the best way to go. Wow!
So how did he arrive at his conclusions on single payer?
I must confess that Ed Grube is a close personal friend of mine. When we met many years ago, he described himself as being to the right of Genghis Khan, whereas I was to the left of Norman Thomas. We had no pretenses that we could change each others ideology, so we dispensed with the useless rhetoric.
We frequently escaped with our mates on camping trips in spectacular locations, free of the cares of our very busy lives back home. During our hikes the ladies would enjoy the things that really count – the flowers, the vistas, the fauna, etc. – whereas Ed and I would discuss government, free markets, regulation, and other topics that were inappropriate when you are in paradise. But men… you know.
I think that both of us were surprised on how much we agreed, particularly on regulation. We could see the terrible injustices resulting from the move to deregulation, especially since 1980. Recent events have only further solidified our views.
Being the compulsive that I am, I couldn’t leave out the topic of health care reform. Since we had dispensed with silly ideology disputes, we could discuss reform quite rationally. He agreed that the status quo was totally unacceptable, and that there are some very legitimate arguments that support public financing of a private health care delivery system. I agreed that we could have health care justice without the requirement of a government owned health care delivery system.
With the downturn in the economy, Ed decided to shut down his business and retire – a wise decision, except that he was too young to qualify for Medicare. I don’t need to go into this part of the story except to say that he certainly recognized the injustices of overzealous medical underwriting and age discrimination. More than ever he could see the advantages of a single payer system.
But there is more to this story. I am not going to pretend that my smooth talking converted a conservative Republican into a single payer supporter, although I may have given him some of the substrate to frame his thoughts. No, it was much more than that.
Ed, who is Estonian by heritage, met the love of his life – Juta – while visiting the land of his roots. After marriage, they lived together in Estonia long enough to be able to recognize the sharp contrasts on moving back to California. Amongst the most notable differences are our health care systems.
“In Estonia public health insurance is a social insurance and relies on the principle of solidarity.” Juta simply takes that as a given. And now, so does Ed – or at least he passionately believes that it should be a given.
Originally published in the Berkshire Eagle.
Everyone is talking about health care reform and trying to decipher the differences between the bills in the House and the Senate. The “public option” is praised by some and derided by others. Politicians are influenced by the financial support of various interest groups who are lobbying furiously to retain or extend their turf.
Regardless of the legislation Congress passes, the health insurance industry is primed to expand its consumption of U.S. health care dollars by selling more insurance policies to people who are currently uninsured. And American taxpayers are going to subsidize many of these policies, a windfall profit for private insurance companies.
In a statement about why he voted against the House Bill (H.R. 3962) passed this weekend, Rep. Dennis Kucinich said, “In H.R. 3962, the government is requiring at least 21 million Americans to buy private health insurance from the very industry that causes costs to be so high, which will result in at least $70 billion in new annual revenue, much of which is coming from taxpayers. This inevitably will lead to even more costs, more subsidies and higher profits for insurance companies — a bailout under a blue cross.”
Few others in power are discussing the important question, “Is all of this legislation real reform or phantom reform?” Universal coverage is important, but what are the other necessary components of health care reform that American people desire? There are four other important elements beyond universal coverage: choice, adequate coverage, security, and cost-effectiveness.
First, phantom reform does give you choice, but it is the choice between many HMOs and other private, for-profit insurance plans. Real reform would give patients the choice they actually want, which is to choose their doctors and hospitals. Americans don’t want a choice of insurance company bureaucrats; they want a choice of health care providers.
Second, phantom reform does give you insurance coverage, but with deductibles and co-pays, as well as exclusions for various services. Real reform would provide coverage with no out-of-pocket costs; i.e., comprehensive care for all medically necessary services, as decided by you and your doctor, not a faceless bureaucrat in an insurance company intent on maximizing its profits.
Third, phantom reform provides illusory security. Sure, you get an insurance policy, but if you can’t work or pay, you lose your insurance. Real reform would provide security for everyone, for as long as they needed care, just as Medicare does now for those over 65.
Fourth, phantom reform saves money by providing less care. “Medical loss” is the term insurance companies use for the dollars they pay out to health care providers and hospitals for their services, at times resorting to criminal means to hold on to the money patients have paid for insurance to cover the health care services they need . Real reform would save $400 billion per year by eliminating private, for profit health insurance, if the government were the non-profit single payer of the health care funds.
Real reform is a single-payer national health insurance program that would be comprehensive, universal, and cost-effective. Phantom reform is what Congress is now hotly debating, and the public option is a red herring in the pursuit of real reform.
According to Dr. Steffie Woolhandler of Harvard Medical School, who has studied the financing of health care reform, the public option would deliver very little of the administrative savings possible in a single-payer program. There would be no savings on hospital billing or the administrative bureaucracies of nursing homes and doctors’ offices. In reality, the public option would save only a fraction (1/7th) of the $400 billion savings available through a single-payer program, even if half of the privately insured were to switch to a public option.
In addition, our experience with Medicare HMOs shows that private insurance plans avoid patients who are seriously ill and have high medical costs. Despite regulations, private insurance companies undermine fair competition. There is no reason to believe the public option would fare any better in this arena.
Unlike politicians, the American people know real reform when they see it. In 2009, a CBS News/ New York Times poll showed that 59 percent of Americans support national health insurance, up from 40 percent in 1979. And Americans know that we have what it takes in the United States to deliver top-notch care: excellent hospitals, well-trained professionals, and superb research.
We already spend at least twice as much per person for health care as other wealthy countries. Even our public spending is greater than the total spending in other nations. We have the money for health care for everyone. The money just needs to be spent on health care delivery, rather than bureaucracy and profits for insurance companies.
If you cannot afford insurance, or your health insurance premiums keep rising, along with your out-of-pocket costs, consider our neighbor to the north. Canada has Medicare for all, a single-payer national health program that provides universal, comprehensive coverage. Canadians also have a life expectancy two years longer than Americans, infant deaths 25 percent lower, more doctor visits and hospital care per person, and a quality of health care equivalent to that of insured Americans. Canada spends half the amount per person that we spend on health care. Now that is real reform.
Health savings? No one knows
By Carrie Budoff Brown
November 11, 2009
Barack Obama ran for president on a promise of saving the typical family $2,500 a year in lower health care premiums.
But that was then.
No one in the White House is making such a pledge now.
It’s one of the most basic, kitchen-table questions of the entire reform debate: Would the sweeping $900 billion overhaul actually lower spiraling insurance premiums for everyone?
Jonathan Gruber, the favorite economist of the White House, said the bill “really doesn’t bend the cost curve.”
Reminded that Obama demanded a bill that lowers health care spending, Gruber said: “That is what he would like to do. But he’s not doing it.”
If premiums are the benchmark by which reform is judged, “we are setting ourselves up to fail,” Gruber said.
From the very start, the two most important goals for reform allegedly were to cover everyone and to control health care costs. But the precondition that reform be based on an expansion of private health plans within our dysfunctional, fragmented financing system immediately eliminated universal coverage as a goal. It proved to be impossible to balance all of the variables in this dysfunctional system to ensure that everyone would be covered. So they gave up.
Efforts were then directed to creating policies that would slow the growth in health care costs, again with the precondition that the role of private insurers would be protected and expanded. This led to the profusion of magical thinking – pretending that numerous vague innovative concepts included in the bill would somehow slow the growth in health care costs. Since the Congressional Budget Office does not have a data base on magical solutions, they were unable to score any of these innovations as effective instruments to control costs. As Jonathan Gruber said, the bill “really doesn’t bend the cost curve.”
So they decided to forget about universal coverage and to forget about total costs, but they still had a problem unique to our financing system based on private health plans. In a high cost system like ours, how do you make premiums affordable?
More magical thinking. Pretend that there is a “basic” level of insurance that will take care of all of our basic health care needs. Gold, or platinum, or Cadillac tiered health plans should be made available for wealthier individuals who want more comprehensive plans and are willing to pay for them. But do those more comprehensive plan cover services that the rest of us really don’t need?
It is almost impossible to sort out health care products and services based on whether or not they are essential. For a person with a disabling osteoarthritis of the hip, is a hip replacement essential? Or should the surgery be reserved for those with platinum plans? A wheelchair for gold plans? A walker for the silver plans? And for the bronze plans, an instruction sheet on how to carve a cane out of a stick of wood?
Since they really couldn’t establish tiers based on the specific services provided, they based them on the actuarial value – the percentage of costs that the plan would pay for. Basic plans have been defined in the legislation as having an actuarial value of 65 or 70 percent. The patient is responsible for 30 or 35 percent of the costs. You can see how “basic” these lower tier plans are when you consider that the average employer-sponsored plan has an actuarial value of 80 percent and some are as high as 88 percent.
Designating this basic plan as the standard created two more problems. The premiums would still be unaffordable for the majority of us, and the out-of-pocket expenses would bankrupt those who developed major medical problems. The answer? Subsidize the premiums and the out-of-pocket expenses with two more administratively complex programs that attempt to match the subsidies to ever-changing income levels. Now do that within a $900 billion ten year budget that has to meet many other demands.
It doesn’t work. Low income individuals who would be mandated to purchase private plans (those not qualifying for Medicaid) do not have the discretionary income to pay even the very modest out-of-pocket expenses required. For moderate and moderately-high income individuals, the portions of the premium and out-of-pocket spending would create financial hardships, especially for those with health care needs.
Only the wealthy would fare well, and they’re the only ones who could afford the highest tier plans. The concept of tiered health plans allows the wealthiest of us to eliminate financial barriers to care, protecting the wealth of the wealthy, while leaving the majority of us with financial barriers that have been proven repeatedly to impair access to essential health care services. What a sick concept!
The precondition of building reform on an infrastructure of private health plans has resulted in a fixation of trying to make premiums and out-of-pocket expenses affordable when it is an impossibility under this model.
Even Jonathan “let’s-get-everyone-covered-and-then-figure-out-how-to-pay-for-it” Gruber says that if premiums are the benchmark by which reform is judged, “we are setting ourselves up to fail.”
It’s not too late to do it right. We can strip down the current legislation to the important beneficial features, including ending private insurer abuses, and pass it as a temporary emergency measure, codifying “temporary” and “emergency.”
We can include in the legislation language that the process must move forward immediately with reform that will ensure that health care is universal, accessible, comprehensive, portable, and publicly administered. That would set us up for success.
At The New Republic blog Jonathan Cohn goes out of his way to attack Marcia Angell’s clear and courageous article at the Huffington Post.
Mr. Cohn begins with a disclaimer:
I’m a longtime single-payer supporter myself. If Angell could get her way, I’d be thrilled. But Angell can’t get her way.
This old saw is by now condescending, tiresome, gratuitous. Mr. Cohn merely tells us what leading politicians have been telling single payer advocates for decades: real health reform is not politically feasible (so go away!) This is not the stance of a single-payer supporter. It also falls well short of a license for the lame straw man argument that follows.
To Angell–and to others on the left, as my colleague John Judis notes today–this is reason for ditching the whole effort. But what, really, would that accomplish? The immediate impact would be to undermine Obama and his allies in Congress, creating the (accurate) impression they are incapable of passing major legislation. The Democratic Party would lose seats at the midterms and then, quite possibly, suffer even bigger setbacks two years hence. That’s not exactly a recipe for progressive revival.
Perhaps Angell and those who agree with her that this would be a constructive failure–that eventually growing frustration with our health care system will help us elect even more progressives and pass more ambitious reforms. Well, maybe. But that’s an awfully big chance to take…
Dr. Angell is not writing about electing Democrats! She is writing about health reform.
The danger is that as costs continue to rise and coverage becomes less comprehensive, people will conclude that we’ve tried health reform and it didn’t work. But the real problem will be that we didn’t really try it. I would rather see us do nothing now, and have a better chance of trying again later and then doing it right.
The nation asked the Democratic White House and the Democratic Congress for health care and so far we have gotten “health insurance reform” with a bonus – restricted access to abortion.
It is this fact that makes the Democratic Party “insurance reform,” – how does Mr. Cohn put it? – “not exactly a recipe for progressive revival.” Yet he blames Dr. Angell instead.
Our nation can do without “insurance reform” that will criminalize the uninsured, subsidize unaffordable insurance premiums with rivers of tax money, protect pharmaceutical company superprofits at patient expense, hugely expand Medicaid in the face of nationwide state budget crises and thus quickly prove fiscally unsustainable. (Incidentally the insurance industry projects its price increases will reach between 79% to 111% by 2019, under the proposed “insurance reform.”)
Dr. Angell keeps her eye on the prize – comprehensive health care for all. A single payer system is the minimum increment of change that can bring that about.
Mr. Cohn wants to change the subject to electing Democrats. Yet ironically, the amazing development of a nationwide grassroots effort for single payer has been the real “progressive revival” of 2009.
If those inside the bubble still feel they can dismiss us by holding up a straw man, it simply means we must try harder, and grow our effort for a single-payer national health program larger and louder. It is not only our duty to our patients, but to a nation that expects genuine health reform.
Andrew Coates is secretary of the Capital District (NY) chapter of PNHP. He practices medicine in Albany, NY.
Over 2,200 veterans died in 2008 due to lack of health insurance
Physicians for a National Health Program
November 10, 2009
A research team at Harvard Medical School estimates 2,266 U.S. military veterans under the age of 65 died last year because they lacked health insurance and thus had reduced access to care. That figure is more than 14 times the number of deaths (155) suffered by U.S. troops in Afghanistan in 2008, and more than twice as many as have died (911 as of Oct. 31) since the war began in 2001.
The Harvard group analyzed data from the U.S. Census Bureau’s March 2009 Current Population Survey, which surveyed Americans about their insurance coverage and veteran status, and found that 1,461,615 veterans between the ages of 18 and 64 were uninsured in 2008. Veterans were only classified as uninsured if they neither had health insurance nor received ongoing care at Veterans Health Administration (VA) hospitals or clinics.
“Like other uninsured Americans, most uninsured vets are working people – too poor to afford private coverage but not poor enough to qualify for Medicaid or means-tested VA care,” said Dr. Steffie Woolhandler, a professor at Harvard Medical School. While many Americans believe that all veterans can get care from the VA, even combat veterans may not be able to obtain VA care, Woolhandler said.
Dr. David Himmelstein, the co-author of the analysis and associate professor of medicine at Harvard, commented, “On this Veterans Day we should not only honor the nearly 500 soldiers who have died this year in Iraq and Afghanistan, but also the more than 2,200 veterans who were killed by our broken health insurance system.”
A Word, Mr. President
By Bob Herbert
The New York Times
November 9, 2009
Reforming the chaotic and unfair health care system in the U.S. is an important issue. But in terms of pressing national priorities, the most important are the need to find solutions to a catastrophic employment environment that is devastating American families and to end the folly of an 8-year-old war that is both extremely debilitating and ultimately unwinnable.
If you were to take a walk around one of the many military medical centers, like Landstuhl in Germany or Walter Reed in Washington, your heart would break at the sight of the heroic young men and women who have lost limbs (frequently more than one) or who are blind or paralyzed or horribly burned. Hundreds of thousands have suffered psychological wounds. Many have contemplated or tried suicide, and far too many have succeeded.
“Mr. President,” I would say, “we’ll never be right as a nation as long as we allow this to continue.”
How can we continue to support a fragmented, dysfunctional financing system that allows some of our veterans (not to mention tens of thousands of others of us) to die merely because we have placed a higher priority on nurturing the private insurance industry than we have on improving access for everyone through a more effective health care financing system? Our veterans. How can we let them down like this?
On a personal note, Veterans Day has always been a difficult day for me. In August of 1964, when I was driving from California to Texas to report for duty as an Army medical officer, we heard on the radio that our close friend, Dick Sather, was the Navy pilot who was just shot down and killed in the Gulf of Tonkin incident. (The other pilot shot down, Everett Alvarez, was held captive for over eight years.)
I was already a pacifist, but strictly on an ethical and not a religious basis. I believe, like so many others, that war is not healthy for children and other living things. The very worst possible way to negotiate international disagreements is to engage in war. And yet the United States does it over and over again. The school yard excuse, “but they started it,” doesn’t even seem to apply anymore.
After medical officer basic training in San Antonio, my first assignment to season me before being sent overseas, was as a battalion surgeon in Fort Hood, Texas. Yes, that Fort Hood.
Now you understand why I seem to be off message – the combination of my Veterans Day grief, the tragic slaughter that just occurred at my former military base, and now this new report on the unnecessary deaths of so many veterans due to a broken health insurance system.
Veterans Day is a day to think about the impact on not just our veterans but all of us, of record unemployment, war, and the unfair health care system that Bob Herbert writes about. We can fix all of them.
So what are we doing? More government money for Wall Street, and less for jobs. More troops for the war in Afghanistan, instead of withdrawal. More money for private insurers, while health care becomes ever less affordable for patients.
Is this what our veterans were fighting for?
“The House Public Plan: Yes, It’s Worth It” write Jacob S. Hacker and Diane Archer in The New Republic. Jacob Hacker is Stanley B. Resor Professor of Political Science at Yale University. Diane Archer is director of the Health Care Project at the Institute for America’s Future and founder and past president of the Medicare Rights Center.
to “The House Public Plan: Yes, It’s Worth It”
By Sarah K. Weinberg, MD
Jacob Hacker and Diane Archer ask us to believe that:
…health reform is much more likely to succeed with a public health insurance option, even one with negotiated rates, than if private insurers are left to run the show.
So a public plan that will be available to less than half the population and will attract maybe 2% as enrollees is going to have any effect at all on big insurers? I don’t think so, and I’ll bet the big insurers and their investors don’t think so either. (United Health Group and Wellpoint stock prices are stable this morning.)
In a remarkable paragraph, Hacker and Archer claim that private insurance premiums will be lower because sicker people will selectively enroll in the public plan:
Let us start with the obvious: No one knows for sure the exact role that the public option will play. CBO may be correct that the public plan will attract a less healthy pool of enrollees, and that risk-adjustment (paying plans with higher-cost patients more) will not fully compensate for this. And it is surely correct that the public plan will have lower administrative costs than private plans. (It should be emphasized that if the public plan has higher premiums primarily because it’s attracting less healthy enrollees, then it is still reducing average premiums and hence federal subsidies for premiums. That’s because average premiums would be even higher if the people enrolled in the public plan enrolled in private plans. That’s what the CBO’s more recent letter discussing “downward pressure” on private premiums implies.) But while the CBO estimates are rightly the authoritative source for Congress, they are by no means infallible. CBO has made clear that an unusually high level of uncertainty attaches to its analysis of the public plan.
Private insurance premiums will be lower because sicker people will selectively enroll in the public plan, forcing its premiums upward. Huh?!
ALL the premiums will go up – the only issue is how steeply. As for the public plan providing significant competition, what business is going to worry about a competitor with restricted access that only has about 2% of the market?
They also assume that providers will voluntarily sign up for a new public plan with a miniscule number of enrollees:
…the public plan would pay the same rates as the private sector. Nothing in the bill requires this.
Especially if that plan tries to pay the providers less than private insurers, there’s no reason to believe this assumption. Buried in this thought is the assumption that private insurers currently pay providers handsomely – something any doctor or hospital can tell you is totally false. American health care costs twice as much as health care anywhere in the world for several reasons, of which the largest is the enormous cost of all the administrative bureaucracy our system requires. Gross overpayment of doctors is not a reason, even though there are some who do exceptionally well from providing overvalued procedures. In fact, private insurers “save” by cutting payments to providers, but not by cutting administrative costs or profits.
This statement is supposed to support the idea that healthy non-elderly Americans will be willing to pay more for a public plan that offers “the same transparency and accountability the public Medicare plan offers”? Hacker and Archer argue they will:
The vast majority of older and disabled Americans enroll in the public Medicare plan – even though by choosing (excessively subsidized) private Medicare [Advantage] plans, many can get broader benefits for less than they pay for Medicare plus supplemental insurance [Medigap].
Generalizing from choices made by 65 year old Medicare eligibles to the notion that the public will flock to the public plan that costs more because they like “transparency and accountability” is… um… a stretch. As a Medicare enrollee, I can tell you that I never have thought of Medicare as transparent and accountable. I’m enrolled in the public Medicare plan because, as the spouse of a federal retiree, I’m required to if I want to keep the federal BC/BS plan as secondary (Medigap) insurance. I suspect that other factors are more important when 65 year olds decide on their Medicare choices. Wanting to stay with the doctor(s) and hospital they already know rather than shift to a plan with a different list of preferred providers would likely be number one on the list, especially for anyone with health issues. (Of course, this is exactly what the peddlers of Medicare Advantage plans want – to attract the 65 year olds who aren’t seeing doctors regularly. These plans often make their enrollees miserable once they do get sick, and many then switch out to public Medicare.)
These eminent health policy thinkers also continue to assume that the public plan will hold down medical costs better than the private plans, just because it is public:
Over the past twenty years, the public Medicare plan has had a substantially slower rate of growth than private insurance.
However, it’s not the public nature of the plan that holds cost increases down, it’s the fact that Medicare covers an entire (willingly) captive population and has great power to dictate payment terms.
But then they point out that:
The CBO report on the House bill states that private insurers are better at controlling utilization than a public plan would be.
The only functioning utilization controls in the U.S. (possibly excepting the VA and the military) are the private insurers’ dirty tricks: delaying or denying coverage for expensive care; rescinding the policies of those who get sick; raising cost-sharing with the sick to astronomical levels, etc.
Hacker and Archer write that:
…the public plan is really the only tool available for testing and implementing reforms in the market for the non-elderly.
2% of the population spread across the entire U.S. is not going to be a group that will be useful for this kind of experimentation. This will especially be true when only a limited number of providers choose to participate.
In conclusion, we are asked to believe that any public option at all will make all the difference:
But it’s still immensely valuable to give Americans an out – another choice – to let the insurers feel the heat of not being the only game in town.
First of all, the majority of Americans won’t have any such choice – they’ll get what their employers offer them, like it or not. Next, we should recognize that the big insurers already ignore the small insurers in each market who have 5% or less of the available business.
Finally, industry opposition to the public option is held up as evidence of the wisdom of the public option:
The fierce and continuing opposition of the insurance industry suggests that they think that a public option will prove a serious counterweight…
I think instead that the insurers’ opposition has been just fierce enough to get them a public option small enough to drown in a bathtub – success beyond their wildest dreams. Because when this public option fails, they (and the Republicans) will say: “See – single-payer health reform doesn’t work!”
Hacker and Archer (and other apologists for HR 3962) are letting their wishful thinking get the better of their common sense. Enough already!
Dr. Weinberg is a retired pediatrician, a member of Physicians for a National Health Program for 20 years, and the Newsletter Editor for Health Care for All – Washington for 9 years. She is also one of the authors of the Washington Health Security Trust, proposed legislation that would establish a single payer health financing system in the State of Washington.
eHealth Views Passage of House Health Reform Bill as “Historic Step Toward Connecting All Americans to Coverage”
November 8, 2009
Health Insurance Exchanges Are Key
The following is (from) a statement from Gary Lauer, chairman and CEO of eHealth, Inc., regarding tonights passage of the U.S. House of Representatives’ health reform legislation:
“eHealth’s experience over the past decade in connecting nearly two million Americans to coverage through our national online marketplace proves that exchanges do work. By employing multiple paths to coverage, including exchanges, and online solutions like ours, we can optimize enrollment and provide the uninsured with the most choices and flexibility.
“The technologies that have been developed by private sector players, such as eHealth, are key to ensuring Americans find and receive the coverage this legislation would mandate.
“eHealth looks forward to being an active partner in implementing meaningful health reform legislation, and is poised and ready to connect the uninsured to coverage quickly.”
eHealth is “Ready to Connect America to Coverage:”
H.R. 3962 – AFFORDABLE HEALTH CARE FOR AMERICA ACT
SEC. 305. OUTREACH AND ENROLLMENT OF EXCHANGE-ELIGIBLE INDIVIDUALS AND EMPLOYERS IN EXCHANGE-PARTICIPATING HEALTH BENEFITS PLAN.
USE OF OTHER ENTITIES.–In carrying out this subsection, the Commissioner may work with other appropriate entities to facilitate the dissemination of information under this subsection and to provide assistance as described in paragraph (2).
From paragraph (2): (C) assist Exchange-eligible individuals in selecting Exchange-participating health benefits plans and obtaining benefits through such plans.
eHealth is ready to become the nation’s broker for private health insurance. Watching the two minute video at the “Ready to Connect” link above will demonstrate just how ambitious their plans are.
This is yet one more reason why the model of reform selected by Congress and the Obama administration is the most expensive of all. With all of the other wasteful administrative expenses, brokers’ fees are added on top, though often hidden in the premium as a commission rather than a fee.
Compare this to Medicare enrollment. The administrative costs for automatic enrollment in Medicare, at that only once in a lifetime, are negligible for the government and its taxpayers.
Imagine the simplicity and efficiency of automatic, lifetime Medicare enrollment at birth for everyone. But Congress won’t go there… not until the nation demands it.
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