Will the insurance exchange be as effective as FEHBP?

Posted by on Wednesday, Sep 30, 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.

Employees Face Big Hike in Health-Care Costs

By Steve Vogel
The Washington Post
Federal Diary
September 30, 2009

Employees enrolled in the Federal Employees Health Benefits Program will pay an average 8.8 percent more in health-care costs, according to figures released by the Office of Personnel Management.

Blue Cross Blue Shield rates will increase 15 percent for self-only coverage and 12 percent for family coverage, the company said. Enrollees will have to pay more thanks to a wider range of benefits and the company’s wide network of providers, said Jena Estes, vice president of Blue Cross Blue Shield’s federal employee program.

“We have a very strong commitment to managing the costs and managing that trend. You’ll see a real strong focus on coordinating the care and managing the total care,” Estes said.

“This is an enormous increase that erodes federal employees’ standard of living,” Colleen M. Kelley, president of the National Treasury Employees Union, said in a statement.

The American Federation of Government Employees expressed “grave concern” at the news. “FEHBP is getting more and more unaffordable for more people,” said Jacqueline Simon, AFGE public policy director.


Members of Congress are promising reform that will give us choices of coverage, just like they have in the Federal Employees Health Benefits Program (FEHBP). They will do this by establishing an FEHBP-like insurance exchange for the purchase of health plans.

Blue Cross Blue Shield is the most popular program selected by federal employees. They promise to continue with their “very strong commitment to managing the costs.” And how well are they doing? This year’s rate increases are 15 percent for individuals and 12 percent for families.

FEHBP, as an example of an insurance exchange, is proof that a financing system based on private insurance plans is an obsolete model that “is getting more and more unaffordable for more people.” Yet Congress is moving forward with this model.

What about a government financing system? At the Senate Finance markup yesterday, when asked by Sen. Chuck Schumer if Medicare is a good program, Sen. Chuck Grassley replied, “I think that Medicare is part of the social fabric of America.” But then he said that government is not a fair competitor, “it’s a predator.”

Ask federal employees insured by Blue Cross Blue Shield whom they think the predator is. Then ask Medicare beneficiaries.

Medicare should be a part of the social fabric that weaves all of us into its egalitarian patterns, forming an indestructible fabric based on social solidarity.

Are physicians fleeing Medicare?

Posted by on Tuesday, Sep 29, 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.

Utilization Trends Indicate Sustained Beneficiary Access with High and Growing Levels of Service in Some Areas of the Nation

Medicare Physician Services
August 2009

GAO found that Medicare beneficiaries experienced few problems accessing physician services during its period of study. Very small percentages of Medicare beneficiaries–less than 3 percent–reported major difficulties accessing physician services in 2007 and 2008. The proportion of beneficiaries who received physician services and the number of services per beneficiary served increased nationwide from April 2000 to April 2008. Indicators of physician willingness to serve Medicare beneficiaries and to accept Medicare fees as payments in full also rose from 2000 to 2008.


In the debate on health care reform we hear that physicians are leaving the Medicare program because they cannot continue to accept the low fees paid by the government. Not true, according to this new GAO report. Physicians are more willing to serve Medicare beneficiaries and to accept Medicare fees as payments in full.

Some might use this finding to support a public option paying Medicare rates, but it is a much more powerful argument when used in support of a single payer, Medicare for all, national health program. Unlike the private insurance plans, Medicare pays enough, but not too much, though appropriate revisions are a continuing work in progress – as it should be.

By Kip Sullivan, JD

Advocates of a “public option” have been extremely critical of the health insurance cooperatives proposed by Sen. Kent Conrad last June and incorporated in the draft legislation released by Senate Finance Committee Chairman Max Baucus on September 16. “Option” advocates claim the co-ops either will not survive or will be so small they will be unable to force the insurance industry to lower its premiums. This is legitimate criticism.

But “option” advocates should level the same criticism against the “option.” The “option” is no more likely to survive and thrive than the co-op program. A comparison of the legislation that would create “option” programs with the provisions in the Baucus bill that would create co-ops indicates there is only one reason to be less pessimistic about the “option,” namely, the “option” legislation requires that someone (the Secretary of the Department of Health and Human Services) attempt to get the “option” program going. There is no similar requirement for the co-op program.

Review of the “option” and co-op proposals

I have described the “option” programs in the Senate Health, Education, Labor and Pensions (HELP) Committee bill and HR 3200 in previous papers.

The Senate HELP Committee “public option” will be multiple “options,” and these will be run by insurance companies

“Public option” advocates circle their wagons around two useless sentences in HR 3200

HR 3200’s “public option” will not resemble Medicare

As I demonstrated in those papers, there is no meaningful difference between the “options” in the two bills. Both bills use vague language and provide few details. Both authorize the Secretary of Health and Human Services (HHS) to hire corporations to set up insurance programs (“options”) that will sell health insurance to the non-elderly. The “options” will be available for sale to only a small percent of the population, namely, that portion which will be eligible to shop for insurance within one-stop-shopping centers called “exchanges” and which will be eligible for subsidies. Both bills call for an “option” program that will consist of numerous insurance companies, not a uniform national program like Medicare. Neither bill gives the Secretary the tools necessary to guarantee that these “option” insurance companies will survive in most markets, much less become large enough to influence the behavior of the insurers in their areas.

The description of the co-ops in Sen. Baucus’ draft bill, which is entitled America’s Healthy Future Act of 2009, is just as vague as the “option” language in the HELP Committee bill and HR 3200. The co-op program – which the Baucus bill calls the Consumer Operated and Oriented Plan program – is described in a two-page section that begins on page 36. Here are the features of the co-op program described in these two pages:

  • Six billion dollars will be available to co-ops around the country as either loans or grants that will be authorized by the Secretary of HHS. In making these loans and grants, the Secretary is to give high priority to ensuring that at least one co-op begins in each state and the District of Columbia.
  • Co-ops must be non-profit.
  • They cannot be sponsored by government agencies or insurance companies.
  • “Substantially all” of the insurance it sells must be to small employers (as defined by state law, typically employers with 50 or fewer employees) and to individuals.
  • Co-ops may not band together to negotiate with providers, but may band together to negotiate with businesses selling goods and services (such as computers and actuarial services) related to the co-ops’ administrative tasks.

That’s it.

One difference between the co-op and “option” programs

As sparse as this description of the co-op program is, it is no sparser and no vaguer than the language describing the “options” in the HELP Committee bill and HR 3200. In none of the three bills are readers told who will step forward to create the co-ops/”options,” how they will do that, or what the co-ops/”options” will look like. We know only that the Secretary will be making loans (and in the case of the co-ops, grants as well) to unidentified entities which will in turn create co-ops/”options.” Will the people who set up the co-ops/”options” create limited networks of clinics and hospitals, or will they let patients see any provider they want? Will clinics and hospitals agree to work for the co-ops/”options” for less money than they get from the insurance industry? There is no point in asking these and numerous other questions about the logistics of creating the co-op/”option” programs and what they will look like because the bills offer no answers.

There is one difference between the co-op provision in the Baucus bill and the “option” provisions in the HELP Committee bill and HR 3200 that could turn out to be significant. The Baucus bill does not require anyone to attempt to create co-ops, while the HELP bill and HR 3200 instruct the Secretary of HHS to hire corporations to create “option” programs throughout the country. But this difference is probably meaningless. Under all three bills as they are currently written, the task of creating insurance companies from scratch will be so difficult (this will be true whether we call the insuring entities “co-ops” or “options”) that it may not matter whether someone is ordered to attempt it or is merely encouraged to do so. To use a military analogy, if Hamburger Hill cannot be taken, it doesn’t matter whether we put a general in charge of ordering the troops to storm the hill or we simply wait for soldiers to rush up the hill on their own initiative. In either scenario, the hill remains in enemy hands.

The mote in Baucus’ eye

“Option” advocates do not share my conclusion that there is little difference between the Baucus co-ops and the “option.” The leaders of the “option” movement, including Sen. Jay Rockefeller, Howard Dean, and Jacob Hacker, excoriate the co-op proposal and, in the same breath, lionize the “option.” The following statements by Sen. Rockefeller illustrate the “option” movement’s tendency to project onto the co-op proposal the very criticisms they should be leveling at the “option”:

These little tiny entities [referring to the co-ops] that will be starting up in states where there have never been any before — remember, there aren’t any in the South, there aren’t any in the Northeast, there aren’t any in the Mid-Atlantic, there aren’t any in the Southwest. They’re only in the upper Midwest and the Northwest. They’re not a good idea. They’re untested. They are unlicensed. They’re unregulated. They’re unstudied.

Why would we even think about putting them in as a control on this massive insurance industry instead of the public option? (Interview with Ed Schultz on MSNBC, July 30 http://www.dailykostv.com/w/002004)

I feel very strongly about that [the “option”] as a discipline on the private health insurance market. The public health insurance option doesn’t have to make a dime. It doesn’t have to make Wall Street happy or shareholders happy. It just has to sell a product at cost. That will put pressure on private insurance companies to bring down their premiums. … My staff has done extensive research on co-ops and everyone says they can’t do health insurance. The best health care co-op exists in the state of Washington, and both of Washington’s senators are adamantly for a public option. That ought to tell you something. (Interview with Ezra Klein in the Washington Post, September 18 http://voices.washingtonpost.com/ezra-klein/2009/09/whats_wrong_with_the_finance_b.html).

Rockefeller’s criticisms of the co-op model – the co-ops will be very small compared with the insurance companies they will compete with, they are untested, and they have not been studied as a national model – apply with equal force to the “option.” Conversely, Rockefeller’s praise of the “option” programs – they won’t “have to make a dime,” they won’t have to “make Wall Street happy” – is equally applicable to the non-profit co-ops.

Explaining the double standard

What accounts for this strange behavior, this willingness to see no problems in the “option” proposals and to see calamity in the co-op proposal? The explanation lies, at least in part, with the failure of the “option” movement’s leadership to acknowledge that the puny version of the “option” written up in the HELP Committee bill and HR 3200 does not resemble the large version originally proposed by Jacob Hacker.

The most important difference between Hacker’s original model and the version drafted by congressional Democrats is that Hacker solved or at minimum greatly reduced the start-up problem by pre-enrolling tens of millions of Americans in the “option” before it opened for business.

If “option” advocates had acknowledged this important difference and had discussed it publicly, obvious questions would have arisen, such as, If the “option” can’t be guaranteed a large customer base on day one as Hacker originally proposed, where will the customers come from, who will recruit them, and at what cost? But the very significant differences between Hacker’s original version of the “option” and the Democrats’ version were never acknowledged by the “option” movement’s leaders. In fact, leaders of the movement have aggravated their failure to discuss the watered down version of the “option” by routinely comparing that version to the highly successful Medicare program. This combination of tactics – the failure to acknowledge how weak the Democrats’ “option” is compared with Hacker’s original version, and the constant comparison to Medicare – induced sloppy thinking by leading “option” advocates. It induced them to project onto the co-op model the doubts they should be having about the “option.” It facilitated groupthink.

Rockefeller, Dean, Hacker and their colleagues in the “option” movement are doing a great job of leveling legitimate criticism against the co-op proposal. Their criticisms are aimed squarely at the question of how the co-ops will get started and whether they will ever grow large enough to take substantial market share away from the insurance industry. But they adamantly refuse to level the same criticism at the “option.” They should tell us why. I doubt they will do that. I doubt it because there is no rational explanation for this double standard. And no one likes to admit to behaving irrationally.

Kip Sullivan is a member of the steering committee of the Minnesota chapter of Physicians for a National Health Program. He is the author of The Health Care Mess: How We Got Into It and How We’ll Get Out of It (AuthorHouse, 2006).

Does the U.S. have the best health care?

Posted by on Friday, Sep 25, 2009

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

How Does the Quality of U.S. Health Care Compare Internationally?

By Elizabeth Docteur and Robert A. Berenson
Urban Institute
August 2009

This brief brings together available evidence on how quality of care in the United States compares to that of other countries and comments on the implications of the evidence for the health reform debate. By exploring how the quality of our care compares internationally, we can address the underlying attitudes and concerns that people have about health reform.

While the evidence base is incomplete and suffers from other limitations, it does not provide support for the oft-repeated claim that the “U.S. health care is the best in the world.” In fact, there is no hard evidence that identifies particular areas in which U.S. health care quality is truly exceptional.

Instead, the picture that emerges from the information available on technical quality and related aspects of health system performance is a mixed bag, with the United States doing relatively well in some areas — such as cancer care — and less well in others — such as mortality from conditions amenable to prevention and treatment. Many Americans would be surprised by the findings from studies showing that U.S. health care is not clearly superior to that received by Canadians, and that in some respects Canadian care has been shown to be of higher quality.

Like other countries, the United States has been found to have both strengths and weaknesses in terms of the quality of care available, and the quality of care the population receives. The main ways in which the United States differs from other developed countries are in the very high costs of its health care and the share of its population that is uninsured.


This paper (14 pages) brings together numerous credible studies on the quality of health care in the United States, as compared with other nations. Anyone reading this message already knows that the United States is paying enough for exceptional care for everyone, but many of us are not receiving it. On average, our health care is mediocre.

This resource can be useful in informing those who would reject efforts at reform because we already have “the best health care in the world.” It would be a shame if we continued to waste funds to preserve a system that provides high quality care for a few when an improved financing system would enable us to improve the allocation of those funds so that we could provide high quality care for everyone.

Where are the price controls?

Posted by on Thursday, Sep 24, 2009

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Mandate minus price controls may increase healthcare costs

By Noam N. Levey and James Oliphant
Los Angeles Times
September 24, 2009

In the drive to bring health coverage to almost every American, lawmakers have largely rejected restrictions on how much insurers can charge, sparking fears that consumers will continue to face the skyrocketing premium increases of recent years.

The legislators’ reluctance to control premium costs comes despite the fact that they intend to require virtually all Americans to get health insurance, an unprecedented mandate — long sought by insurance companies — that would mark the first time the federal government has compelled consumers to buy a single industry’s product, effectively creating a captive market.

“We are about to force at least 30 million people into an insurance market where the sharks are circling,” said California Lt. Gov. John Garamendi, a Democrat who served as the state’s insurance commissioner for eight years. “Without effective protections, they will be eaten alive.”

But Democrats have shied away from regulating premiums in the face of charges from business leaders and Republicans that controlling what insurers charge would be meddling too much in the private sector.

As a result, while states have long supervised what companies charge for mandated automobile and homeowners insurance, the idea has been largely banished from the healthcare debate.

“That would be a very substantial additional intervention in the marketplace,” said Sen. Jeff Bingaman (D-N.M.), a member of a bipartisan group of lawmakers who worked with Senate Finance Committee Chairman Max Baucus (D-Mont.) on his healthcare bill. “I just don’t think the support would be there for that kind of a change.”

Nor are lawmakers seriously considering any proposals to regulate what doctors, hospitals, drug makers and other healthcare providers charge — a strategy used by several European countries to control healthcare spending.

But even the insurance industry’s leading representative in Washington acknowledged that those reforms may not slow the rising cost of premiums soon.

“You can’t restrain premiums unless you restrain medical costs,” said Karen Ignagni, president of America’s Health Insurance Plans, on the industry’s view of the problem. “So far, members of Congress have been allergic to that.”


“It’s the Prices,Stupid:”

One of the more unique features of the health care system in the United States is that we spend far more on care even though our use of health care services is comparable to other nations. The difference is in the prices. Other nations use government regulation to improve pricing, but the United States persists in refusing to intervene in market pricing.

Does the current model of reform under consideration by Congress do anything to alleviate the upward pressure on prices? They propose an exchange of competing private plans to control prices, while explicitly excluding a public plan with “administered pricing.” So the answer is “no.” Market competition of private plans has had no impact on controlling health care spending in the past, and there is no private sector mechanism that would have any beneficial impact in the future.

Think of the regulatory changes proposed. Congress would require insurers to accept those who they currently exclude because of preexisting disorders. They would place a limit on out-of-pocket expenses, requiring the balance to be paid by the insurers. They would remove the lifetime cap on coverage, requiring insurers to pick up the costs of those with very expensive medical problems. These and other measures would result in significant increases in private health insurance premiums, making the plans even less affordable.

Since insurers would be required to compete with each other, they would have to continue to pay our comparatively high prices if they are to attract enough physicians and hospitals to guarantee adequate provider networks. That’s the way the market works. Thus the current model of reform is a guarantee that we will continue to see unaffordable pricing throughout our health care system.

In a remarkable moment of candor, the insurance industry’s chief lobbyist, AHIP’s Karen Ignagni, states that Congress has been “allergic” to restraining medical costs. Since the private insurance industry has been in charge for the past several decades, obviously they are hopelessly allergic as well – incurably so.

Do we want to be a captive market of the private insurance industry? Or do we want to be captives of a public insurance program like Medicare? Just ask our seniors what they thought on turning 65.

Insurance and Equity in Primary Care and Specialist Office Visits

Posted by on Wednesday, Sep 23, 2009

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Universal Health Insurance and Equity in Primary Care and Specialist Office Visits: A Population-Based Study

By Richard H. Glazier, MD, MPH, Mohammad M. Agha, PhD, Rahim Moineddin, PhD and Lyn M. Sibley, PhD
Annals of Family Medicine
September/October 2009

Universal coverage of physician services should serve to reduce socioeconomic disparities in care, but the degree to which a reduction occurs is unclear. We examined equity in use of physician services in Ontario, Canada, after controlling for health status using both self-reported and diagnosis-based measures.

CONCLUSIONS After adjusting for health status, we found equity in contact with primary care for educational attainment but inequity in specialist contact, frequent visits, and bypassing primary care. In this setting, universal health insurance appears to be successful in achieving income equity in physician visits. This strategy alone does not eliminate education-related gradients in specialist care.


Much of the discussion on health care reform centers around financing reform, with goals of achieving universality and affordability. Effective reform that would actually accomplish that (i.e., single payer) would be a crucial first step toward the even more important goal of reducing the socioeconomic disparities in care. The record on disparities in the United States is shameful.

This study looks at inequities in a country that has already established an equitable, universal financing system for health care: Canada. Three important conclusions: 1) Physician visits for both primary care and specialists were equitable regardless of the income level of the patient, 2) Physician visits for primary care were equitable regardless of the level of the educational achievement of the patient, and 3) Patients with a higher level of educational achievement had greater contact with specialists, often bypassing primary care.

Think of how Canada must struggle with this policy issue. They must determine whether more educated individuals are obtaining an excessive quantity of specialized services, or if those with less education are being deprived of specialized services they should have. Then they have to decide on policies that would improve access or reduce waste, as appropriate.

Compare that to the policy issues we face in the United States. We have a financing system that creates personal financial hardships, results in physical suffering and sometimes even death, and wastes hundreds of billions of dollars that could be redirected to paying for health care services that people need and are not receiving. Canada has passed that hurdle long ago.

Wouldn’t it be nice if we could also be working on the minutiae of health policy instead of the most fundamental changes that we desperately need? Unfortunately, Congress, in moving forward with tweaking the private insurance industry, has decided to work on the minutiae and ignore the basics. Tweaks can never fix a fundamentally flawed financing structure that must first be replaced before it can be tweaked.

Lessons from California on the insurance mandate

Posted by on Tuesday, Sep 22, 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.

Insurance Mandates Don’t Work

By Jamie Court
The Washington Post
September 21, 2009

A cornerstone of President Obama’s health-care plan is, as he said in his speech to Congress, “individuals will be required to carry basic insurance, just like most states require you to carry auto insurance.” But the tarnished history of such laws shows that making insurance mandatory, and even making it more affordable, does not compel the uninsured to buy it.

In California, the car capital of America, the injustice of mandatory insurance laws sparked one of the great voter revolts of modern history — and that still didn’t solve the uninsured motorist problem. In 1988, the people of California passed Proposition 103, which required auto insurance companies to seek permission through an elected insurance commissioner for premium increases. It created an intervener system that allows members of the public to challenge unnecessary premium hikes. The law also made auto insurance pricing fairer in various ways, including banning ZIP-code based auto insurance.

The Consumer Federation of American reported in 2008 that Proposition 103 had saved Californians $62 billion on their auto insurance. The market is competitive, prices are down, and the number of uninsured motorists has decreased some from pre-Prop 103 levels. Yet in the most competitive auto insurance market in the nation, the uninsured motorist rate is still 18 percent, among the highest. That’s true even after California took more punitive measures against uninsured motorists. Stiffer fines, the impounding of cars and the loss of legal rights for uninsured motorist have not significantly impacted the uninsured motorist rate.


The health care reform proposal before Congress would increase regulatory oversight of the private insurers, mandate individuals to purchase their plans, and penalize those who fail to do so. The experience with auto insurance in California should provide us with at least a hint as to whether that is a rational response to the health care crisis.

True, auto insurance and health insurance are not the same thing, but the mandate to purchase either type of insurance applies to the same individuals. Why should we expect a change in behavior merely because the unaffordable insurance product is designed to protect the individual’s health? Even with the proposed subsidies, a very large number of individuals will not have enough funds to pay the premiums and will remain uninsured.

California’s mandate to purchase more highly regulated auto insurance was a success, at least according to the incrementalists. The insurance market is more competitive, the number of uninsured has decreased, and Californians saved $62 billion on their premiums. The fact that 18 percent of California motorists are still uninsured is merely a technical parameter that we’ll work on later.

Come on! We can get it right! We can establish a separate health care risk pool and fund it equitably through the tax system based on ability to pay, and we can provide automatic enrollment for everyone.

We must achieve reform. The last thing that we want to do is to defeat the current proposal and then walk away with nothing. But it is even more imperative for us to reject the current proposal and immediately move forward with reform that will provide affordable care for all of us.

Frankly, I’m sick and tired of listening to those who say that PNHP needs to get on board and support the public option, which is really saying that we need to support an individual mandate to purchase unaffordable plans. Those of you who were duped into supporting this model that can’t possibly work need to abandon that ship and get on board with us and our colleagues who will accept nothing less than health care justice for all.

Health care reform: time for an end run

Posted by on Monday, Sep 21, 2009

We have seen this coming for many weeks, but the release of the Baucus plan in recent days by the Senate Finance Committee, without any Republican support within the Gang of Six, leaves no more doubt about Republican intentions or votes on health care reform. House Republicans have already been clear in their total opposition to reform bills in the House. Republicans want nothing to do with reform except to derail any plan put forward by the Democrats, and are salivating over making a defeat on health care reform a Waterloo event for the Obama Administation, carrying over into the elections of 2010 and 2012.

Meaningful reform of the health care system, truth be told, was lost more than two years ago when the basic issues were framed up. The Democratic frame was too centrist from the beginning. It was a surrender-in-advance approach intended to gain moderate and some bipartisan support by saying that the system is basically sound and just needs incremental change. “If you like your insurance, you can keep it” was the byword. The real question should have been what kind of financing system should we have—multi-payer, keeping alive through generous subsidies a failing insurance industry, or single-payer public financing coupled with a private delivery system.

So the Democrats started from a weak frame, and through the many compromises along the way in the House and Senate have ended up with an expensive, defanged “reform” bill. Compromises in the political center have not gained Republican votes, and have only lessened the chances of any reform bill being effective. The right has demagogued and distorted the issues, but is correct on one count—any of the bills in Congress (except H. R. 676, the Conyers bill, still relegated to the closet) will fail to contain health care costs, and will instead add at least some $800 billion or more to the federal government’s costs over the next ten years. We have already seen evidence that the pledged contributions toward the costs of health care reform made last spring by corporate stakeholders in our market-based system will be more than repaid to them through new revenue streams to their industries if any of the bills now being considered in Congress are enacted. (links to “Alliance” blogs #28, 29, 30 and 33).

President Obama’s convictions on health care reform are still unclear and contradictory. They seem to be intended as centrist and negotiable, as if nothing is really worth fighting for. He would have “started with single-payer if I were starting from scratch”. Then, even while portraying the insurance companies as villains and obstacles to reform, he concludes that we should build on our private multi-payer system and “hold them honest” with a public option. But weak as the public option has became (link to Blog # 21), he still won’t draw a line in the sand in its defense, calling it “only a sliver of my reform plan.”

There is no question that Obama is a pragmatist. So if only on pragmatic grounds, it is time for him to change course (now!) before his plan is gang-tackled in the middle of the field by opponents in both parties, including Blue Dog Democrats as well as progressives on the left who have given up on his plan. So, Obama needs to pick up the single-payer ball (H.R. 676), pivot, roll out to the left, pick up his interference, and run around left end for pay dirt. If he does so, he will have a majority of the public with him, and the number of co-sponsors of the bill will soar as timid members of Congress get political cover and discover stronger backbones. That demonstration of unambiguous presidential leadership could unify the Democratic party in favor of health care reform, and gain further support among fiscal conservatives, whether Republicans or Independents.

Here is what Obama faces if he stays on his present course in the middle of the road. The political discourse will get even uglier and more divided. Amendments from both sides of the aisle will further gut bills pending in Congress. If any bill gets out of committee to votes on the floor in the House and Senate, it will still face further revision by a Joint Conference committee. A bill with bipartisan support appears to be out of the question, and Democrats are likely to become even more fragmented as time goes on. So either a bill dies in Congress or any watered-down bill that may survive to be enacted will likely fail to contain surging costs of health care or make health care and insurance more affordable. Either way, the Democrats lose on the issue, and because of that loss, the stage is set for a Republican counter-attack during the 2010 and 2012 elections.

Based upon what has already happened in Congress and likely political dynamics going forward, here is what any surviving health care bill would probably look like:

• Individual mandate, with minimal restraints on the insurance industry and large federal subsidies for many years to come
• No employer mandate or public option
• Health care exchanges and co-ops, despite lack of evidence for their effectiveness (Link to Blog # 25)
• No negotiation by the government of prescription drugs prices
• Major expansion of Medicaid, again with large federal subsidies and states pushing back against their share of payments
• Minimal or no savings from projected savings hoped for by cutbacks in Medicare and Medicaid
• Continued escalation of health care costs and insurance premiums far above wages and cost-of-living, with little improvement in affordability for millions of Americans
• Record federal and state deficits calling for emergent action

If all that happens, President Obama will lose his credibility, his legacy will be tarnished and his political future clouded. His failure will match that of the Clinton Health Plan in 1993 and 1994, when many of the same mistakes were made. More important, “reform” won’t work, costs will continue to spiral upward, access will further deteriorate, the numbers of uninsured and underinsured will rise further, and the 45,000 American lives lost each year will increase.

The only winners with health care “reform” will be corporate stakeholders who get to keep raising their prices without significant government oversight. The insurance industry will join the list of industries bailed out by generous government subsidies even as they deplore “big government”.

If he were to acknowledge impending failure and change course to the left, this could be Obama’s FDR moment. In 1936, confronted by the Great Depression and corporate self-interest such as we see today, this is what he said to an audience at Madison Square Garden:

“We had to struggle with the old enemies of peace: business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering. They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by an organized mob. Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me and I welcome their hatred.”

This is the kind of bold leadership and political courage called for in our turbulent times today. Our democracy is being challenged, as are our values and character. As usual, time will tell what kind of society we have become.

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: http://www.commoncouragepress.com

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NYT Blog: Medicare for all?

Posted by on Monday, Sep 21, 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.

Medicare for All? ‘Crazy,’ ‘Socialized’ and Unlikely

By Katharine Q. Seelye
Prescriptions Blog
The New York Times
September 19, 2009

Jonathan S. Skinner, an economics professor at Dartmouth, said there would be both positive and negative effects from expanding Medicare to all.

“The best thing about expanding Medicare is we can cover everybody with one sweep of the pen and cut administrative costs substantially,” he said.

But, he said, it would probably require a tripling in payroll taxes just to pay hospitals alone. And it would do nothing to control costs, Mr. Skinner said.

“Medicare is dysfunctional,” he said. “It provides the wrong incentives to doctors. This would be extending that dysfunctionality to the entire population.”

Expanding Medicare, he said, is “the cotton candy solution: it feels really good, but after a while, your stomach starts to go ‘ewwww.’ ”



Fostering Accountable Health Care: Moving Forward In Medicare

By Elliott S. Fisher, Mark B. McClellan, John Bertko, Steven M. Lieberman, Julie J. Lee, Julie L. Lewis and Jonathan S. Skinner
Health Affairs
January 27, 2009

To succeed, health care reform must slow spending growth while improving quality. We propose a new approach to help achieve more integrated and efficient care by fostering local organizational accountability for quality and costs through performance measurement and “shared savings” payment reform. The approach is practical and feasible: it is voluntary for providers, builds on current referral patterns, requires no change in benefits or lock-in for beneficiaries, and offers the possibility of sustained provider incomes even as total costs are constrained. We simulate the potential expenditure impact and show that significant Medicare savings are possible.


Several readers found fault with Katharine Seelye’s dismissal of “Medicare for all” single payer reform as being too complicated, imposing a big tax increase on the middle class, and driving doctors and hospitals out of business because of low reimbursement rates. She also quoted Stuart Altman as saying it would be too disruptive, and Robert Moffit as saying that it would mean too much government intrusion.

Too complicated? A single payer system is much simpler and more efficient than the fragmented multi-payer system under consideration by Congress. Big tax increase? Moving from individual insurance premiums to a single taxpayer-financed risk pool would not only be more efficient, but it would finally make the way we pay for health care much more equitable. Driving doctors and hospitals out of business because of rates? The stewards of a single payer system would never establish a deficient pricing system that would shut down our health care delivery system.

Disruptive? Our overpriced and underperforming health care system screams out for disruption. Too much government intrusion? Most other industrialized nations have demonstrated that more government involvement than we have is an essential ingredient in achieving a better performing system at a lower cost.

Jonathan Skinner, whose comments were selected from Seelye’s article, is part of the Dartmouth group that demonstrated large variations in health care spending that do not correlate with quality and outcomes. Medicare’s fee-for-service payment system is thought to contribute to this inconsistency by rewarding greater frequency and intensity of services while ignoring quality.

It is great that Skinner and his colleagues, and others as well, are looking at options that might provide us with greater value in our health care purchasing. It is ironic, however, that they propose “fostering accountable health care in Medicare” while he states that the “cotton candy solution” of expanding Medicare would make your stomach go “ewww.”

An improved Medicare that covered everyone would provide the financing environment that would ensure the best health care value attainable. There’s no “ewww” there.

Americans are dying at a faster rate — 1 every 12 minutes, 5 an hour, 120 a day, 45,000 a year — not from war or natural disaster, but from lack of health insurance.

That’s the stunning finding of a study published today in the American Journal of Public Health by leading researchers at Harvard Medical School. The report, “Health Insurance and Mortality in U.S. Adults,” reveals that the uninsured have a 40 percent higher risk of death than those with private insurance, resulting in 45,000 preventable deaths annually.

These are our friends and neighbors, our fellow Americans who can’t afford or otherwise get private health insurance. Increasingly, this group includes nearly all lower-income and a growing majority of middle-class Americans.

The Institute of Medicine estimated in 2002 that more than 18,000 Americans between the ages of 19 and 64 were dying each year as a result of being uninsured. The new number is two and a half times that figure.

Trying to get by, the uninsured and underinsured delay necessary care, put off filling drug prescriptions or take only some of their medications each day. Most are just one major illness or accident away from financial ruin.

A growing number of patients with cancer have to turn down recommended chemotherapy or radiation treatment because of inability to pay for care. If they have insurance, many find that the small print in their policies excludes such coverage. If they are uninsured, their risk of death multiplies. No one in dire need of medical care should be put in this lose-lose situation.

We’re not talking about a third world country. This is the United States, one of the most industrialized nations in the world. But increasingly, we look more like a developing country — 42nd in the world for life expectancy (behind Japan and most of Europe), and ranked last among 19 OECD countries in preventable deaths that should not occur in the presence of timely and effective health care.

Meanwhile, the charade goes on, as our elected representatives in Congress dither over health care reform. None of the bills in Congress will resolve the affordability and access problems.

The Congressional Budget Office estimates the House health reform bill would still leave 17 million persons uninsured and that Sen. Baucus’ bill, unveiled yesterday, would leave 25 million uninsured. That translates into tens of thousands of unnecessary deaths every year.

There are now 3,300 health industry lobbyists running around Washington, D.C., trying to shape the small print to their advantage in whatever bill finally gets passed (if any). The insurance and pharmaceutical companies and their hangers-on are spending $5 million a week to block real reform. Suffice it to say that none of these companies have the best interests of the uninsured or the underinsured at heart.

Through its trade group, America’s Health Insurance Programs, the industry is fighting for its life (but not our lives). And so far, it is winning. By “cooperating” with health care “reform” by pledging to eliminate pre-existing conditions as a barrier to coverage, and saying they will take all comers in return for a government mandate that everyone be required to buy its shoddy products, the insurers are poised to reap a massive financial windfall.

So far, the bills in Congress set no limits on what the insurers can charge for premiums, and the legal requirements for covered benefits are likely to be minimal.

If a “reform” bill along these lines passes, it will be a bonanza for insurers, drug and medical device manufacturers, and other players in the medical-industrial complex, all at our expense. Since their revenues are our costs (as patients and taxpayers), there will be no cost containment.

We can prevent another 45,000 Americans from dying next year. An effective cure to the health care crisis is within our reach, and it lies within a single-payer, Medicare-for-All plan. By cutting out private insurance companies, we would not only save taxpayers billions, but deliver quality care to everyone. We shouldn’t have to wait another 12 minutes.

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: http://www.commoncouragepress.com

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