Sen. Coburn and Prof. Feldstein predict single payer

Posted by on Wednesday, Oct 13, 2010

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

Coburn: Private health insurance may end soon

By Randy Krehbiel
Tulsa World
October 12, 2010

“There will be no insurance industry left in three years,” Coburn told the Republican Women’s Club of Tulsa County.

“That is by design. You’re going to make insurance unaffordable for everyone — which is what they want. Because if there’s no private insurance left, what’s left? Government-centered, government-run, single-payer health care.”

Senator Tom Coburn, M.D.


Nursing Economics: Is U.S. Health Care Evolving Toward a Single-Payer System? An Interview with Health Care Economist Paul Feldstein, PhD

Interview by Peter I. Buerhaus, PhD, RN, FAAN
Medscape Family Medicine
October 13, 2010

Peter Buerhaus: Looking to the future, do you think the passage of health reform legislation and its implementation could eventually lead to the adoption of a single-payer system?

Paul Feldstein: It is hard to say where we are going, particularly because the legislation creates health insurance exchanges which will be overseen by an insurance regulator. The insurance regulator will have the authority to set the benefit package and influence whether a state approves or denies rate hikes by insurance companies. I can see a scenario where there is very little cost containment and little pressure to keep insurance premiums from rising substantially. And, if there is a weak mandate for individuals to purchase health insurance, then the resulting adverse selection is likely to cause insurers to increase their premiums. People will become dissatisfied with the premium increases and some may become more supportive of a government-funded public insurance option. By heavily subsidizing government-provided health insurance and undercutting private insurers, many people will switch to lower-cost public insurers because studies show that people are willing to switch insurers for not much of a price difference. Eventually, if many individuals purchase public insurance, we could end up with a single-payer system or something close to one.

Paul J. Feldstein, Ph.D.

The majority of progressives predict that a single payer system is inevitable because the nation will no longer tolerate the increasing costs of health care. On the other side, many conservatives and libertarians predict that a single payer system may be inevitable because health plans will no longer be affordable in a regulated insurance market. Senator Tom Coburn and Professor Paul Feldstein represent the latter view.

Senator Coburn has been nicknamed “Dr. No” because of his conservative, anti-government, obstructionist approach to legislation. His views can be dismissed as those of a right-wing ideologue.

Prof. Feldstein, on the other hand, presents a more intellectual discourse of his position on health care financing. In a conversation we had during a forum at which we both appeared (Eighth Tamkin Symposium at the University of California at Irvine), Prof. Feldstein indicated to me that he was a dedicated follower of the teachings of his mentor at the University of Chicago – Milton Friedman. I probably need not say more.

The full interview of Prof. Feldstein (link above) is worth reading if you wish to better understand the sincere framing of single payer concepts from the perspective of a free-market intellectual. Although I say that his framing is sincere, it is distorted by what I believe to be exaggerated potential adverse consequences of single payer and by his failure to include certain inescapable benefits of single payer which, specifically, more than offset the deficiencies. He also repeats many of the trite criticisms of single payer that are based more on ideology and less on solid policy science, supposedly proving points by citing what are actually exceptions.

So while those on the right threaten us with the inevitability of single payer, the supporters of health care justice preach the inevitability of single payer. It looks like it’s not if we’ll have single payer, but when. But it won’t happen until we all understand that the financing mechanism of the Patient Protection and Affordable Care Act is not an avenue to reform, but a barrier that must be displaced. What we put in its place is where we totally disagree.

I might add that my conversation with Prof. Feldstein was in 2006, long before the recent reform process was underway, and at that time he told me that he believed that eventually we would have a single payer system, as much as he lamented the prospect. He is a very bright individual.

Prescription abandonment

Posted by on Tuesday, Oct 12, 2010

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

Pharma Insight 2009

Wolters Kluwer Pharma Solutions

Sample represents more than 80% of the dispensing activity within the United States for retail prescriptions, inclusive of largest retail chains.

While payers still greatly influence patient access to treatment, increasingly, patients are weighing treatment cost and benefit, especially of new prescriptions.

2009: Commercial Rx Claims – New Rx

85.59% – Dispensed to patient
8.08% – Denied by health plans
6.33% – Abandoned by patients
Brand Rx – 9.30% abandoned
Generic Rx – 5.50% abandoned

This study covered 80 percent of the retail dispensing activity within the United States. It included patients for whom our health care system is working, at least theoretically. These individuals gained access to a physician, received one or more prescriptions, and then attempted to have the prescription filled by a retail pharmacy.

Private health plans that should be assisting patients in receiving the care that they should have, denied over 8 percent of the new prescriptions recommended by physicians.

Of all new prescriptions, over 6 percent were prepared but then abandoned by patients, primarily because of the high out-of-pocket costs of the prescription.

We need a health care system that ensures that all of us receive the health care that we need, including prescription drugs. A single payer national health program – an improved Medicare for all – would do just that. No one would walk away from a pharmacy empty handed.

By Christine Adams, Ph.D.

Once again, Texas has the distinction of having the highest rate of people lacking health insurance in the nation – 26.1 percent. According to the Census Bureau’s new report, more than 1 out of every 4 Texans is uninsured, compared to the national average of 1 out of every 6 people.

These hard economic times show the woeful inadequacy of having an employer-based, for-profit health insurance system. Lose your job? Lose your health insurance. No health insurance? No access to health care. What’s the easiest way to fall into poverty? Get sick – even if you have health insurance at the time of your illness.

As T.R. Reid, author of “The Healing of America” says, “In the world’s richest nation, we tolerate a health care system that leads to large numbers of avoidable deaths and bankruptcies among our fellow citizens … that doesn’t happen in any other developed country.” Ironically, the U.S. spends twice as much as any other nation on health care without getting value for our money.

Nations with national health insurance spend about half as much as we do, have better overall medical outcomes and cover all their residents and citizens, according to the World Health Organization. The only real difference between us and them is that they do not allow for-profit health plans to play a central role in their health systems. And contrary to the popular myth of “socialized medicine,” nations with national health insurance mostly have less interference in medical practice and less government involvement in health care than we do.

There are just three models for universal health care in developed nations: Beveridge (the type of system used in the UK), Bismarck (used in Germany), and single-payer (in use in Canada and, since 1995, Taiwan, among others). The role of government varies with the model, but all three models exclude for-profit health plans from all but supplemental policies which cover extras such as private rooms. In other words, no insurance company bureaucrat determines whether a British, German, or Canadian patient will receive a needed test or treatment.

The Beveridge model, like our Veterans Administration system, is the nearest to “socialized medicine” because it features hospitals that are owned by government and doctors on government salaries. But there’s no government interference where it counts – in clinical practice. Doctors in other countries are shocked at the level of interference by insurance companies into medical practice in the U.S.  In the other two models, doctors are in private practice. In the Bismarck model, private insurance companies function as quasi-governmental agencies – they are nothing like our Aetnas and Cignas — to assure access to all while government plays referee. Under the single-payer model, as in our Medicare program, government – the “single payer” – pays the bills for care, while the actual delivery of care is private.

Nations with single-payer systems reap tremendous savings on paperwork and bureaucracy by streamlining administration and keeping for-profit insurers out. Estimates are that the U.S. could save $400 billion annually by replacing our fragmented system of private insurers with an improved Medicare-for-all program, enough to cover all the uninsured and to upgrade everyone else’s coverage.

The for-profit, employer-based U.S. system only works for Wall Street and a handful of top executives who make millions by denying our nation what we are already paying for – high quality health care for all at an affordable price. Find out from nonpartisan sources what the other health care models are like. You will likely be surprised at how well these models work.

With single payer, Medicare for all, the United States will be able to truly have the best health care system in the world. That would be especially good news to us Texans.

Christine Adams is a licensed psychologist and statewide secretary for Health Care for All Texas (

Lessons from Bangladesh

Posted by on Monday, Oct 11, 2010

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

Health System in Bangladesh

World Health Organization
(Accessed October 11, 2010)

Bangladesh has made significant progress in recent times in many of its social development indicators particularly in health. This country has made important gains in providing primary health care since the Alma Ata Declaration in 1978. All health indicators show steady gains and the health status of the population has improved. Infant, maternal and under-five mortality rates have all decreased over the last decades, with a marked increase in life expectancy at birth.

Like most transitional societies, a wide range of therapeutic choices are available in Bangladesh, ranging from self care to traditional and western medicine. The public sector is largely used for in-patient and preventive care while the private sector is used mainly for outpatient curative care.

The Public Sector

The primary care in the public sector is organized around the Upazila Health Complex (UHC) at sub-district level which works as a health-care hub. These Units have both in- and out-patient services and care facilities. Most commonly, they have in-patient care support with 31 beds, while some UHC have over 50 beds. Many UHC Units have a package service called “comprehensive emergency obstetric care services” (EOC) available, with an expert gynaecologist, an anaesthetist and skilled support nurses on duty round-the-clock, and basic laboratory facilities. At a lower tier, the Union Health and Family Welfare Centre (UHFWC) are operational, constituted with two or three sub centers at the lowest administrative level, and a network of field-based functionaries. The public sector field-level personnel are comprised of Health Assistants (HAs) in each union who supposedly make home visits every two months for preventive healthcare services, and Family Welfare Assistants (FWAs) who supply condoms and contraceptives pills during home visits. Recently some of the female HAs and FWAs have been trained as birth attendants (skilled birth attendants – SBAs), to provide skilled services within a household setting.

The Private Sector

In the private sector, there are traditional healers (Kabiraj, totka, and faith healers like pir / fakirs), homeopathic practitioners, village doctors (rural medical practitioners RMPs/ Palli Chikitsoks-PCs), community health workers (CHWs) and finally, retail drugstores that sell allopathic medicine on demand. In addition to dispensing medicine, sellers at these mostly unlicensed and unregulated retail outlets also diagnose and treat illnesses despite having no formal professional training.


Physician’s obligations to patients

By Dr. Delwar Hossain
The New Nation – Bangladesh’s Independent News Source
October 10, 2010

Doctors of medical background are usually brilliant and talented groups of people of our country. They are the cream of the society and pride of this country.

High moral values and strict ethical practice should be observed in the physicians simply because they are considered next to Allah by the sick people. In true sense they are the deputy of almighty Allah in this world. Unfortunately with the few exceptions they are indulged in immoral activities and unethical practices of all sorts. I think it is not too late to rectify ourselves now.

Malpractices of all sorts have engulfed the physicians of all categories and money appears as the single most important driving factor. Money is an important factor but should not be the only factor for our profession.

Cesarean operation is a life saving method for mother and baby. It was invented only for selective and complicated labor. It is still used as such in the West. But quite different picture is seen in our country. When this facility was first available in our country several decades ago hardly 10% labor was done by it. It was used only in cases of its valid indications. But now around 50% (varies 40% to 95%) labors are done by it across the country and in majority cases injudiciously. It becomes the easiest method of earning a lot of money within shortest possible time! If we become an exploiter instead of a perfect technical person how can we be able to protect the interest of a patient?

Cases of gross negligence on the part of physicians are being reported in paper now and then. These are nothing but the tip of the ice-burg only. One of my known persons decided to deliver their baby by Cesarean section. He managed to get the best anesthesiologist and gynecologist. Patient started muscle twitching on the operation table during later part of operation. On inquiry it was found that Oxygen cylinder ran out of oxygen! And the anesthetist was found upstairs in computer game! By this time patient incurred irreparable brain damage. Then she was transferred to Dhaka to Singapore and attended by both the British and the American specialists. But did not get any benefit. Now she is deeply unconscious, has been bed-ridden for last one and a half decades, on life saving measures. She and her family life had gone to hell.

Can a health care system in a transitional society such as Bangladesh provide lessons for a modern industrialized nation like the United States? Well, yes. See how many lessons you can find here.

Robert Reich: Aftershock

Posted by on Friday, Oct 8, 2010

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


By Robert B. Reich
Published 2010 by Alfred A. Knopf


In September 2009… Treasury Secretary Tim Geithner, assessing what had happened to the United States in the years leading up to the Great Recession, repeated the conventional view that “for too long, Americans were buying too much and saving too little.”

The problem was not that Americans spent beyond their means but that their means had not kept up with what the larger economy could and should have been able to provide them.

Part I – The Broken Bargain
Chapter 2 – Parallels

Economists Emmanuel Saez and Thomas Piketty have examined tax records extending back to 1913. They discovered an interesting pattern. The share of total income going to the richest 1 percent of Americans peaked in both 1928 and in 2007, at over 23 percent.

Between the two peaks is a long, deep valley. After 1928, the share of national income going to the top 1 percent steadily declined… to 9 to 11 percent in the 1950s and 1960s, finally reaching the valley floor of 8 to 9 percent in the 1970s. After this, the share going to the richest 1 percent began to climb again… reaching its next peak of more than 23 percent in 2007.

Part III – The Bargain Restored
Chapter 1 – What Should Be Done: A New Deal for the Middle Class

Medicare for all. The passage of health care legislation in 2010 represents only the first step toward reform. The next stage should be Medicare for all. The most efficient way to provide all Americans with high-quality health care is to allow everyone to sign up for Medicare and to subsidize the costs for middle-class and lower-income families.

Emmanuel Saez – Striking it Richer: The Evolution of Top Incomes in the United States

The landmark study by Emmanuel Saez and Thomas Piketty has been cited by many in helping to explain what went wrong with our economy. The productivity gains of American workers were not shared with the workers but were transferred to the wealthiest Americans. Robert Reich explains that the economy falters when the masses to not have the funds to purchase the products and services made possible by their own productivity.

What should be done is intuitive. In restoring the bargain by creating a New Deal for the middle class, one of the most obvious and effective measures would be to establish a Medicare program for everyone and fund it publicly through progressive tax policies.

So simple and so right. Yes, Reich is right.

Our bad habits? Or our health care system?

Posted by on Thursday, Oct 7, 2010

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

What Changes In Survival Rates Tell Us About US Health Care

By Peter A. Muennig and Sherry A. Glied
Health Affairs
October 7, 2010

Many advocates of US health reform point to the nation’s relatively low life-expectancy rankings as evidence that the health care system is performing poorly. Others say that poor US health outcomes are largely due not to health care but to high rates of smoking, obesity, traffic fatalities, and homicides. We used cross-national data on the fifteen-year survival of men and women over three decades to examine the validity of these arguments. We found that the risk profiles of Americans generally improved relative to those for citizens of many other nations, but Americans’ relative fifteen-year survival has nevertheless been declining. For example, by 2005, fifteen-year survival rates for forty-five-year-old US white women were lower than in twelve comparison countries with populations of at least seven million and per capita gross domestic product (GDP) of at least 60 percent of US per capita GDP in 1975. The findings undercut critics who might argue that the US health care system is not in need of major changes.

We speculate that the nature of our health care system — specifically, its reliance on unregulated fee-for-service and specialty care — may explain both the increased spending and the relative deterioration in survival that we observed. If so, meaningful reform may not only save money over the long term, it may also save lives.

This study provides credible evidence that lower life expectancy in the United States, when compared to twelve other nations, is not due to smoking, obesity, traffic accidents nor homicides. Thus this study can be used to refute those who contend that we have the greatest health care system on earth, but it is the bad habits of those unworthy of health care that result in our lower life-expectancy ratings.

The authors speculate, “It is possible that rising US health spending is itself responsible for the observed relative decline in survival.” Specifically they suggest that “reliance on unregulated fee-for-service and specialty care may explain both the increased spending and the relative deterioration in survival.” They seem to dismiss the lack of health insurance as not having been found to have “substantial impacts,” though there is “uncertainty on this point.”

This opinion meshes well with a prevalent view expounded during the reform process that our costs are high because of an excess of health services that often impair outcomes. With almost no substantial evidence, the Dartmouth variations often were blamed for impaired outcomes, while largely ignoring a plethora of data that show that insufficient care, especially related to being uninsured or under-insured, greatly impairs outcomes.

One of the authors of this study, Sherry Glied, is taking this spending-causes-decline-in-survival theory with her to the Department of Health and Human Services where she is assistant secretary for planning and evaluation. These “neo-theorists” preach that we can improve quality and decrease spending through economic tools such as accountable care organizations and bundling of services. Come on.

It’s time to bring in the old school European-style theorists who have already shown that universal social insurance programs with well established primary care infrastructures do control costs and improve outcomes. Many Europeans engage in the same bad habits as found here in the United States, yet none of them are unworthy of health care.

By Claudia Chaufan

While “consumer-driven fire department” sounds decidedly weird, for some reason some have been brainwashed to believe that “consumer-driven health care” makes sense.

But it does not. It makes no more sense to let people’s house burn down because they cannot pay their fire-department fees — maybe they chose the wrong “plan”? or a plan with a deductible they cannot afford? – than to let them die because they cannot afford their health care.

Now, why the new federal law, the Patient Protection and Affordable Care Act P-PACA), will fail to keep its two key promises (protecting patients and making health care affordable), is not the topic of this posting, because I and many others have commented on it extensively elsewhere.

Rather, it is to point out that if we continue turning health care more and and more into a “consumer good” that those who have the ear (and pockets) of Congress and the White House can make a profit off of (and P-PACA reinforces the trend ), we are up to extremely unpleasant experiences.

Such as, for instance, looking at our homes burn down while the Fire Department watches. And unfortunately, this nightmare is already with us. It happened just a few days ago, in Tennessee.

Here is how the episode is described in Amy Goodman’s show, Democracy Now:

Tenn. Fire Department Allows Home to Burn Down over Unpaid $75 Fee

In Tennessee, a local fire department refused to put out a house fire last week because the homeowner had forgotten to pay $75 for fire protection from a nearby town. The firefighters showed up to the scene of the fire and then watched as the home of Gene Cranick burned to the ground. Cranick’s neighbors had paid the $75 fee, so when the fire spread across the property line firefighters took action, but only to save the neighbor’s property.

The local mayor defended the actions of the firefighters. South Fulton Mayor David Crocker said, “Anybody that’s not in the city of South Fulton, it’s a service we offer. Either they accept it or they don’t.” On Monday, Gene Cranick appeared on Countdown with Keith Olbermann.

Gene Cranick: “Everything that we possessed was lost in the fire. Even three dogs and a cat that belonged to my grandchildren was lost in it. And they could have been saved if they had been—they had put water on it. But they didn’t do it, so that’s just a loss.”

Keith Olbermann: “When you all called 911, as I understand it, you told the operator you’d pay whatever was necessary to have the firefighters come put out and prevent the fire from spreading to your house. What was their response?”

Cranick: “That we wasn’t on their list.”

Are we going to watch in disbelief while our homes burn down?

As Dr. Bill Skeen, executive direction of Physicians for a National Health Program-California, wrote:

Sadly, those of us who believe healthcare is a right know that this country has never assumed the mantle of providing healthcare to all its residents. Currently we leave 50 million of our brothers and sisters uninsured; 45,000 of them die each year because of it. It is time for us to stand up and demand that our nation return to the real American values of empathy and compassion and caring about our neighbors’ wellbeing.

Last night we as a nation let a family’s house burn to the ground while those who could save it watched and did nothing. Everyday we let more than a hundred people die who have no health insurance. Are we willing to standby and do nothing to stop it?

We don’t need to. And we mustn’t.

Let’s pick up the phone and call our U.S. Representatives today, and tell him or her to co-sponsoer HR676 when it is reintroduced next year in Congress. Tell him or her that you are outraged at what happened in Tennessee and that these two issues, fire protection and health care for all, are one and the same at their core. They demonstrate the incontrovertible need for government to protect the common good, and for we Americans to show our humanity to each other.

Let us demand Medicare for All – everybody in, nobody out!

Originally posted on Social Medicine.

HHS rushes into reform… with expedited waivers!

Posted by on Wednesday, Oct 6, 2010

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

Statement on the application of medical loss ratio standards to certain health plans under the Affordable Care Act

U.S. Department of Health & Human Services
September 30, 2010

Jay Angoff, director of the Office of Consumer Information and Insurance Oversight, within the U.S. Department of Health and Human Services (HHS) released the following statement today, regarding the application of medical loss ratio standards to certain health plans under the Affordable Care Act:

“As many employers and insurers consider health insurance options for 2011, one question that has been raised is the applicability of provisions of the Affordable Care Act to health plans and coverage with special circumstances. HHS remains committed to implementing the law in a way that minimizes disruption to coverage that is available today while also ensuring that consumers receive the benefits the Act provides.

“For example, pursuant to the Affordable Care Act and our regulations, HHS recently announced an expedited process for plans to apply for a waiver from the requirement in the Affordable Care Act establishing minimum annual limits where such limits would result in decreased access or increased premiums. HHS has approved dozens of these waiver requests, most often filed by so-called “mini-med” plans, and in doing so, has ensured the continuation of health coverage for workers and their families. Complete waiver applications were generally processed in 48 hours.

“More recently, the issue of the applicability of the medical loss ratio requirements to plans such as mini-med plans has come up. HHS has not yet issued regulations implementing the medical loss ratio requirements because the Affordable Care Act tasks the National Association of Insurance Commissioners (NAIC) with first making recommendations to the Secretary.

“Although the NAIC is close to completing its work, we understand that some employers must soon make decisions regarding coverage options for 2011. As such, we fully intend to exercise her discretion under the new law to address the special circumstances of mini-med plans in the medical loss ratio calculations.  According to the Affordable Care Act, medical loss ratio “methodologies shall be designed to take into account the special circumstance of smaller plans, different types of plans, and newer plans.”  We recognize that mini-med plans are often characterized by a relatively high expense structure relative to the lower premiums charged for these types of policies. We intend to address these and other special circumstances in forthcoming regulations.”

So the Patient Protection and Affordable Care Act (ACA) didn’t extend health care coverage to everyone and didn’t enact significant cost containment measures, but at least it did establish regulations that would end insurance abuses such as low annual dollar caps on coverage and administrative excesses that waste dollars that should be going to health care. Or did it?

Next year plans are required to provide a minimum of $750,000 in coverage, phasing to unlimited coverage in 2014. Also group plans are required to pay out at least 85 percent of premium revenues for health benefits (medical loss ratio). These regulatory changes are essential if health plans are going to benefit the insured, even though that would require plan redesign by employers such as McDonald’s and Jack in the Box that currently offer limited-benefit plans (mini-med plans) to their employees.

These plans offer as little as $2,000 a year in benefits. This could be perceived as a practical joke, but it certainly isn’t funny. This isn’t under-insurance; it’s virtually no insurance at all. Also, with so few benefits paid out, these plans cannot possibly meet the required medical loss ratios. Though ACA will not insure everyone and will not control costs, the new regulatory rules were supposed to bring an end to these abusive un-insurance programs.

Under ACA the Department of Health and Human Services (HHS) was given an expanded role in regulatory oversight, so what is their response to these plans? They have established an expedited process for these plans to be granted waivers exempting them from the new requirements!

What will happen in 2014? What changes will take place in the interim that will cause HHS to terminate the waiver program and require removal of dollar caps on coverage along with compliance with medical loss ratios? If the employers need the waivers now, they’ll certainly need them in 2014 when premiums are much higher because of the new regulatory requirements.

Is HHS really that sympathetic to employers while being so uncaring about the needs of their employees? I mean waivers… not just waivers… but expedited waivers! Just what was reform supposed to have accomplished?

As with so many of these daily messages, this would not even be a topic if Congress had enacted a single payer national health program – an improved Medicare for all.

Who will design and operate the accountable care organizations?

Posted by on Tuesday, Oct 5, 2010

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

Health Care Providers, Insurers: Accountable Care Organizations Bring Legal Worries

By Jenny Gold and Phil Galewitz
Kaiser Health News
October 5, 2010

Doctors and hospitals eager to pursue a new model of health care being promoted by the Obama administration are raising concerns that they could run afoul of antitrust and anti-fraud laws, while insurers are warning that the new arrangements could lead to higher prices for medical care.

A key part of the health overhaul law encourages the development of “accountable care organizations” that would allow doctors to team up with each other and hospitals in new ways to provide medical services. Health care providers want to make sure their ACOs won’t be accused of stifling competition or trying to fix prices when they bargain with insurance companies. Insurers, meanwhile, are expressing concern that providers could use the leverage of ACOs to demand higher prices.

Whether ACOs – which are just a concept for now – can be made to work could determine whether the health care law ultimately succeeds in lowering costs and improving care for consumers.

The federal health program for the elderly and disabled is due to start trying out ACOs in 2012, and some providers are scrambling to figure out how to apply the idea to privately insured patients as well. The antitrust rules mostly concern the  private insurance market; in Medicare, the government sets the payment rates.

But America’s Health Insurance Plans, the insurers’ trade group, warned government officials against being too accommodating. It said in a recent letter  that ACOs won’t help consumers “if they are mere vehicles for price fixing or aggregating market power, and the antitrust agencies must continue their efforts in this area, using enforcement, guidance, and other tools.”

Cory Capps, an economist at Bates White Economic Consulting, said, “We could end up in the worst world,” one in which the delivery of care isn’t made more efficient but providers accumulate “greater pricing power.”

Susan DeSanti, director of policy planning at the FTC, said that the agency is working with CMS on the issues, and that guidance on ACOs will be issued to reduce uncertainty. “The antitrust laws are actually consistent with the goals of ACOs,” she said. “The antitrust laws encourage collaborations when they are going to produce good things for consumers, like improved health care, and the only caveat is that the creation of market power shouldn’t go along with that. But antitrust is not a barrier here.”

Humana Medical Director Dr. Tom James said the insurer wants to show that “health plans have a role with ACOs,” adding that it’s important that ACOs be seen as more than cost-cutters. “If not done right, it could give the whole movement a bad name,” he said. “We learned that with HMOs in the 1990s.”

The Patient Protection and Affordable Care Act (ACA) promises us greater affordability through the establishment of accountable care organizations (ACOs). By adopting an as-yet-to-be-defined team approach to health care, the organizations purportedly would improve quality while controlling costs, theoretically by eliminating the excess services demonstrated by the Dartmouth Atlas (even though our much greater problem is under-utilization as demonstrated by Commonwealth, RAND, and others).

Who will be making the decisions on the structure and then the operations of these teams? Will it be altruistic members of the medical, hospital, and policy communities? Very unlikely, based on the history of the HMOs. Although the original HMOs were designed with the intent of providing optimal patient care (through a team approach!), the enabling legislation that brought a surge in managed care also brought out the entrepreneurial minds that replaced health care altruism with a business ethic of health care.

There is absolutely no doubt that the same will occur now, and actually has already begun. The entrepreneurs will be in control before the altruists can develop a process to fulfill the vision for a health care utopia. Although the teams will be designed along business lines, purportedly to control costs, the motivation of those in control will be to make money. Even if the teams are not owned by passive investors, the physicians and hospital administrators will still be manipulating the structure and operations to serve their own interests first.

The vision of various teams competing with each other by offering higher quality and lower costs is a fantasy. These teams will use their oligopolistic and monopolistic powers to drive costs up. Markets do work very well for those who are able to pervert them. Just look at the perversions of the private insurance industry that has helped to orchestrate the most expensive health system in the world, while squandering the opportunities to bring some measure of quality to our system.

Congress and the Obama administration have brought us ACOs, and you would think that they would feel some obligation as government stewards to provide guidance and oversight. But what has been their response? Susan DeSanti of the Federal Trade Commission said that “the antitrust laws encourage collaborations,” and that “antitrust is not a barrier here.”

As Cory Capps of Bates White Economic Consulting stated, “We could end up in the worst world,” one in which the delivery of care isn’t made more efficient but providers accumulate “greater pricing power.”

The tragedy is that all of the attention that has been diverted to these ill-defined and perversely-incentivized ACOs has distracted our nation’s policy makers from seriously considering reform that actually would achieve our goal of quality, affordable care for everyone – an improved Medicare for all. Focus, folks.

‘Let us be dissatisfied!’

Posted by on Monday, Oct 4, 2010

By Drs. Margaret Flowers and Andy Coates

Photo courtesy of Dr. Walter Tsou

These words, taken from a speech by Dr. King, were the refrain of a speech today by the actor Wendell Pierce. He was the one of few speakers at the One Nation rally who began to express what we and our colleagues have experienced since George Bush left the White House. We must be dissatisfied until we have social and economic justice for all in this nation. Dissatisfaction fuels our drive to end the great inequalities in this nation until we succeed.

The United States is an outlier, abnormal when compared to other industrialized nations in so many ways. We have the greatest income inequalities (except for Singapore) and this inequality is associated with poor performance in many areas of social well-being. We spend the most on health care and we leave the greatest percentage of our population either completely uncovered (50.7 million) or partially covered and at risk of financial ruin in the face of a serious accident or illness.

The One Nation march which was held in Washington, D.C., Saturday was intended to support efforts to elect Democrats in November and speaker after speaker expounded the importance of electing Democrats. Yet we met very different concerns among those in attendance.

We heard and saw the majority of people talking about issues, not elections. We joined with coalitions marching for peace and for immigrant rights and unions demanding the right to organize, workplace dignity, job security and a living wage. There were signs with slogans supporting an end to corporate power and personhood, as well as those for jobs, education and an end to racism. Teachers were in the house, defending public education.

Our aim was to invite other attendees at the rally to renew support for single-payer health care reform/improved Medicare for all. We were doctors and health care advocates from around the country standing together to make it clear that we still have a health care crisis and we still need single payer. And we were greeted warmly, as people joined our chants, took our literature and signs, and cheered as we passed.

The health reform that recently passed does not solve the fundamental problems that we have in this country. Simply put, it will cost too much and cover too few. Today we saw that another reform is still possible.

We know that two-thirds of people in the U.S. support single payer. Among Democrats, it is closer to 4 out of 5 who support it. Yet in spite of the great popularity of single payer, many leading Democrats became convinced that single payer was not politically feasible and accepted the bill that passed. They supported a law written by and for the very industries that profit off our sick-care non-system, instead of the opinions of their political base. While the party continues to laud their bill as a great success, today we saw that it is imperative that we continue to reach out to Democrats with our message.

And so, single-payer supporters gathered in Washington. Doctors wore their white coats or scrubs. Advocates decorated themselves with stickers and carried signs. We marched as a group through the crowds carrying banners and we chanted, “We still need health care: Medicare for all!” And everywhere we went, people cheered and took photographs.

The single-payer movement is building. We must make this manifest. We must be present and spread our message. One of the banners we carried read, “Every day, 120 Americans die from lack of health care. It doesn’t have to be this way. Single payer now. Everybody in, nobody out.” This is a human tragedy that is unacceptable.

And so let us be dissatisfied until this health injustice ends.

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