Health care spending for 2009

Posted by on Wednesday, Feb 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.

Health Spending Projections Through 2018: Recession Effects Add Uncertainty To The Outlook

By Andrea Sisko and colleagues at Office of the Actuary, Centers for Medicare and Medicaid Services
Health Affairs
February 24, 2009

Projected spending for 2009:

$2,509.5 billion – National Health Expenditures (NHE)

$8,160.3 – NHE per capita

17.6% – NHE as percent of GDP

http://content.healthaffairs.org/cgi/content/abstract/hlthaff.28.2.w346v1

These are the most reliable numbers to use that represent our health care spending for this year. Rounding off these numbers makes them easier to remember and eases communication of the amounts:

Total health spending is two and one-half trillion dollars

Health spending per person is over 8100 dollars

That amounts to about seventeen and one-half percent of our GDP

IOM report: America's Uninsured Crisis

Posted by on Tuesday, Feb 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.

America’s Uninsured Crisis: Consequences for Health and Health Care

Institute of Medicine
The National Academies
February 24, 2009

Web briefing

Lawrence S. Lewin, Chair, Committee on Health Insurance Status and Its Consequences (and also founder of The Lewin Group):

We were asked… to basically answer three questions, and this was a follow-on to the IOM studies that were produced in six volumes between 2000 and 2004. The first is what are the dynamics driving an apparently persistent downward trend in health insurance coverage? The second, is being uninsured harmful to the health of children and adults? And third, are insured people affected by high rates of uninsurance in their communities, so called spill-over effect? …I think that it’s important to point out some things that we were not able to cover. The first were a whole series of economic and financial impacts of uninsurance, impact on medical debt and global competitiveness. These are issues where the data are not very sound, and where there is a lot of disagreement in any event. We were not able to, because of the non-availability of data, to look at the impact of different levels of insurance, so in a sense we treated insurance coverage as a binary issue – you either had it or you didn’t have it, and we know that there are a lot of shadings in between, but we believe that the research is clear enough – very clear indeed – about even the binary decision. And finally, we were specifically asked not to deal with the potential approaches to solving the problem. There are lots of people doing that – indeed as we speak.

****

Lawrence S. Lewin:

The conclusions are, yes indeed, health insurance coverage does matter… That question, which I think is at the heart of the debate, really should no longer be an issue… Secondly, particularly given the fact that it does make such a difference, we believe that there is a compelling need to do something to off-set this persistent decline with which we’re faced, and that there is an argument to be made that even those who currently have insurance, even if they don’t lose it which they are at greater risk of doing, should have an interest in these issues. As a consequence, the committee unanimously adopted the following recommendations… The committee recommends that the president work with Congress and other public and private sector leaders on an urgent basis to achieve health insurance coverage for everyone, and, in order to make that coverage sustainable, to reduce the cost of health care and the rate of increase in per capita health care spending.

****

A web question from Dr. Don McCanne from Physicians for a National Health Program:

Although this report is limited to the importance of being insured, shouldn’t reform efforts also be directed toward adopting policies that would ensure that coverage actually enables access and affordability? Since there are questions about the limits of the private insurance model in accomplishing this, shouldn’t all options be on the table, including a single payer national health program?

Lawrence S. Lewin:

Without taking any position implied by the very last point about a particular proposal, I think the answer is yes, of course, all options should be on the table until they’re more thoroughly analyzed, and I believe many things are being considered right now. But I think to opine on the question itself is really beyond the scope of the committee.

Links to this audio briefing, the news release, the report in brief, the project web page, and the full report:
http://www.nationalacademies.org/morenews/20090224.html

In six previous reports, published from 2001 to 2004, the Institute of Medicine concluded that “being uninsured was hazardous to people’s health and recommended that the nation move quickly to implement a strategy to achieve health insurance coverage for all.”

After a five year lapse, the Institute is issuing an update which concludes, “Health insurance coverage matters. Expanding health coverage to all Americans is essential. Action to reduce health care expenditures and the rate of increase in per capita health care spending is also of paramount importance if health insurance coverage for all is to be achieved and sustained.”

Is this earthshaking news or what? Having health insurance can be beneficial for your health, and everyone should have it, especially since it makes communities healthier as well. Uh, I think we all knew that.

What is surprising is Lawrence Lewin’s statement that there is “disagreement” on the economic and financial impacts of uninsurance, and the data on this “are not very sound.” Is he suggesting that we should discard a couple of decades of extensive, highly credible studies demonstrating that those without health insurance face impaired access to care, financial hardship, and often personal bankruptcy, not to mention physical suffering and perhaps even death?

Just as astounding is his statement that there is a “non-availability of data to look at the impact of different levels of insurance.” Again, is he recommending that we discard the plethora of highly credible studies, which demonstrate that the explosion in underinsurance products is also causing much of the same suffering as that experienced by the uninsured?

Lewin’s statements provoked me enough to submit the question on whether we should include on the table a consideration of single payer as a financing model that would enable access and affordability. He did let slip out the obvious answer, “yes,” before retreating to the position that he should not “opine” on it.

The answer is YES! Single payer definitely needs to be on the table.

Lewin may not want to opine, but that shouldn’t stop us from opining that we should remove from the table any reform model that would leave us short of providing all necessary care for everyone without exposing anyone to financial hardship. That would really clear the table. Then we could get serious about working on a single payer national health program.

OECD: Health Care Reform in the United States

Posted by on Monday, Feb 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.

Economic Department Working Paper No. 665: Health Care Reform in the United States

By David Carey, Bradley Herring and Patrick Lenain
OECD (Organisation for Economic Co-operation and Development)
February 6, 2009

Abstract

In spite of improvements, on various measures of health outcomes the United States appears to rank relatively poorly among OECD countries. Health expenditures, in contrast, are significantly higher than in any other OECD country. While there are factors beyond the health-care system itself that contribute to this gap in performance, there is also likely to be scope to improve the health of Americans while reducing, or at least not increasing spending. This paper focuses on two factors that contribute to this discrepancy between health outcomes and health expenditures in the United States: inequitable access to medical services and subsidized private insurance policies; and inefficiencies in public health insurance. It then suggests two sets of reforms likely to improve the US health-care system. The first is a package of reforms to achieve close to universal health insurance coverage. The second set of reforms relates to payment methods and coverage decisions within the Medicare programme to realign incentives and increase the extent of economic evaluation of different medical procedures.

http://lysander.sourceoecd.org/vl=16683430/cl=20/nw=1/rpsv/cgi-bin/wppdf?file=5ksnw5ghd45c.pdf

OECD reports are important not only because of their credible studies of economic conditions throughout the world, but also because they are used for policy decisions in the thirty member nations (including the U.S.) plus more than one hundred other countries and economies. Thus it is important to understand this new OECD report, “Health Care Reform in the United States,” especially at this time when intensive reform efforts are taking place in Washington.

The thirty member nations are “countries committed to democracy and the market economy.” Although the data provided by OECD can be very helpful in addressing each nation’s economic problems, the recommendations offered must be evaluated with a recognition that there is a bias toward market solutions, with governments being relegated to a supportive role in improving the functioning of markets.

As expected, this report describes well the poor performance of our health care system in spite of the very high level of spending – by far the highest of all nations. Special attention is directed to the increasing proportion of both the uninsured and the underinsured, and the failures of the private insurance market and current government policies to correct these deficiencies.

The most serious problem with this report is that their recommendations are primarily limited to those that would improve the functioning of private insurance markets, with a government role limited to refining policies that would enable improvements in the private markets (plus minor changes in Medicare design that might have a minimal impact in improving value, but with some policy tradeoffs). Although they parenthetically hint that single payer policies in other nations have been effective in achieving some of the reform goals, at no time do they suggest that a single payer approach might benefit the United States; in fact, they specifically reject it as “radical.”

Considerable attention is directed to the work of Jonathan Gruber and his efforts to use private insurance plans as a foundation for reform, including the real-life experience of the Massachusetts plan. Although the authors of this report echo some of his suggestions, their recommendations fall short of an optimal program of social insurance based on private health plans (a model that we believe is inadequate anyway). Except for tweaks to Medicare, they remain silent on public insurance programs. Last week we provided a critique of the Massachusetts plan, explaining why it is an unsatisfactory model for reform in the United States. (http://www.pnhp.org/news/2009/february/massachusetts_plan_.php)

Just one example of the inadequacies of their recommendations is the inconsistency between their discussion of the financial hardships faced by the underinsured, and their recommendation to “decrease the generosity of supplemental Medicare insurance designs for beneficiaries without chronic conditions to reduce moral hazard risks, which supplemental insurance accentuates by insulating Medicare beneficiaries from Medicare’s cost-sharing provisions.” Again, they provide good data on problems with our system (underinsurance), but they provide a terrible recommendation for policy changes (prevent “moral hazard” by expanding underinsurance) based on market theory instead of social solidarity.

In sum, OECD’s credibility as an important resource on economic data does not extend to credibility for its recommendations that are based on pro-market ideology. This report is valuable for its data showing how poorly our health care financing system is functioning, but it is almost worthless as a guide for policies on how to repair our system since it reinforces the obsolete model of private health plans and ignores the more efficient and effective model of a single payer national health program.

Who is behind those closed doors in the Senate?

Posted by on Friday, Feb 20, 2009

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

Health Care Industry in Talks to Shape Policy

By Robert Pear
The New York Times
February 19, 2009

Since last fall, many of the leading figures in the nation’s long-running health care debate have been meeting secretly in a Senate hearing room. Now, with the blessing of the Senate’s leading proponent of universal health insurance, Edward M. Kennedy, they appear to be inching toward a consensus that could reshape the debate.

The 20 people who regularly attend the meetings on Capitol Hill include lobbyists for AARP, Aetna, the A.F.L.-C.I.O., the American Cancer Society, the American Medical Association, America’s Health Insurance Plans, the Business Roundtable, Easter Seals, the National Federation of Independent Business, the Pharmaceutical Research and Manufacturers of America, and the United States Chamber of Commerce.

http://www.nytimes.com/2009/02/20/us/politics/20health.html?ref=politics

What?! In this time of transparency and Change, when we have an open window of opportunity to finally fix our very sick health care system, we are reverting to a closed door process dominated by the most powerful lobbyists in the nation whose interests take precedence over the American patient?!

Robert Pear reports that they are inching toward a consensus, but read his description of the memorandum prepared by director of the health staff of Senator Kennedy’s Health, Education, Labor and Pensions Committee. They have agreed on almost nothing. “…the sense of the room is that an individual obligation to purchase insurance should be part of reform…” is as close as they have come, and, even there, there is no agreement on what that coverage should be and on how you would enforce it.

At best, this process can end only with recommendations for a few tweaks in our system, just as the window slams shut and everyone walks out.

Have these people no decency?!

A few in the room do, but they are overpowered by those who… Well, you know. People can go broke and die for all they care, as long as we keep our public institutions out of their private businesses.

Stall and walk out. How’s that for CHANGE WE CAN BELIEVE IN?

(The following aired as a commentary on Northeast Public Radio and was also distributed via email by the Unions for Single Payer Healthcare.)

COBRA is a law that allows you to keep your employer-sponsored health insurance for 18 months if you lose or change jobs. To do so, you have to pay 102% of the cost (the full premium plus a 2% surcharge.)

The stimulus package just passed provides for laid off workers, who had health insurance on the job, to receive a subsidy of 65% of the health insurance premium for up to nine months.

According to a report by FamiliesUSA, the national average unemployment benefit is $1,278 monthly. Under COBRA, national family coverage averages $1,069 per month. So laid off workers, in order to keep health insurance for their families, will have to pay more than $375 a month but after nine months will have to come up with the full $1,069.

Here in New York, to keep family health insurance under COBRA costs an average of $13,618 a year, 85% of the average unemployment benefit in New York. For those eligible in New York, the 9-month COBRA subsidy will lower the the average cost for a family to keep health insurance to about $7,000 for a full year. The family also gets to keep the out-of-pocket expenses — co-pays, co-insurance and deductibles.

A recent study by the Commonwealth fund reported that only 9% of unemployed workers continued health insurance under COBRA. The 65% subsidy should allow some to consider keeping health insurance under COBRA, where before it would have been just unthinkable. This can help those with chronic illnesses, or those with very sick family members, or where a spouse continues working.

To keep family coverage under COBRA, with the subsidy, for up to nine months, it will cost people who are laid off, on average, one-third of every unemployment check. This money will go to a health insurance company, instead of food, housing and school expenses for the family.

But while the subsidy makes private health insurance through COBRA slightly more affordable for the unemployed, purchasing it remains a Faustian bargain. What “stimulus” is there in asking a person who has just lost their job to give a third of each unemployment check to the private insurance industry? And what will they do after nine months have come and gone?

Despite the good intentions in Congress and the White House, subsidized COBRA payments are not feasible for the unemployed — and terrible policy for the nation. There is no reason on why Congress should shovel our money into an industry that pits its profits against our health, with a program that holds one-third of our limited unemployment check hostage and only lasts nine months.

If the leaders of this nation wanted to provide health security for all they would enact a single-payer mechanism to finance health care.

Single payer would mean that no one would ever be without health care. Not first time job seekers, not workers changing jobs, not laid off or striking workers. Everyone would be covered.

A single payer health program would: — save at least $400 billion in health spending per year, — create millions of new jobs, — create enormous savings for employers (including federal, state and local governments as well as schools and not-for-profit agencies) who now pay private health insurance premiums, — allow the unions to get back to bargaining for wages and working conditions instead fighting over premiums, co-pays, deductibles, co-insurance payments, dental, vision, drug coverage, mental health benefits, etc.– and, in relieving the worry about health coverage that comes with the loss of a job, single payer would raise us all up.

Now that would be a stimulus! We really need single payer national health care.

Single payer – over on the side table

Posted by on Thursday, Feb 19, 2009

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

Canada and the Recession: Angles of Deflection

By Nancy Folbre, a professor of economics at the University of Massachusetts Amherst
The New York Times
Economix
February 19, 2009

As the economist (and fellow Economix blogger) Uwe Reinhardt explains, the single-payer Canadian health care system delivers very good results for about half the per-person cost of ours — with huge savings from reduced paperwork. Economic disparities in access to health care are significantly lower there.

President Obama promises to expand health insurance coverage in the United States with little threat or inconvenience to the private sector. But some Democrats in Congress, led by Representative John Conyers, advocate a single-payer “Medicare for All” bill strongly influenced by the Canadian model.

http://economix.blogs.nytimes.com/2009/02/19/canada-angles-of-deflection/?hp

And…

Worthwhile Canadian Initiative

By Fareed Zakaria
Newsweek
February 7, 2009

(Canada’s) health-care system is cheaper than America’s by far (accounting for 9.7 percent of GDP, versus 15.2 percent here), and yet does better on all major indexes. Life expectancy in Canada is 81 years, versus 78 in the United States; “healthy life expectancy” is 72 years, versus 69. American car companies have moved so many jobs to Canada to take advantage of lower health-care costs that since 2004, Ontario and not Michigan has been North America’s largest car-producing region.

http://www.newsweek.com/id/183670

And…

This Won’t Hurt a Bit

by Jonathan Cohn
The New Republic
February 18, 2009

Advocates of single-payer systems complain frequently that the mainstream political debate doesn’t give their idea the attention it deserves. They are right. Public insurance programs enjoy huge economies of scale; they don’t fritter away money on profits or efforts to skim healthier patients from the population. When it comes to billing, they tend to be a lot simpler than, say, a system with dozens of competing insurance plans. All insurance systems require providers to file a lot of paperwork; single-payer systems, though, require just one set. The centralized power of single-payer systems also gives them unparalleled sway over not just the amount of money they pay but how they dole it out; with that kind of leverage, they can push the medical system toward making key improvements in quality.

In an ideal world, then, single-payer would almost certainly be the best option. But is it politically feasible? Single-payer advocates like to point out that Representative John Conyers has a single-payer bill in Congress with close to 100 co-sponsors. But many of those co-sponsors have signed on because, until now, it has been a cheap, meaningless way to win points with liberal interest groups.

http://www.tnr.com/politics/story.html?id=4d41ab07-8c25-4b22-81d2-02b4d149afe2

And…

How the U.S. measures up to Canada’s health care system

Interview of Uwe Reinhardt
Worldfocus
January 28, 2009

We have a Canadian health plan in America. It’s called Medicare. It works. Don’t tell me Medicare doesn’t work. Tell that to the elderly. One way to test it is to say “Let’s take it away.”

You have to, in the end, cover people. And if you, the private health insurance agency, are not able to do it, we can do it. The government can do it. And we’ll discover this more and more.

http://worldfocus.org/blog/2009/01/28/how-the-us-measures-up-to-canadas-health-care-system/3783/

The good news is that individuals from the media and from the policy community are acknowledging, on the side, that single payer would cover everyone, would improve health outcomes, and would cost less than the other current proposals for reform. Today’s quotes are only a few examples of a multitude of such comments. Single payer has not been removed from the national dialogue on reform.

The bad news is that all too often these are only side comments as the discussion then moves forward with the need to support “feasible” approaches that do not cover everyone, waste tremendous resources, and cost far more than would a publicly-administered and publicly-financed system.

Are we such automatons that we need to set aside facts about an approach that would benefit all of us, and reflexly accept deficient, perverse policies that would benefit the private insurance industry? Why is gifting our funds to the private insurance industry feasible, while spending those funds on health care that people need is not?

As Sen. Daniel Patrick Moynihan said, we’re entitled to our own opinions, but not our own facts. Let’s dump the opinions and craft reform based on the actual facts. Seriously!

Massachusetts' plan is the wrong model for the U.S.

Posted by on Wednesday, Feb 18, 2009

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

Massachusetts’ Plan: A Failed Model for Health Care Reform

Prepared by Dr. Rachel Nardin, Assistant Professor of Neurology, Harvard Medical School, with Drs. David Himmelstein and Steffie Woolhandler (both Associate Professors of Medicine, Harvard Medical School)
February 18, 2009

Executive Summary

The Massachusetts Health Reform Law of 2006 expanded Medicaid coverage for the poor and made available subsidized, Medicaid-like coverage for additional poor and near-poor residents of the state. It also mandated that middle-income uninsured people either purchase private health insurance or pay a substantial fine ($1,068 in 2009). Smaller fines (up to $295 per employee) were also levied on employers who fail to offer insurance benefits.

The reform law has not achieved universal health insurance coverage, although half or more of the previously uninsured now have some type of insurance policy.

The reform has been more expensive than expected, costing $1.1 billion in fiscal 2008 and $1.3 billion in fiscal 2009. In the face of a state budget crisis in fall 2008, Gov. Deval Patrick announced that he will keep the reform afloat by draining money from safety-net providers such as public hospitals and community clinics.

While the number of people lacking health insurance in Massachusetts has been reduced, several recent surveys demonstrate that substantial problems in access to care remain in the state. While the new health insurance improved access to care for some residents, many low-income patients who previously received completely free care under the state’s old free care program now face co-payments, premiums and deductibles that stop them from getting needed care.

In addition, cuts to safety-net providers have reduced health resources available to the state’s remaining uninsured, as well as to others who rely on safety-net providers for services in short supply in the private sector. These safety-net services include emergency room care, chronic mental health care, and primary care. The net effect of this expensive reform on access to care is at best modest, and for some patients, negative.

By mandating that uninsured residents purchase private health insurance, the law reinforced the economic and political power of health insurance firms. Thus, the reform augments the already high administrative costs of health care. Moreover, the agency that administers the new law (the “Connector”) adds an extra 4 to 5 percentage points to the already high overhead of private health insurance policies.

The reform failed to reduce overreliance on expensive, high-technology services. Indeed, some of its provisions such as changes in Medicaid rates and cuts to safety-net providers (who do more primary care) have further tilted health spending toward expensive, high-technology care.

A single-payer system of non-profit national health insurance could save about $8-$10 billion annually in the state through reduced administrative costs. This money could be used to cover all of the state’s uninsured residents and to improve coverage for those who now have insurance, without any increase in total health care costs.

The Massachusetts reform law is not providing universal access to care, even in a state with highly favorable circumstances, including previously high levels of spending on health care for the poor, high personal incomes, and low rates of uninsurance. It is not a model for the nation.

Report: Massachusetts’ Plan: A Failed Model for Health Care Reform
http://pnhp.org/mass_report/mass_report_Final.pdf

Press release: Massachusetts Is No Model for National Health Care Reform
http://www.pnhp.org/news/2009/february/massachusetts_is_no_.php

Those supporting the leading Democratic model for reform frequently cite the Massachusetts plan as an example of how building on our current system of health care financing is the best path to success. Unfortunately, they use selected positive numbers to define success, while ignoring the fact that Massachusetts has failed in its efforts to achieve the real goals of reform. You can understand how pathological the politics of reform has become when they have to dig into the data of a failed reform effort in order to redefine failure as a success.

Let’s look at some of the goals, and how Massachusetts has fared:

* Everyone should be included – We should quit being dishonest when we say universal, and start demanding that universal means absolutely everyone. The Massachusetts model has left perhaps five percent of individuals without any coverage whatsoever, and there is little likelihood that the numbers of uninsured will be reduced further because of serious flaws in their model.

* The growth in health care costs must be slowed – The Massachusetts model has been ineffective in addressing the primary causes of excess cost escalation.

* Health care must be affordable for each individual – Insurance premiums and cost sharing in private plans have remained unaffordable for many in Massachusetts, impairing access to care. Insurmountable debt or personal bankruptcy from medical bills remains a very real threat in Massachusetts.

* Under-insurance must be eliminated – Massachusetts has expanded the problem of under-insurance in an attempt to make premiums affordable, failing to achieve either goal of adequate plans or affordable premiums.

* Administrative waste must be reduced – Massachusetts has added complexity to an already complex financing system, significantly increasing the administrative waste in their system.

* Coverage should be automatic, portable, and permanent – Massachusetts has provided further confirmation that no model built on our dysfunctional financing system can achieve these goals.

* Health care must be accessible – The Massachusetts model has further exacerbated the deficiencies in the state’s primary care infrastructure, resulting in increased difficulty in accessing their system. Their fragmented financing model has very little capability of realigning resource allocation to improve access.

* Private intermediaries that waste resources and impair access must be eliminated – But isn’t this what the Massachusetts plan is all about? Their view is that we must use our public agencies and tax funds in an all-out effort to protect the private insurance industry, regardless of the harm to patients in the form of physical suffering and financial hardship.

Suppose Congress and the administration accept the message that the Massachusetts plan is the wrong model for reform. Will they then move forward with a single payer national health program – a model that would actually achieve our goals? It is unlikely, based on all signals emitting from Washington. Instead, they will develop a uniquely American plan designed for Americans.

It will be a plan built on our uniquely American, dysfunctional, fragmented system of financing health care. But it won’t be like the Massachusetts plan that was developed in a wealthy state with greater health care resources, and with fewer financing problems than the rest of the nation. No, it won’t be like Massachusetts. It will be much worse… much, much worse.

"Divided We Fail" is divided and failing

Posted by on Tuesday, Feb 17, 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.

The Influence Game: Labor and business, joined in health care cause, now at odds on specifics

By Julie Hirschfeld Davis
Chicago Tribune
February 16, 2009

Labor unions and business groups have teamed up in a multimillion-dollar national lobbying campaign to pressure President Barack Obama and Congress for big changes in the nation’s health care system. But as they get down to the specifics, their strange-bedfellows alliance is quietly at odds.

After spending two years and more than $20 million to promote the idea, collaborators in the Divided We Fail coalition — a project of the seniors lobby AARP, the service workers’ union, and groups representing small business and the Fortune 500 — are indeed divided over key elements of how to fix health care.

Its members agree that something should be done to revamp health care in the United States, and there’s consensus on a vague set of general principles that include making coverage more accessible, affordable and efficient. But they differ over important details, including what roles the government and private businesses should play.

The emerging rifts highlight how difficult it will be for Obama and the Democratic-run Congress to deliver what they say they are committed to: a health care overhaul that would guarantee everyone affordable coverage.

They also illustrate the limits of one of lobbyists’ favorite tactics: banding together with partners to try to build support for a top priority. Such alliances are born and die all the time in Washington, often falling victim to internal disputes over policy.

The coalition is led by a handful of Washington’s most influential lobbyists — Bill Novelli of AARP, John J. Castellani of the Business Roundtable and Dan Danner of the National Federation of Independent Business — as well as Andy Stern of the Service Employees International Union, among the most politically active groups in organized labor.

They acknowledge, however, that keeping the coalition together is getting more difficult as Obama and Congress prepare to delve into specifics.

For instance, labor unions and liberal groups are pressing for a universal health coverage system in which the government provides insurance that competes with private plans. SEIU wants to give everyone health benefits similar to those enjoyed by federal employees. It backs Obama’s “pay or play” idea of forcing employers to either offer health insurance to their workers or pay a fee so they can get it elsewhere.

The Business Roundtable and National Federation of Independent Business, on the other hand, want a system based mostly on private health insurance and are against new requirements for employers. The Business Roundtable’s members include health-insurance giants CIGNA, Aetna and Humana, all of which would have to compete with the government if labor got its way.

There’s also a fight brewing between private insurers and consumer groups over how to ensure that everyone is covered. Insurers say they’ll agree to accept any patient regardless of pre-existing health conditions — but only if everyone is required to buy coverage. Consumer groups say that would turn the government into a collection agency for private insurance companies.

http://www.chicagotribune.com/news/nationworld/sns-ap-health-care-strange-bedfellows,0,6877237.story

“Divided We Fail” presented itself as a broad coalition of diverse interests that could come together and agree on health care reform. But it isn’t a broad coalition. It is a coalition that primarily represents business interests – big business through the Business Roundtable, and small business through the National Federation of Independent Business (NFIB).

Also supporting this effort is AARP, which is probably best characterized as a broker for UnitedHealth insurance products – also a business interest with its own concerns about the future of health care financing in the United States.

The other supporter is Service Employees Union (SEIU), a union that broke off from AFL-CIO partly in a dispute over health care benefits. AFL-CIO wants to be sure that the crucial contribution of employer funds for health care continues at least until a well-financed, universal program can be enacted. Our current system of financing health care would collapse without employer contributions. For SEIU, requiring employers to fund comprehensive benefits was a more difficult issue. Service employees are compensated at lower rates than are those in the manufacturing industries, and their more meager benefit programs reflect this. SEIU would prefer to negotiate for higher wages without the necessity of forgoing wage increases in exchange for health benefits. Although a labor union, SEIU’s position is quite convenient for businesses in the service industries.

This coalition was pro-business, but, in the end, they agreed on only one principle – private health plans should be the dominant player in any reform proposal. Even there, their concepts of the specific role of private insurers are quite different.

Business Roundtable members want to maintain control of their health benefit programs, but they also want relief from the costs. They want public subsidies of their fairly comprehensive programs (even though they are already shifting more costs to their employees), but they don’t want any government-managed insurance programs that compete with the private plans.

NFIB wants a market of very cheap, publicly-subsidized under-insurance products, if they are expected to offer coverage at all. They want relief from the regulatory oversight that would make insurance work. But they too are adamantly opposed to any effective government insurance program that might put their own efforts to shame because of the paltry benefits that they would offer. And they definitely do not want to be mandated to provide coverage for all of their employees.

AARP wants to move aggressively into the non-Medicare market with their brokered UnitedHealth plans. They know that they could never compete with a well designed Medicare-like program that would be available to everyone. They are careful in their public statements, mindful of prior credibility issues stemming from prior public positions such as their support of Medicare privatization. But even now, AARP’s Bill Novelli says that “it’s an inside-outside game.” Outside refers to their public marketing through “Divided We Fail,” whereas inside refers to their private lobbying of Congress. What do you suppose goes on behind those closed doors?

SEIU truly does have the welfare of its members at the forefront. Their president, Andy Stern, can and should be faulted for failing to support single payer based on the “lack of political feasibility” argument. Nevertheless, he does support a regulated market of comprehensive private plans, along with a Medicare-like public option that some believe would improve the private sector products through the forces of competition.

So, even though this pro-business coalition agrees on the common denominator of private insurance plans, they cannot agree on an adequate benefit package, on eliminating under-insurance, on individual mandates, on employer-mandates, on cracking down on wasteful middlemen brokers, on equitable tax policies to finance reform, nor on fundamental health policy issues such as community rating and guaranteed issue.

It looks like the pro-business “Divided We Fail” coalition has divided and failed.

To succeed, a coalition must put patients first, and place all others in a secondary position. Although no coalition could possible ever have all interests on board, a patient-oriented coalition should eventually be successful simply because patients are what our health care system is all about.

“Health Care for America NOW!” was such an effort, but they made a mistake. They decided to go for broader support, bringing more varied interests into their coalition, although most are from the progressive community. To do this, they decided that they must agree that single payer is not politically feasible. Consequently, they decided to support a regulated private market with a public insurance option, trading away many of the beneficial features of a single payer system, though with hopes that it could eventually evolve into single payer. SEIU has joined this coalition, whereas AARP, Business Roundtable, and NFIB have not, reflecting the fact that HCAN and SEIU are truly patient oriented. But the outside opposition to a public option and to an adequately regulated and mandated private insurance market is so great that this coalition is already failing.

“Healthcare-NOW!” is an organization that has been around longer, but differs in that they support health care reform that is designed exclusively to benefit patients – without compromise! All other interests benefit when patients fare well (except the private insurers). “Healthcare-NOW!” provides unwavering support for the principles and policies of the single payer model of a national health program. Although “Healthcare-NOW!” still has a long path to travel, “fail” is not a word in their vocabulary.

Healthcare-NOW Position Regarding Health Care for America Now:
http://www.healthcare-now.org/about/regarding-hcan/

Richard Gottfried on private and public coverage decisions

Posted by on Monday, Feb 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.

The last Quote of the Day message discussed Medicare’s national coverage determinations process (NCD), using as an example the decision to decline coverage for computed tomography colonography (CTC) when it is used as a screening test for colorectal cancer.

New York Assemblyman Richard Gottfried responds:

email
February 13, 2009

All insurance plans make decisions about what they will cover. With employer-sponsored insurance, insurance carriers know that their client is the employer, whose only interest is keeping costs down. There is only downward pressure.

The people who run public insurance have pressure to keep costs down, but it is balanced by pressure from the public (to whom they are ultimately accountable, especially with a program like Medicare that is not only for the poor) to keep quality and services up. So there is a balancing of downward and upward pressure.

Even if we move from employer-sponsored coverage to individuals buying their own insurance, the pressure would still be overwhelmingly downward. When making the choice among possible plans to buy, individuals are also under enormous pressure to focus exclusively on price. Hardly anyone would ask whether CTC is covered.

Since someone is going to make choices about what gets covered, we’re all better off if it is done by publicly-sponsored, publicly-funded and publicly-accountable coverage.

Richard N. Gottfried
Chair, Committee on Health
New York State Assembly
822 Legislative Office Building
Albany, NY 12248
250 Broadway, #2232
New York, NY 10007
(518) 455-4941
(212) 312-1492
GottfrR@assembly.state.ny.us

Richard Gottfried points out an extremely important distinction between the nature of coverage decisions in public health care financing systems, and in private insurance financing systems, whether employer-sponsored or individual coverage.

Whether it is the employer or the individual who is making a decision on the purchase of insurance (not the purchase of health care), with our current very high health care costs there is tremendous downward pressure on insurance premiums.

Slowing the the rise in premiums for private plans can be accomplished only by reducing coverage – by reducing benefits covered (e.g., maternity, mental health services, restricted list of contracted providers, prior authorization requirements, etc.), or by increasing the out-of-pocket costs for the patients (e.g., higher deductibles, higher copayments, higher coinsurance percentages, tiering of coverage, capping total amount of coverage, etc.)

This is precisely the recent history of private health coverage. Premiums continue to increase, and, though less and less affordable, the increases have been slowed enough to still maintain a market of private plans, even though that continues to decline as the rate of employer-sponsored coverage continues to fall. The perverse tradeoff is that this downward pressure slowing the rate of premium increases has caused an intense upward pressure in out-of-pocket spending, often making health care no longer affordable for those who do have private insurance.

Contrast this with public health care financing. As Richard Gottfried points out, the downward pressure to control government health care spending is balanced by an upward pressure from the public to demand health care quality and adequate services.

Medicare is a prime example. The public is opposed to any reduction in Medicare benefits. In fact, increasing coverage by adding prescription drug coverage was due to public demand. They are now demanding that it be improved further through measures such as eliminating the donut hole.

What could explain the apparent dilemma that people seem to be quite willing to purchase inadequate private plans that may not provide the financial protection that they need, yet they are not willing to accept inadequate coverage in a public health care financing program such as Medicare? Part of the answer may lie in the subliminally perceived relative inequity of premiums for private plans versus taxes for public programs.

The premiums for private plans are determined directly by the benefits covered by the plan, minus the cost sharing shifted to the patient. Costs are now so high that either premiums will be unaffordable, or out-of-pocket payments will be unaffordable, or, in actuality, downward pressures in the face of high costs are making them both unaffordable. More people are beginning to recognize that this is an obsolete method of financing health care.

The level of tax contribution for a publicly-financed health care system is not related to the benefits that are offered, but is determined by the ability of the individual or employer to pay the tax. Polls demonstrate that individuals are willing to pay more taxes that would be spent on publicly-financed health care. People seem to realize instinctively the fairness in this.

They also realize that Richard Gottfried is right. The downward pressure on private plans has caused most of us to look for relief from a health care financing system that is so badly broken. At the same time, the balanced pressure on Medicare has caused us to be very protective of that program. Now if we could just extrapolate our thinking to support Medicare for everyone, we’d have it made.

Virtual colonoscopy as a proxy for high-tech excesses

Posted by on Friday, Feb 13, 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.

NCA (national coverage analyses) Tracking Sheet for Screening Computed Tomography Colonography (CTC) for Colorectal Cancer

Centers for Medicare and Medicaid Services (CMS)

Issue

CMS covers colorectal cancer screening for average risk individuals age 50 and older using fecal occult blood testing, sigmoidoscopy, colonoscopy, and barium enema (42 CFR 410.37). On March 5, 2008, the American Cancer Society, the US Multi Society Task Force on Colorectal Cancer, and the American College of Radiology issued new cancer screening guidelines, including a recommendation that computed tomography colonography (CTC) be considered an acceptable option for colorectal cancer screening for such individuals. CTC, also referred to as virtual colonoscopy, uses computed tomography (CT) to acquire images and advanced 2-dimensional (3D) -image display techniques for interpretation. Neither the Medicare law nor the regulations identify the CTC test as a possible coverage option under the colorectal cancer screening benefit. However, under 42 CFR 410.37(a)(1), CMS is allowed to use the NCD process to determine coverage of other types of colorectal cancer screening tests that are not specifically identified in the law or regulations as it determines to be appropriate, in consultation with appropriate organizations.

Actions Taken

February 11, 2009:
CMS posts a proposed decision memo indicating our intent not to expand the colorectal cancer screening benefit to include coverage of this test. We are also posting a technology assessment, including a cost effectiveness analysis for use of this test as a screening test which was requested from the Agency for Healthcare Research and Quality. As with all national coverage analyses, the public may submit comments or additional evidence that cause us to reassess our evidentiary review and arrive at different conclusions.

Tracking Sheet:
http://www.cms.hhs.gov/mcd/viewtrackingsheet.asp?id=220

Technology Assessment Report: Cost-Effectiveness of CT Colonography to Screen for Colorectal Cancer (92 pages):
http://www.cms.hhs.gov/determinationprocess/downloads/id58TA.pdf

Links to other documents:
http://www.cms.hhs.gov/mcd/viewnca.asp?where=whatsnew&nca_id=220&basket=nca:00396N:220:Screening+Computed+Tomography+Colonography+%28CTC%29+for+Colorectal+Cancer:Open:New:8

This CMS decision to not pay for computed tomography colonography (CTC or “virtual colonoscopy”) when used as a screening test for colorectal cancer has already caused considerable controversy even before the final public comment period has closed. Before we start deciding who is right and who is wrong, we should look at the issues. (What? Make decisions based on facts!?)

Medicare, as a public health insurance program, has an obligation to finance health care for which the benefit to patients more than offsets any potential risks. Also, as a steward of taxpayer funds, Medicare has an obligation to see that those funds, which are finite, are used optimally to benefit the public good. Ah ha! Rationing! But is it?

Rationing is generally defined as distributing restricted allotments of a scarce resource. Current debates on rationing stem from concerns about the escalating costs of health care, creating an excessive demand on our limited resource of… dollars! So are dollars becoming so scarce that we have to cut back on beneficial health care services?

Let’s look at how Medicare approaches this problem. Medicare does not make treatment decisions, but rather makes decisions about whether or not to pay for certain services. These decisions are important not only for Medicare patients, but for other patients as well, since the commercial insurance industry often follows Medicare’s lead on whether or not to pay for these selected services.

Virtual colonoscopy (CTC) used as a colorectal cancer screening test serves as a good proxy for this decision process.

First, does CTC screening benefit the patient? No attempt will be made to summarize the massive amount of studies and documentation that has been used to answer this question, but only a couple of points will be made here. If a CTC test is positive, it then is followed up with colonoscopy, which has already been approved as a screening test for colorectal cancer. Thus the patient has received two uncomfortable, expensive screening tests when only one has sufficient data to confirm its unquestionable value in screening. Further, over one out of one thousand patients receiving CTC screening at age 50 will likely develop cancer as a result of the radiation exposure from this test, resulting in a negative impact on the benefit/risk ratio.

Second, is CTC screening a responsible use of taxpayer funds? The Technology Assessment Report indicates that, based on cost effectiveness, it would not be in our interests, as taxpayers, for our public stewards to pay for CTC screening.

Consequently Medicare has made a decision to not pay for CTC screening for CRC, unless new important information is provided during the pubic comment period, or if new studies in the future would warrant readdressing this issue. It is likely that several commercial insurers will follow Medicare’s lead on this.

So what is the controversy? It comes from two sources: 1) dedicated professionals who have legitimate disputes over the interpretation and weighting of the evidence, and 2) right-wing ideologues who see this as a golden opportunity to attack “government medicine.”

Innumerable studies confirm that a significant portion of wasteful spending stems from non-beneficial, high-tech excesses. Defining those excesses will always be controversial, but the process used by Medicare is precisely what we need, especially with the inevitable improved refinements in the process that we will see in the future. Those dedicated professionals who will be denied payment by these decisions will always have doubts about the process, but they will always have the opportunity to provide more data that would warrant reconsideration of the payment decisions.

What will we see from the right-wing non-think tanks? The government rations care. Government medicine kills people over 65 who have colon cancer. Government deprives patients of their health care decisions. Patients should own their own health care and get the government out of their lives.

Refuting their position, it is important to understand that this is not rationing. The government is not declining to pay for CTC testing in individuals for whom it is clinically indicated. They have merely made a decision to not pay for CTC screening when the clinical data and costs have not demonstrated that it has advantages that would warrant it being included as a screening option. The conservatives/libertarians would substitute for rational decision making by our public stewards, a chaotic health-business marketplace that would prevent the majority of us from receiving the care that we need merely because it isn’t affordable.

Medicare has shown that we can address wasteful, excess costs. The easiest measure would be to recover the costs of the administrative excesses – a process that would be made possible by providing everyone with Medicare. Reducing the waste of high-tech excesses is more difficult, but the national coverage determinations process (NCD) has shown us that it is not only possible, but that we must expand this important government function since it will help to guarantee that high-quality, affordable care will always be there for all of us.

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