Options for health care cost control

Posted by on Tuesday, Apr 14, 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 Obama Administration’s Options for Health Care Cost Control: Hope Versus Reality

By Theodore Marmor, PhD; Jonathan Oberlander, PhD; and Joseph White, PhD
Annals of Internal Medicine
April 7, 2009

In short, if medical costs are to be controlled, no substitute exists for constraining prices and capping expenditures. Frank talk about these cost-control realities, however, is politically difficult. It immediately elicits alarms from the medical care and insurance industries about “rationing” (ignoring the fact that the United States could realize significant savings from lower prices and administrative costs). Others, particularly the pharmaceutical industry, raise alarms about the effect that cost control would have on the pace of medical innovation. In addition, spending targets constrain medical providers’ income and thereby prompt intense political struggles. The Obama team’s limited treatment of cost-control realities — including the absence of global budgets and spending targets or caps — seems to reflect a desire to avoid such political controversies.

We write this essay, then, as a cautionary tale. Claims of savings from health information technology, prevention, P4P, and comparative effectiveness research are politically attractive. Their political appeal lies largely in the embrace of widely supported goals, including better health and improved quality of medical care. In theory, these reforms — more research, more preventive screenings, and better organized patient data — sound like benign devices to moderate medical spending. For many purposes, such reforms are substantively very desirable. But these reforms are ineffective as cost-control measures. If the United States is to control health care costs, it will have to follow the lead of other industrialized nations and embrace price restraint, spending targets, and insurance regulation. Such credible cost controls are, in the language of politics, a tough sell because they threaten the medical industry’s income. The illusion of painless savings, however, confuses our national debate on health reform and makes the acceptance of cost control’s realities all the more difficult.


High health care costs are the primary driving force behind the renewed effort for reform. Everyone agrees that high costs are straining personal, business and government budgets, and something must be done to make health care affordable for all of us.

Some of us are also concerned about health care justice. We want to see that everyone has affordable access to high quality care. It is more than fortuitous that the most effective methods of reducing excess health system spending also achieve the social justice goal of health care for everyone.

Much has been written on what does work and what doesn’t work in controlling spending. This paper provides an excellent, brief summary of the concepts being floated, and is well worth downloading. We should be very concerned that the leading mechanisms proposed, as summarized in this article, would not have a significant impact on slowing spending, and would likely actually increase our costs. Nor would they be effective in achieving health care justice for all.

If we are going to address costs seriously, there is no other option than to fundamentally restructure our health care financing system. As the authors state, “no substitute exists for constraining prices and capping expenditures.” We can never achieve that by relying on our wasteful, fragmented multi-payer system of financing health care. As all other nations have shown us, there is no other option than central, public control.

It is true that some nations do use private insurers. But private insurers in their countries organized into social insurance programs serving the public good have almost nothing in common with private insurers in the United States that shun organization in order to serve their own business interests. Adding a few regulations to our current fragmented system will increase costs but cannot transform a self-serving business model into a public-serving social insurance model.

We really have only two effective choices that would achieve both of our goals. We can dismiss our current private insurers and bring in new private insurers with a mission of serving the public good, but that is the most expensive model of reform, and it compromises equity and efficiency. Our other choice would be to eliminate our fragmented financing system and replace it with a single payer national health program. That would allow us to constrain prices and cap expenditures while achieving our other goal of providing all necessary care for everyone.

We can do it, but the people, through our elected representatives, are going to have to tell the special interests that we’ve had enough.

Josh Freeman on the question of a national policy on the right to health care

Posted by on Friday, Apr 10, 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.

Does the nation need a clear policy on a right to basic health care?

By Josh Freeman
Medicine and Social Justice
April 10, 2009

At a recent conference, I was asked to be a “thought provocateur” (!!) on the topic “The nation needs a clear policy on the basic right to health care”.

This is an interesting question, since my first reaction is: “Of course, we need a clear policy on the basic right to health care! I mean, I have a pretty clear idea of what that policy should be, but certainly even those who would disagree with me would agree that we need a policy!”

But, on reflection, I don’t know that they do. I think that a great deal of the perseverance of our “non-system” of health care has been a result of a consensus among our leaders to NOT talk about this issue, to NOT grapple with it, to not have to take a position one way or another on whether health care is a basic right.

This is because, if one does take a position, there are implications, and things that we would then have to do.

If health care is a basic right, then we need to provide it to everyone. We can no longer diddle around with partial fixes, tinkering around the edges, covering (maybe) children but not their parents, covering people who are poor — as long as they are children and their mothers and are really poor and not working — but not those who are poor, or nearly-poor, depending on which state you are in. Or, for that matter, working-class, or, in increasing numbers, middle class.

But the problem is most people in power, including most politicians including the President, don’t want to have to take a position against health care being a basic right. It sounds, well, mean. There aren’t many people, except, well, mean people (and maybe some reactionary ideologues), who are willing to defend this position.

So we have shows such as “Sick Around America”, the Frontline “sequel” to T.R. Reid’s “Sick Around the World” (which Reid disassociated himself from). It interviewed insurance company executives who said “sure we can insure everyone”. If we make it mandatory and can make a profit, everyone. Hmm. The cost would be ridiculous. And the option of single payer was never mentioned. There is a lot more that has to be decided if we agree that health care is a basic right, like how to provide it, how to pay for it, and what will be and will not be covered. I mean, sure, other countries seem to have solved that problem, and we could model a system on one or more of theirs, but where’s the fun in that?

And if we agree that health care is not a basic right, we solve that problem, but we have other ones — like all these uninsured, and underinsured people.

  • And folks not getting preventive care but rather incredibly expensive curative care.
  • And companies like our automobile companies going bankrupt in some part because of the cost of health insurance.
  • And, oh yeah, people dying in the streets.

For the record, I do believe that we need a policy on health care as a basic right, and my belief is that it should be. Perhaps the most important reason is social justice; we all share in the public good. This is what virtually every other nation of the first world has long realized. When T.R. Reid asked the leaders of the countries he visited for “Sick Around the World” how many of their citizens went bankrupt as a result of health care debts, they all said none. The most dramatic response was from the President of the Swiss Confederation, a conservative who had originally opposed the Swiss program in the early 90s. “No one,” he boomed in his French-accented English, “why, it would be a national scandal!”

The health of our society depends upon the health of all of us.

  • When people crowd our emergency rooms, not with minor illnesses, but with serious illnesses that could have been prevented with earlier treatment, that is a scandal.
  • When parents cannot afford their own health care and their illnesses threaten their ability to keep providing for their children, that is a scandal.
  • When people stay in jobs they hate, or forego the opportunity to start a new business, because they rightfully fear being uninsured, that is a scandal.
  • When our friends and neighbors, parents and children, only take partial doses of their medicine because it is a choice between that and not eating, that is a scandal.
  • When a hard-working man with chest pain can see the billboards advertising the superb heart care available at our local hospitals and know they are not meant for him because he is uninsured, that is a scandal.

When we are all in it together, we all have an interest in making the system be as good as it can be. The efforts of those of us who are more educated, more financially able, more vocal, more empowered will ensure that the needs of those who are less able to lobby for themselves are also met.

Just as our nation cannot survive half-slave and half-free, or with only half of adults having the vote, we cannot survive with only some of us having access to health care.

We need to do this for all of us, for, after all, ultimately, we are our brother’s and sister’s keepers.


The Coastal Research Group

Joshua Freeman, MD is Professor and Chair of the Department of Family Medicine at the University of Kansas School of Medicine. I was fortunate to have been in the audience when Josh delivered his comments above at the Twentieth National Conference on Primary Health Care Access, sponsored by The Coastal Research Group.

Words on paper (or on a computer monitor screen) can express concepts, but they fall short in expressing the passion and inspiration communicated to the audience during the presentation of the speaker. This was one of those moments I’ll remember forever.

Josh had to leave before the discussion of a reactor panel assembled to respond to his comments. One physician from Nebraska expressed his views of health care as a matter of justice – comments which also moved me deeply. Another physician from Texas was not inclined to support health care as a right, and then he read us a passage from the Bible.

I’ll ask you, does the nation need a clear policy on a right to basic health care?

Jacob Hacker provides details for public option

Posted by on Thursday, Apr 9, 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.

Institute for America’s Future and Berkeley Center on Health, Economic & Family Security
Policy Brief
April 2009

Healthy Competition: How to Structure Public Health Insurance Plan Choice to Ensure Risk-Sharing, Cost Control, and Quality Improvement

By Jacob S. Hacker, Ph.D.

Executive Summary

The debate over health care reform has increasingly centered on the issue of “public plan choice”–whether Americans younger than 65 who lack employment-based coverage should have the choice of enrolling in a new public health insurance plan modeled after Medicare. The central argument for public plan choice is that such a plan, offered as a choice within a new national insurance “exchange,” provides an essential set of security guarantees, ensuring that Americans without insurance from their place of work can find a plan that offers them quality, affordable health care through a broad choice of providers in all parts of the country.

For public plan choice to provide such guarantees, however, the public plan must be properly structured, compete on a truly “level playing field” with private plans, and have the authority to use its bargaining power as one of many tools to encourage greater value in health care delivery. The most effective and easily implemented model for the new public plan is a “Medicare-like” plan that builds on Medicare’s administrative infrastructure and basic framework of coverage but is separate from Medicare’s risk pool and departs from Medicare in a number of key respects regarding payment and benefits.

To create a level playing field requires attention to the “three R’s” of workable public-private competition: rules that are the same for both the public plan and private plans, risk adjustment that protects plans from being competitively disadvantaged if they enroll a less healthy group of people, and regional pricing that allows private plans and the public plan to compete within regions on the same terms, rather than having the public plan compete on a national basis with regionally based private plans (whose premiums may be lower or higher in any given region).

Finally, giving the public plan the authority to bargain for reasonable rates is an essential item on the menu of cost control — and one that the Congressional Budget Office (CBO) and other budget watchdogs are likely to “score” as producing savings (in contrast with many other currently favored cost-control strategies). Nonetheless, there are reasonable concerns about how the new public plan will use its bargaining power — concerns reflected in current proposals for a price-taking (rather than price-making) public plan that would have limited ability to secure fair rates. However, a watered-down public plan would be a grave mistake. Instead, the public plan should include safeguards designed to ensure that providers are fairly represented and that bargaining for lower prices does not negatively affect patients’ access to care or shift costs onto private insurers. Indeed, a better alternative to a public plan without price-setting authority would be allowing private fee-for-service-style plans to piggyback on the public plan in setting their own prices.

Public plan choice is rooted in existing precedents that have shown themselves to work, rather than speculative convictions about how a delicately balanced new system will operate. It must be part of any successful reform package. Without public plan choice, Americans without workplace insurance will be put in jeopardy, private insurers will lack an effective check on their actions, and the opportunity to place our crumbling framework of health financing on a secure foundation will be lost.


This is a very important paper because addresses one of the most controversial issues in the current health care reform debate: Should a Medicare-like plan be offered in competition with a market of private health plans? UC Berkeley Professor Jacob Hacker adds to his previous contributions on the private plan/public option model of reform by describing in detail what a properly-designed Medicare -like option would look like.

To understand this fairly complex model, you really need to read this 31 page report. But looking at just a few of the problems that he addresses can give you an idea of where this approach is headed.

How would the public option control costs?

From the report: “The great virtue of public plan choice as a means of cost control is that it proposes relatively minimal disruption to existing arrangements compared with other comprehensive reform proposals. It only says that a public health insurance plan will be offered alongside private plans as a coverage option for those without insurance through their employer. It is the competition between private plans and public health insurance, with its distinctive cost-control advantages, that presses both public and private plans to provide more for less and ensures that the goal of affordable quality coverage can be maintained over time at a price the nation can bear.”

DM: In the Medicare Advantage program we have already tested this concept, and the private plans required more money, not less, than the “competing” traditional Medicare program. With a single, universal public program, cost efficiencies would apply to our entire health care system.

How would this proposal spur improved quality?

From the report: “… a new public health insurance plan for the nonelderly (and Medicare, through its association with the new plan) can and should be centrally involved in obtaining better information to improve physician and patient decisions, as well as insurer decisions about coverage, pricing, and benefit structure. Because of its broad and national reach, the stability of its enrollment, and the unparalleled opportunity for data collection and use, the new public health insurance plan is the player in the system that will have the largest incentives to make these investments.”

DM: So the public program would bear the costs on research and data collection. Would those costs be allocated exclusively to the patients in the public program? Would the private insurers have a free ride? Since the mission and income needs of the private insurers are different from the public plan, would they even use the results of the research, especially if greater spending would ensue? Would the government even have access to the proprietary information of these plans competing in the private marketplace? Obviously a single, universal public program would have a more complete and accurate information database that could be applied to improve the quality of our entire health care delivery system, rather than allowing private plans to pick and choose based on bottom line issues rather than optimal quality.

What should the public plan look like?

From the report: “More specifically, the new public plan should be national (with the same basic terms nationwide for patients and providers), governmental (a true public health insurance plan, not, say, a nonprofit insurer operating under federal charter), comprehensive (providing defined benefits on the same basic administrative platform), and built on Medicare’s infrastructure.”

DM: So a bona fide public program is proposed, but…

How could the public and private plans compete “on a level playing field”?

From the report: “… a level playing field requires a set of safeguards that are easily remembered as the “three R’s”: rules, risk adjustment, and regional pricing.”

Rules: “Both the public and private plans should also have to abide by the same fundamental rules, the main purpose of which is to prevent plans from profiting by selecting healthy people rather than delivering value. These rules include: community rating, guaranteed issue, limits on marketing, standardized and defined benefits, reserve requirements, transparency…”

Risk adjustment: “…there is also a need for risk adjustment. That is, plans should be paid different amounts by the exchange based on the expected and realized risk of their enrollees. Enrollees and plans should not be penalized when a plan attracts less healthy enrollees. While prospective risk adjustment technologies have come a long way, they are still imperfect. Thus any risk-adjustment system should mix prospective risk adjustment with a retrospective risk-adjustment process at the end of the year that redistributes funds among the plans to ensure that those with very unfavorable mixes of risk are protected. Of course, the public health insurance plan must be part of this arrangement.”

Regional pricing: “… the bids made by both the public plan and private plans should be made on a regional basis. In other words, although the exchange should be nationally administered, the bids should be regionally specific. Many private plans will only wish to provide benefits in certain regions where they operate. The public health insurance plan will of course be truly national. Without regional bidding, the public plan will be disadvantaged in areas where private premiums are low and advantaged where they are high. Neither is conducive to a truly level playing field.”

DM: Merely to counter the attack that the government doesn’t play on a level field, we would have to establish a set of administratively complex rules of competition with which the government must comply, include the difficult task of determining and adjusting for the relative risks in the public and private pools in spite of the private insurers proclivity to game these risks, and then require our national public program to bid in each region to provide fairness for the government program? This adds considerable administrative inefficiency to a government program that should be offering greater efficiency. A single, universal national health program would not require these extra rules, risk adjustments and health plan competitive bidding processes.

How would the premium for the public plan be established?

From the report: “A strong argument can be made for the federal government setting subsidies on the basis of the average weighted premium of plans, as opposed to the cost of the least expensive plan. First, this would reduce the chance that lower-income enrollees would feel pressured by costs to enroll in the least expensive plan. Second, it would at least crudely adjust subsidies to reflect the variance of plan premiums as well as the level. In areas where the range of plan premiums is larger, subsidies based on the average will much better protect enrollees against premium costs than subsidies based on the lowest-cost plan. For these two reasons, the weighted-average-premium approach is preferable to the lowest-cost-plan approach for setting subsidies, and the graphics that follow focus on showing how this approach would work. However, either approach would create the necessary incentive for enrollees to prefer less expensive plans.”

DM: Instead of a complex process to determine a premium for a public program based on the actuarial value of the benefits provided, a single payer program would do away with premiums. The system would be financed with a simpler and much more equitable tax. Also, everyone who believes in health care justice should be deeply troubled by the statement that this approach “would create the necessary incentive for enrollees to prefer less expensive plans.”

Since premiums would be unaffordable for the majority, how would subsidies be administered?

From the report: “… the subsidy could vary with the income of the enrollee. Low-income enrollees would certainly receive even greater assistance, as well as help with cost-sharing. Because most enrollees through the exchange will be workers whose employers have contributed on their behalf, and because coverage should be kept affordable, the subsidies should cover a good portion of the premium for all enrollees. Since the average employer/employee split of health premiums is roughly 80/20 in the private market today, 80 percent seems a reasonable baseline contribution.”

DM: The purpose of government subsidies is to transfer payment for health care from the wealthy to those who cannot afford to pay for their full, evenly-divided allocation of our national health care bill. That now includes middle-income Americans. A subsidy system requires a separate administrative task for everyone included within the system of health care coverage, with further adjustments depending on out-of-pocket expenses, and periodic reevaluation of eligibility requirements. These administrative excesses are made necessary only because we couple the payment of health care to the specific benefit package – the insurance plan. A single payer system eliminates this administrative nonsense by replacing premiums and cost-sharing with tax financing – again, a much simpler and more equitable approach.

What about the all-payer alternative?

From the report: “…allow private plans that pay providers on a more or less fee-for-service basis to piggyback on the public plan in setting their own prices… In practice, all-payer rate setting of this sort would mean that private fee-for-service plans within the exchange would use the same fee schedule that the public plan did. Allowing private plans that use fee-for-service payment to piggyback on the public plan’s rate thus would have broader benefits than simply reducing the opposition of private insurers to the idea of a public plan. It would make cost control more effective, encourage administrative simplification and care improvement, and increase the degree of coordination in American health financing.”

DM: Okay. So we combine the public and private payers into an all-payer program. Then why would any individual in his/her right mind, other than an insurance executive or shareholder, want to keep this worthless, wasteful, expensive industry in play?

PNHP has been under attack by our friends in the progressive community for being opposed to the public Medicare-like option. That is a misstatement of our position. We are opposed to a fragmented, dysfunctional health care financing system that is causing financial hardship, physical suffering, and, all too often, death. Adding a public option will have only a negligible impact on the fundamental flaws that are causing so much personal grief.

Our friends and our enemies know what would fix our system: a single payer national health program. We think we understand the position of our enemies – largely based on greed. Why else would they support such a cruel system?

But our friends? Why do they attack us as they retreat to a secure position within the ranks of the private insurance industry? Besides, just wait and see what the insurers and their purchased representatives in Congress will do with Jacob Hacker’s “Healthy Competition” proposal. You’ll have to look quick because the window of opportunity for reform will have slammed shut.

Lewin report on the public option

Posted by on Wednesday, Apr 8, 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 Cost and Coverage Impacts of a Public Plan: Alternative Design Options

Prepared by John Sheils Randy Haught
The Lewin Group
April 6, 2009

President Obama has proposed to create a “public plan” that would compete for enrollment with the private insurance industry.

The public plan is difficult to evaluate because no one has specified in legislation how it would work.

Consequently, in this paper, we present impact estimates under several variations on the public plan model.

If Medicare payment levels are used in the public plan, premiums would be up to 30 percent less than premiums for comparable private coverage. On average, the monthly premium in the public plan for a typical benefits package would be $761 per family compared with an average of $970 per family in the private market for the same coverage.

If the public plan is opened to all employers as proposed by Senators Clinton and Edwards, at Medicare payment levels we estimate that about 131.2 million people would enroll in the public plan. The number of people with private health insurance would decline by 119.1 million people.

Medicare premiums would be lower than private premiums because of the exceptional leverage Medicare has with providers. Medicare pays hospitals about 30 percent less than private insurers pay for the same service. Physician payments are about 20 percent less than under private coverage. Also, because Medicare has no allowance for insurer profits or broker/agent commissions, administrative costs for this population are about one-third of administrative costs in private health plans.

Assuming Medicare reimbursement rates and eligibility for all individuals and employers, provider net income would decline under this public plan proposal, even after accounting for reduced uncompensated care and increased utilization for the newly insured. Net hospital revenues would fall by $36 billion (4.6 percent), and physician net income would fall by $33 billion (6.8 percent).


No details have been released by either Congress or the administration about the specifics of a potential public insurance option that could be offered in competition within a market of private health plans. Nevertheless, to provide an analysis of how such a plan might work, The Lewin Group used certain assumptions to prepare this simulation.

Under this analysis, hospitals would be paid 30 percent less than the reimbursement rates of private insurers, and physicians would be paid 20 percent less. Using these and other assumptions, premiums for the public plan would be 30 percent less than comparable coverage by private plans.

Supporters of the public option are likely to claim that it is an essential component of reform since it will lower the cost of insurance while expanding coverage to over 100 million more people.

Opponents of the public option are already claiming that the government would be an unfair competitor to the private plans because of its ability to dictate rates that are lower than what the private plans must charge.

This simulation may very well also increase the opposition by physicians and hospital administrators because of concern about the possibility of shifting large numbers of patients from the private plans to the government plan with its considerably lower reimbursement rates. In the heat of the debate, it may be forgotten that these fee reductions were an assumption made by the authors of this report for simulation purposes, and not a feature of any actual legislative proposal.

Unfortunately, this study only fuels a debate that has diverted us from the discussion that we should be having. Instead of arguing over a controversial, yet-to-be-defined measure that cannot possibly lead to the efficiencies, equity and effectiveness of the single payer model, we should be discussing what actually would work – true single payer reform.

Sanders and single-payer

Posted by on Tuesday, Apr 7, 2009

Originally published in the Berkshire Eagle.

Sen. Bernie Sanders, a Vermont Independent, has just introduced a single-payer health care reform bill into the United States Senate. This legislation stands in sharp contrast to the reform models offered by the White House and Sen. Max Baucus, which are similar to our current Massachusetts reform. Unlike Massachusetts, the Sanders bill would eliminate the many private insurance companies and create a “single payer” to administer health care funds.

Single-payer health care would save American taxpayers $400 billion in administrative costs, says Sanders, which would be enough money to provide health care coverage for everyone in our country. Sanders is a senator who knows how to save money at a time when taxpayers are paying billions to keep AIG afloat.

As we know from our Massachusetts experience with health care reform, preserving the role of private health insurance companies does not lead to universal coverage or contain rising health care costs. The Massachusetts reform program has not been affordable for the individual or for the state, and access to health care continues to be problematic, with nearly a quarter of the state’s residents saying they had difficulty getting care in 2008.

The provisions of Senator Sander’s bill are: (1) universal coverage; (2) comprehensive benefits, including mental health, dental and prescription drug coverage; (3) patient choice of doctors and hospitals; (4) fully-funded community health centers to provide access to care for the 60 million people living in rural and other underserved areas; and (5) resources for the National Health Service Corps to train 24,000 new health professionals to address the shortage of primary care doctors and dentists.

Massachusetts continues to have a critical shortage of primary care doctors, and providing health insurance for the uninsured through our current program has only made that deficiency more visible. Having health insurance in Massachusetts doesn’t guarantee health care if you can’t find a doctor when you are sick. Others with insurance can’t get care because they can’t afford their co-payments and deductibles.

Sanders’ program would be paid for by taking the current sources of government health care spending, and combining them with modest new taxes that would be less than people now pay for insurance premiums and other out-of-pocket expenses. Four hundred billion dollars would be saved annually by eliminating insurance company profits and overhead, as well as the paperwork that burdens doctors and hospitals.

Dr. Uwe Reinhardt said at a hearing before the U.S. Senate Finance Committee, “We have 900 billing clerks at Duke (a 900 bed university hospital). I’m not sure we have a nurse per bed, but we have a billing clerk per bed. . . it’s obscene.”

Doctors and hospitals are sick of the paperwork and the health care dollars that don’t go for health care delivery. And everyone hates the intrusion of insurance companies into health care decisions. A poll published in the Archives of Internal Medicine found that 64 percent of doctors in Massachusetts now support single-payer health care.

Sen. Bernie Sanders’ legislation is a bold step forward. Five hundred physicians in Massachusetts have signed a letter to Sen. Kennedy, asking him to support a single-payer reform similar to Sanders’ bill. Kennedy supports universal coverage, but would leave the current dysfunctional system of multiple insurance company payers intact. Kennedy has said, “Health care is not just a commodity . . . to be rationed based on the ability to pay. It is time to make universal health insurance a national priority, so that the basic right to health care can finally become a reality for every American.”

Unfortunately, leaving the current system intact would not save the $400 billion now lost to administrative expenses. We ask Sen. Kennedy to listen to Massachusetts physicians and reject the lobbying forces of the profit-driven insurance industry. We also ask him to join Sen. Sanders in sponsoring the only solution for health care reform that will cover everyone at a cost we can afford.

McClellan asks, "What would be the point?"

Posted by on Monday, Apr 6, 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.

Democrats seek compromise on health care plan

By Ricardo Alonso-Zaldivar
The Washington Post
April 2, 2009

Democrats are seeking a compromise on a bigger government role in insurance coverage as part of President Barack Obama’s proposed health care overhaul.

At issue is whether middle-class workers and families should have the option of a government-sponsored plan that would compete with private insurers.

Sen. Charles Schumer, who is working on the issue for the Senate Finance Committee, said Thursday one potential compromise is based on insurance plans that most states already offer their employees. Obama’s health secretary nominee, Kansas Gov. Kathleen Sebelius, likes the idea.

Schumer, D-N.Y., said such a plan would avoid expanding a federal program like Medicare and that a private insurer possibly could run it. Sebelius already administers that type of plan in Kansas.

The insurance lobby fears that a federally backed plan could drive companies out of business.

“We are taking a look at the different state employee plans to get a better understanding of how they operate,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans.

GOP lawmakers “are going to need to know what’s in the fine print,” said Craig Orfield, a spokesman for Sen. Mike Enzi, R-Wyo., a leading lawmaker in the debate.

“My goal is to find a plan that would be acceptable to large numbers of senators,” Schumer said in an interview. “Right now, the private insurers are totally opposed, but maybe there’s room.”

In California, the state sponsors three medical network plans for employees and retirees. These plans are offered alongside traditional insurance plans. The state-sponsored plans, administered by Anthem Blue Cross, account for about one-fourth of the 1.3 million people in the state employee health program, said Karen Perkins, a spokeswoman for the California Public Employees Retirement System, known as CalPERS.

The idea of using the state employee plans as a model came last month from two policy experts, Len Nichols and John Bertko.

“We were just trying to avoid nuclear war,” said Nichols, director of health policy for the nonpartisan New America Foundation. “We saw advocates of Medicare for all pushing to put the country into Medicare. And we saw the right using that to push the moderates out of engagement in the health reform debate.”

Schumer said he is looking at Nichols’ idea as a possible compromise and is beginning to sound out other Democrats and policy experts. He has room to maneuver because Obama and many Democrats did not spell out what they mean by a “public” insurance option.

But Schumer said other Democrats insist that option should look like Medicare, in which the government directly sets benefits and payment rates.

Mark McClellan, a health policy expert who ran Medicare under President George W. Bush, said Nichols’ proposal was “well meaning,” but that the government is much bigger than any state, so the effects of a federally backed plan on the insurance market would be far greater.

“At this point, I don’t know many Republicans who are confident a public option could work without making it look like another private sector choice,” said McClellan. “And then what would be the point?”


The progressives in the House of Representatives have stated that they “will only support comprehensive health care reform legislation which includes a public plan option on a level playing field with private health insurance plans.” (http://cpc.grijalva.house.gov/index.cfm?ContentID=351&ParentID=0&SectionID=66&SectionTree=66&lnk=b&ItemID=349)

The Republicans will not support a government-run plan that competes “unfairly” with the private health plans. Specifically, they will not support a Medicare-like option.

But look at the wording of the statement from the Progressive Caucus. The public plan option must be “on a level playing field with the private plans.” The model that meets that definition is a PPO that is sponsored by the government but administered by private insurers, with a firewall separating the PPO from the government. Thus the government option will be simply another PPO, with all of its perverseness, competing in a market of private plans. The line in the sand drawn by the Progressive Caucus was washed away by their carefully worded release.

Mark McClellan has it right. The only hope for gaining the support of Republicans is to make the government option “look like another private sector choice, and then what would be the point?”

With the concession of the progressives, the strategy for a Medicare-like public option has already failed. Moving forward with what amounts to another private PPO with a government seal of approval means that the private insurance industry will maintain control of health care financing for the majority of Americans.

We have in the making yet one more example of where the Republicans will extract enough concessions from the Democrats to ruin the legislation, and then when it comes time to vote, the Republicans will vote against it anyway.

The Democrats have to give up the fantasy of a bipartisan solution since Congressional bipartisanship is a total fiction. The Democrats have to move forward with honest health care reform that works for everyone. They shouldn’t look for help from the party of NO.

How many doctors support single payer?

Posted by on Friday, Apr 3, 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.

U.S. Physicians’ Views on Financing Options to Expand Health Insurance Coverage: A National Survey

By Danny McCormick, Steffie Woolhandler, Anjali Bose-Kolanu, Antonio Germann, David H. Bor and David U. Himmelstein
Journal of General Internal Medicine
April 2009

We asked respondents (physicians engaged in direct patient care) to choose the single option they preferred: 1) “The current health care system, in which most people get their health insurance from private employers, but some people have no insurance”; 2) “A universal insurance program in which everybody is covered under a program like Medicare that is run by government and financed by taxpayers”; or 3) “The current health care system, with the addition of new tax credits for buying, or tax penalties for failing to buy, health insurance”.

9% – The Current Health Care System

42% – Single-Payer National Health Insurance Program

49% – The Current System With Addition of Tax Credits or Penalties

Conclusions: The vast majority of physicians surveyed supported a change in the health care financing system. While a plurality support the use of financial incentives, a substantial proportion support single payer national health insurance. These findings challenge the perception that fundamental restructuring of the U.S. health care financing system receives little acceptance by physicians.


This study supports the findings of other surveys that confirm that almost all physicians want reform of our current health care system, but they remain divided over whether or not we should replace the private insurance system with a government-run, taxpayer-financed program.

One interesting subset of this study suggests an answer to the question as to whether or not the AMA supports single payer reform. Although official positions of the AMA are decided by their House of Delegates, this survey helps us determine if the views of AMA members are different from a cross-section of practicing physicians. AMA members support the current system with the addition of tax credits or penalties over single payer by a ratio of 55 to 36. Physicians who are not AMA members are evenly divided with a ratio of 46 to 45.

When the physicians were asked if they agreed that people without health insurance have access to the medical care they need, single payer supporters disagreed at a ratio of 5 to 1. Supporters of the current system with added tax credits/penalties were more evenly divided. There is a fundamental difference, even if with fuzzy divisions.

Please forgive me for a moment of introspection, which seems apropos here. When I retired from practice and set up my home office to work on health care reform, I put all of my framed certificates, awards and other documents in a box in the garage, except for one that I received on graduation from medical school: The Oath of Hippocrates. My desk faces it. Frankly, much of the rhetoric doesn’t particularly resonate with me. I mean… pessary for abortion? … mischief and corruption? … seduction of females, males and slaves?

But there are two lines in the Oath that I hold sacred:

“I will follow that system of regimen which, according to my ability and judgement, I consider for the benefit of my patients, and abstain from whatever is deleterious and mischievous.”

“With purity and holiness I will pass my life and practice my art.”

I have been very thankful for having had the opportunity to have known and worked with physicians who share these values – roughly one-half of the physicians whom I’ve met through the years. And the single payer supporters in PNHP with whom I continue to work? All of them, 100 percent, understand the sanctity of the healing arts. That’s what we’re all about.

FRONTLINE's "Sick Around America"

Posted by on Friday, Apr 3, 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.

Sick Around America

March 31, 2009

Investigating the stories of Americans whose lives have become a quest to find and keep health insurance…

Join the Discussion


I am disappointed that this long-awaited special on healthcare did not address the single payer option. There were ample interviews with insurance company lobbyists but no discussion of this obvious choice. Our nation’s people are in crisis and the shameful greed displayed in other industries is replicated in the for profit hospital corporations, insurance companies and pharmceutical industries. We cannot afford profit in healthcare, as we will continue to have a chaotic, threadbare system riddled with donut holes and pitfalls for those who can least navigate: patients and their families. I’d like to see equal time — a Frontline on the single payer option.

Grace Gifford
Conway, SC

FRONTLINE’s editors respond:

Many viewers have written criticizing this report for not looking at solutions, in particular, a single payer system. Certainly, the topic is another important piece of any examination into the health care system and how it can be improved. And it would warrant a separate program of its own. We would like to point out that we did examine how the single payer system works in many European countries in our program last season, Sick Around the World. You can view this online.We believe that our report this week, Sick Around America, was equally of value in focusing on our current private health insurance system and showing how many Americans are only one or two events away from financial disaster or total ruin because they can’t afford this insurance, or because it offers inadequate coverage, or because it suddenly can be rescinded by the insurer for alleged omissions or errors. We also felt it important in this report to look at another major problem with the private insurance system: America’s for-profit medical system means that insurers have a fiscal duty to avoid risk and make profits for investors. Thus, insuring people who already have serious, chronic illnesses works against the interests of stockholders.

FRONTLINE: Sick Around America

Join the Discussion

PNHP: “‘Sick Around America’ disappoints” – selected responses

Columbia Journalism Review: “Sick Around America” by Trudy Lieberman

T.R. Reid had hosted FRONTLINE’s “Sick Around the World,” an important documentary describing successful health programs in several other nations that provide care for everyone at a fraction of the costs of our fragmented, inefficient health care system that leaves so many out.

We were looking forward to T.R. Reid’s sequel, “Sick Around America,” describing the problems with our private insurance system. Many of us were disappointed with the format of the program, believing that they missed a great opportunity to educate the nation on several health policies that would work well for all of us. Thus it was no surprise to us that T.R. Reid was not mentioned during the program, nor in the credits.

What happened? Reid left the show this February in a dispute with FRONTLINE. Trudy Lieberman of Columbia Journalism Review quotes Reid as saying, “When I saw it, I didn’t agree with it. It took a different view of health policy than I have.”

The program did use anecdotes effectively, demonstrating some of the problems with private insurance. Examples included medical underwriting, rescission, lapses in coverage, financial burdens due to underinsurance, and other deficiencies that most Americans now understand.

Watching this program, it is very clear that change is required. But the message for reform was outrageous. Throughout the program, many executives of the private insurance industry were featured, and they confirmed that these deficiencies were very real and needed to be addressed. That’s good. What was outrageous is that they were in no way contrite, but instead they implied that they would provide the leadership to make sure that private insurance will continue to manage the financing for health care in America, beginning with an individual mandate for every American to buy their lousy products.

We can only speculate on the motives of the producers. My opinion is that they wanted to provide support for the current efforts of the Democrats in Congress and in The White House to build reform based on private health plans. A publicly-administered and publicly-financed program would require a total restart on the reform process, and so it wasn’t offered as a potential solution. In deference to the insurance executives, the producers didn’t even promote a public Medicare-like option.

Remember, these insurance executives are not contrite. They can never provide the moral leadership that we need to create a health care system that serves all of us well.

‘Sick Around America’ disappoints

Posted by on Wednesday, Apr 1, 2009

“Sick Around America,” a Frontline documentary about the dysfunctional U.S. health care system, aired March 31 on PBS.

Billed as a sequel to the widely hailed “Sick Around the World,” a 2008 Frontline production featuring veteran Washington Post correspondent T.R. Reid, the new documentary was eagerly awaited by U.S. supporters of fundamental health reform.

In the first film, Reid gave an accurate portrayal of several single-payer health systems overseas. Many reform advocates hoped this new documentary would discuss single payer as an option for the United States, too, particularly given its popularity among the U.S. public.

Alas, that was not to be the case. Nor, incidentally, was Reid’s name to be found anywhere in the credits.

Instead, filmmaker Jon Palfreman, who also directed the first documentary, concentrates on telling dramatic patient stories that illustrate the utter failure of the present private-insurance-based system. But he offers little in the way of what to do about it.

To the extent that any reform proposal is cited as a possible pathway for change, it is the flawed, mandates-based Massachusetts model. While some of the serious problems of that faltering model are pointed out, viewers are nonetheless left with the impression that mandates may be the way to go. That’s certainly the point made by Karen Ignagni, president of America’s Health Insurance Plans, who makes multiple appearances in the film.

Frontline publishes a blog of viewer comments on its documentaries, and a number of PNHP members and other single-payer supporters were quick to express their disappointment. In fact, single-payer supporters from all over the country were heavily represented in the blog discussion during the first 12 hours after the film’s release. Below is a small sampling of their comments. You can join the discussion at http://www.pbs.org/wgbh/pages/frontline/sickaroundamerica/talk/


Americans are totally frustrated by our health care system and this documentary illustrates why the current health reform debate is moving in the wrong direction. Congress is about to force all Americans to buy private health insurance under the pretense of “universal health care” using the Massachusetts model. This is not what Americans want and to compel us to buy into the outrageous behavior of the private health insurance industry is totally disgusting.

We need single payer, national health insurance and begin with a totally different cultural orientation — everybody in, nobody out.

Walter Tsou, M.D.



Massachusetts — Election Day 2008. A ballot initiative put forward in 10 legislative districts read:

“Should the representative from this district be instructed to support legislation creating a cost-effective single payer health insurance system that is available to all residents, and oppose laws penalizing those who fail to obtain health insurance?”

73 percent of the 181,895 people voted YES.

Why oh why, from the very state where the health insurance “mandate” — a law criminalizing the uninsured — is held up as a model for the nation, in spite of its obvious failure?

Single payer national health insurance, H.R. 676, will SAVE hundreds of billions of dollars and COVER EVERYONE.

Health is a human right!

Andrew D. Coates, M.D.
Delmar, N.Y.



This program is heavy on interviews of insurance executives. Where are the voices for Single Payer, Medicare For All?

You stated that all other countries require all residents to buy health insurance. This is not true. Canada and UK cover everyone through taxes. Taiwan has a system like our Medicare.

If the US mandates insurance, the for-profit insurance industry will rake in tax payer money to support share holders, complex administration costs and excessive executive salaries and bonuses. This show is disappointing.

Karen Green Stone
Bloomington, Ind.

And …


Thank you, Frontline, for your inspiring programs first on health care around the world and now on health care in the U.S. We should draw three conclusions:

1. As Dr. Delbanco stated so eloquently, the first step is to provide health care to everyone. Only then, and at the same time, should we tackle the problems of cost and quality. If we wait to expand health coverage until we have succeeded in curtailing costs, we will wait forever and acquiesce in the suffering of those without access to the care they need.

2. If we truly want everyone to have health insurance, we need to provide it to them, i.e. to make signing up as automatic and easy as possible. Mandates to purchase health insurance are inefficient, expensive, incomplete, and unnecessary.

3. To make universal health care as efficient and inexpensive as possible, we need to institute a single payer system, i.e. to eliminate the hassle imposed on patients and providers by the private insurance system and eliminate the waste of health care dollars in marketing, claims processing, administrative salaries, and profits. The models are the single payer bills introduced by Representative Conyers in the House and by Senator Sanders in the Senate.

Thank you again, Frontline, for teaching us these lessons.

Paul Sorum, M.D.
Schenectady, N.Y.



Let me add my voice to the others who wish that this program had discussed the option of a single-payer system. Can America afford the continued existence of the private health insurance industry?

Oak Park, Ill.



Your “Sick Around America” show was excellent in all respects except one. Once again you held to the media standard of maintaining absolute blackout regarding the option of a “Single Payer” system. Most advanced countries provide superior care, far more efficiently, with less cost without the burden of insurance. Your coverage never included that possibility as proposed by HR 676. And, you stated that President Obama’s meeting included all the stakeholders without mentioning that Single Payer advocates were deliberately excluded. Such coverage withholds critical information from the public.

Jerry Reed
Grants Pass, Ore.

Views on IRAs and HSAs contrast sharply

Posted by on Wednesday, Apr 1, 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.

Not the Next IRA: How Health Savings Accounts Shape Public Opinion

By Jason Barabas
Journal of Health Politics, Policy and Law
April 2009

This study has documented policy feedback effects of a personal nature. The central finding is that policy feedback effects occur, but they can be domain specific. That is, participation in investment accounts for retirement or health do not lead to uniformly conservative or liberal policy opinions. As expected, IRA owners tend to favor Social Security privatization, but that does not mean that investing always or unequivocally engenders support for investment account-based policy solutions. Participation in HSAs reduces public support for health care privatization. In particular, HSA owners, owing to their wildly different programmatic experiences, are much less likely to endorse individualized health care coverage. Thus, HSAs and related forms of consumer-driven health plans are not automatically designed to become “the next IRA.” The irony is that dissatisfaction with HSAs is greatest among those who have them.


Much has already been written about the wisdom, or lack thereof, of health savings accounts (HSAs) and the high-deductible health plans that are linked with them. By design, they benefit higher-income individuals who are able to take advantage of the regressive tax policies, and who remain healthy, allowing the savings to accumulate for use in their retirement years. But they don’t work for individuals with modest incomes who have significant health care needs.

You would think that HSAs would be dismissed from the current dialogue on reform, but no. Our politicians are struggling with how to pay for comprehensive reform. One goal is to reduce spending on insurance premiums, and that makes lower-cost, high-deductible plans more attractive to those attempting to make reform cost-neutral, for the government, that is.

As Congress plays games with the budgeting of health care reform, it is imperative that they understand that the “dissatisfaction with HSAs is greatest among those who have them,” whether conservative or liberal.

It is hoped that soon Congress will give up looking for magical solutions to pay for health care for everyone, and get serious about a solution that actually would work – a single payer national health program.

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Physicians for a National Health Program's blog serves to facilitate communication among physicians and the public. The views presented on this blog are those of the individual authors and do not necessarily represent the views of PNHP.

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