Himmelstein and Woolhandler on a public plan option

Posted by on Thursday, Mar 26, 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.

Public Plan Option in a Market of Private Plans

By David Himmelstein, M.D. and Steffie Woolhandler, M.D., M.P.H.:

The “public plan option” won’t work to fix the health care system for two reasons.

1. It forgoes at least 84 percent of the administrative savings available through single payer. The public plan option would do nothing to streamline the administrative tasks (and costs) of hospitals, physicians offices, and nursing homes, which would still contend with multiple payers, and hence still need the complex cost tracking and billing apparatus that drives administrative costs. These unnecessary provider administrative costs account for the vast majority of bureaucratic waste. Hence, even if 95 percent of Americans who are currently privately insured were to join the public plan (and it had overhead costs at current Medicare levels), the savings on insurance overhead would amount to only 16 percent of the roughly $400 billion annually achievable through single payer — not enough to make reform affordable.

2. A quarter century of experience with public/private competition in the Medicare program demonstrates that the private plans will not allow a level playing field. Despite strict regulation, private insurers have successfully cherry picked healthier seniors, and have exploited regional health spending differences to their advantage. They have progressively undermined the public plan — which started as the single payer for seniors and has now become a funding mechanism for HMOs — and a place to dump the unprofitably ill. A public plan option does not lead toward single payer, but toward the segregation of patients, with profitable ones in private plans and unprofitable ones in the public plan.


The option to purchase a public plan within a market of private health insurance plans would merely provide one more player in our inefficient, dysfunctional, fragmented, multi-payer system of financing health care, that is if the public option even survives the political process. It would leave in place the deficiencies that have resulted in very high costs with the poorest health care value of all nations (i.e., overpriced mediocrity in health care).

Those who believe that the people of this nation would have the wisdom to drop their private plans and join the government program are ignoring history. When Congress authorized private plans to compete with our existing public program, Medicare, many enrollees did just the opposite. One-fifth have left the traditional Medicare program and joined the private plans.

So why should we care? Why shouldn’t they have the right to choose private plans if they want them? We know that those private plans are wasting money, both in their own costs and the administrative burden they place on the delivery system, but what all too many don’t realize is that we are all paying for that waste because of the inherent structural deficiencies in our financing system. Plus we are being deprived of the reforms needed in our health care delivery system that our own single payer monopsony would bring us.

Single payer activists, don’t give up. As President Obama said in his press conference this week, “persistence!”

Culling dependent coverage a great return on investment

Posted by on Wednesday, Mar 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.

Employers getting more strict on health-care eligibility

By Steve Twedt
Pittsburgh Post-Gazette
March 25, 2009

Facing a difficult economy and running short of ways to reduce health-care costs, employers are becoming more aggressive about checking the eligibility of their workers’ dependents.

A Watson Wyatt survey of 489 employers this month for the National Business Group on Health found that audit reviews are the fastest growing change that companies are making to their health-care programs, well ahead of health risk appraisals or improving case management.

During an eligibility audit, employees are asked to document that family members on their health plans are eligible for coverage. They may be required to produce marriage certificates, proof of college enrollment or tax forms. Ex-spouses are not eligible. Nor are sickly uncles who live with the family. Stepchildren may not be eligible either, depending on the plan.

The appeal of eligibility audits is that they almost guarantee hard-dollar savings — with estimates of ineligible dependents typically in the 5 to 12 percent range — and they often can pay for themselves within a year.

“We have completed dependent eligibility audits for over 50 employers and we have yet to have a case where the employer did not receive a return on investment of over 300 percent within one year. Many times it is well over 1,000 percent,” said Michael Browning of Chapman Kelly, Inc., consultants in Jeffersonville, Ind.

Pittsburgh-based Daniel Priga, a principal with Mercer consulting, said the firm “conservatively” estimates a $1,900 savings per year for every ineligible dependent taken off the books. Such a return “is hard to find in today’s environment.”


Doing eligibility audits of dependents covered by employer-sponsored plans is yet one more example wherein our current dysfunctional system of financing health care actually promotes administrative waste. A rational system uses administrative services efficiently to pay for the health care that patients need. In the United States, much of the administrative cost of health care financing is due to efforts to avoid paying for health care.

Only in the United States do we consider that taking health insurance away from individuals to be a “return on investment.”

Battle over public option to private insurance plans

Posted by on Tuesday, Mar 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.

Health-Care Battle Set to Focus on Public Plan

By Laura Meckler
The Wall Street Journal
March 24, 2009

Congress is poised for a battle over whether an ambitious health-care overhaul should include a new government-run health plan to compete with private companies in the effort to cover the uninsured.

The matter is likely to come to a head first in the Senate Finance Committee, where Chairman Max Baucus (D., Mont.) has pledged to write a bipartisan bill. His partner, Sen. Charles Grassley of Iowa, the top Republican on the panel, is adamantly opposed to the provision for a public health-care plan. As such, aides in both parties say it’s unlikely a public plan will be included in the legislation now being negotiated.

The House of Representatives, on the other hand, is likely to include the provision in its version of the bill, expected in late spring or early summer, aides say. That suggests the issue would have to be worked out in negotiations between the chambers later this year.

But opponents say a public plan would be an unfair competitor because it could become big enough to drive down reimbursements to doctors and hospitals, much like Medicare does, putting more cost pressure on the private sector. Consumers would then flock to the public plan because its premiums would be cheaper, opponents fear, and ultimately no viable private plans would remain.

Insurance companies, many of which support other aspects of the health-system overhaul, strongly oppose a public plan, said Karen Ignagni, president of America’s Health Insurance Plans, the industry lobby group. “It’s a very short step to a Medicare-like program for all Americans in a single-payer system,” she said.



Hearing: Addressing Insurance Market Reform in National Health Reform

U.S Senate Committee on Health, Education, Labor, and Pensions
March 24, 2009

Senator Tom Harkin: I want to ask about a public plan… Can a public plan coexist with private insurance plans? That seems to be a question I’m getting all of the time. Can we have a health reform that has all these private plans, and then have a public plan?

Ronald A. Williams, MS, Chairman and Chief Executive Officer, Aetna Inc.: My opinion is no, it cannot…

Janet Trautwein, Executive Vice President and CEO, National Association of Health Underwriters: I would just add to that, and also I don’t think it is possible for a public and private sector to compete on a level playing field. I don’t see any way that that’s possible…

Karen Pollitz, M.P.P., Research Professor, Health Policy Institute at Georgetown University: Private health insurance and public plans coexist today… …I think it’s absolutely essential.

Karen Ignagni, M.B.A., President and CEO, America’s Health Insurance Plans: …what we have done is propose an aggressive system of government regulation that would supervise private sector competition…

Len Nichols, Ph.D, Director, Health Policy Program at the New America Foundation: …if we just decide to put everybody into Medicare, except for the private plans that would survive for maybe three years… we’re going to end up with a system that is basically going to be run from Washington and Baltimore… think about a public plan model more like what state employees do… …let it compete with the private insurance industry… …a PPO type arrangement… We would suggest even stronger firewalls between the people who run the new marketplace and the people who run the plan…

Katherine Baicker, PhD, Professor of Health Economics, Department of Health Policy and Management at the Harvard School of Public Health: …I worry that in practice one ends up doing more harm than good…

Sandy Praeger, Health Insurance Commissioner, State of Kansas: The public plan… and I’ve read Dr. Nichols’ report… and I think he makes some very good points. …if it’s competing on a level playing field with the private marketplace… If you have equal rules and are treating the public plan the same as the private plan, it can help drive market changes…


Perhaps the surest sign of trouble for the proposal to offer a public Medicare-like plan to compete with private insurance plans is the commitment of Finance Chairman Max Baucus that reform will be bipartisan along with the adamant opposition of a public option by Ranking Member Charles Grassley. Having discarded other public insurance proposals such as single payer, even before the negotiations began, the competing Medicare-like option is standing alone as the obvious trade-away for achieving political consensus.

The insurance industry contends that a public plan would provide “unfair” competition to the private plans, just as the private Medicare Advantage plans had to be granted large overpayments to counter the “unfair” advantage of the traditional public Medicare program. It is surprising how many others perpetuate this framing that the private insurers should be granted extra tax dollars in order to level the playing field with a more efficient government health financing system. The real unfairness is gifting taxpayer funds to the private insurers.

So what is being proposed as a compromise public insurance option? Let’s have the government set up a private insurance-style PPO, and require it to copy the private sector business model of taking away choice through restricted provider lists, expanding administrative functions including the necessity of marketing its product, competing on benefits and cost-sharing provisions, and engaging in all of the other non-beneficial excesses of the marketplace. Just to be absolutely certain that the public option has all of the flaws of the private health plans, Len Nichols would put up even stronger firewalls between the government administrators and the government’s own public option disguised as a private plan. And this ridiculous effort to “level” the playing field is all for the benefit of… not the patients… but the insurers!

What is sad is that the enemies of reform have already won. They have managed to eliminate comprehensive reform from the national dialogue and have reduced the debate to whether or not we’ll add one more plan, a public plan, to our dysfunctional, fragmented, multi-payer system that costs so much and serves us so poorly. Anyone who believes that the mere additional option of purchasing a public insurance plan is going to transform our health care system is living in La La Land.

In Des Moines today, at the third White House Regional Forum on Health Reform:

Greetings everybody and thanks for hosting this. I’m delighted that we’re talking about these issues.

My name is Jess Fiedorowicz. I’m a physician and faculty member at the University of Iowa. And I’m here representing Physicians for a National Health Program. [applause]

[Iowa State Senator] Jack Hatch had mentioned that he thought that health care was a human right. I agree. But if it is a human right then why are we settling short of not covering every Iowan? This plan does not cover every Iowan.

The majority of Americans, and the majority physicians, support single payer national health insurance. Single payer national health insurance is the only true path to universal care.

Governor Culver, you mentioned “pooling.” How about this for a pool? Everybody In! How is that for a pool?

Nancy-Ann DeParle, I have a question for you.

With the majority of Americans and the majority of physicians supporting single payer national health insurance, can we put it on the table for discussion?

Can we discuss, can we study costing? Can we study the feasibility of this socially just, truly universal and fiscally responsible alternative to our currently unjust and woefully inefficient system?

Governor Culver’s reply:

Thank you. [pause] It’s on the table now! [laughter and applause] Which is the purpose of this meeting, to hear from everyone that’s willing to try to help us solve this national crisis, this national challenge.

(Video available at the Des Moines Register, Dr. Fiedorowicz’s remarks begin at 54:12.)


When President Obama announced regional forums to discuss health reform, single payer advocates rejoiced. The weight of evidence and the momentum of popular opinion – and the fact that people are fed up with the insurance they have! – can indeed carry the democratic process in favor of single-payer health reform, as Dr. Fiedorowicz proposes. Yet it remains up to us to put single payer “on the table.”

This beautiful sense of responsibility, yearning to help others, with its rejection of healthcare injustice, has come across from all who have protested and participated on behalf of single payer reform at the White House forums, in Washington, DC, Dearborn, Burlington and Des Moines. There should be little doubt that together we can achieve reform that is “socially just, truly universal and fiscally responsible.”

Dr. Nilles handed this statement to Nancy-Ann DeParle at the forum in Des Moines today:

White House Regional Health Care Forum
Des Moines, Iowa
March 23, 2009
Statement of Lisa Nilles, M.D.
Member of the Minnesota Universal Health Care Coalition and Physicians for a National Health Program

Hello. My name is Lisa Nilles, and I am a physician and chaplain from Minneapolis, Minnesota.

I came to Des Moines today to hold the Obama administration to its promises.

I hold the administration to its promise to:

Respond to the tens of thousands of Americans who honored your request to submit on-line questions on health care reform, and to participate in community forums, this past December.

The people spoke in favor of single-payer. Are these voices being considered in the planning currently going on in Washington? As our health care costs spiral out of control and lead our citizens, businesses and government to the edge of bankruptcy, if not into it, the people know that our current multiple payer system is part of the problem, and expansion and improvement of our Medicare program is the solution.

I hold the administration to its promise to:

Develop policy based on science.

I urge you, President Obama, to support the health care reform plan that best provides universal access and controls cost. Insist that HR 676 be included in the work of the Congressional Budget Office, and insist that our elected officials base their recommendations on the evidence. Our lives depend on this.

To all our elected officials. You need public support to enact broad changes. You have it.* By bringing the National Health Insurance Act, HR 676, to the table, to the debate, and to the President’s desk, you will have represented the will of the American people, and finally, America will join the ranks of countries who commit to the health care of their citizens, and are better for it. Thank you.

* CBS/New York Times Poll, Feb. 1, 2009. 59% of those surveyed thought the government should be the entity responsible for providing national health insurance, 32% thought private enterprise should be the responsible entity.

Bayh howls with the Blue Dogs

Posted by on Monday, Mar 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.

Moderate Senate Dems Launch New Group to Shape Public Policy

U.S. Senator Evan Bayh
Press release
March 18, 2009

A diverse group of 16 Senate Democrats today announced the formation of a new moderate coalition that will meet regularly to shape public policy. The group’s goal is to work with the Senate leadership and the new administration to craft common-sense solutions to urgent national problems.

Leading the new group are Democratic Senators Evan Bayh of Indiana, Tom Carper of Delaware and Blanche Lincoln of Arkansas. All three leaders are honorary co-chairs of Third Way, a progressive Democratic policy group, and Senators Bayh and Carper have led the centrist Democratic Leadership Council.

In addition to Senators Bayh, Carper and Lincoln, others joining the group are Senators Mark Udall and Michael Bennet of Colorado, Mark Begich of Alaska, Kay Hagan of North Carolina, Herb Kohl of Wisconsin, Mary Landrieu of Louisiana, Joe Lieberman of Connecticut, Claire McCaskill of Missouri, Ben Nelson of Nebraska, Bill Nelson of Florida, Mark Pryor of Arkansas, Jeanne Shaheen of New Hampshire, and Mark Warner of Virginia.

… the Moderate Dems are joined by a shared commitment to pursue pragmatic, fiscally sustainable policies across a range of issues, such as deficit containment, health care reform, the housing crisis, educational reform, energy policy and climate change.



For Blue Dogs, Health Budget Raises Questions of ‘When,’ Not Just ‘How’

By David Clarke
March 16, 2009

As the congressional budget panels prepare to write their fiscal 2010 blueprint, members of the Blue Dog Coalition of fiscally conservative Democrats want to make sure that any expansion of health care coverage is fully paid for–and that its tax or spending offsets are guaranteed to yield savings down the road.

Leaders of the 51-member coalition wrote to the House and Senate Budget committees as well as congressional leaders stating their support for President Obama’s goal of offsetting the cost of a planned health care overhaul. But the Blue Dog leaders said they do not want the savings to be achieved too far in the future if new spending in the short term is going to exacerbate already high federal deficits.

“While we agree that reforming our health care system will eventually lead to savings, it would be irresponsible to take on additional large-scale deficit spending in the short term without the ability to definitively quantify future savings,” Blue Dog leaders wrote March 13 in a two-paragraph letter.

The Blue Dogs are major boosters of the congressional “pay as you go” budget rule that requires new mandatory spending or tax cuts to be fully offset with increases in revenue or spending cuts elsewhere.


The Blue Dog coalition in the House of Representatives has often assisted Republicans in preventing the advancement or even the introduction of progressive legislation that increases government spending. Supposedly their mission is merely to avoid deficit spending by enforcing “paygo” rules (all new spending is offset with other program cuts or with new revenues), but all too often they seem to not only support elimination of deficit spending, but also the policy of “no new taxes.” It appears that they are not only concerned about deficits, but they also seem to want to avoid an increase in the size of the federal budget.

Now Sen. Evan Bayh and fifteen of his colleagues have decided to establish a Blue Dog-type coalition in the Senate. In an obvious effort to wield more power from the middle, they “are joined by a shared commitment to pursue pragmatic, fiscally sustainable policies across a range of issues, such as… health care reform…” Ouch!

Although most observers of the Washington political scene believe that the make or break on comprehensive health care reform will occur in the Senate, there are enough Blue Dogs in the House to not be discounted as major players since they could side with the Republicans if new taxes are used to comply with paygo.

But look at what has happened in the Senate. The moderate Democrats are no longer passive observers (not that they ever really were). Now with their newfound power, the battle for cloture has shifted. Instead of Democrats simply requiring one or two Republican votes to invoke cloture, they must also meet the demands of these sixteen Senate Blue Dog look-alikes. The Republicans now not only have one vote to spare on preventing cloture, they also have a very large buffer in the Democratic Party to prevent comprehensive tax-and-spend health care reform.

There goes any adequate government option to the private plans – “because of adverse selection, we can’t pay for it.” There goes adequate subsidies for private plans for average-income Americans – “without new taxes, we can’t pay for it.” There goes adequate regulatory oversight for the private plans – “unless we have high deductibles and stripped down benefits, the people can’t pay for the plans.”

Single payer would provide the Blue Dogs with the reform they want, or should want. Health care budgets would be balanced without increasing spending over our current level. They just have to understand that funneling health care dollars through our tax system is more efficient than turning them over to private insurers. They need to look at all dollars going into health care, and not just the public dollars.

Real life medical debt bankruptcies

Posted by on Friday, Mar 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.

Bankruptcy filings soared in 2008

By Darrell Smith
The Sacramento Bee
March 17, 2009

Bankruptcy filings in Sacramento and the Central Valley continue to soar as weary residents seek relief from the grip of foreclosures and rising unemployment.

More than 31,000 personal and business bankruptcy petitions were filed in the Eastern District of the U.S. Bankruptcy Court in 2008, an increase of 79 percent over 2007’s filings, according to a report released by the federal court.

The caseload is such that callers to the U.S. Bankruptcy Court in Sacramento are greeted with a message that says clerical staff are too busy to speak with them.

“We have never experienced increases with the number of percent we’re seeing,” said Richard Heltzel, clerk at the U.S. Bankruptcy Court for the Eastern District of California, based in Sacramento.

“With unemployment comes the loss of health insurance – so many of our bankruptcies are triggered by uninsured health care costs,” Heltzel said. “I expect to see close to 40,000 cases this year.”


Landmark studies have confirmed beyond any doubt that medical debt is a significant contributor to personal bankruptcy. Yet the opponents of comprehensive reform continue to challenge the data. In the report of John Goodman and his colleagues discussed in yesterday’s message, they stated, “Well-designed economic studies have found no statistical link between bankruptcies and health problems.”

Richard Heltzel, clerk at the U.S. Bankruptcy Court for the Eastern District of California, is not a health policy wonk. His only qualification is that he sees the health care costs listed in the personal bankruptcy filings.

Medical debt is a very real problem, faced by very real people, and it really does contribute to personal bankruptcy. Fortunately, most in Washington seem to understand that now, even if they disagree on what we are going to do about it. We can tell them how this problem can be eliminated, but they are still rejecting our advice, preferring instead to ensure the solvency of the private insurance industry.

John Goodman hides the rest of the story

Posted by on Thursday, Mar 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.

The U.S. Health System: The Rest Of The Story

By John Goodman
Health Affairs Blog
March 19, 2009

Here is a paper (link below) with as many as 100 references that you almost never see cited in Health Affairs, or in the Journal of the American Medical Association (JAMA), or in the New England Journal of Medicine (at least not in their public policy articles). In fact, if you are a regular reader of these publications, I think you are going to be very surprised.

My colleagues Linda Gorman, Devon Herrick, Robert Sade and I discovered that public policy articles in the leading health journals (especially the health policy journals) tend to cite poorly done studies over and over again in support of two propositions: (1) Our health care system needs radical reform and (2) the reform needs to be modeled along the lines of the systems of other developed countries. At the same time, these articles tend to ignore contravening studies that are often published in economics journals and subject to much more rigorous peer review.

In our rest-of-the-story literature review, we focus on eight questions:

1. Does the United States spend too much on health care?

2. Are U.S. outcomes no better and in some respects worse than those of other nations?

3. Is the large number of uninsured in the U.S. a crisis?

4. Does lack of health insurance cause premature death?

5. Are medical bills causing bankruptcy?

6. Are administrative costs higher for private insurance than public insurance?

7. Are low-income families more disadvantaged in the U.S. system?

8. Can the free market work in health care?

John Goodman says that he wants us to hear the rest of the story, but then he doesn’t tell it to us.

He and his colleagues have pieced together a document using classic Goodman rhetorical deceptions. They pull out of the literature isolated items that support their position without identifying them as exceptions to the great body of information available in the health policy literature. They repeat the use of many studies that have been discredited as manipulations or distortions based on libertarian ideology, even though they are aware of the highly credible challenges to those reports. They use silly diversions to attack some of the most solid and important studies in the health policy literature. Patching these deceptions together creates magical conclusions that would seem to refute the most fundamental principles that can be gleaned from a couple of decades of solid health policy science research.

Using health policy reports retrieved from the refuse bin, they then end with the conclusion that we should adopt their favored proposal for reform, health savings accounts, a non sequitur to the specious arguments they have presented. Even though the policy community has dismissed HSAs as a serious response to the tragic dysfunction of our health care system and its financing mechanisms, the authors persist in abandoning their academic purity in pushing their cause.

“The Rest of the Story” might appeal to ideologues, but it is repulsive to those of us who are outraged by the the physical suffering and financial hardship faced by the millions of U.S. residents who are victims of a flawed financing system, unable to afford or receive the care that they need in a $2.5 trillion health care industry.


Paper on health care reform by John Goodman et al:

Tenet paid overtime hours by math, not money

Posted by on Wednesday, Mar 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.

O.C. hospital owner to pay $85M to settle OT dispute

By Courtney Perkes
The Orange County Register
March 11, 2009

Tenet Healthcare, the owner of three Orange County hospitals, has agreed to pay $85 million to settle claims that nurses and other 12-hour-shift employees were denied extra pay after a change in California law entitled them to overtime.

At the time the law changed, Tenet was the county’s largest hospital owner with 10 facilities. In settling, the Texas-based company admitted no wrongdoing, but spokesman David Matthews said the California pay practice has stopped.

The case centered on Tenet’s “California differential” pay scale, according to court documents. The suit alleged that to avoid overtime costs, Tenet lowered the hourly pay rate for employees when they worked more than eight hours a day. That meant that while technically earning overtime, their net wages remained the same as before.

According to the suit, Tenet used as many as five hourly pay rates depending on the length of the work shift.

“It’s not enough for an employer to demonstrate that it pays overtime on paper,” said Frank Coughlin, a Santa Ana attorney representing Pagaduan. “They have to pay overtime in money, not math.”


Although PNHP is most noted for its advocacy of a single payer national health program, we also oppose the perversities of for-profit health care corporations in which the primary responsibility of the board of directors is to their investors. Tenet Healthcare has provided us with innumerable examples of these perversities. A quick Google of the PNHP website, in a fraction of a second, produced these lines and many more:

“For-profit hospital chain Tenet, formerly National Medical Enterprises (NME), is the subject of four separate federal investigations…”

“Troubled Tenet Healthcare dominates the expensive list…”

“Overall Tenet’s hospitals averaged gross markups of 477% over costs…”

“Last week, the hospital’s owner, Tenet Healthcare, agreed to pay $54 million to the government to resolve accusations that Redding Medical doctors conducted unnecessary heart procedures and operations on hundreds of healthy patients…”

“Tenet, the second largest US hospital firm, paid more than half a billion dollars to settle…”

“Tenet’s CEO exercised stock options worth $111 million…”

“OrNda Healthcorp, a hospital chain recently acquired by Tenet, paid fines of $12.65 million to the government for kickbacks to physicians for referrals…”

And this was only the first page Googled, but you get the gist.

Regardless of the wisdom of the California requirement of paying 4 hours of overtime for a 12 hour shift, it is the law, and there are several options that Tenet had to comply with it. As a for-profit corporation, they chose a method that would protect their investors from higher labor costs, but a method that involved dishonest accounting.

The employees no longer knew what their hourly wages were because, for each paycheck, Tenet retroactively calculated the hourly wage base so that it would wipe out overtime payments, and that base wage would vary from paycheck to paycheck.

Would you feel secure in a Tenet hospital? What other ways are they cheating to improve their bottom line?

HR 676, the United States National Health Care Act or the Expanded and Improved Medicare for All Act introduced by Rep. John Conyers, would provide for comprehensive health insurance coverage for all United States residents, but that is not all. Recognizing the conflicted interests of for-profit corporations in health care, HR 676 also includes the provision that for-profit providers of care opting to participate shall be required to convert to not-for-profit status.

HR 676 was introduced only seven weeks ago, and already has 66 cosponsors, far more than any other health reform legislation. Yet the members of the House and Senate who are leading the reform process have refused to include it in the dialogue on reform, insisting that any reform include not only the perversities of the for-profit health care corporations, but also, even worse, the profound waste and injustices of a financing system patched together with private health plans.

(The remainder of this message has been deleted because it contained expletives, or would have had it been written.)

SCHIP – a lesson on demographic incrementalism

Posted by on Tuesday, Mar 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.

Beyond Incrementalism? SCHIP And The Politics Of Health Reform

by Jonathan B. Oberlander and Barbara Lyons
Health Affairs
March 17, 2009

Given the enormous political and fiscal barriers to adopting legislation that aims for universal or near-universal coverage, it could be tempting for Congress and the Obama administration to follow the expansion of children’s health insurance with further incremental measures. The political appeal of such a strategy is understandable: maximizing consensus on incremental policies while avoiding harder, more polarizing, and more expensive reforms is a time-tested strategy in U.S. health policy. Indeed, it is the exact political formula that produced SCHIP’s enactment in 1997. Advocates of incrementalism have long recognized that political constraints mean that the alternative to imperfect, limited reforms is, alas, often to do nothing. In that context, incrementalism looks quite appealing–a fallback position seemingly validated by the repeated failure of big-bang reform.

Yet there are real limits to incremental health reform. After all, despite gains in Medicaid and SCHIP, almost nine million children remain uninsured. The insurance system for children, notwithstanding their sympathetic status, is beset by the same problems that plague the rest of the U.S. health care system: fragmentation, inequality, and alarming coverage gaps. It is a sobering reminder of just how far the country has to go in health reform that we have not been able to secure universal coverage even for children.

There are also limits to a health reform strategy premised on demographic incrementalism that insures Americans group by group. Unlike children or the elderly, most uninsured Americans do not fit into sympathetic population subgroups that can be neatly matched to public programs. The SCHIP formula can only take us so far, since “all the ‘good’ (that is, politically attractive) populations are taken.” To make significant progress toward covering all Americans, we will have to adopt insurance expansions that don’t simply target politically attractive populations.

If the past decade has proved anything in American health policy, it is that incrementalism is not enough. A decade of incrementalism and inaction has left us with higher costs and rising numbers of uninsured Americans; absent decisive action, those trends will only worsen in coming years. It is encouraging, then, that both the Obama administration and key players in Congress are now pursuing bolder reforms. Perhaps we are entering a new era where U.S. health policy will finally move beyond incrementalism.


Incrementalism: the crossroads of policy and politics.

When each attempt at comprehensive reform fails, the usual response is for everyone to walk away. A few come back to try to retrieve whatever little bit that seems to be politically feasible.

The path of incrementalism has failed to slow the increase in costs and has resulted in increases in the numbers of uninsured and now greater increases in the underinsured. Lauding the mini-successes rings hollow when the health care system continues to have “fragmentation, inequality, and alarming coverage gaps.” By any reasonable standard, incrementalism has been a miserable policy failure.

The incrementalists tell us that the Children’s Health Insurance Program (CHIP) shows us that incrementalism can be a very successful approach to reform. There is no question that this program has been beneficial at least for those children covered. The primary detriment is that it reduced the political pressure for more comprehensive reform.

As the authors point out, children are perhaps the most attractive group for demographic incrementalism. It passes the test of politics, but fails on policy. The CHIP program that “covers all children” has left 9 million children without coverage, perpetuating “fragmentation, inequality, and alarming coverage gaps” for children! The very best incremental program that we have enacted in the past four decades has fallen far short of our goals for reform because beneficial policies were traded away in the politics of reform.

We are now at a rare moment in time when the politics seem aligned so that we can set aside incremental approaches for the time being and seriously consider comprehensive reform. The difficulty is that those leading the reform process are already abandoning important beneficial policies in what they believe will be a successful strategy to keep the politics aligned.

Let’s look at one important example. In their article, Oberlander and Lyons describe the fight over “crowd out,” the concept that, as you raise the qualifying income level for a government children’s insurance program, you increase the number of children that will move from private health plans to the public program that provides a better value. The qualifying income level is very problematic because it is middle-income families that have incomes too high to qualify for the program yet too low to readily afford private insurance. Although the opposition to crowd out could be perceived as an attempt to protect the private insurance industry, the policy principle is much more fundamental.

As the authors explain, “The SCHIP debate revolved around the same boundary issues that will determine the fate of comprehensive reform in 2009 and beyond: the balance between public and private insurance, who should be eligible for government subsidies and at what income level, whether health care is an individual responsibility or social good. Those issues are far from resolved.”

So… the intersection of policy and politics. Those who are leading the reform process and who should believe that health care is a social good are supporting policies that will leave the private insurers in charge, invoking the politics of appeasement to satisfy those who believe that health care is an individual responsibility.

If we are going to achieve our goals of affordable, high quality health care for everyone, it is absolutely imperative that we adopt policies that advance health care as a social good. Policies that shift the responsibility to the individual will further increase our problems with fragmentation, inequality, and alarming coverage gaps.

Whether following a path of incrementalism or the enactment of comprehensive reform, this political divide will never go away. Appeasement politics will always be ruinous for the social good of health care.

The bottom line: The politics must support the policies of health care as a social good, with no compromise. The battle must continue until it is successfully executed. Perceptions of defeat are only perceptions. That is not the time to walk away and eventually crawl back on the ragged path of incrementalism. We must continue the charge, no matter the battle scars, until we achieve health care justice for all. Our finances, our health, and our lives depend on it.

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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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