Medical causes of home mortgage foreclosures

Posted by on Monday, Oct 6, 2008

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.

Get Sick, Get Out: The Medical Causes of Home Mortgage Foreclosures

By Christopher Tarver Robertson, Richard Egelhof, & Michael Hoke
Health Matrix
Vol. 18:65 2008

In recent years, there has been national alarm about the rising rate of home foreclosures, which now strike one in every 92 households in America, and which contribute to even broader macroeconomic effects.

These factors — loose lending, irresponsible borrowers, a flat real estate market, and rising interest rates — have together become the “standard account” of home foreclosure.

Policymakers and scholars may be surprised to learn that even in the midst of this spike, one of the largest causes of home foreclosures was none of the above. We studied homeowners going through foreclosure in four states and found that medical crises contribute to half of all home foreclosure filings. If these patterns hold nationwide, medical causes may put as many as 1.5 million Americans in jeopardy of losing their homes each year.

Half of all respondents (49%) indicated that their foreclosure was caused in part by a medical problem, including illness or injuries (32%), unmanageable medical bills (23%), lost work due to a medical problem (27%), or caring for sick family members (14%). We also examined objective indicia of medical disruptions in the previous two years, including those respondents paying more than $2,000 of medical bills out of pocket (37%), those losing two or more weeks of work because of injury or illness (30%), those currently disabled and unable to work (8%), and those who used their home equity to pay medical bills (13%). Altogether, we found that about 7 in 10 of our respondents either self-reported a medical cause of foreclosure, or experienced one of these indicia of medical disruptions in the years before foreclosure.

Altogether, these findings suggest that the standard account of mortgage foreclosure is missing a large portion of the story. Mortgage foreclosures are not just the results of bad loans, bad properties, or bad borrowers. Instead, many mortgage foreclosures are the result of unpredictable medical disruptions that impact both the incomes and the expenses of family finances.

The authors of this study indicate that the results are only preliminary, primarily due to limitations in methodology. Although we cannot quantify precisely the extent of the problem, the qualitative conclusion is certainly valid. Just as with personal bankruptcy, medical debt in both insured and uninsured individuals contributes to loss of homes through mortgage foreclosures.

This past month has demonstrated to all of us the importance, for our entire economy, of establishing policies that would ensure that default of home mortgages would be a relatively rare event. Eliminating medical debt certainly would not prevent all home loan defaults, but it would prevent a great many of them, even if we cannot yet precisely quantify how many.

Simply changing to a more efficient, single payer national health program would be one of the least expensive measures that we could undertake to help reduce home mortgage foreclosures.

Almost everyone would like to see measures that would reduce the negative impact of our financial crisis that was precipitated by mortgage-bcked securities. Some of us also would like to see that everyone has affordable access to health care, even if it is only an additional benefit of a financial rescue package.

The V.P. debate and the agenda for health reform

Posted by on Friday, Oct 3, 2008

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 Vice-Presidential Debate

October 2, 2008

Sarah Palin: (in her closing statement) It was Ronald Reagan who said that freedom is always just one generation away from extinction. We don’t pass it to our children in the bloodstream; we have to fight for it and protect it, and then hand it to them so that they shall do the same, or we’re going to find ourselves SPENDING OUR SUNSET YEARS TELLING OUR CHILDREN AND OUR CHILDREN’S CHILDREN ABOUT A TIME IN AMERICA, BACK IN THE DAY, WHEN MEN AND WOMEN WERE FREE.

Video and transcript:


Ronald Reagan Speaks Out Against Socialized Medicine LP recording, 1961, Woman’s Auxiliary of the AMA

Ronald Reagan: Write those letters now. Call your friends, and tell them to write them. If you don’t, this program (King-Anderson version of Medicare) I promise you will pass just as surely as the sun will come up tomorrow. And behind it will come other federal programs that will invade every area of freedom as we have known it in this country, until, one day, as Norman Thomas said, we will awake to find that we have socialism. And if you don’t do this, and if I don’t do it, one of these days, you and I are going to SPEND OUR SUNSET YEARS TELLING OUR CHILDREN, AND OUR CHILDREN’S CHILDREN, WHAT IT WAS ONCE LIKE IN AMERICA WHEN MEN WERE FREE.

WHAM campaign (Women Help American Medicine):

mp3 audio of “Ronald Reagan Speaks Out Against Socialized Medicine”

If you really care about the future of our health care system, you should give some thought to the motivation of the McCain/Palin camp in selecting this closing statement for her debate.

Obama and Biden support a greater government role in ensuring that more individuals have affordable health care and health care coverage. McCain and Palin support freedom and individual responsibility in accessing health care and health care coverage. If you need health care, well designed public policies can work for all of us, but private policies can work only for those with the financial means to obtain adequate coverage.

For her closing statement, the McCain/Palin advisors selected the most notorious attack on a government role in health care, deceptively cloaked in the rhetoric of freedom. That should tell you something.

Commonwealth Fund on candidates' proposals

Posted by on Thursday, Oct 2, 2008

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 2008 Presidential Candidates’ Health Reform Proposals: Choices for America

By Sara R. Collins, Jennifer L. Nicholson, Sheila D. Rustgi, and Karen Davis
The Commonwealth Fund
October 2008

The presidential candidates’ health care reform proposals offer fundamentally different visions of the future of health insurance in the United States. Both candidates propose reforms in which the health system would continue to be structured around private insurance markets, with a supporting role played by public insurance programs. But their plans diverge significantly on the way a reformed system should operate.

McCain would change the tax code to encourage people to buy coverage through the individual insurance market and effectively loosen state rules governing the sale of insurance by allowing people to buy policies across state lines. Obama would encourage the continuing participation of employers in the health insurance system, expand eligibility for Medicaid and the State Children’s Health Insurance Program (SCHIP), and create a new insurance market “exchange” — with consumer protections, choice of public and private health plans, and income-based premium subsidies — that would largely replace the individual market.

According to one estimate… in 10 years McCain’s proposal would reduce the number of people who are uninsured by 2 million out of a projected 67 million. Obama’s plan would reduce the number of uninsured people by 34 million in 10 years.

Executive Summary:

Full Report:

So these are the “choices for America.” We currently have 46 million people who are uninsured. After ten years of McCain’s plan, we would have 65 million uninsured, but ten years of Obama’s plan would leave only 33 million people without insurance. Only 33 million!?

The phrase, “both candidates propose reforms in which the health system would continue to be structured around private insurance markets,” should set off deafening alarm bells and sirens. Schemes designed around U.S.-style private insurance markets can never achieve our goal of affordable health care for everyone.

Some say that we could do it if we required everyone to participate through individual and employer mandates. With an average family policy now priced at $12,600, not including deductibles and copayments, it is unrealistic to require individuals and small businesses to purchase coverage and health care with money that they do not have. Even Sen. McCain understands that the government is going to have to ante up, but that alone is still not enough since his proposal would leave 65 million uninsured.

With a national health expenditure of $2.4 trillion, we already have enough to fund a universal risk pool that would pay for all necessary services for absolutely everyone, but only if we were to do it through a single payer national health program. If we were to attempt it using private plans that were truly effective in preventing financial hardship, and that had government subsidies that would make the premiums affordable, the inefficiencies would add close to half a trillion dollars to our national health care bill, and too many individuals would still fall through the cracks.

So what about choices for America? Which candidate? Or which health reform proposal?

In a September 30 interview with the Des Moines Register editorial board, Sen. McCain provides us with some insight to these choices: “I’ve always been a free enterprise person who thinks that families make the best choices for themselves and their future. That’s a dramatically different philosophy than my Democrat friends, in my view, who think that government is the answer. Sen. Obama wants to create a huge health care bureaucracy for America.”

Sen. Obama has said that, if starting from scratch, we would create a single payer system. That’s the health reform proposal that Americans should choose if we’re really serious about including absolutely everyone in an affordable program. And which candidate do you think would approve this message?

Video of Sen. McCain’s Des Moines Register interview:

Gov. Schwarzenegger again vetoes single payer bill

Posted by on Wednesday, Oct 1, 2008

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.

Schwarzenegger vetoes universal health care

By Aurelio Rojas
The Sacramento Bee
September 30, 2008

For the second time in three years, Gov. Arnold Schwarzenegger on Tuesday vetoed legislation that would have established a government-run universal health care system.

Senate Bill 840 by Sen. Sheila Kuehl, D-Santa Monica, would have set up a single-payer system in which the state would assume the role that private insurance companies now play.



By Anthony Wright
Health Access Weblog
October 1, 2008

Some of the bills vetoed:

SB 840 (Kuehl) SINGLE PAYER: Would establish a process to create a single-payer health care system in California that would enable all residents to have health coverage.

SB 973 (Simitian) PUBLIC INSURER: Would create a statewide public insurer, connecting existing regional, county-based health care plans, to compete with private health care plans and provide consumers more affordable coverage choices.

SB 1440 (Kuehl) CAPPING ADMINISTRATION AND PROFIT: Would set a minimum medical loss ratio — requiring every insurer to spend at least 85 percent of premiums on patient care.

AB 2 (Dymally) HIGH-RISK POOL: Would have reformed the Managed Risk Medical Insurance Program (MRMIP), which provides coverage for “un-insureables” who have “pre-existing conditions.” Efforts would make the high risk pool more affordable and available and eliminate the annual $75,000 cap on benefits.

AB 1945 (De La Torre) INDEPENDENT REVIEW: Would establish an independent review process if an insurer wants to rescind coverage, and raises the standard in existing law so that coverage can only be rescinded if a consumer willfully misrepresents his health history.

AB 1887 (Beall) MENTAL HEALTH PARITY: Would require health plans to provide coverage for all diagnosable mental illnesses.

AB 1962 (De La Torre) MATERNITY COVERAGE: Would require all individual insurance policies to cover maternity services.

This was Gov. Schwarzenegger’s year for comprehensive healthcare reform in California. By the end of this year all Californians were going to have affordable health care.

He previously vetoed Sen. Kuehl’s single payer legislation, dismissing it as socialized medicine. He then embarked on a “post partisan” process of bringing all stakeholders together to create a comprehensive model of reform with “shared responsibility.” The extensive negotiations resulted in a legislative product that neither the Republicans not the Democrats could support, and it died in committee.

Many legislators then wanted to separate out some of the beneficial features of the package and introduce them as individual bills. Gov. Schwarzenegger had said that the delicate compromises necessitated by the political process required that the legislators accept either the entire package or none of it. He stated that he would veto individual measures because they served some interests and not others. He has proven that, in this matter at least, he is a man of his word.

He was given a second opportunity to approve a plan that would accomplish his stated goal: affordable health care for everyone. He once again vetoed Sheila Kuehl’s single payer bill, placing his personal ideology above the health of the people.

He did sign a bill requiring restaurant chains to post the number of calories of food items on their menus. Not much for the Year of Health Reform.

Fraser: Canadian patients worse off than uninsured Americans

Posted by on Tuesday, Sep 30, 2008

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 Hidden Costs of Single Payer Health Insurance

A Comparison of the United States and Canada

by Brett Skinner, Mark Rovere, and Marisha Warrington
Fraser Institute
September 2008

In practical terms, Canadian patients are unable to buy quicker access or better care than what the government health insurance program provides. In this sense, Canadian patients on waiting lists are worse off than uninsured Americans who may legally use their own money or credit to buy health care if they lack insurance coverage.

The Canadian single-payer system is an example of what not to do in health care. The fact is that single-payer systems are probably the worst way to achieve universal health insurance coverage. If Canada is currently witnessing the failure of its own single-payer health insurance system, why would Americans want to adopt such a system for themselves?

Nevertheless, the problem of the uninsured needs to be solved before a “tipping point” is reached and Americans have a Canadian-style health policy disaster foisted upon them by single-payer advocates who are not fully disclosing all the facts about health care in Canada.

The evidence indicates that the best approach to achieving universal health insurance coverage is to make people prioritize their own income toward the purchase of their own health insurance, not to make some taxpayers buy health insurance for everyone through a redistributive, government health insurance monopoly.

This report will be used by the opponents of single payer health reform in the United States. You should be aware of it so that you can dismiss it as a resource lacking credibility.

The Fraser Institute supports “a free and prosperous world through choice, markets and responsibility.” The quote from their report leaves no doubt as to their ideological preferences for relying on individual responsibility, and rejecting government health insurance.

This report itself is typical of the Fraser Institute in that it presents a very dishonest case in support of their ideology (while accusing U.S. single payer advocates of not fully disclosing all the facts about health care in Canada, a blatantly untrue assertion). Although the report is rife with distortions and untruths, only one example will be discussed here since the compromise in methodology is representative of the others.

The U.S. Census Bureau reported that the uninsured rate of the U.S. population was 15.8 percent in 2006. The Fraser Institute adjusted the number down to 7.9 percent by excluding those who could have been insured, even though they weren’t. (Those who were uninsured for part of the year were also excluded from the Census Bureau numbers; thus the numbers, just as easily, could have been adjusted upwards to represent the total uninsured for all or part of the year.)

Although 100 percent of Canadians are insured, they classified 6.0 percent as “effectively uninsured” because they were unable to establish a relationship with a primary care physician (a problem that we also have in the United States, though no adjustment was made for that).

Thus they conclude, “Based on these figures, the estimated percentage of the population that was ‘effectively’ uninsured for non-emergency, necessary medical services at any given time during 2007 was roughly the same in both countries: 7.9% in the United States, versus 6.0% in Canada.”

Zero percent uninsured in Canada is the same “effectively uninsured” rate as 15.8 percent uninsured in the United States!? In full self-confidence, you can tell the single payer opponents that they can take their Fraser report and… (censored).

Additional comment from a reader: I believe the important thing to keep your eye on in this discussion is OUTCOMES. At the end of the day, this is the measure of whether our system is succeeding or failing. As we found in our research for the American Human Development Report, with $3,326 per person per year, Canada is buying an average of 2.5 additional years of life for their citizens, as compared with our annual expenditure per person of $6,401 on healthcare– nearly double! Canadian life expectancy at birth is 80.4 years, ours is 77.9. Again, looking at other important measures of bang for the buck, Canada has lower infant and child mortality rates than the U.S., far lower rates of low birth weight babies and more. A focus on outcomes seems to be me to be the way to cut through the ideologically-charged discussion of “nanny government” and socialized medicine. I’m attaching a nice editorial board piece that just came out in the Seattle Post-Intelligencer using this argument:

Thx for excellent work following the news and research on this critical issue,

Sarah Burd-Sharps, Co-Director
American Human Development Project

Germany's lessons for H. Aaron and his cautious approach

Posted by on Monday, Sep 29, 2008

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.

Healthy Choice

By Henry Aaron
The New Republic
September 29, 2008

A lot of Democrats want universal health care to be the next president’s top priority. But it shouldn’t be.

The ‘Big Bang’ Approach to Health Reform is the Wrong Strategy.

Congress is unlikely to change how the entire U.S. health care industry operates with one bill. And if it did so, it would probably make a hash of the job. Differences among the states in the cost and style of delivery of health care approximate those of the European Union. More importantly, apart from periods after major wars or depression, democracies typically make large social and economic changes gradually, through laws enacted successively over many years.

So, rather than ‘betting the administration’ on one shot, the sensible strategy would be to enunciate a broad vision for reform and propose practical steps to move in the envisioned direction. Get them through Congress, see what works and what doesn’t, and then move forward again.


Health Care Financing Reforms in Germany: The Case for Rethinking the Evolutionary Approach to Reforms

By Percivil M. Carrera, Karen K. Siemens and John Bridges
Journal of Health Politics, Policy and Law
October 2008

Abstract (excerpt)

In this article, we document twelve significant attempts to reform health care financing in Germany and critically appraise them according to the principles of solidarity and subsidiarity on which SHI (social health insurance) systems were built. While the reforms in the aggregate offered the prospect of addressing the challenges faced by the system, the modest results of the reforms and remaining deficiencies of the system underscore the limitations of the evolutionary approach to reforms. This suggests that reformers should consider a more revolutionary approach.

Concluding Remarks (excerpt)

An appraisal of health care financing reforms in Germany since reunification offers three lessons. First, while evolutionary reforms may be more politically feasible than radical reforms, evolutionary reforms are inadequate in addressing the issue of the sustainability of health care financing. Second, the impact of evolutionary reforms can be substantial when they extend and build on and not contradict or undermine previous measures. Finally, the biggest challenge to health care financing reform is the aversion to take the revolutionary route.

The logic of Henry Aaron and other incrementalists seems to be as follows: Comprehensive reform of health care financing is not feasible because, if it were, we would have it by now; therefore we should abandon any thoughts of a single comprehensive reform package and move forward with tinkering around with various steps to see “what works and what doesn’t.” Of course, the discontinuity of this framing belies the alleged logic.

Aaron suggests that history shows us that only “major wars or depression” motivate democracies to make “large social and economic changes.” Is our current war too small, with too few U.S. casualties? Is our current recession too shallow, with too few unemployed and bankrupt? Is the home foreclosure rate too low, and the meltdown of the financial services industries too limited? Perhaps, perhaps.

If these don’t concern us enough, then what about the sputtering of the engine of the great American Dream? You know, that Dream that everyone could have a home, educational opportunities, healthy food, transportation, retirement security, and… health care. That engine has been redesigned to produce wealth transfer – a transfer of wealth from the masses who have increased our nation’s productivity, to the few who commandeered the machinery of Wall Street. Isn’t the sunsetting of the American Dream a crisis of proportions that finally would make us demand action?

If we are going to make our economy work for everyone, we are going to have to have to take “the revolutionary route” to health care financing reform. If we don’t fix our health care financing system, we will continue to see further erosion of the other elements of the American dream.

We do know how to do it, but first we are going to have to send Henry Aaron and his ilk off to their policy laboratories to tinker with their evolutionary reforms that never get us there. We can’t allow them to stand in our way any longer.

We need to throw out the current health care financing system and replace it with a system that would pay for all necessary health care services for everyone: a single payer national health program.

As Katrina vanden Heuvel and Eric Schlosser stated in today’s Wall Street Journal, “A universal health care system would help American families, while cutting the nation’s long-term health care costs… A new New Deal… would simply ensure that federal spending is driven by the needs of every American. Anything less than this — any proposal that rewards those who created the problem and penalizes those who can least afford it — is a raw deal.”

America Needs A New New Deal

When September Ends

Posted by on Saturday, Sep 27, 2008

Ten years ago this month I was new doctor, an intern doing primary care. It was a joy that fall to begin at an outstanding clinic in a rural village where I would learn to see both adults and children over the next 3 years.

My first week at the clinic an elderly patient, a farmer, presented to me with several days of a productive cough, perhaps a fever, some increased work of breathing. A smoker, he’d had to quit for a few days due to his illness. He had no contacts with ill people or with children (who might be likely to share their viruses.)

On exam he looked ill and had wet rales in one lung lobe. I thought he had pneumonia, and listening to his symptoms I had become worried that he might need to be in the hospital.

We checked his vitals including pulse oximetry, asked him for a sputum sample for culture, did phlebotomy for a blood count and electrolytes. Then we sent him up the hill to the community hospital for a chest x-ray and asked him to return with the x-ray so we could look at it.

It was an amazing experience to begin to find confidence as a physician, to be able to listen to the patient, perform a physical exam, then obtain additional data, and then bring it all together to share it — to make a deliberate and informed decision together with a patient about the diagnosis, prognosis and treatment.

As it turned out, the patient’s tests were mostly reassuring. He had acute bronchitis. It could be viral. More likely, I thought, he could brewing a bacterial pneumonia. After we looked at the x-ray together and discussed what worsening symptoms to watch for, I wrote a prescription for the drug I thought most likely to help his body expel the infection. I asked to see him again in a week or so, sooner if necessary.

Medical school and my first two intern months had taught me about community-acquired pneumonia and the local patterns of infection. To share this knowledge was liberating — we knew not only which organisms would be likely to be cause the patient’s illness but also which antibiotic might best treat the potential culprit.

The patient returned the next week to say he was feeling much better. “That antibiotic worked great.” He then gently explained to me that he could not afford the drug I had chosen. It had cost more than his usual spending money for an entire month. It had cut into his budget for food and gasoline and electricity.

With some anguish I discussed this with my preceptors. How do we learn how much each drug costs? Which antibiotics are both affordable and appropriate for the diagnosis? How do we know how the patient will pay for their care? Isn’t it immoral to ask? Why does medical education stress state of the art science if the ability to pay trumps our ability to practice the same medicine?

Thus I learned about the bottom line — the bottom line of the chart sticker. It had a code that one could easily decipher. It told who was paying the bill — which insurance company, or HMO, or Medicare, or Medicaid, or “self-pay” — uninsured. Soon I found myself checking that bottom line for every patient — and when I feared money would be a problem, I learned to raise the issue tactfully, respectfully.

My teachers soon taught me a few tricks. For example many medications cost roughly the same amount per pill even though there might be several strengths to choose from. If a pill could be cut in half we might prescribe a double dose and instruct the patient to take half a pill instead of a whole. By cutting the pill in half, patients could cut the cost in half too.

Eventually I knew the actual costs of all kinds of tests and medications and could quote them. I also knew what the local insurers were likely to cover — and not cover. I kept a short list of generic drugs, each class listed by price, in my desk drawer. And I learned that patients without health insurance often go without tests and treatments and specialists and even emergency care because of out-of-pocket costs.

None of us went to medical school to ask our patients to choose between an antibiotic and the electric bill. But when I look back over ten years the appalling and insidious intrusion of the questions — “who will pay?” and “what is the cost?” — simply and horribly accelerates, no matter how necessary the care, no matter how routine the test, no matter how clear the choice of treatment.

The Medical Society of the State of New York (MSSNY) recently reported that 93% of my New York colleagues complain that they have had to change their choice of prescription medications because of insurance carrier restrictions. 92% of New York physicians agree with the statement: “Insurance company financial incentives or disincentives to physicians regarding treatment protocols may not be in the best interest of their patients.” And 87% say that insurance companies pressure them “to prescribe a course of treatment based on cost rather than on what may be best for the patient.”

The big picture of the costs of health care — $2.4 trillion, 16.6% of GDP for the nation in 2008 — rightly receives much attention. But the relentless intrusion of costs into the doctor-patient relationship endangers nearly every interaction — a cruel fact which too many of us, patients and caregivers alike, are painfully, personally aware.

The MSSNY poll also showed that 95% of New York physicians believe that “Decisions on what medications are right for a patient should be made by the patient’s own doctor and not by the health plan or the insurance carrier.” (And small wonder that PNHP has so many new members here in New York.)

A single-payer program would provide a socially responsible way to cover the costs of all necessary medical care. It is the first step toward a more humane physician-patient relationship. By standing up for single-payer we will restore not only our profession, but our humanity.

FEHBP basic premium up 13 percent

Posted by on Friday, Sep 26, 2008

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 Insurance Costs to Spike an Average 8 Percent

By Joe Davidson
The Washington Post
September 26, 2008

Health insurance premiums for federal employees will jump almost 8 percent… the Office of Personnel Management announced yesterday.

Premiums for most workers, however, will climb even more next year — about 13 percent — which is the increase for enrollees in the Blue Cross and Blue Shield plans. Sixty percent of federal workers are enrolled in one of the Blue Cross and Blue Shield plans.

Colleen M. Kelley, president of the National Treasury Employees Union, was not impressed. “It is very discouraging to see average increases of this magnitude,” she said, “particularly given the bargaining power OPM should be able to exercise as manager of the nation’s largest group health plan.”

So you want the health insurance program that the members of Congress have? This is it: the Federal Employees Health Benefits Program (FEHBP). This is the plan that several politicians have supported as an option to purchase in place of your current coverage, if you should no longer want to keep that.

Prior studies have questioned whether FEHBP is an appropriate option for moderate income individuals. The employees’ portion of the premiums plus the out-of-pocket cost sharing is not affordable for them should they have significant health care needs. In fact 100,000 federal employees eligible for FEHBP are not covered by the program, many because they cannot afford their portion of the premiums.

The politicians frequently discuss guaranteeing basic coverage, “without the bells and whistles,” and refer to the FEHBP Blue Cross/Blue Shield plans as a model. The premiums for this basic coverage will increase 13 percent for 2009. 13 percent!

The Office of Personnel Management, the largest purchaser of health benefits in the nation, has been ineffective in containing runaway costs in the FEHBP program. We desperately need a new model of health care financing. It is time to seriously consider adopting a single payer monopsony. Then everyone could have affordable health care.

NAFTA-based suit threatens Canada's medicare

Posted by on Thursday, Sep 25, 2008

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.

Suit seeks to open Canadian health care to privatizers

By Frances Russell
Winnipeg Free Press
September 24, 2008

Canada’s growing flirtation with private for-profit health care has led to the first legal assault on Canadian medicare under the investor-state clause of the North American Free Trade Agreement.

Alone among the world’s trade treaties, NAFTA allows foreign investors to sue the Canadian government directly if any public policy or governmental action denies them investment or profit opportunities.

Now, a group of 200 private investors led by Arizona businessman Melvin J. Howard is planning to use the NAFTA national treatment mechanism to pry open Canadian medicare — often described by neoconservatives as “the last great uncracked oyster in the North American marketplace.”

Howard and his partners want to open a private surgical centre in B.C. similar to the Cambie Clinic owned by Dr. Brian Day, past-president of the Canadian Medical Association, but are facing what they call anti-American roadblocks in several municipalities.

The use of NAFTA’s Chapter 11 to put medicare out of business — more accurately, to make it a for-profit, private, and likely American, business — has long been feared by medicare’s supporters. They have never believed government assurances that NAFTA grandfathered medicare beyond the reach of foreign insurance companies and health maintenance organizations (HMOs) seeking to replace it with U.S. private for-profit medicine.

It’s significant to note that NAFTA’s Chapter 11 effectively gives foreign investors greater rights than Canadian investors, because Canadians are restricted in their ability to sue their own government.

(Mike McBane, co-ordinator of the pro-medicare National Health Coalition) says privatizers and foreign investors are emboldened by what he calls a “perfect storm:” a federal government that believes in provincial autonomy, not national standards; the 2005 Supreme Court Chaoulli decision that private medical services do not abridge medicare and are a fundamental human right; and the CMA’s new support for two-tier medicine.

He cites a speech Prime Minister Stephen Harper gave in 2001 when he was president of the National Citizens Coalition in which he stated: “(W)hat we clearly need is experimentation — with market reforms and private delivery options within the public system. And it is only logical that, in a federal state where the provinces operate the public health care systems and regulate private services, that experimentation should occur at the provincial level.”

Continues McBane: “The dangerous thing is, you establish a private clinic and then it gets sold… We know why foreign investment wants it because they see public health care budgets as a cash cow.”

Canadians, who much prefer their public medicare system to the U.S. private-market version of health care, have long feared that NAFTA would open up their health care system to an invasion of U.S.-style, investor-owned, market-based insurers and providers. The U.S. experience has proven that these entrepreneurs can cause health care costs to skyrocket, while greatly impairing equitable coverage and access.

The door has been opened; the “oyster has been cracked.” The U.S. entrepreneurial invaders have invoked NAFTA to force the introduction of expensive, corporate, for-profit, upper-tier health care to serve Canada’s more affluent citizens. Once in place, the public medicare program will see a gradual decline in funding because of the lack of a strong political voice (moneyed voice) representing lower-income individuals.

Chronic underfunding of Canada’s medicare will convert it into a bottom-tier, U.S.-style Medicaid program with impaired access since providers will bail out of the public sector and move into the lucrative, upper-tier private sector. (Just as with Medicaid, some dedicated physicians will remain in the public sector simply because it is the right thing to do, but they will have to work with much more limited resources.)

Tommy Douglas, the father of Canadian medicare, was selected by the people as “The Greatest Canadian.” The people must now consider what Tommy Douglas would have had to say about investor-owned health care. Perhaps it’s time for the citizens of Canada to demand that their political leadership revisit NAFTA.

The increasing burden of medical debt

Posted by on Wednesday, Sep 24, 2008

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.

Trade-Offs Getting Tougher: Problems Paying Medical Bills Increase for U.S. Families, 2003-2007

By Peter J. Cunningham
Center for Studying Health System Change
September 2008

About 57 million Americans were in families with problems paying medical bills in 2007–an increase of 14 million people since 2003, according to a new national study by the Center for Studying Health System Change (HSC). Problems paying medical bills increased for both nonelderly insured and uninsured people. Although the rate of medical bill problems is much higher for uninsured people, most people with medical bill problems–42.5 million–had insurance coverage. About 2.2 million people with medical bill problems were in families that filed for bankruptcy as a result of their medical bills, and a much larger number reported other financial consequences, such as problems paying for other necessities and having to borrow money. The increase in medical bill problems–especially among insured people–is the main reason why more people reported unmet medical needs because of cost in 2007 than in 2003.


Health Benefits In 2008: Premiums Moderately Higher, While Enrollment In Consumer-Directed Plans Rises In Small Firms

By Gary Claxton, Jon R. Gabel, et al
Health Affairs
September 24, 2008

Average annual premiums in 2008 are $4,704 for single coverage and $12,680 for family coverage. These amounts are about 5 percent higher than premiums were last year. Enrollment in high-deductible health plans with a savings option increased to 8 percent of covered workers, up from 5 percent in 2007. Deductibles in preferred provider organizations, the plan type with the largest enrollment, increased from 2007 levels.


Studies Show Strain of Medical Bills

By Reed Abelson
The New York Times
September 24, 2008

Even as Washington and Wall Street debate the best way to avert an economic meltdown, increasing numbers of Americans are struggling with another financial crisis: the growing burden of unpaid medical bills.

Two studies released Wednesday morning provide further evidence of the toll health care is increasingly placing on working families, even for those who have health insurance. And as employees are paying more medical expenses out of their own pockets, they are having a harder time coming up with the money.

While policy analysts acknowledge that finding any new money to expand coverage may prove difficult, some also say the terms of the debate may be changing as policy makers and the public rethink their positions on the need for regulation and the role of the government in industry — including the health care system.

“We can now imagine a government takeover that we could not imagine before,” (said Len Nichols, a health economist at the New America Foundation).

The bad (but not unexpected) news is that there is no relief from the unrelenting increases in health care costs for individuals and their families. But there is one number that should alarm all of us: 42.5 million people WITH INSURANCE COVERAGE have medical bill problems in spite of their coverage.

Whereas most advocacy efforts for reform have been directed towards expanding health care coverage to include more individuals, the proposals have included compromises designed to make health insurance more affordable. These compromises, involving fewer benefits and greater cost sharing, have made health care LESS affordable. Just ask those 42.5 million insured individuals who have medical bill problems.

It is time for us to get past the process of trying to bring everyone under the private insurance umbrella that leaks like a sieve. We need to adopt a financing system that is effective in preventing individuals with health care needs from having to face the additional burden of medical debt.

The private insurance industry covers primarily the relatively healthy: the healthy workforce, their healthy families, and the healthy sector of the individual insurance market. But some of these healthy individuals do develop significant medical problems, and for tens of millions of them, the private plans have not prevented medical debt. Shouldn’t that be the purpose of health insurance?

A government takeover of health care financing could provide us with the coverage that actually would work: a single payer system that would enable each of us to access the health care that we need, without exposing us to the additional burden of medical debt. If the government can serve as responsible stewards of our mortgage markets, surely they can become responsible stewards of our health care financing.

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