The Swiss and Dutch Health Insurance Systems: Universal Coverage and Regulated Competitive Insurance Markets

By Robert E. Leu, Frans F. H. Rutten, Werner Brouwer, Pius Matter, and Christian Rütschi
The Commonwealth Fund
January 2009

Universal coverage attained through a mandate that every individual purchase a basic insurance plan

Building on a previous system of social and private insurance, the individual mandate in the Netherlands took effect in 2006. The Swiss have operated with a mandate since 1996. In both countries uninsured rates are low (estimated at about 1.5 percent of the population in the Netherlands and below 1 percent in Switzerland).

Enforcement of mandatory health insurance

Switzerland

On the other hand, some people who are nominally covered are not paying their premiums. Since 2005, insurers have been permitted to suspend payments on behalf of such people, meaning that providers are left with unpaid bills or consumers are denied services. These suspensions can last 8 to 24 months, because of the time it can take to ascertain whether a consumer is unable to pay the premium (in which case cantons or communities will often assume financial responsibility) or is simply unwilling to pay. About 120,000 people, or 1.6 percent of the population, were affected by suspensions in 2006.

Netherlands

Before the new Health Insurance Act, there was a fear that, despite the mandate, many individuals would opt not to obtain coverage. In fact, the number of uninsured at the end of 2006 was about the same as before the new mandate took effect — 241,000 people, or 1.5 percent of the population.

Almost an equal number of people — 240,000 as of the end of 2007 — were enrolled with an insurer but were not paying their premiums. Beginning July 1, 2007, insurers were allowed to expel enrollees who have not paid premiums, but these enrollees simply switched to other insurers and failed to pay them as well. To prevent this, the government has forbidden people from switching plans when they are behind in paying their premiums. There is also a proposal to allow garnishing of wages or unemployment or disability benefits.

http://www.commonwealthfund.org/usr_doc/Leu_swissdutchhltinssystems_1220.pdf?section=4039

The Commonwealth Fund is joining the chorus of those who say that we should look to the Swiss and Dutch systems as potential models for universal coverage in the United States. What is meant by universal coverage? It means that everyone is covered (except for the one percent or so who are not, and the one and one-half percent who have been suspended for failure to pay their premiums).

If we were to adopt a “universal” program that left about two and one-half percent without coverage, that means that about 7.5 million U.S. residents would be left out. The population of Switzerland just happens to be 7.5 million. Does anyone else see any irony in adopting a Swiss-like insurance system that would leave out the equivalent of the entire population of Switzerland? Perhaps some might argue that the Swiss population is more worthy of coverage than would be the 7.5 million that we would leave out.

This report is very supportive of the private insurance industry. The lead author, Robert E. Leu, Ph.D., serves as a director on the board of the largest private hospital group and a large health insurance company in Switzerland. Rate of coverage is only one of the many policy issues covered in a favorable light in this report. Those who have been following our national dialogue on health policy will recognize many other sections in this report that seem to be more intent on marketing their model to the United States than to caution us against the deficiencies in their systems.

Their faith in the social value of the private insurance industry is certainly noteworthy. For instance, when discussing the Swiss nonprofit plans for basic coverage, and for-profit plans for supplemental coverage, they state, “There may be synergies between the two lines — for example, in provider relations — and some insurers may use health information from basic coverage when deciding to whom to offer supplementary insurance (this is illegal but difficult to control).” Does isolating this statement parenthetically sterilize it, making it a fundamental business principle?

Private insurers, whether for-profit or nonprofit, are businesses. They will always advance innovations that enhance their business models. No matter how tightly they are regulated, they will engage in activities that are “illegal but difficult to control.” Of course, since not every potential loophole could possibly be covered by laws and regulations, some of the innovative, immoral business behaviors technically might not be illegal, even though they should be.

In a single payer public health program, everyone is covered for life, automatically, including the 7.5 million deemed less worthy (?) than all of the citizens of Switzerland. Not only that, we would also remove from our midst an expensive, superfluous industry that thrives on immoral or illegal (but difficult to control) business practices. Now really, isn’t single payer a better model for the United States?

President Barack Obama

January 20, 2009

The question we ask today is not whether our government is too big or too small, but whether it works – whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified. Where the answer is yes, we intend to move forward. Where the answer is no, programs will end. And those of us who manage the public’s dollars will be held to account – to spend wisely, reform bad habits, and do our business in the light of day – because only then can we restore the vital trust between a people and their government.

http://www.nytimes.com/2009/01/20/us/politics/20text-obama.html?pagewanted=all

H.R. 6675, The Social Security Amendments of 1965

Social Security Online
Legislative History

House of Representatives

Democrats
237 – Yea
48 – Nay
8 – Not Voting

Republicans
70 – Yea
68 – Nay
2 – Not Voting

Senate

Democrats
57 – Yea
7 – Nay
4- Not Voting

Republicans
13 – Yea
17 – Nay
2 – Not Voting

http://www.ssa.gov/history/tally65.html

As we reflect today on Martin Luther King’s gift to the nation, and on tomorrow’s historic inauguration, it seems fitting to look back at the vote that brought us Medicare. This was a vote for health care justice for our seniors, and a first step towards the dream, shared by Martin Luther King Jr then and Barack Obama now, of health care justice for all of us.

In 1965, the 57 Senate Democrats supporting the Medicare bill needed 10 Republicans to be able to invoke cloture if necessary. They received the support of 13 of the 32 Republicans. Opposition within the Democratic ranks was enough to prevent passage had these Republicans not supported the measure.

In 2009, to be able to invoke cloture the Democrats likely will need the support of one Republican plus one for each Democrat (or Independent) who breaks ranks, and that is out of 41 Republicans rather than 32.

Was passage of the Medicare bill feasible in 1965? It happened. Is comprehensive reform feasible now? Many contend that it is not because of the alleged increased polarization of politics.

Is it really true that Barack Obama has shifted from a liberal position to that of a moderate? Is it really true that he is going to try to govern from the middle while likely being frustrated in his efforts to bring about change because of the ability of either extreme to block the agenda of the other extreme?

Is all politics aligned along the bipolar linearity of the liberal/conservative agendas? Is Barack Obama actually positioning himself in the middle of this linear spectrum? Or is something else happening?

Using an analogy in geometry, points along a line are very confining and quite limiting in the realm of possibilities. If that line were rotated around a single point, the plane created certainly expands the possibilities, but is still very confining. Now imagine that plane being rotated around a linear axis to create three dimensions, not confined within a sphere, but extending toward infinity in all directions, with the added fourth dimension of time.

In this model, conservatism is at one point in a linear offshoot. Liberalism is at another point in a linear offshoot in the opposite direction. Moderates may think that they occupy the common meeting ground, but they are confined to a single point in the middle (think Blue Dogs).

Does this infinite four dimensional model represent the future to which Barack Obama is leading us? Is he discarding the old linear model that has caused so much harm and grief, and moving on to an all inclusive model that will work for all us us.

Maybe we are receiving a gift of a new start – a gift that Martin Luther King Jr would want us to have, and a gift that Barack Obama wishes to bring to us.

Today is a good day to take a mere six minutes of quality time to experience the hope that Americans are finally coming together:

Born Again American
http://www.bornagainamerican.org/

Correction and clarification of cloture vote

In 1965, when Medicare was enacted, cloture required two-thirds of those present and voting. My calculation was based on the assumption that the Democrats knew that they had only 57 votes, and would require 10 more if all Senators were present and voting. In fact, 10 did not vote so only 3 additional votes were required. Thus the Republican Senators actually gave them an extra margin of 10 votes (13 yea votes in total), but that could not have been known until the count revealed how many withheld their votes.

In 1975, the cloture rule was changed from two-thirds present and voting to three-fifths of those duly chosen and sworn. That fixes the number at 60 if all seats are filled.

In 2009, there are 56 Democrats duly chosen and sworn, plus Senators Sanders and Lieberman who usually vote with the Democrats. It is improbable that Norm Coleman’s challenge to Al Franken will be upheld, so the Democratic caucus will have 59 of the 60 votes required for cloture. Thus the Democrats will require 1 Republican to cross over, plus 1 more for each Senator that breaks ranks with the Democrats. (Obviously, 11 was in error – pure, simple klutz.)

Today’s message does not change. Let’s end the polarized divide and move on with an all inclusive model that will work for all of us. Let’s all become “Born Again Americans.” Martin Luther King Jr would want that, and tomorrow…

http://www.bornagainamerican.org/

The Public’s Health Care Agenda for the New President and Congress

Kaiser Family Foundation
January 15, 2009

The public ranks action on health care highly as part of efforts to stem the impact of the economic recession and also views reforming health care as one of the top priorities for President-elect Obama and Congress, according to a new national survey conducted by researchers from the Kaiser Family Foundation and the Harvard School of Public Health.

One of the key questions of health care reform is how to pay for it. The survey suggests that, as has long been the case, the public is split down the middle in its willingness to sacrifice financially in order to cover more individuals: roughly half (49%) say they are not willing to pay higher insurance premiums or taxes, while a similar percentage (47%) say they are. There are big partisan differences here, with most Democrats (59%) saying they are willing to pay, most Republicans unwilling to pay (67%), and independents divided (49% willing, 47% unwilling).

Any debate over health reform options will also involve negotiating the very different views of rank and file Democrats and Republicans. Democrats are significantly more likely to place a priority on action on health care, which ranks second on their priority agenda (61% say it is a top priority), compared to Republicans, who rank it eighth (23%). More than three-quarters (77%) of Democrats think health reform “is more important than ever” due to the economy, while six in ten (62%) Republicans believe the nation “cannot afford to take on health reform now.” Democrats are more likely to favor a big push on coverage, and as noted above, more willing to pay for it.

The survey also suggests that as in the past early support for a number of reform proposals could fade in the face of arguments that opponents might raise in a public debate. For example, seven in ten Americans (71%) say they favor the idea of employer mandates. But when given the argument often made by critics that this may cause some employers to lay off some workers support falls dramatically, to just under three in ten (29%). The same pattern holds on the topic of individual mandates. Roughly two in three (67%) favor requiring all Americans to have health insurance with help for those who could not afford it. When given the criticism that some people may be required to buy health insurance they find too expensive or do not want, support falls to two in ten (19%).

http://www.kff.org/kaiserpolls/kaiserpolls011509nr.cfm

Toplines (24 pages):
http://www.kff.org/kaiserpolls/upload/7853.pdf

There are no real surprises in this new poll on the public’s attitude toward health care reform. Most do believe that we are in a window of opportunity for reform based on the fact that the public ranks health care reform as one of the top priorities for President-elect Obama and Congress. But the feasibility of comprehensive reform comes into question when noting that 62 percent of Republicans believe that the nation cannot afford to take on health reform now, and only 23 percent of them believe that reform is even a priority.

As with all polls, there are concerns in this one as well.

Questions 10, 11 and 12 initially demonstrate public support for both an employer mandate and an individual mandate. But then asking about one trade-off for each (employers laying off workers, or individuals finding insurance to be too expensive) results in a dramatic decline in support for either option. Two lessons here: 1) support for the leading options is very fragile and can easily lead to failure in our efforts to achieve reform, and 2) since support plummets with only a single additional bit of information, it is quite clear that the public is very poorly informed on the fundamental policy issues of reform.

Question 13: “Would you be willing to pay more — either in higher health insurance premiums or higher taxes — in order to increase the number of Americans who have health insurance, or not?” The public is split, 47 percent saying they would, and 49 percent saying they would not. The problem with this question is that it presumes that covering more individuals will cost more money. That is true of the leading proposals under serious consideration, but it is not true of the single payer model.

They need to ask, “Would you support a government-administered insurance program that covered everyone and was financed through the tax system if that meant that most Americans would pay somewhat less than they are now paying for health care and only the wealthy would pay more?” Until now, polls asking only about government and taxes in health reform usually have provided about a 60 percent positive response.

Because this more complete question has not been asked, we can only speculate what the response would be, but the question does need to be asked. We should find out whether working Americans are willing to continue to beat up on themselves in order to provide the rich with financial protection that they don’t even need.

Drug coverage called key to reforming healthcare

By Jeffrey Young
The Hill
January 14, 2009

More generous insurance coverage of prescription drugs should be an essential part of any comprehensive proposal to overhaul the U.S. healthcare system, Big Pharma’s top lobbyist said Wednesday.

“Just getting insurance for everybody doesn’t do a doggone thing if it doesn’t insure the things you need and the things you ought to get in healthcare,” Pharmaceutical Research and Manufacturers of America (PhRMA) President and CEO Billy Tauzin told reporters.

“Let me say it as emphatically as I can: The pharmaceutical industry and the products we make are going to be a major part of the solution to healthcare access and affordability in this country,” said Tauzin, a former Republican House member from Louisiana.

“What we are deeply concerned about is if all of a sudden you decide to move to a single-payer system or you crowd out private competitors,” Tauzin said.

http://thehill.com/business–lobby/drug-coverage-called-key-to-reforming-healthcare-2009-01-14.html

And…

Obama, Reid take dead aim at Medicare HMOs

By Jeffrey Young
The Hill
January 14, 2009

Rep. Pete Stark (D-Calif.)… said last month that while even a Democratic bugbear like the Pharmaceutical Research and Manufacturers of America (PhRMA) should be consulted on health reform, health insurers could twist in the wind, as far as he was concerned.

“We’re not going to pass these plans if we don’t have the American Medical Association, the American Hospital Association — even PhRMA. You’re not going to get the insurance companies on board, I don’t think, but they’re the easiest to roll because nobody likes insurance companies. So, if they don’t like what we’re doing, I guess somebody has to be the bad guy,” said Stark, who chairs the Health Subcommittee of the Ways and Means Committee and will be one of the lead authors of House Democratic health reform legislation.

Stark has a sharper tongue than most of his colleagues, but his comments point up the challenges facing the health insurance industry as the health reform debate approaches.

http://thehill.com/leading-the-news/obama-reid-take-dead–aim-at-medicare-hmos-2009-01-14.html

The lobby organizations, America’s Health Insurance Plans (AHIP) and the Pharmaceutical Research and Manufacturers of America (PhRMA), have been amongst the most visible targets of those of us who have been fighting for comprehensive reform that would best meet the health care needs of all of us.

AHIP represents an administratively burdensome middleman industry that has impaired health care access for their own beneficiaries while failing to provide the financial security that is the very purpose of insurance. There is no moral basis for including them in a health care system designed to best meet the needs of patients.

PhRMA represents an industry that has thrived on over-priced products that often have been marketed to professionals and the public in a dishonest manner, frequently overstating the benefits of their products while failing to adequately reveal the potential for very serious adverse consequences that their products may cause. They have also obstructed efforts for us to be sure that the prices of their products are based on reasonable costs plus fair profits.

Both organizations have earned their tarnished reputations, since their self-serving advocacy has had a serious negative impact on patient/consumers, both financially and health-wise. But there is a very crucial difference between these two entities. Pharmaceuticals are an essential component of the health care system, whereas the private insurance industry is not essential and provides us with only negative value. We need to work with the pharmaceutical industry, but we need to tell the private insurers to go “twist in the wind.”

Pete Stark is right. We do have to sit down with representatives of the health care delivery system: the drug industry (PhRMA), the hospital industry (AHA), and physicians (PNHP instead of the AMA), amongst others. But the process should prohibit up front the trade-off of beneficial policies.

Pete Stark’s Health Committee needs to lay out the policies that will best serve the interests of patients. Then, without any compromise in the fundamentals, they can work with these sectors to refine those policies in order to maintain a vibrant health care delivery system that would best serve the interests of patients. Self-seving measures that don’t benefit patients should be rejected automatically.

While Karen Ignagni is twisting in the wind (AHIP), we should honor Billy Tauzin’s white flag (PhRMA). But as he enters the reform process, he needs to be reminded that single payer isn’t about the pharmaceutical industry; it’s about health care justice for everyone in America. Therefore, it’s not negotiable.

Originally published in the Berkshire Eagle

As Tom Daschle, President-elect Obama’s choice for secretary of health and human services, flies across the country to attend community meetings on health care reform, and the Obama Web site solicits opinions and health care stories from citizens, those of us who support a single-payer national health insurance program hold our collective breath. Will the incoming government really listen to the citizens who, in poll after poll, by a clear majority, support single-payer health care? Or will the vested interests of the private, for-profit health insurance lobby win again?

The Congressional Budget Office just released a 197-page report analyzing issues related to health care reform. In discussing an array of proposals for reform, the report gave a scant two paragraphs to reviewing the single-payer, “Medicare for All” option. Yet given the fact that a single-payer national health care program would save $400 billion in administrative costs and pay for itself, rather than adding billions of dollars to an already overburdened system, one would think the “Medicare for All” option would be front and center, and would have received extensive attention in this report.

In addition to potential savings of $400 billion a year in administrative costs, a single-payer federally-administered national health program would help contain costs by creating global budgets and bulk purchasing, including prescription medications. Single-payer is the only feasible route to universal health care that would cover everyone, and be cost-effective for government, individuals, and business. Everyone would benefit except the private insurance companies, which would be eliminated in a single-payer system.

The public/private financing mix that is the foundation of the proposals made to date by president-elect Obama and Senators Ted Kennedy and Max Baucus simply won’t work, because they are unable to contain costs. This has been shown in numerous state experiments patterned after this model. The most recent example is our Massachusetts “Chapter 58″ health reform legislation, which is being billed as the “model for the nation.”

The Massachusetts plan is not financially sustainable. State payments for premiums for the fully state-subsidized insurance plans will increase by an average of more than 9 percent in 2009. Participating insurers are trying to keep premiums down by decreasing benefits and shifting more costs to individuals, creating plans with huge deductibles and large co-payments. Governor Deval Patrick has said, “The increases at this rate over time (are) just not sustainable, not for families, not to business, not for government.”

Meanwhile, private insurance companies continue to rake in profits and pay their CEOs millions of dollars. CEO William van Faasen of Massachusetts Blue Cross Blue Shield earned $16.4 million in retirement benefits in 2006, in addition to almost $3 million paid for his other role as chairman of the insurance company. These bloated compensation packages would not be paid to administrators in a single-payer health care system.

Mr. Van Faasen has recently been in the news again in a Boston Globe exposé about his agreement with Partners Healthcare in Boston to pay their hospitals 30 percent more than other hospitals in the area. Such behind-the-scenes arrangements would not be possible in a more transparent non-profit single-payer system.

HR 676 is the national single-payer bill, known as “The Expanded and Improved Medicare for All Act.” This legislation would eliminate the for-profit insurance companies, and the government would administer our health care funds. However, our private health care delivery system would remain the same.

This is not “socialized medicine,” as hospitals and doctors’ services would remain private. There would be comprehensive coverage for everyone, paid for with a progressive tax. There would be no other premiums, co-payments or deductibles. Everyone would have a choice of doctors and hospitals, and there would be effective cost control. This would be accomplished without increasing health care costs.

Why isn’t this legislation the centerpiece of the Congressional Budget Report, rather than a two-paragraph footnote? Please call your congressional representative and ask him or her to support single-payer health care (HR 676). Then send this article to your friends and ask them to do the same.

Comprehensive Assessment of Reform Efforts (COMPARE)

RAND Health

COMPARE is a transparent, evidence-based approach to providing information and tools to help policymakers, the media, and other interested parties understand, design, and evaluate health policies.

COMPARE has four objectives:

• Synthesize what is known about the current health care system.
• Describe policy options that have been proposed to address one or more existing challenges.
• Analyze the effects of different health care policy options on multiple dimensions of health system performance.
• Identify gaps in our knowledge about the effects of policy changes.

COMPARE was developed to help public and private decisionmakers systematically assess and compare the effects of different policies across multiple dimensions of health care system performance, encompassing cost, quality, and access. COMPARE gives users a comprehensive framework in which to examine both the intended and unintended effects of changes in health care policy and to examine trade-offs across policies, or across different dimensions of performance for any particular policy (e.g., the effect on spending compared to the effect on insurance coverage or on patient experience).

The Web site includes four main sections, U.S. Health Care Today, Policy Options, Analysis of Options, and Modeling Estimates.

http://www.rand.org/health/feature/compare/

Press release:
http://news.prnewswire.com/DisplayReleaseContent.aspx?ACCT=104&STORY=/www/story/01-13-2009/0004954039&EDATE=

And…

RAND COMPARE

Policy Options – Change Insurance Coverage

* Individual Mandate
* Employer Mandate
* Purchasing Pools
* Refundable Tax Credit
* Medicaid/SCHIP Eligibility
* Open Enrollment in FEHBPModeling Estimates – Policy Options

* Tax Credit
* Medicaid Expansion
* Individual Mandate
* Employer Mandate

Who funds COMPARE?

AARP
Abraxis BioScience, Patrick Soon-Shiong MD, Founder, Chairman, and CEO
Aetna Foundation
Alcoa
Amgen Foundation
Blue Cross Blue Shield of Massachusetts
California HealthCare Foundation
The Funari Family Foundation
General Motors Foundation
Johnson & Johnson
Karen Katen
Charles N. Martin Jr., The Martin Foundation
Pacific Business Group on Health
Pfizer
RAND Corporate Endowment
RAND Health Board, designated gifts from individual members
Robert Wood Johnson Foundation
John J. Rydzewski
Leonard D. Schaeffer
The Suzanne Nora Johnson and David G. Johnson Foundation
United Health Foundation
Wellpoint Foundation

http://www.randcompare.org/

To generate custom reports:
http://www.randcompare.org/analysis/reports/

RAND COMPARE provides both a valuable information resource on U.S. health care today, and an interactive tool that can be used to evaluate the impact of various policy options under different models of reform. It has now been released for public use.

Elizabeth McGlynn and Jeffrey Wasserman are codirectors of COMPARE. On a Webinar event January 13, the release of COMPARE was announced along with a discussion of how it works. When I noted that a single, public insurance model (single payer or Medicare for all) was not an option available on the COMPARE website, Dr. McGlynn assured me that it was a model that should be added.

In their press release they stated, "An individual mandate is the most cost-effective strategy for decreasing the number of uninsured." Innumerable other studies comparing models of reform have shown that a single payer model is the most cost-effective strategy and actually eliminates the uninsured. Models based on private insurance, such as the individual mandate, have been shown to be less effective, according to these other studies.

The sponsors surely support RAND’s function as "a nonprofit research organization providing objective analysis," and would want to see that objective data on the single payer model be made available immediately for comparison with the other options.

Since we are entering a period of intense activity in health care reform, it would be helpful to have the single payer model added as expeditiously as possible. If you agree, then please send a very brief message requesting that single payer be added ASAP. Email them at: COMPARE@rand.org

You may wish to share this message with others and ask them to make the same request.

Big Health Insurer Agrees to Update Its Fee Data

By Danny Hakim and Reed Abelson
The New York Times
January 13, 2009

In a settlement with one of the nation’s biggest insurers, New York’s attorney general, Andrew M. Cuomo, has ordered an overhaul of the databases the industry uses to determine how much of a medical bill is paid when a patient uses an out-of-network doctor.

A statement from Mr. Cuomo’s office said the industry had engaged in “a scheme to defraud consumers” by systematically underpaying the nation’s patients by hundreds of millions of dollars over the last decade.

The move, to be announced Tuesday, is part of a settlement with the insurance giant UnitedHealth Group, which operates the industry databases. It results from a yearlong investigation by Mr. Cuomo’s office that concluded the data had understated the true market rates of medical care by up to 28 percent.

The settlement will have a nationwide impact because UnitedHealth, the biggest health insurer in New York, operates the databases used by the entire industry, through its Ingenix business unit. The deal calls for creation of a new independent database, to be run by a university that is still to be selected.

Because insurers typically reimburse patients for only 70 to 80 percent of the “reasonable and customary” cost of medical services when they visit doctors outside the insurer’s designated network of physicians, the patient can get shortchanged if the insurer understates the prevailing local fees.

According to Mr. Cuomo, the databases consistently understated the local “reasonable and customary” rates, which Ingenix collects from insurers. The report of the investigation’s findings described the industry calculations as “created in a well of conflicts” that produced information that was “unreliable, inadequate and wrong.”

In an interview Monday, Mr. Cuomo said: “For years this database was treated as credible and authoritative, and consumers were left to accept its rates without question. This is like pulling back the curtain on the wizard of Oz. We have now shown that for years consumers were consistently low-balled to the tune of hundreds of millions of dollars.”

The inability to decipher the insurer’s calculations can be overwhelming to patients with serious medical conditions.

Mary Jerome, a professor at Columbia who was found to have ovarian cancer in 2006, said she had been left with unreimbursed medical bills amounting to tens thousands of dollars. Her complaints to the attorney general’s office helped spur the investigation.

Ms. Jerome, who said she had been treated at Memorial Sloan Kettering, in large part because her primary care physician recommended the hospital, expected she would have to pay no more than her $3,000 deductible for going out of network. But she said she had soon been swamped with bills that left her $70,000 to $80,000 in debt.

Karen Ignagni, the president and chief executive of the industry trade group America’s Health Insurance Plans, praised UnitedHealth for its “major leadership effort” in reaching the agreement.

http://www.nytimes.com/2009/01/13/health/policy/13care.html?ref=business&pagewanted=all

The administrative waste of private insurers along with the excessive administrative burden they place on the health care delivery system alone is more than enough to warrant dismissing them as stewards of our health care dollars. A more fundamental moral reason to dismiss them is that they place service to patients in a secondary position to their efforts to achieve business success, frequently using dishonest deception to do so.

A prime example is this instance in which they have engaged in “a scheme to defraud” their own beneficiaries by deliberately falsifying the “reasonable and customary” cost of medical services. This is not simply an accounting trick to keep more money. This is thievery which has a negative impact on their own clients’ financial and physical health.

The experience of Professor Mary Jerome of Columbia demonstrates how nefarious this industry is. She had a $3000 deductible policy and used it at Memorial Sloan Kettering. You would think that this policy would allow her to obtain the care she needed without having to face financial hardship. But, no. She has been “swamped with bills that left her $70,000 to $80,000 in debt.”

Although New York’s attorney general has removed control of this data base from these crooks, they will continue to introduce more innovations that will enhance their bottom lines at the expense of patients and their health care professionals. The explosion in medical debt experienced by insured patients is proof that their innovations have the nefarious intent of defrauding their own beneficiaries.

And what does Karen Ignagni of AHIP have to say about this fraud? She praises UnitedHealth for its “major leadership effort.” Worse yet, what does it say about those controlling our national dialogue on reform when Karen Ignagni is included in almost every major forum, and single payer advocates such as the leadership of PNHP are deliberately excluded?

Do we really value these dishonest businessmen more than we value the health and financial security of our people?

Squeezed! Caught between Unemployment Benefits And Health Care Costs

Families USA
January 2009

By November 2008, more than 2.7 million people had joined the ranks of the unemployed since the recession began in 2007, and 10.3 million people were unemployed. Many of those people (and their families) lost their health coverage when they lost their jobs.

Some workers who had insurance through their former employers may be able to continue to purchase the same coverage — but they must pay the full cost out of their own pockets. This continuation coverage, called “COBRA” (from the Consolidated Omnibus Budget Reconciliation Act of 1986), could provide a vital health care lifeline for many families. Unfortunately, for most individuals and families, the cost of this coverage is prohibitively high, especially when compared to average unemployment benefits.

$1278 – Average monthly unemployment income

$388 – Average COBRA premium for an individual
30% – Premium as a share of unemployment income

$1069 – Average COBRA premium for a family
83% – Premium as a share of unemployment income

Conclusion

As our nation faces a severe recession, growing numbers of unemployed workers and their families are coping with the loss of health insurance. The short- and long-term physical and financial consequences of such a loss can be devastating. COBRA continuation coverage can be a crucial health lifeline for newly unemployed workers. But while many workers have the right to purchase such coverage, the cost is often prohibitively high. To make COBRA coverage truly affordable, a meaningful subsidy should be provided to recently unemployed workers. For those who do not have a COBRA coverage option, Congress should provide a temporary Medicaid benefit to recently unemployed, low-wage workers.

http://www.familiesusa.org/assets/pdfs/cobra-2009.pdf

Families USA has continued to be a source of highly credible studies demonstrating the severe deficiencies in health care financing in the United States. A prime example is this study of COBRA benefits. Although the intent of COBRA was to allow individuals and families to maintain their employer-sponsored coverage after losing their jobs, this study demonstrates that this is yet another failed policy as unemployed individuals are unable to pay for that coverage.

Unfortunately, the conclusion of this study also represents yet another inadequate policy recommendation of Families USA. The obvious conclusion is that health insurance must be automatic, for life, and comprehensive enough to prevent financial hardship regardless of income or health status. Instead, Families USA would leave this flawed COBRA program in place, and merely tweak it so that a few of the 46 million uninsured could receive coverage. Temporary Medicaid? Come on!

It is no secret that PNHP and Families USA have had their differences. The leadership of PNHP has demonstrated that a single payer national health program would provide affordable health care for everyone throughout life. The leadership of Families USA has continued to insist that single payer is not feasible, and that reform must occur in incremental steps – increments such as subsidies for COBRA benefits.

We have been following for decades their preferred course of incremental reform, and all parameters are worse. We have an outrageously expensive system with increasing numbers of uninsured and underinsured, and ever greater financial hardship for those individuals and families with health care needs. Of nineteen industrialized nations, we have the worst rate of amenable mortality (premature deaths which are preventable). Incrementalism has been a cruel, miserable policy failure in the United States.

The leadership of Families USA understands this. Thus for the past decade they have supported “strange bedfellow” coalitions, bringing together organizations that traditionally have been at odds on the reform issues. Each of these efforts has been introduced with considerable fanfare, with the obligatory statements from each participating organization to the effect that finally we are coming together to fix our health care system.

What happens? Behind the scene the opponents of reform continue to sabotage the efforts. The opponents are using the reputation of Families USA to burnish their own tarnished images, while gaining additional years before they must face the inevitability of a bona fide national health program.

The opponents will never support a program that is contrary to their selfish interests or their right-wing ideology. NEVER!

For those who believe that we are close to bringing all interests together on reform, think about this. The leading reform proposal is based on private health plans which everyone knows are no longer affordable, and the Republicans will never approve an adequate “tax on the rich” that would be needed to pay for those plans. The supporters also have recommended the creation of a public insurance option which individuals could purchase (even though it wouldn’t be affordable either). Yet the opponents have blasted the proposal because it is an incremental step towards single payer. AHIP, USCOC and some of the Senate Republicans have made it clear that this is a non-starter.

Forget incrmentalism! Forget sleeping with the enemy!

Ronny, sorry, but what you’ve been doing just hasn’t worked. It’s time for you to get up out of that bed and join us in our crusade for the real thing – health care justice for all.

****

Note of Clarification: What is the fundamental disagreement? One side wants an affordable, high-quality health care system that really does include everyone. The other side is opposed, either because of anti-egalitarian ideology or simply because of selfish self-interest. That is where the battle must take place.

The debate over an incremental versus comprehensive strategy for reform has been an unfortunate digression that has splintered one side – the supporters of health care justice. PNHP, Families USA, UHCAN, Healthcare-NOW!, Health Care for All, the HCAN coalition, and all of the other individuals and organizations that share the common goal of health care for everyone must unify in support of truly comprehensive reform that does not compromise on the policies that will get us there. This goal must have precedence above all others and must represent the primary thrust of our efforts.

That does not mean that there is no place for incremental measures. The Children’s Health Insurance Program (SCHIP) is an incremental measure that must be renewed and expanded immediately, but only as an urgent, temporary measure until we can enact a comprehensive program for everyone, including children.

It is absolutely crucial that we all pull together now, pulling out all the stops, especially while we are in this political window. Once we have a comprehensive system, the incrementalists can have a field day tweaking the inevitable glitches in the system.

An Analysis of Leading Congressional Health Care Bills, 2007-2008

(Part I, Insurance Coverage)

By Sara R. Collins, Ph.D, Jennifer L. Nicholson, and Sheila D. Rustgi
The Commonwealth Fund
January 2009

Overview

This report analyzes and compares leading bills of the 110th Congress aimed at expanding and improving health insurance coverage. Bills and proposals from members of Congress and President-elect Barack Obama include plans to fundamentally reform the health insurance system through mixed private–public approaches that build on our current system; a public insurance option available to the entire population; bills to change the tax treatment of employer benefits; federal–state partnership to provide grants to states to expand coverage; and bills that would expand coverage for children or disabled individuals, among others. Using analysis from the Lewin Group, the authors provide coverage and cost estimates for the proposed bills, which range from 48.9 million uninsured people gaining coverage to a net loss of coverage for 283,000 people; proposals could increase national health spending by as much as $64.1 billion or create savings of $58.1 billion.

Executive Summary:
http://www.commonwealthfund.org/publications/publications_show.htm?doc_id=777197

Full report (132 pages):
http://www.commonwealthfund.org/usr_doc/1223_Collins_analysis_cong_bills_2007-2008_part_I_ins_coverage.pdf?section=4039

For those who would like to have a better understanding of the various Congressional approaches to reform, this report is very helpful. The Lewin Group analysis brings reality to the claims being made by the proponents of each approach.

The proposals vary considerably in how effective they are (or are not) in expanding coverage to include everyone. Only one of the proposals evaluated, Representative Pete Stark’s AmeriCare Health Care Act, would be effective in covering everyone. The closest to this would be the Commonwealth (Obama/Baucus) and the Wyden proposals, but they would leave a few million without coverage.

Not only is Stark’s AmeriCare proposal the most effective in expanding coverage, it is also the least expensive in terms of our total National Health Expenditures, actually reducing spending by about $58 billion.

The results are no surprise. Many studies, such as the California Health Care Options Project (a study of nine models of reform) have shown that those models that build on our current system of private and public plans are the most expensive models of reform, and fall short on goals of universality, comprehensiveness, and equity. In contrast, the single payer model and health service model actually accomplish those goals while being the least expensive models of reform (though most Americans would prefer government health insurance to a government-owned health care delivery system).

To be clear, Pete Stark’s AmeriCare is not a single payer model. AmeriCare, an improved and expanded Medicare-like program, would cover 85 percent of us. The existing Medicare program would be improved and cover another 10 percent of us. Qualified employer-sponsored plans would cover 1 percent (yes, only one percent). Dual Eligible and TRICARE would cover the balance. Of the proposals studied, AmeriCare is the closest to single payer, though many single payer advocates would have preferred that Representative John Conyers’ HR 676 single payer bill be included in the analyses.

Perhaps it’s better that it wasn’t since it could have led to a misinterpretation and inevitable misuse of the findings. HR 676 would require that investor-owned providers be converted to not-for-profit status, and that the investors be compensated by public funds at the appraised value of the converted facilities. As only one example, the hospital corporation HCA has a book value of $24 billion. That alone would wipe out close to half of the savings of the Stark proposal.

The importance of this analysis is that, regardless of the politics, it’s the policies that count. Senator Mike Enzi, senior Republican on Senator Kennedy’s Health, Education, Labor and Pensions Committee, says that reform should include the 80 percent of policies on which we agree, and exclude the 20 percent on which we don’t, which is code language for rejecting policies that are not in his plan. His approach, heavily dependent on private plans, is the most expensive of all and yet leaves 22 million people uninsured. He has said, “Forcing private plans to compete with a public program like Medicare, with its price controls and ability to shift costs to private payers, will inevitably doom true competition and could ultimately lead to a single-payer, government-run health care program.”

People are going broke, suffering and even dying, and we continue with academic exercises on ideology-tinged policy options? It’s time to move on beyond the politics of ideology, and finally get into gear with the politics of sound policy. With a health care bill of well over $2 trillion, we need reform that works!