On the positive side of the ledger, the PPACA brings some welcome changes:

• Will extend health insurance to 32 million more people by 2019.
• Provides subsidies to help many lower-income Americans afford health insurance.
• Starting in 2014, expands Medicaid to cover 16 million more lower-income people.
• Provides new funding for community health centers that could enable them to double their current capacity.
• Eliminates cost-sharing for many preventive services.
• Phases out the “doughnut hole” coverage gap for the Medicare prescription drug benefit.
• Will create a new national insurance plan for long-term services: Community Living Assistance Services and Supports (CLASS) program.
• Will establish a nonprofit Patient-Centered Outcomes Research Institute to assess the relative outcomes, effectiveness and appropriateness of different treatments.
• Initiates some limited reforms of the insurance industry, such as prohibiting exclusions based on pre-existing conditions and banning of annual and lifetime limits.
• Contains some provisions to improve reimbursement for primary care physicians and expand the primary care workforce.

On the negative side of the ledger, however, these are some of the reasons that the PPACA will fall so far short of needed health care reform that it is not much better than nothing:

• Surging health care costs will not be contained as cost-sharing increases for patients and their families.
• Uncontrolled costs of health care and insurance will make them unaffordable for a large and growing part of the population.
• At least 23 million Americans will still be uninsured in 2019, with tens of millions more underinsured.
• Quality of care for the U. S. population is not likely to improve.
• Insurance “reforms” are so incomplete that the industry can easily continue to game the system.
• New layers of waste and bureaucracy, without added value, will further fragment the system.
• With its lack of price controls, the PPACA will prove to be a bonanza for corporate stakeholders in the medical-industrial complex.
• Perverse incentives within a minimally-regulated market-based system will still lead to overtreatment with inappropriate and unnecessary care even as millions of Americans forego necessary care because of cost.
• The “reformed” system is not sustainable and will require more fundamental reform sooner than later to rein in the excesses of the market.

How did this latest reform effort get so far off track? Here are three of the major reasons:

• The issues and policy options were framed as the political process was hijacked by the very interests that are largely responsible for today’s cost, access and quality problems in health care. As examples, the drug industry lobbied successfully to avoid any price controls of drugs, as the VA does so well; the insurance industry avoided real rate controls over their premiums and ended up with other loopholes to game the new system; and all of the corporate stakeholders will gain subsidized new markets without significant regulation of the market.
• The quest for bipartisanship was futile as reform got run over in the middle of the road. The big questions cannot be answered in the political center, such as whether health care should be a right or a privilege, or whether health care resources should be allocated based on ability to pay or medical need.
• Market failure was not recognized as the wellspring of our system problems. When it was agreed to “build on the strengths of the present system” instead of more fundamental reform, corporate stakeholders and their lobbyists found willing legislators to craft centrist “remedies” which could be sold to the public as  reform. But the various incremental tweaks of our existing system, such as employer and individual mandates, have failed over the last 20 or 30 years to remedy cost, access and quality problems.  In the absence of real health care reform, we can now expect these kinds of unfavorable outcomes in coming years:

• soaring costs without effective price controls throughout the system.
• managed care fails to control costs or improve quality.
• persistent financial and other access barriers for many millions of Americans.
• growing backlash by physicians and consumers.
• gaming of private plans and adverse selection in public plans.
• consolidation among hospitals sustaining high prices.
• increased cost-sharing for employees as employers cut back benefits.
• continued high levels of inappropriate and unnecessary care.
• added bureaucracy and waste in an even more fragmented and dysfunctional system.

We have yet to learn that an unfettered health care marketplace can only perpetuate our problems, not fix them. Most industrialized nations have learned this many years ago, and are able to achieve better quality of care with improved outcomes for their populations even as they spend much less on health care than we do. We have to conclude that a larger role of government will be required to assure real and sustainable health care reform.

There is a fix in plain sight for our problems — single-payer financing coupled with a private delivery system. The private insurance industry has outlived its usefulness, and is only being kept alive by government subsidies, whether by overpayments of private Medicare plans or this latest provision in the PPACA to pay out nearly half of a trillion dollars in subsidized premiums for their inadequate coverage.

When will we have the political will to face up to our real problems in health care and show that the democratic process can still work?

Adapted from “Hijacked: The Road to Single Payer in the Aftermath of Stolen Health Care Reform,” 2010, with permission of the publisher Common Courage Press. http://commoncouragepress.com/index.cfm?action=book&bookid=402

For starters, quality of care in the U.S. is highly variable, and is unsatisfactory for many millions of Americans, as these cross-national comparisons against other nations with one or another form of universal access clearly show:

• The U.S. ranks last among 19 industrialized countries in “amenable mortality rates,” deaths that could have been prevented by timely and effective health care; that translates to about 101,000 excessive deaths per year in this country. (Nolte, E, McKee, CM. U.S. has most preventable deaths among 19 nations. Health Affairs 27 (1):58-71, 2008)

• The U.S. ranks last among 23 industrialized nations on infant mortality, with rates double those of Iceland, Japan and France. (Schoen, C, Davis, K, How, SKH, Schoenbaum SC. U.S. health system performance: A national scorecard. Health Affairs Web Exclusive, W457-475, 2006) http://www.commonwealthfund.org/Content/Publications/In-the-Literature/2006/Sep/U-S–Health-System-Performance–A-National-Scorecard.aspx

• Lower-income people in this country receive worse care than their higher- income counterparts on 21 of 30 primary care quality measures, four to five times higher rates of disparity compared to Australia and Canada. (Huynh, P, et al. The U.S. health care divide. Commonwealth Fund, April 2006)

On the plus side, the PPACA does make some attempts to improve the quality of care through such provisions as these: expanded access to care; elimination of cost-sharing for preventive services; establishing a comparative effectiveness research initiative; expansion of health information technology (HIT); and modification of payment mechanisms (e.g. accountable care organizations, or ACOs, and “value modifiers” for physician reimbursement).

But these are important ways that will largely cancel out the impact of these efforts to improve the quality of care:

• We can expect an increase in cost-sharing (with reduced affordability) as employers downgrade the actuarial value of their coverage and as insurers market their underinsurance products in the individual market and through exchanges. A recent study of Medicare Advantage plans found that increased co-payments resulted in fewer outpatient visits, more hospital admissions and longer hospital stays for patients with hypertension, diabetes and a history of acute myocardial infarction. (Trivedi, AN, Moloo, H, Mor, V. Increased ambulatory care copayments and hospitalizations among the elderly. N Engl J Med 363 (4):320-8, 2010)

• The critical shortage of primary care physicians and an underfunded primary care infrastructure persist as our specialist-dominated workforce continues to provide more care than is appropriate or necessary, with less coordination and worse outcomes. For optimal quality of care, patients need both primary care and appropriate specialist care. (Parchman, M, Culter, S. Primary care physicians and avoidable hospitalization. J Fam Pract 39: 123-6, 1994) (Beal, AC, Doty, MM, Hernandez, SE, Shea, KK, Davis, K. Closing the divide: How medical homes promote equality in health care: results from the Commonwealth Fund 2006 Health Care Quality Survey)

• The new Patient-Centered Outcomes Research Institute lacks the authority to mandate or even endorse coverage and reimbursement rules for any particular test or treatment. (Kaiser Health News staff. True or false: Seven concerns about the new health care law. March 31, 2010)

• Perverse incentives will still permeate the system because of largely unchanged reimbursement policies (mostly fee-for-service) and coverage decisions influenced more by politics and lobbying by industry than hard scientific evidence of efficacy and cost-effectiveness. Procedures will continue to be over-reimbursed, primary and cognitive care services will remain under-reimbursed, and there will be little restraint over excess volume of services in most practice settings. These are examples of how big this problem is:

• One-third of U.S. births today are by Caesarian section (compared to a national average of just 5 percent in the 1960s). (Neergaard, L. Overtreated: More medical care isn’t always better. Associated Press, June 7, 2010)

• About one-third of tests and treatments are inappropriate or unnecessary and often harmful. (Wennberg, JB, Fisher, ES, Skinner, JS. Geography and the debate over Medicare reform. Health Affairs Web Exclusive W-103, February 13, 2001)

• Investor-owned hospitals, HMOs, nursing homes and mental health centers provide more expensive care of lower quality than not-for-profit facilities. (Geyman, JP. The Corrosion of Medicine: Can the Profession Reclaim its Moral Legacy? Monroe, ME. Common Courage Press, 2008, p 37)

• Well-reimbursed imaging procedures are greatly overused, thereby increasing risk of cancer; as an example, a recent report found that Illinois hospitals are using twice as many double CT scans (one with dye, the other without) than the national average, believed by many experts to be unwarranted. (Graham, J. New government report raised questions about CT scans at Illinois hospitals. Chicago Tribune, July 12, 2010)

• Wider adoption of health information technology has not been demonstrated to improve outcomes of care in most non-integrated parts of our health care “system”; most of the increase in medical computing has been driven by financial and billing reasons, not quality of care. And most quality improvement efforts have been based on process measures, such as use of beta blockers after a heart attack or use of hemoglobin A1C in diabetes, without good correlation with actual outcomes. (Chaudhry, B, Wang, J, Wu, S, Maglione, M, Mojica, W, et al. Systematic review: Impact of health information technology on quality, efficiency and costs of medical care. Ann Int Med 144 (10):742-52, 2006) (Himmelstein, DU, Wright, A, Woolhandler, S. Hospital computing and the costs and quality of care: A national study. Amer J Med 123 (1):40-6, 2010)

• The long-delayed experiments with accountable care organizations and bundled payments are likely to be ineffective in improving quality of care in non-integrated practice settings which involve non-salaried physicians. So despite what we are being asked to believe by supporters of PPACA, we cannot really expect much, if any, improvement in the quality of care for the U.S. population as a result of this legislation.

Adapted from Hijacked: The Road to Single Payer in the Aftermath of Stolen Health Care Reform, 2010, with permission of the publisher Common Courage Press. www.commoncouragepress.com

On the plus side, the PPACA does offer these welcome provisions:

• Extending health insurance to 32 million more people by 2019.

• Allowing parents to keep their children on their policies until age 26.

• Expansion of Medicaid to cover 16 million more lower-income Americans.

• New funding for community health centers that could allow them to double their patient volume.

However, on the other side of the ledger, there are many problems that will render restricted access to care for tens of millions of Americans, an ongoing and even increasing problem. These examples show how far short of the mark the PPACA falls on access to care:

• There will still be 23 million people without any kind of health insurance in 2019.

• Federal support for Medicaid expansion will not kick in until 2014.

• More than 32 million other Americans will be under-insured in 2019, as a result of these kinds of circumstances:

1. Many younger healthier people, the “Young Invincibles,” will opt out of coverage until they have an accident or get sick.
2. Many people will not be able to afford coverage through either exchanges (which won’t be operational until 2014) or high-risk pools.
3. The new federal temporary high-risk pool is already underfunded and plagued with many problems; at best, it will be available for up to 7 million uninsured people, but more likely for only about 200,000 or 3 percent of the target population. (Merlis, M. Health coverage for the high-risk uninsured: Policy options for design of the temporary high-risk pool. National Institute for Health Care Reform. May 27, 2010.)
4. The actuarial value of insurance plans for most of the newly “insured” will be as low as 60 to 70 percent (i.e. insurers leave 30 percent to 40 percent of the bill with patients and their families).
5. Even those fortunate enough to have employer-sponsored (ESI) coverage will find their plans costing more, covering less, and more difficult to afford; the Congressional Budge Office projects that the average family premium in the ESI market in 2016 will cost more than $20,000, not including deductibles and other out-of-pocket expenses. (Congressional Budget Office. An Analysis of Health Insurance Premiums Under the Patient Protection and Affordable Care Act. Nov. 30, 2009.)
6. Access to care will further deteriorate as a result of 36 billion in Medicare and Medicaid cuts to safety-net hospitals. We can expect closure of some of these critical facilities that provide a wide range of services that other hospitals find too unprofitable to provide, including kidney dialysis, cancer treatment and mental health care.
7. Although the PPACA does call for an increase in reimbursement for primary care physicians, that won’t happen until 2013, and will then last only two years — just a small gesture toward the nation’s growing crisis in primary care.
8. The U.S. is facing a shortage of 35,000 to 44,000 primary care physicians for adults by 2025 (Colwill, J, Cultice, JM, Kruse, RL. Will generalist physician supply meet demands of an increasing and aging population? Health Affairs [Millwood] 27: w232-41, 2008.) An increasing number of people with insurance coverage cannot find a primary care physician to take care of them, especially those on Medicare or Medicaid, due to low reimbursement in those programs.
9. Since the PPACA calls for phased cuts in overpayments to private Medicare Advantage plans over the next few years, enrollees will face cuts in benefits and rising premiums.
10. As they confront deficits of 127 billion over the next two fiscal years, states are making draconian cuts in Medicaid across the country that will only aggravate current barriers to care. State appeals to the federal government for relief of Medicaid costs are now caught in a political crossfire threatening further unraveling of Medicaid funding. (Solomon, D. States face new pinch as stimulus ebbs. Wall Street Journal, June 23, 2010: A5.)
11. A majority of states outsource their Medicaid programs to private insurers that frequently create profits by cutting services. A recent report found that 2.7 million children on Medicaid in nine states were not receiving required screenings and immunizations. In Florida, the insurer WellCare paid 40 million in restitution to the state after it acknowledged that it had set up a subsidiary to make it appear that it was spending more on health care than it actually was. (MacGillis, A. Some states say they’re not receiving the Medicaid services they’re paying for. The Washington Post on line, July 8, 2010.)

Despite the hype we hear about “near-universal” access just down the road with PPACA, the above leads us to believe that access to care will remain inadequate for much of the population. In our next post, we will look at what this year’s health care “reform” legislation means for the quality of care Americans receive.

Adapted from “Hijacked: The Road to Single Payer in the Aftermath of Stolen Health Care Reform,” 2010, with permission of the publisher Common Courage Press. www.commoncouragepress.com

During the long run-up to this bill, President Obama told us that it would save the average American family $2,500 a year on insurance premiums (a claim that the Congressional Budget Office later dispelled as untrue, instead projecting a $2,300 increase in premium costs for the average family). (1) (Hemingway, M. Obama promised $2,500 health care savings; CBO says plan is $2,300 price increase. Washington Examiner on line, March 10, 2010)

The inconvenient fact is that premiums for families enrolled in employer-sponsored health plans from 2000 to 2008 increased by 97 percent, while those enrolled in individual plans increased by 90 percent; during this period, insurers’ payments to providers rose by 72 percent, medical inflation increased by 39 percent, wages grew by 29 percent and overall inflation went up by 21 percent. (2) (Health Care for America Now! (HCAN). Insurance industry inflates rates while falsely blaming new health care law. June 2010)

According to a recent survey by the Council of Insurance Agents and Brokers, more than one-half of smaller employers with 50 or fewer employees will face premium hikes for group policies in the 11 percent to 20 percent range for 2011. (3) (Wojcik, J. Group health insurance rates on the rise: Survey. Business Insurance, June 3, 2010)

So how in the world can we expect the new health care “reform” legislation to actually make health care and health insurance more affordable?

The new law promised not only cost savings but also provided for $476 billion (almost one-half of the total $1 trillion cost of the law in its first 10 years) in new federal subsidies to help lower- and middle-income Americans to pay for health insurance. We need to ask whether the promised cost savings are likely to materialize and whether the subsidies will help that much.

For openers, cost savings are an illusion. Supporters of PPACA assure us that several approaches will contain health care costs – such as an increase in wellness and prevention programs, wider application of health information technology, and experimentation with such initiatives as “accountable care organizations” and tweaks to the fee-for-service reimbursement system. Most are delayed for years into the future and none have yet been demonstrated to save money for patients and their families.

The cost of health care is certain to rise exponentially as far as we can see, since the market controls prices and the volume of services in a deregulated non-system. And insurance premiums are also certain to rise rapidly at rates way above the cost of living and median household income based on various industry-friendly loopholes in the law and gaming by the industry. These examples show how easy it will be for the industry to continue to exploit the public through both private and public programs:

• Under the new law, insurers can raise premiums based on age (by a 3:1 ratio), by geographic area, by the number of family members, and by tobacco use (by a 1.5 to 1 ratio).

• Many insurers are now aggressively marketing “wellness plans” in both private and public plans. One example is the Healthways SilverSneaker’s membership fitness plan for seniors enrolled in Medicare Advantage plans. This is a clever strategy for insurers in two ways – they cherry-pick healthier seniors without infirmities that prevent their participation in such programs and then they charge 20 percent higher premiums to those seniors not enrolled in fitness programs. (4) (Blue Shield of California. Blue Shield of California to offer award-winning fitness program to Medicare beneficiaries in San Bernardino. January 18, 2010) (5) (Britt, R. Experts: Critical loophole in Senate health bill. Market Watch. January 7, 2010)

• Many healthier younger people will gamble with being uninsured until they get sick, in order to avoid paying fines for noncompliance with the individual mandate. This has already happened in Massachusetts over the four years since the “Massachusetts Miracle” was adopted in 2006. Since then, the number of short-term insurance buyers has increased by four-fold, getting insurance only after they have health care problems, then dumping coverage after they get care. This has increased the cost of insurance for other people and costs the state’s program an additional $300 million a year. (6) (Lazar, K. Short-term insurance buyers drive up cost in Mass. The Boston Globe, June 30, 2010) (6) (Lazar, K. Short-term  insurance buyers drive up cost in Mass. The Boston Globe, June 30, 2010)

People with employer-sponsored group coverage will also take hits. As employers confront hikes in the costs of group coverage, they will pass along these costs to their employees in the form of increased co-payments and deductibles, often with other restrictions in coverage. Middle-income families will be especially hard-hit if they have so-called Cadillac plans – those with annual premiums in excess of $8,500 for individuals and $23,000 for families. Employers will be faced with a tax on such plans beginning in 2013, when we can expect them to avoid the tax by limiting coverage and forcing more cost-sharing on their employees. (7) (Herbert, B. Op-Ed. A less than honest policy. New York Times, December 29, 2009)

But won’t the nearly half a trillion dollars in federal subsidies over 10 years make health care affordable for lower- and middle-income Americans? Here too the story is not what we are being led to believe by pundits and supporting politicians. Subsidies will not start until 2014, and then are not available to people already covered by employer-sponsored insurance, those qualifying for Medicaid (incomes less than 133 percent of the federal poverty level, or FPL) and those earning more than 400 percent of FPL. Subsidies can only be obtained by those purchasing coverage on their own on an Exchange.

The Commonwealth Fund has established useful criteria to assess affordability of health care vs. other costs of living. When put up against other basic necessities of life, such as food, housing, and one car to get to work, health care costs above 10 percent of family income become a hardship level, as are medical expenses above 5 percent of family income for lower-income adults below 200 percent of the federal poverty level and those with health plan deductibles above 5 percent of income. (8) (Schoen, C, Doty, M, Collins, SR, Holmgren, AL. Commonwealth Fund. Insured but not protected: How many adults are underinsured, the experiences of adults with inadequate coverage mirror those of their uninsured peers, especially among the chronically ill. Health Affairs Web Exclusive, June 14, 2005)

The Kaiser Family Foundation has developed a useful Health Reform Subsidy Calculator, by which people can readily determine their own health care costs. As an example, a family of four with an income of $60,000 in 2014 will have an insurance premium of $16,858 (for which it will be responsible for $4,937, since the government will provide a subsidy of $11,921). That family will also be responsible for up to $6,250 in out-of-pocket costs, which together would account for 18.6 percent of its household income. And those costs may well be higher due to restricted coverage of their own plan and changes in cost-sharing requirements. By comparison, seniors were paying an average of 15 percent of their annual income on premiums and out-of-pocket health care costs in 1965 when Medicare was enacted. (Blumenthal, D., et al. “Renewing the Promise: Medicare & its Reform.” New York, Oxford University Press, 1988.)

So far we have found little evidence that health care “reform” circa 2010 will contain health care costs or make health care more affordable. In our next post we will consider how much we can believe about claims of improved access to care.

Dr. John Geyman is professor emeritus of family medicine at the University of Washington School of Medicine in Seattle, a past president of Physicians for a National Health Program and author of “Do Not Resuscitate: Why the Health Insurance Industry Is Dying, and How We Must Replace It.” This posting is partially based on materials in his forthcoming book, “Hijacked: The Road to Single Payer in the Aftermath of Stolen Health Care Reform,” soon to be released by Common Courage Press in both print and e-book format. http://www.commoncouragepress.com

We are being advised by many to “wait and see” how this complex new bill plays out over the next five to ten years, but we can already know what its outcomes will be. More than 30 years of health policy science, including documentation of the repeated failures of incremental changes built into the new law, together with well-entrenched trends in our market-based system, allow us to project its outcomes with confidence. For this legislation has been molded and crafted by the political power and money of corporate stakeholders in the medical-industrial complex.

Five previous posts in 2009 described the uneasy “alliance” of the five biggest players—the insurance industry, the drug industry, the hospital industry, business and organized medicine. They will do just fine with the new law at the expense of patients, families and Main Street.

Health care “reform” this time around was intended to address these four basic system problems: (1) containing health care costs, (2) making health care more affordable, (3) increasing access to care, and (4) improving the quality of care. This post introduces a series of five that will examine how well the PPACA will do on each of these four goals, followed by an overall assessment of the law. These posts will draw in part from my new book Hijacked: The Road to Single Payer in the Aftermath of Stolen Health Care Reform, soon to be released by Common Courage Press in both print and ebook format.

CONTINUED UNRESTRAINED DRIVERS OF HEALTH CARE COSTS
These are some of the many reasons that we can already conclude that health care costs will continue to run out of control at rates far exceeding the costs of living and median household incomes.

•  No price controls. Wall Street has already factored in rapid expansion of markets for drugs, medical devices and other services in a system of expanded access. There is also a long line forming of providers of information technology and administrative services that will exploit the complex implementation of this law.
•  No bulk purchasing. The PPACA has prohibited the government from negotiating the prices of prescription drugs and retains a ban on importation of drugs from Canada and other countries.
•  Lack of control over perverse incentives that drive increased volume of services. These in turn are driven by retention of fee-for-service (FFS) reimbursement that encourages physicians and other providers to offer more services than are medically appropriate or necessary.
•  No effective mechanism to rein in marginal or ineffective technologies. Coverage policies for new drugs and medical devices are still lax and not subject to rigorous evidence-based criteria for either efficacy or cost-effectiveness.
Although the PPACA does call for a Patient-Centered Outcomes Research Institute, its role is already neutered by not having the power to mandate or even endorse coverage or reimbursement rules for any particular treatment. (2) (Kaiser Health News staff. True or false: Seven concerns about the new health law, March 31, 2010)
•  The dominant business model of health care prevails, with many facilities and services remaining for-profit and investor-owned and with an ongoing trend for increasing consolidation within industries.
•  The PPACA has grandfathered-in specialty hospitals, typically physician-owned facilities that focus on well-reimbursed procedures in such areas as cardiology and orthopedics, whereby physicians can “triple dip”, earning high incomes as providers, owners and investors.
•  More preventive services will further fuel health care inflation. While the PPACA does provide new coverage for many preventive services, this will lead to increased costs due to additional diagnostic and treatment services engendered. (3) (Russell, L. Preventing chronic disease: An important investment, but don’t count on cost savings. Health Affairs 28 (1): 42-5, 2009)
•  Private insurers can’t contain health care costs, even where they have dominant market power. A 2009 report by the Congressional Research Service, The Market Structure of the Health Insurance Industry, concludes that “The exercise of market power by firms in concentrated markets generally leads to higher prices and reduced output—high premiums and limited access to health
insurance—combined with high profits.” (4) (Austin, DA, Hungerford, TL. The Market Structure of the Health Insurance Industry. Washington, D.C. Congressional Research Service, November 17, 2009)
• There are no controls over premium rate increases by insurers. Despite the outcry by government officials, annual premium rates are escalating at rates up to 56 percent (5) (Johnson, A. Fight over health-care premiums heats up. Wall Street Journal, February 19, 2010: A6), and there is no end in sight for continued exorbitant rate increases. Insurers will continue to game the system by extracting
maximal profits and offering reduced coverage with actuarial values (the amounts insurers actually pay in coverage) as low as 60 or 70 percent.
•  National health care spending will grow unabated despite the passage of PPACA. The Centers for Medicare and Medicaid Services (CMS) projects that overall national health expenditures (NHE) will increase from its present 17 percent of GDP to 21 percent in 2019, a total of $4.470 trillion. (6) (Foster, RS. Office of the Actuary. Estimated financial effects of the “Patient Protection and Affordable Care Act,” as Amended. Centers for Medicare and Medicaid Services, April 22, 2010)

These well-documented trends leave no room to think that health care “reform” will have any chance to contain health care costs. Instead, health care inflation will be exacerbated by all the new incentives and inefficiencies in the new “system”. In our next post we will examine the impact of these trends on affordability of health care.

Dr. John Geyman is professor emeritus of family medicine at the University of Washington School of Medicine in Seattle, a past president of Physicians for a National Health Program and author of “Do Not Resuscitate: Why the Health Insurance Industry Is Dying, and How We Must Replace It.” Buy John Geyman’s Books at: http://www.commoncouragepress.com

In order to answer our question as to the value of the House bill, we need to re-state the original major goals of reform: (1) contain skyrocketing costs of health care and health insurance; (2) expand access to care by including everyone; and (3) improve the quality of care.

At a gross cost of $1.055 trillion over ten years, the House bill would do some good things, including reduction of the uninsured by up to 30 million; helping many Americans to pay for insurance through government subsidies; helping small business to provide coverage to their employees; expanding Medicaid and community health centers; establishing a new Center for Comparative Effectiveness Research to study and recommend the most effective treatments; initiating limited reforms of the health insurance industry, such as termination (four years hence) of its common practice of denying coverage based on health status and pre-existing conditions; phasing out government overpayments to private Medicare Advantage plans; revoking a decade-old anti-trust exemption for insurance companies; and creating a new long-term care program (CLASS ACT) to supplement Medicaid and/or private long-term care insurance.

However, the negatives far outweigh the positives, and adopting this bill would delay real reform for years to come. Despite a chorus of accolades about the bill by its supporters, even comparing it with the historic importance of Social Security and Medicare, this monster bill instead bears the heavy imprint of corporate stakeholders who themselves are largely responsible for out-of-control health care costs. After months of lobbying and campaign contributions to legislators crafting the legislation, their multiple conflicts of interest and political compromises, this bill ends up being a bailout for the insurance industry and a bonanza for stakeholders in the medical industrial complex.

Here are some of the major problems with the bill:

• It will not “bend the cost curve” for many reasons—with the exception of a  provision that the government negotiate drug prices with manufacturers (as the VA does so effectively), there are no real restraints on the prices of health insurance or health care services; insurers have already warned that premiums will continue to surge in future years; perverse incentives would remain in the system to continue providing large amounts of inappropriate and unnecessary services, especially by specialists in more highly reimbursed areas; and recommendations based on studies by the new Center for Comparative Effectiveness Research could not be used to mandate coverage or reimbursement policies.

• As the crisis in declining access to care only grows (with already 46 million uninsured and at least another 30 million underinsured), expansion of Medicaid, subsidies, and limited restrictions on insurers would not take place for four more years. And as many states struggle with their deficits during the recession, access and benefit levels available to patients on Medicaid will be seriously jeopardized in many parts of the country. Meanwhile 45,000 Americans are dying each year  as a result of being uninsured—one every 12 minutes.

• Because of a number of small-print provisions in the bill, bought by industry interests and crafted by their representatives, we would see a growing epidemic of underinsurance among the newly insured. These are some of the reasons: low requirements for actuarial value, the proportion of health care costs that insurers are required to pay for care (probably ending up as low as 65 or 70 percent when further compromises are made with the Senate); restricted levels of benefits to be covered (the minimal essential benefits package would be in four tiers, has yet to be developed, and we can expect that it will fall far short of all necessary care); in a last-ditch effort to pass the bill and assuage pro-life legislators, new anti-choice language was added by the Stupak amendment that would deny coverage of abortion care to millions of women; and coverage shortcomings of private plans already in force will be grandfathered in without reform.

• Even after the expenditure of more than $1 trillion, the bill would still leave some 18 million Americans uninsured.

• The public option, diminished as it has been to the point where it could only include 2 percent of Americans by 2019, would not have enough market clout to “keep the insurers honest.” The Congressional Budget Office (CBO) has already concluded that the public option would not offer real competition to private insurers, and that its premiums would even have to be higher than private premiums. It would not be available until 2013 through the new Health Insurance Exchange, and then only to the uninsured and some employees of small businesses without coverage. Moreover, such Exchanges have no track record of success. After 15 years of experience in California, that Exchange failed, mostly due to lack of pricing power and adverse selection by attracting sicker enrollees.

• The CBO has projected that rising insurance costs could mean that middle-income families would spend 15 to 18 percent of their income on premiums and co-payments.

• This bill would not reverse the unraveling of the employer-sponsored insurance system because of rising health care costs that outpace the rest of our economy; despite subsidies to small business, employer-sponsored insurance would remain unsustainable.

• This bill would only add to the already large burden of complexity and bureaucracy, together with their additional costs. At the same time, it would forego savings of some $400 billion a year that could otherwise be achieved through a simplified, more efficient single-payer system.

So in sum, this bill, while well intentioned, is fatally flawed. It would not effectively address the three major system problems demanding urgent reform, and would delay real reform by letting much of our population falsely think that reform is at hand. It would leave in place an inefficient, exploitive insurance industry that is dying by its own hand, even as it props it up with enormous future profits through often subsidized individual and employer mandates.

The most fundamental single question about how to reform our health care system should be whether or not we abandon our multi-payer, mostly investor-owned financing system or move to a not-for-profit single-payer system, Medicare for All, which this year’s political process has carefully kept off the table. The lesson of history in this country tells us that, as long as we retain private health insurance at the core of our health care system, we can never achieve universal access to affordable, comprehensive high-quality care.

Dr. John Geyman is professor emeritus of family medicine at the University of Washington School of Medicine in Seattle, a past president of Physicians for a National Health Program and author of “Do Not Resuscitate: Why the Health Insurance Industry Is Dying, and How We Must Replace It.”

Buy John Geyman’s Books at: www.commoncouragepress.com

This article originally appeared in Tikkun magazine on Nov. 16, 2009.

But this bill is not good enough to pass. It will not make a big enough difference in addressing the three main problems requiring reform–containing the spiraling costs of health care, providing universal access to affordable health care, and improving its quality. If we look at the provisions of this 1,990-page bill concerning just the first two of these three goals, we see that it will fail to deliver real reform.

After all of the political compromises along the way that have led to the introduction of the new bill (HR 3962), on the positive side we can say that it will introduce some limited reforms to the health insurance market, expand health insurance to some of the uninsured (primarily by expansion of Medicaid and by often-inadequate government subsidies to individuals and small employers for the purchase of private insurance); and help to address some other problems, such as the growing shortage of primary care providers.

But the negative side far outweighs the positive:

• Although supporters of the new House bill claim that it would expand coverage for as many as 30 million uninsured, we are actually likely to see an  increase in the number of uninsured in coming years for these kinds of  reasons—as costs keep going up, many Americans will be forced to drop  their present coverage because of inability to afford rapidly rising costs of  premiums, deductibles and co-payments; there is no guarantee that the  uninsured will be able to afford new private coverage (even with subsidies, which won’t kick in for another four years); and expansion of Medicaid will  not take place until 2013 (many states are already pushing back with  concerns that the their recession-strained budgets will not allow them to pay  their share in adding to their Medicaid programs, potentially leaving millions of the poorest Americans uninsured.

• There are no effective cost containment mechanisms built into the bill, either for the costs of health insurance or for health care itself. As it whines about weakening of the individual mandate that will likely limit some of its big increase in the insurance market, the health insurance industry is already warning that sharp premium increases will result. The most the bill will do is to require disclosure and review of premium increases, without any regulatory teeth. Although the bill would set up a Health Benefits Advisory Committee to recommend a minimal essential benefits package (with four tiers), insurance industry lobbyists will argue for the most minimal levels of coverage, and we can anticipate an exponential growth in underinsurance. Moreover, there are no price controls to be applied anywhere in the system, except perhaps in authorizing the government to negotiate drug prices with manufacturers. But that provision will almost certainly not clear the Senate, where we can expect even less concern for affordability and prices.

• Although the public option has been the target of intense controversy, it will play a negligible role in health care reform. The CBO has concluded that it would cover no more than 6 million Americans, just two percent of the population, in 2013, and will cost more than private programs, mostly due to adverse selection in attracting sicker individuals and its inability to set reimbursement rates for physicians and hospitals as is done by Medicare. Moreover, middle-income families may be required to spend 15 to 18 percent of their income on insurance premiums and co-payments.

• HR 3962 will not result in making health care more affordable, despite allocating some $605 billion over ten years for subsidies to low- and middle-income Americans to buy insurance on Exchanges. We can count on continued increases in the cost of health insurance as far as the eye can see, together with less actuarial value of coverage.

• Buried in the fine print of this monster bill are many provisions that will benefit corporate stakeholders in the medical industrial complex on the backs of patients and their families. These examples make the point:

• Although medical loss ratios (MLR) (the proportion of premium revenue actually spent on medical care) are specified at a minimum of 85 percent, this loophole has been added–”while making sure that such a change doesn’t further destabilize the current individual health insurance market.” By way of comparison, the Senate Commerce Committee has found that the average MLR for the largest insurers in the individual market is only 74 percent, with 26 percent of premium revenue going to marketing, administrative overhead and profits.

• Although the bill would create a much-needed Center for Comparative Effectiveness Research, it would have no say over reimbursement and coverage policies. As the bill says, it “contains protections to ensure that research findings are not construed to mandate coverage, reimbursement or other policies to any public or private payer.”

In sum, this $1.055 trillion plan over ten years will not fix the major problems of cost and affordable access to health care in our deteriorating system, will add new layers of bureaucracy and complexity to the present system, is not fiscally responsible, and is not sustainable.

What to do now? Rather than accept an unworkable bill that is politically  expedient, we would be better off to make a major course change. That vote could take place as early as tomorrow.

If that fails, shelving this bill would be the best option. Until a few days ago, I would have added that lawmakers should be pressed to retain the amendment proposed by Dennis Kucinich (D-Ohio) to allow states to experiment with single-payer plans, as a number of states would like to do (e.g. California, Colorado, Illinois, Maine, New Mexico, New York and Pennsylvania). Although that amendment had already been passed by a rare bipartisan vote of 27-19 in the House Education and Labor Committee, it has been stripped from the bill.

The best first option would be to call for a floor vote, as originally promised by the House Speaker Pelosi, for  the amendment proposed by Anthony Weiner (D-NY) to substitute HR 676, a single-payer proposal, for HR 3962. If that fails, shelving this bill would be the best option, but if that is not possible, lawmakers should be pressed to retain the amendment proposed by Dennis Kucinich (D-OH) to allow states to experiment with single-payer plans, as a number of states would like to do (eg. California, Colorado, Illinois, Maine, New Mexico, New York and Pennsylvania).

That amendment has already been passed by a rare bipartisan vote of 27-19 in the House Education and Labor Committee.  Whether a health care bill survives the end game in both chambers of Congress in this session is still up in the air. If a bill is finally enacted into law, however, it will be ineffective in remedying the big problems of cost and access to health care. We should be gearing up for an intense effort in 2010 to push for real health care reform–Medicare for All.

Dr. John Geyman is professor emeritus of family medicine at the University of Washington School of Medicine in Seattle, a past president of Physicians for a National Health Program and author of “Do Not Resuscitate: Why the Health Insurance Industry Is Dying, and How We Must Replace It.” Buy John Geyman’s Books at: http://www.commoncouragepress.com

Meaningful reform of the health care system, truth be told, was lost more than two years ago when the basic issues were framed up. The Democratic frame was too centrist from the beginning. It was a surrender-in-advance approach intended to gain moderate and some bipartisan support by saying that the system is basically sound and just needs incremental change. “If you like your insurance, you can keep it” was the byword. The real question should have been what kind of financing system should we have—multi-payer, keeping alive through generous subsidies a failing insurance industry, or single-payer public financing coupled with a private delivery system.

So the Democrats started from a weak frame, and through the many compromises along the way in the House and Senate have ended up with an expensive, defanged “reform” bill. Compromises in the political center have not gained Republican votes, and have only lessened the chances of any reform bill being effective. The right has demagogued and distorted the issues, but is correct on one count—any of the bills in Congress (except H. R. 676, the Conyers bill, still relegated to the closet) will fail to contain health care costs, and will instead add at least some $800 billion or more to the federal government’s costs over the next ten years. We have already seen evidence that the pledged contributions toward the costs of health care reform made last spring by corporate stakeholders in our market-based system will be more than repaid to them through new revenue streams to their industries if any of the bills now being considered in Congress are enacted. (links to “Alliance” blogs #28, 29, 30 and 33).

President Obama’s convictions on health care reform are still unclear and contradictory. They seem to be intended as centrist and negotiable, as if nothing is really worth fighting for. He would have “started with single-payer if I were starting from scratch”. Then, even while portraying the insurance companies as villains and obstacles to reform, he concludes that we should build on our private multi-payer system and “hold them honest” with a public option. But weak as the public option has became (link to Blog # 21), he still won’t draw a line in the sand in its defense, calling it “only a sliver of my reform plan.”

There is no question that Obama is a pragmatist. So if only on pragmatic grounds, it is time for him to change course (now!) before his plan is gang-tackled in the middle of the field by opponents in both parties, including Blue Dog Democrats as well as progressives on the left who have given up on his plan. So, Obama needs to pick up the single-payer ball (H.R. 676), pivot, roll out to the left, pick up his interference, and run around left end for pay dirt. If he does so, he will have a majority of the public with him, and the number of co-sponsors of the bill will soar as timid members of Congress get political cover and discover stronger backbones. That demonstration of unambiguous presidential leadership could unify the Democratic party in favor of health care reform, and gain further support among fiscal conservatives, whether Republicans or Independents.

Here is what Obama faces if he stays on his present course in the middle of the road. The political discourse will get even uglier and more divided. Amendments from both sides of the aisle will further gut bills pending in Congress. If any bill gets out of committee to votes on the floor in the House and Senate, it will still face further revision by a Joint Conference committee. A bill with bipartisan support appears to be out of the question, and Democrats are likely to become even more fragmented as time goes on. So either a bill dies in Congress or any watered-down bill that may survive to be enacted will likely fail to contain surging costs of health care or make health care and insurance more affordable. Either way, the Democrats lose on the issue, and because of that loss, the stage is set for a Republican counter-attack during the 2010 and 2012 elections.

Based upon what has already happened in Congress and likely political dynamics going forward, here is what any surviving health care bill would probably look like:

• Individual mandate, with minimal restraints on the insurance industry and large federal subsidies for many years to come
• No employer mandate or public option
• Health care exchanges and co-ops, despite lack of evidence for their effectiveness (Link to Blog # 25)
• No negotiation by the government of prescription drugs prices
• Major expansion of Medicaid, again with large federal subsidies and states pushing back against their share of payments
• Minimal or no savings from projected savings hoped for by cutbacks in Medicare and Medicaid
• Continued escalation of health care costs and insurance premiums far above wages and cost-of-living, with little improvement in affordability for millions of Americans
• Record federal and state deficits calling for emergent action

If all that happens, President Obama will lose his credibility, his legacy will be tarnished and his political future clouded. His failure will match that of the Clinton Health Plan in 1993 and 1994, when many of the same mistakes were made. More important, “reform” won’t work, costs will continue to spiral upward, access will further deteriorate, the numbers of uninsured and underinsured will rise further, and the 45,000 American lives lost each year will increase.

The only winners with health care “reform” will be corporate stakeholders who get to keep raising their prices without significant government oversight. The insurance industry will join the list of industries bailed out by generous government subsidies even as they deplore “big government”.

If he were to acknowledge impending failure and change course to the left, this could be Obama’s FDR moment. In 1936, confronted by the Great Depression and corporate self-interest such as we see today, this is what he said to an audience at Madison Square Garden:

“We had to struggle with the old enemies of peace: business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering. They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by an organized mob. Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me and I welcome their hatred.”

This is the kind of bold leadership and political courage called for in our turbulent times today. Our democracy is being challenged, as are our values and character. As usual, time will tell what kind of society we have become.

Dr. John Geyman is professor emeritus of family medicine at the University of Washington School of Medicine in Seattle, a past president of Physicians for a National Health Program and author of “Do Not Resuscitate: Why the Health Insurance Industry Is Dying, and How We Must Replace It.”

Buy John Geyman’s Books at: http://www.commoncouragepress.com

That’s the stunning finding of a study published today in the American Journal of Public Health by leading researchers at Harvard Medical School. The report, “Health Insurance and Mortality in U.S. Adults,” reveals that the uninsured have a 40 percent higher risk of death than those with private insurance, resulting in 45,000 preventable deaths annually.

These are our friends and neighbors, our fellow Americans who can’t afford or otherwise get private health insurance. Increasingly, this group includes nearly all lower-income and a growing majority of middle-class Americans.

The Institute of Medicine estimated in 2002 that more than 18,000 Americans between the ages of 19 and 64 were dying each year as a result of being uninsured. The new number is two and a half times that figure.

Trying to get by, the uninsured and underinsured delay necessary care, put off filling drug prescriptions or take only some of their medications each day. Most are just one major illness or accident away from financial ruin.

A growing number of patients with cancer have to turn down recommended chemotherapy or radiation treatment because of inability to pay for care. If they have insurance, many find that the small print in their policies excludes such coverage. If they are uninsured, their risk of death multiplies. No one in dire need of medical care should be put in this lose-lose situation.

We’re not talking about a third world country. This is the United States, one of the most industrialized nations in the world. But increasingly, we look more like a developing country — 42nd in the world for life expectancy (behind Japan and most of Europe), and ranked last among 19 OECD countries in preventable deaths that should not occur in the presence of timely and effective health care.

Meanwhile, the charade goes on, as our elected representatives in Congress dither over health care reform. None of the bills in Congress will resolve the affordability and access problems.

The Congressional Budget Office estimates the House health reform bill would still leave 17 million persons uninsured and that Sen. Baucus’ bill, unveiled yesterday, would leave 25 million uninsured. That translates into tens of thousands of unnecessary deaths every year.

There are now 3,300 health industry lobbyists running around Washington, D.C., trying to shape the small print to their advantage in whatever bill finally gets passed (if any). The insurance and pharmaceutical companies and their hangers-on are spending $5 million a week to block real reform. Suffice it to say that none of these companies have the best interests of the uninsured or the underinsured at heart.

Through its trade group, America’s Health Insurance Programs, the industry is fighting for its life (but not our lives). And so far, it is winning. By “cooperating” with health care “reform” by pledging to eliminate pre-existing conditions as a barrier to coverage, and saying they will take all comers in return for a government mandate that everyone be required to buy its shoddy products, the insurers are poised to reap a massive financial windfall.

So far, the bills in Congress set no limits on what the insurers can charge for premiums, and the legal requirements for covered benefits are likely to be minimal.

If a “reform” bill along these lines passes, it will be a bonanza for insurers, drug and medical device manufacturers, and other players in the medical-industrial complex, all at our expense. Since their revenues are our costs (as patients and taxpayers), there will be no cost containment.

We can prevent another 45,000 Americans from dying next year. An effective cure to the health care crisis is within our reach, and it lies within a single-payer, Medicare-for-All plan. By cutting out private insurance companies, we would not only save taxpayers billions, but deliver quality care to everyone. We shouldn’t have to wait another 12 minutes.

Dr. John Geyman is professor emeritus of family medicine at the University of Washington School of Medicine in Seattle, a past president of Physicians for a National Health Program and author of “Do Not Resuscitate: Why the Health Insurance Industry Is Dying, and How We Must Replace It.”

Buy John Geyman’s Books at: http://www.commoncouragepress.com

Republicans have fought against Medicare from the very beginning. They bitterly opposed it in various committees in both houses of Congress in 1964 -1965. But they relented, at least for a while, in the face of strong public support for the program, and it passed with bipartisan support.

Almost overnight, tens of millions of American seniors gained access to affordable health care. Medicare was also a boon to the medical profession, hospitals, and the insurance industry, since Blue Cross became the main fiscal intermediary between government, physicians and hospitals.

But that honeymoon was not to last. Republicans have been trying to rein in “entitlement programs” and chip away at Medicare since the start of the Reagan years in 1980. As Speaker of the House in 1994, with a new Republican majority in Congress, Newt Gingrich introduced a bill to privatize and convert Medicare to a smaller program with defined contributions instead of one for all seniors with benefits defined by law. His statement at the time clarified the conservative agenda: (This kind of ‘reform’ might result in “solving the Medicare problem” and lead it to “wither on the vine.” Later pronouncements have followed along the same line, as illustrated by Grover Norquist’s desire to “shrink the government down to the size that it could be drowned in a bathtub.”

With the Balanced Budget Act of 1997, the conservatives’ goal to privatize Medicare was advanced with the new Medicare + Choice (M + C) program. These private plans, mostly HMOs and PPOs, were promoted as offering more choice and value than traditional Medicare. But their subsequent track record belied those claims. Instead, these programs proved themselves unstable in the marketplace, seeking out favorable markets, leaving others when profits were not sufficient, cherry picking the market by avoiding sicker enrollees, and costing the government an average of 13 percent more per enrollee than in traditional Medicare. About one-third of Medicare beneficiaries enrolled in M + C plans between 1999 and 2002 were dropped when their plans abandoned the market, often forcing patients to change physicians and return to regular Medicare.

As M + C programs became discredited, Republicans renewed their attack on Medicare with the passage in 2003 of the Medicare Prescription Drug, Improvement and Modernization Act (MMA), another bonanza for the insurance and drug industries. The MMA established private Medicare Advantage plans (MA) as successors to M + C plans and turned over the drug benefit to the private sector, even prohibiting the government from negotiating drug prices as the Veterans Administration does so effectively. As expected, MA plans have many of the same problems as M + C plans. They are still subsidized by government overpayments averaging 14 percent more than Medicare, while providing less efficiency, choice, value and reliability than traditional Medicare.

Today, as health care reform proposals take shape amid a highly polarized debate in Congress and across the country, conservatives (including Republicans, Blue Dog Democrats and some Independents) have mobilized once again to expand private markets for the insurance industry and other corporate stakeholders in the medical industrial complex. While overlooking their role in fueling health care inflation in both private and public programs, conservatives are intent on handing the party in power a defeat over health care reform, but at the same time maneuvering to expand future health care markets.

In their strategy to kill ObamaCare (whatever that may turn out to be), they are all of a sudden sounding like defenders of Medicare beneficiaries against the presumed evils of big government. Consider these examples of their new-found protector role of seniors:

• Senator Mike Enzi (R-WY) and member of the Gang of Six charting policy in the Senate Finance Committee, warns that “Democrats are cutting hundreds of billions from the elderly and planning to limit or deny care based on age or disability of patients.”
• House Minority Leader John Boehner (R-OH) claims that projected reductions in the growth of Medicare spending means “fewer choices and lower health care quality for our nation’s seniors.”
• In order to “assure that our greatest generation will receive access to quality health care”, Michael Steele, chairman of the Republican National Committee, recently proposed a ‘Seniors’ Health Care Bill of Rights’ with these provisions:

“(1) We need to protect Medicare and not cut it in the name of ‘health insurance reform’;
(2) We need to prohibit the government from getting between seniors and their doctors;
(3) We need to outlaw any effort to ration health care based on age;
(4) We need to prevent government from dictating the terms of end-of-life care; and (5) We need to protect our veterans by preserving Tricare and other benefit programs for military families.”

The cynicism of these statements almost defies belief, given the long Republican track record of trying to undermine Medicare at every turn. These would-be defenders of Medicare pretend to be protecting seniors from an uncaring government, while raising such scare words as rationing and loss of choice, coverage and benefits. Their real goal is to advance their narrow agenda of undermining public programs by privatizing them to their best advantage.

The Republican machine, based on long experience, is expert at scare tactics. One of many examples is the threat of “death panels”, raised by former vice-presidential candidate Sarah Palin and others in reaction to a provision (Section 1233) in the House bill (H.R. 3200) which would provide funding for voluntary end-of-life counseling by physicians on such matters as living wills. Ironically, this provision was suggested by Johnny Isakson, Republican pro-life senator from Georgia, who has been advocating such counseling for years. But as the Medicare Rights Center, AARP and many experts have confirmed, none of these scare claims have any substance in fact.

So what we are seeing is blatant distortion, disinformation and deception by conservative forces bent on defeating any health care reform advanced by the party in power. Fanning concerns and worries among seniors is intended to weaken seniors’ support for reform and perpetuate the hold of private markets on the system. Meanwhile, of course, Republicans keep trying to exploit private Medicare markets to their own advantage as long as the program is alive.

Adapted in part from Shredding the Social Contract: The Privatization of Medicare, 2006, with permission of the publisher Common Courage Press.

Buy John Geyman’s Books at: http://www.commoncouragepress.com