News

San Francisco Chronicle
January 31, 2002
By Victoria Colliver

"Blue Shield of California yesterday introduced a two-tiered system with hospitals on the 'choice' list less costly than those on the 'affiliated' list."

"The tiered system is one of the most immediate ways insurers and employers can pass on to consumers some of the rising costs in health care."

Larry Levitt, vice president of the Kaiser Family Foundation:

"One of the real values of employer-provided health insurance was it was pretty simple for people. You signed up for a package and every employee --from the janitor to the CEO -- got the same benefits. As we get into this tiering, low-wage employees are getting a different benefit than high-wage employees."

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2002/01/31/BU209140.DTL

Comment: The shifting of health care costs to individuals that have the greatest need for care is increasing with a vengeance. The inevitable tiering results not only in fewer benefits for lower income individuals, but it will actually prevent access to care because of lack of affordability.

With our great resources dedicated to health care, using global budgeting to fund facilities would contain costs for hospitals without the necessity of tiering access to care. It is time that we recognize the inhumanity of controlling costs by creating financial barriers to access. Instead, we should control the funds that create excess capacity in our system.

The $1.4 trillion that we are spending on health care would fund all of the capacity that we need, if we merely adopted the administrative efficiencies of a single, publicly administered insurance program, and dismissed the egregiously wasteful private health plans. $1.4 trillion amounts to about $5000 for each man, woman and child in the United States. For a family of four, placing $20,000 into a universal risk pool would provide very nice health care coverage indeed. And public funding with public administration would assure equity both in the way that we pay for and the way that we access health care.

Steven Wolfson, M.D. responds to John Baldwin, M.D., Dean of Dartmouth Medical School who said, "There are some things that aren't businesses and that's OK. I haven't heard anyone talk about privatizing the Marine Corps."

Dr. Wolfson:

Can't you just see "Managed Marine Care"

Your request for a rifle is denied. Diagnosis does not fit this treatment.

No air support will be authorized unless applied for prior to use.

Our 800 line is always open for claims for reinforcements, ammunition, etc.

Sorry, our operators are serving other customers.

We do not provide M-16 rifles; crossbows are equally effective and less costly.

Posted by pnhp at 12:00 PM | Permalink | Comments (0)

The Washington Post
January 30, 2002
By Laura Meckler, Associated Press

"President Bush will ask Congress for new tax credits to help people buy health insurance, an idea that conservatives champion."

"Conservatives typically prefer a free-market approach, which would have families choose their own health insurance packages in the open market. Bush's plan, first made when he was running for president and included in his budget last year, will offer tax breaks to help pay premiums.

"This year's proposal will be essentially unchanged and will be worth up to $1,000 per person a year, or $2,000 per couple, according to an administration official speaking on condition of anonymity."

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San Diego Daily Transcript
January 25, 2002

John Baldwin, M.D., Dean of Dartmouth Medical School:

"The great majority of American people, around 85 percent, if you ask them, 'Do you have a right to health care?' they say yes. But that's not true, it's written down nowhere that you or I have the right to be cared for if we become sick."

The crisis started eight years ago with the "businessification of medicine," he said. When President Bill Clinton's universal health care initiative failed and the Republication Congress of 1994 was elected, the HMO mechanism took hold.

"What we learned was that health care was not a business. It is an essential service like national defense. The Eisenhower highway system is not a business."

Baldwin disagreed with representatives of the American Medical Association who supported flawed policies such as defined contribution, health marts, medical savings accounts, and increased consumer risk sharing:

"As marketers in medicine would say, 'You buy what you can afford.' What does that mean when you're a kid with leukemia in a Hispanic neighborhood that has no insurance, and then compare that with a child from a wealthy neighborhood? Buy what you can afford."

"The first step is to enact in legislation what most American people believe: They have a right to health care. Based on the massive amount of information, determine what ought to be done for people with evidence-based medicine. Then the economic step, how much would that cost?"

Baldwin admits his system would alter how so-called "medical business" functions. Regardless, the nation's leaders should appropriate money based on a rational system in the context of universal access to health care, he said.

"There are some things that aren't businesses and that's OK. I haven't heard anyone talk about privatizing the Marine Corps."

http://dailynews.yahoo.com/h/sddt/20020125/lo/experts_debate_options_for_health_care_reform_1.html (For original article, cut and paste full address into your browser.)

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January 18, 2002 Washington, DC

Marian Wright Edelman Founder and President of the Children's Defense Fund

"And he (Martin Luther King) called then for a Poor People's Campaign. And at that time, there were 11 million poor children, and he reminded us, that we have the resources, in this world's rich nation, that we have the know-how, we have the experience. And that was the call to action. And here we are now, in the beginning of a new millennium and century, and an economy that has tripled in wealth and we have 12 million poor children.

"We've made a lot of progress. We've made a lot of incremental progress, and we're in a little dip at the moment. But, we're still the wealthiest nation in history and it is time to finish that call for a poor people's campaign for an America, where everybody has enough, where every child has hope. We do have the know-how. We do have the experience. And don't you let anybody on Capitol Hill tell you we don't have the money.

"We don't have a money problem; we have a morality problem. We have a political priority problem.

"I would not deny anybody, their first or second million or even billion. But, you know, there's something out of balance when just four wealthy Americans, possess greater wealth than the GNP of the 34 least developed nations in the world, with over 650 million people. And the same Americans, possess more wealth than that of 14 million American families. Their wealth, four people, exceeds the revenues of 24 states, with 42 million citizens.

"You know, they didn't need a tax cut last spring. They don't need another tax cut, under the guise of economic stimulus. This money that has been given them, even small percentages of it, the individual tax rate, the estate tax, could lift every child out of poverty, could provide every child and human being in America health care.

"And they must hear our voice saying, 'enough.' That no more tax breaks take effect, for the wealthy, while there are homeless and uninsured children. I mean it is not--it's un-American, to have people lined-up to get more out of greed when we have hunger and homeless children.

"So, that's what the issue is for us before this Congress, and we should not be discouraged. We've got to get out there and tell those stories. We've got to get out there and say how much money. -- Why should it be so hard to do what is right? When it saves money, saves lives, you know, holds families together. Why should it be so hard to raise children in this country?

"And so, I think this is a moment of enormous opportunity for us, and so, just do not lose heart. What's going to happen in this country is going to depend far more on what we do, than on what people on the Hill do. We can make them find the same money they found for the tax break... for children... if we mobilize and organize."

http://www.kaisernetwork.org/health_cast/uploaded_files/kff011802d.pdf

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The American Prospect
Volume 13, Issue 3.
February 11, 2002
by Robert D. Putnam

"In the aftermath of September's tragedy, a window of opportunity has opened for a sort of civic renewal that occurs only once or twice a century. And yet, though the crisis revealed and replenished the wells of solidarity in American communities, those wells so far remain untapped. At least, this is what that gap between attitudes and behavior suggests. Civic solidarity is what Albert Hirschman called a "moral resource"--distinctive in that, unlike a material resource, it increases with use and diminishes with disuse. Changes in attitude alone, no matter how promising, do not constitute civic renewal."

"Americans today, our surveys suggest, are more open than ever to the idea that people of all backgrounds should be full members of our national community. Progressives should work to translate that national mood into concrete policy initiatives that bridge the ethnic and class cleavages in our increasingly multicultural society."

http://www.prospect.org/print/V13/3/putnam-r.html

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January 21, 2002
Dr. David Satcher

RAY SUAREZ: Well, you grew up in the deep South during the years that Dr. King was trying to change the country's view of race relations. You were still a student when he was killed. How far are we from reaching some of the goals he articulated 40 years ago?

DR. DAVID SATCHER: Well, we've made a lot of progress since I was a child. I was 12 years old when the Montgomery bus boycott started, and I remember going into town and not being able to buy ice cream. You may say, "Well, that's no big deal," but what it did to you as a person to feel that you were shut out was very significant. But I think because of the work of Dr. King and many others, many of those barriers have been broken. But in medicine and in public health, we also have dreams. And those dreams relate to eliminating disparities in health and health care, making sure that everybody in this country has access to quality health care. That's an extension of Dr. King's dream, but it's really critical for the future of this country.

RAY SUAREZ: Is it all about money at this point or is it something a little bit more challenging than simply being able to write a check?

DR. DAVID SATCHER: I think first and foremost, it's about commitment. I really believe that as a nation, we need to make a commitment to universal access. The fact that one out of three Latinos in this country is uninsured, one in four African Americans are uninsured and the fact that so many people live in communities where they don't have access to care, as a nation we ought to make a decision that we're going to work to eliminate those barriers to care. And I'm convinced that we can do it if we make that commitment.

http://www.pbs.org/newshour/bb/health/jan-june02/satcher_1-21.html

Uwe Reinhardt responds to the David Satcher interview:

I found the following exchange from the same interview truly stunning:

RAY SUAREZ: So as you sift through your time as surgeon general, what would you identify as some of the high points of your term?

DR. DAVID SATCHER Well, clearly, you know, we did a major report on mental health, and I believe the response of the American people to that report and to the report on suicide prevention has really been amazing. It's led to several follow-up reports and activities and, of course, we contributed to the world health report on mental health that came out recently.

Comment: Here the Surgeon General of the United States tells us that the high point of his career in that portfolio was a report on mental health that, basically, led to the issuance of yet other reports (aside from some unidentified "activities" probably too trivial to warrant explicit naming.)

Finally I understand what we mean by the dictum: "It's the thought that counts." If only low-income, uninsured people could grasp it. (But, then, perhaps they do grasp it, which may be why they don't bother to scream en masse and in fury at the ballot box).

Best,

Uwe

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The New York Times
January 21, 2002
by Robert Pear

"A federal advisory commission is recommending that the government increase Medicare payments to doctors, hospitals, home care agencies and some nursing homes, even as President Bush prepares to send Congress a budget that would squeeze billions of dollars from Medicare by limiting payments to health care providers."

"White House officials gave several reasons for wanting to slow the growth of Medicare. The cost of the program rose more than 10 percent last year, and that pace cannot be sustained as baby boomers join the rolls, administration officials said. The White House also wants to hold down Medicare spending to improve the overall fiscal picture, to reduce the budget deficit and to ensure that money will be available for drug benefits."

Representative Jim McCrery, Republican of Louisiana:

"Congress pays a lot of attention to the commission and its recommendations. But it's going to be difficult, in the current budgetary environment, to come up with increases in reimbursement."

http://www.nytimes.com/2002/01/21/national/21MEDI.html

Comment: This brings up the rhetoric of "cutting Medicare in order to give tax breaks to the rich." But is it just rhetoric?

Posted by pnhp at 12:00 PM | Permalink | Comments (0)

(http://www.kaisernetwork.org/health_cast/uploaded_files/BushAdmn.pdf)

"Mr. Scully is the Administrator of the Centers for Medicare and Medicaid Services. And when one reads his remarks on the above cited website, he sounds like a caring and concerned man who truly wants to see the various problems plaguing U.S health care addressed properly.

"BUT, I wonder if Mr. Scully would be so glib about the length of time it may take to 'fix' the problems of the elderly, the poor, and the uninsured if he were one of them. With all due respect and honor and sensitivity to the tragic events of September 11th and the aftermath, it did not take us 10 years, or 25 years to get around to responding to the threat and the attack upon our soil and our citizens and residents. The will was there. Miraculously, so was the money.

"What Mr. Scully, and others in this Administration need to do is to simply be honest with the American public. Just admit that the people who have to suffer the consequences of no insurance, no access to care, or have to go without needed drugs because of lack of money to pay for them, these are people who are easily erased from our national consciousness. The above-cited remarks loudly imply that one can ignore these people, MANY OF THEM CHILDREN, with impunity; one can ignore them with little political consequence...after all, they don't donate thousands of dollars to campaign coffers, they don't have lobbyists fighting for their cause with money, favors, and patronization.

"But in actuality, we ignore them at great peril to our country and its future. In the process of dismissing the plight of 42 million uninsured, of stating that maybe we can try 'knocking that down in 10 years' - down to what, one may ask? - we are institutionalizing a morally outrageous type of dehumanization. Social and economic rights....the right to decent housing, to a basic education, the right to NOT be hungry, and yes, the right to basic health care...are not options ... these are necessities for survival. The right to survival is the most basic right of every human being born on this earth. And in the wealthiest country in the world, with the most sophisticated medical technology, and the highest expenditures on health and medical care...this should not even be an issue, it should be a given.

"The number, 40-some million uninsured, is the one that has been getting the most attention recently ... as well it should. But that is only part of the U.S. health care system-story. The number is even larger, as many as 55 million, when one counts those who lack health insurance for some part of the year. Another 50 million or so are said to be underinsured, many of them elderly people for whom Medicare only pays about half of medical expenses. All total, somewhere between 35% and 40% of the U.S. population has woefully inadequate or nonexistent financial access to health care. This constitutes a moral, ethical, political, economic, and social crisis for the country as a whole; and if it were 'fixed overnight,' that would not be soon enough!"

Barbara Rylko-Bauer, PhD basiarylko@juno.com

New e-mail address for Don McCanne:

don@mccanne.org

Use this address to be added to or removed from the "Quote of the Day" list, as well as for personal communications. Replying directly to a "Quote of the Day" message also will access this address.

Posted by pnhp at 12:00 PM | Permalink | Comments (1)

Washington, DC
January 16, 2002

Thomas Scully, Administrator of the Centers for Medicare and Medicaid Services:

"... with all the best intentions, we all want to do overnight fixes and fix everything tomorrow. And the system's too big and the finances are too big, and it just can't happen.

"So, to some degree, we gotta figure out-we got 42 million uninsured today. How do we get to knocking that down in 10 years? It's not gonna happen in one year. We don't have a Medicare drug benefit today. It's not gonna happen next year. How do we get one in 8 or 9 years that works, that doesn't blow up the system?

"Medicaid is a wonderful program, but it's unbelievably, as many of you know, disproportionate in the way it subsidizes people among the states. It needs to be fixed. That's a morass that's gonna take 25 years to fix. But I hope, as healthcare policy people, we can start thinking about longer-term goals, instead of the short-term fixes."

http://www.kaisernetwork.org/health_cast/uploaded_files/BushAdmn.pdf

Comment: With this kind of dynamic leadership, we should have health care reform within... well... uh... maybe not after all... at least during this administration.

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Newsday.com
January 17, 2002
by Marie Cocco

"The choice made in 1994 was to let it be, to reject a national solution and let every American find his own. Each employer and each individual would choose in a marketplace that would somehow bring perfect rationality to a perfectly irrational health-care system.

"For that to be true, you would have to believe that economics, and not emotion, is what drives people when they're having a baby or some tightness in the chest. You would have to assume that people who lose their jobs, and with it their insurance, have a choice. Or that people who go without insurance because they can't afford the premiums are making an informed decision, not a desperate one.

"Now we know all the old health-insurance problems, and some new ones, are still problems. The question is who, if anyone, will step forward to suggest a real solution."

http://www.newsday.com/news/opinion/ny-vpcoc172554436jan17.column

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Third Edition, 2002 Lange Medical Books/McGraw-Hill By Thomas S. Bodenheimer, M.D. and Kevin Grumbach, M.D.

"Perhaps no tension within the U.S. health care system is as far from reaching a point of satisfactory equilibrium as the achievement of a basic level of fairness in the distribution of health care services and the burden of paying for those services. Despite two years of intense debate on health care reform following the 1992 presidential election, more people in the country were uninsured in 2000 than in 1994, with prospects dim for attainment of universal coverage in this century. Due to persistent financial barriers, more patients will go without early detection of potentially curable cancers, more patients with chronic diseases will be hospitalized because of lack of timely outpatient care, more hypertensive patients will forego the medications that might avert the occurrence of strokes and kidney failure, and more babies will be born prematurely and spend their first weeks of life in a neonatal intensive care unit. The poor will continue to pay a greater proportion of their income for health care than do more affluent families, and catastrophic health care costs will ravage countless middle class families.

"People providing and receiving care in the United States must work together to achieve a brighter future for the nation's health care system. Changing the future will require that people look beyond their immediate self-interest to view the common good of a health care system that is accessible, affordable, and of high quality for all. A heightened level of public discourse will be needed, with a populace that is better informed and more actively engaged in shaping the future of their health care system. Abstract concepts in health policy will need to be discussed and debated in a manner that connects with the daily realities experienced by patients and caregivers. The attitudes and actions of physicians and other health professionals will play a major role in determining the future of health care in the United States. With leadership and foresight among the community of health professionals, our nation may yet achieve a system that allows the most honorable features of the healing professions to flourish."

http://shop.mcgraw-hill.com/cgi-bin/pbg/searchresult.html?q=Understanding+Health+Policy&x=14&y=10

Comment: As we contemplate further deterioration in the most expensive but least efficient health care system in the modern world, there has never been a greater need to more thoroughly understand the fundamentals of health policy. Tom Bodenheimer and Kevin Grumbach, in this updated third edition of their classic text, provide a highly readable explanation of policy issues that must be understood by those who wish to help establish an equitable health care system for all of us. It is a great resource for those just learning about health policy. And for those that have more knowledge in the field, it is great for organizing thoughts and approaches to policy issues. It should be in the library of every health care reform activist.

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American Medical News
January 21, 2002
Opinion
"The time is right to fix the problem of the uninsured" by Richard F. Corlin, M.D., President of the American Medical Association

"Let's quickly summarize our AMA proposal:

"We endorse the concept that employers provide a defined contribution for the purchase of health expense coverage -- rather than a defined benefit.

"Our proposal supports a system in which all Americans with health coverage are given tax credits -- in amounts inversely correlated with their income -- rather than excluding employer-provided health benefits from their taxable income.

"We also support the creation of opportunities for alternative health insurance markets -- "voluntary choice cooperatives" -- that would offer more choices for individuals than are presently available.

"Universally available medical savings accounts play an important role in this consumer-oriented system."

"And the AMA plan would also help to develop in each and every individual a consciousness of the real costs involved in their health care choices."

"Let me know what you think about our plan." richard_corlin@ama-assn.org

http://www.ama-assn.org/sci-pubs/amnews/amn_02/edca0121.htm

Comment: Briefly, the impact of the AMA proposals:

Defined contribution - Results in under-funding of comprehensive coverage, leaving low-moderate and low income individuals with Spartan benefits and greater out-of-pocket expenses, impairing access to care because of lack of affordability

Tax credits - Result in severe under-funding of comprehensive coverage with the same consequences as defined contributions, and threatens the link of health insurance to employment, increasing the numbers of uninsured

Alternative health insurance markets - Creates multi-tiered health care by creating a marketplace for the Spartan plans that a defined contribution or tax credit could purchase, while opening access to all products for the affluent

Medical Savings Accounts - Removes funds from the risk pools for the sick and poor making the Spartan products even less affordable

The AMA proposal is a disaster for those with modest or low incomes. The proposal shifts too much of the responsibility of paying for care to the individuals who have the greatest medical needs. This defeats the fundamental purpose of health insurance, and that is to pool risk, providing security for everyone by shifting the costs of paying for care from the large numbers of healthy individuals to the smaller numbers of those with greater needs. Under the AMA proposal, the affluent can self-fund the deficits, assuring their own security, but modest income individuals will not be able to bear the burden of the costs of major medical problems.

Why would the AMA support such a cruel proposal? Two considerations come to mind. Physicians wish to escape from the restrictions on fees and services that have been characteristic of the age of managed care. Many physicians believe that the AMA proposals will remove constraints on their fees and services. They are content to care for more affluent patients, whereas those that cannot afford their services can be someone else's problem. Thus the proposal is very self-serving for physicians. The other reason that we can speculate is that the AMA leadership is saturated with political conservatives that ideologically prefer the wealth-oriented policies of the Heritage Foundation (www.heritage.org) to the patient-oriented policies of Physicians for a National Health Program (www.pnhp.org).

Most physicians really do care about patients. Please honor Dr. Corlin's request to let him know what you think about the AMA plan. His e-mail address is above.

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PNHP's Comments on the Draft of the American College of Physicians -American Society of Internal Medicine Seven-Year Plan to Provide Affordable Coverage for All Americans

By Quentin Young, Don McCanne and Ida Hellander

Overview and Summary of Problems with Corporate Control of Medicine

Despite good intentions, the ACP-ASIM proposal for providing health care coverage for all cannot possibly meet that goal - and delays real reform by seven painful years in which the number of uninsured is expected to rise by 10 million or more. Further, while acknowledging that other problems with our health care system must be addressed, the ACP-ASIM proposal actually perpetuates these problems by keeping intact a system in which greatly flawed health financing and corporate control over health care is an integral part:

- The dominant impediment to decent health care for all is, and has been for two decades, the rapid domination of all aspects of the health system -hospitals, physicians' practices, nursing homes, etc. - by profit-oriented venture capital. No reform is possible without the correction of this historic shift. The ACP-ASIM proposal is silent on this issue.

- The costs of a multi-payer, for-profit insurance system are so exorbitant as to preclude decent health access for all, not to mention the increasingly neglected sectors of long-term care, mental health services, and prescription drug coverage

- Crucial ethical issues - patient choice, physician' autonomy, physicians' ethical responsibility to care for the sick regardless of race, income, or insurance status, "first do no harm", etc. - are being seriously degraded by the current system. The ACP-ASIM draft does not address the linkage between the delivery system and the systematic denial of services and degradation of medical ethics.

- The ACP-ASIM proposal fails to reject incremental strategies, precisely at the historical moment when employers are bailing out of their workplace insurance commitments and governments are slashing their medical and other health programs. Clearly, single payer national health insurance emerges not any longer as the best solution, but as the only solution!

- The reality that health care is a public good, not a for-profit, investor-owned commodity, has shaped the health programs of all democratic, advanced industrial nations. The ACP-ASIM draft does not examine the lessons our country can learn from the superior achievements - fiscally and medically - of other countries (Canada, Sweden, Norway, etc.).

The single-payer solution:

Universal coverage will never be achieved until we have one single system with an effective method of budgeting and cost control. And quality in health care will not be achieved until we have universal coverage with an effective method of health planning. These are inseparable, and the attempt to take on expanding coverage without reforming the fundamental structure of the health financing system would be like running our government without the Constitution.

Comment: Our response further describes the deficiencies in the ACP-ASIM proposal. By failing to address important policy issues, the ACP-ASIM proposal can never lead to an equitable, affordable system of health care for everyone. We propose an alternative which will accomplish that goal -the single payer solution.

The entire response is available at: http://www.pnhp.org/pressreleases.html and click on "PNHP's Comments on the ACP-ASIM Proposal for Health Reform (MS Word document)."

The ACP-ASIM proposal is available at: http://www.acponline.org/hpp/seq_plan01.htm?hp and click on "draft."

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The New York Times
January 12, 2002
Letters

To the Editor:

Re "On an Icy Night, Little Room at the Shelter" (Jan. 5):

Very simply stated, in the year 2002 here in the United States, everyone should have a warm and safe place to sleep. There is no excuse for its being any other way.

HAROLD LANGUS Poughkeepsie, N.Y.

http://www.nytimes.com/2002/01/12/opinion/L12HOME.html

Comment: Very simply stated, in the year 2002 here in the United States, everyone also should have health care. There is no excuse for its being any other way.

Posted by pnhp at 12:00 PM | Permalink | Comments (0)

The New York Times
January 11, 2002
by Robin Toner

"Federal officials confirmed this week that health care costs are climbing faster than they have in years, creating new strains on employers, individuals and government programs that cover the elderly and the poor."

"... the proportion of people who believe that 'radical change' is needed in the health care system has risen, said the Republican pollster Bill McInturff."

"Not surprisingly, administration officials insist that Mr. Bush will embrace, in his budget, a series of credible health care proposals not unlike what he offered last year - tax credits to help the uninsured buy coverage, particularly people recently laid off, and a new prescription drug proposal for the elderly, tied to an overhaul of Medicare."

Mark McClellan, a senior White House health care adviser and member of the Council of Economic Advisers:

"The president's definitely been interested in rising costs. His direction to us has been, if anything, to redouble our efforts to find approaches to keeping coverage affordable."

http://www.nytimes.com/2002/01/11/politics/11HEAL.html

Comment: Affordable for whom? The answer is that the administration wants to make health care affordable for the payers, specifically employers and the government. But their two primary proposals, tax credits and Medicare premium support, shift the costs to the patients, making care unaffordable for low to moderate income individuals. At the same time, these proposals protect the profits of the private health plans, again at the expense of the beneficiaries.

We don't need "radical change" that shifts costs to those who are in the greatest need of health care services, thereby expanding financial barriers to care. Instead, we need radical change that establishes equity in our health care system and contains costs through mechanisms that improve allocation of our resources. We need a universal program of social insurance which utilizes global budgeting. And we need it now.

Posted by pnhp at 12:00 PM | Permalink | Comments (0)

Health Affairs
January/February 2002
by Richard Kronick and Todd Gilmer

"Among persons with income between 100 percent and 200 percent of FPL (federal poverty level), public coverage reduced the number of uninsured persons and crowded out some private insurance. The partial successes achieved by these programs should be kept in perspective: Even after program implementation, approximately 30 percent of low-income adults in the four states were uninsured."

"If expanded programs of subsidized insurance for low income adults are to greatly reduce the numbers of uninsured persons, they must be designed, implemented, financed, and marketed more successfully than were the programs we studied. Such programs have the potential to reduce private coverage, particularly as they are extended to persons with incomes above the federal poverty level. As has been discussed elsewhere, crowding out of private coverage will result in welfare-improving enhancements for low-income persons but does reduce the program's target efficiency. Given the pressing problems created by the existence of close to forty million uninsured persons, we think that designing programs to maximize participation should be an overriding policy goal. However, in a voluntary market programs that are attractive enough to enroll large numbers of uninsured persons inevitably will be attractive enough to enroll large numbers of persons who would have had private insurance in the program's absence."

Comment: This study demonstrated the important principle that programs of public insurance, such as Medicaid and S-CHIP, may "crowd out" private insurance. That is, these publicly funded programs for lower income individuals may displace health insurance coverage that is currently funded privately (albeit with tax advantages). For individuals with private coverage that shift into the public programs, the costs for this coverage is shifted to the taxpayers even though it does not result in a reduction in the rolls of the uninsured.

There is a much more important principle which this study demonstrates. These programs of public insurance, Medicaid and S-CHIP, after fully implemented, still exclude significant numbers of low income individuals. Further, since states must contribute a component to the funding of these programs, during difficult economic times they are subjected to the guillotine of the budget cutters. Since they are chronically under-funded anyway, these program cuts can be disastrous for our health care delivery system.

There are four lessons here:

(1) Public insurance programs for low income individuals partially miss the target population, insuring the already insured, at the expense of taxpayers.

(2) A program of social insurance should have separate sources of funding that are not admixed with the general budget that is highly subject to political machinations. Although the status of the economy will affect delegated funding for a health care program, problems with funding should not be compounded by injecting the potential for a greater element of political chicanery.

(3) Existing public insurance programs fail to patch many of the holes in the health care safety net, leaving unacceptable voids in health care coverage.

(4) Incremental approaches, most of which include some form of public programs for low income individuals, will never provide the comprehensiveness and equity that is missing from our system. Only fundamental restructuring of health care funding can accomplish that. We desperately need a universal program of social insurance.

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Health Affairs
January/February 2002
by Katharine Levit, Cynthia Smith, Cathy Cowan, Helen Lazenby , and Anne Martin
(The authors are in the National Health Statistics Group, Office of the Actuary, at the Centers for Medicare and Medicaid Services in Baltimore.)

"Historical spending trends through 2000 along with historical medical inflation and employment reports for the first half of 2001 indicate that the acceleration in health care costs will likely continue. This stands in stark contrast to recent reports of an increasingly sluggish U.S. economy. Pressure will mount on both public and private payers to finance accelerating health care costs out of decelerating incomes and revenues. Increased job layoffs in the slowing economy will lead to a less competitive job market, reducing private employers' incentive to shoulder rising health care costs, potentially increasing the number of uninsured persons. Competition may force employers to shift a larger share of rising costs to workers, who may no longer be able to afford accelerating out-of-pocket costs. Fewer employers may offer health insurance, and the recently unemployed are often left without coverage. Shrinking tax revenues will likely force government to evaluate health care priorities at a time when the need for coverage is rising. These national health spending estimates may well mark the end of an era of reasonably affordable health care cost growth."

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The Des Moines Register
January 4, 2002
A single-payer national plan makes more and more sense by Register Editorial Board

"Americans should consider establishing a national health-insurance system that covers everyone."

"A single-payer, national health-insurance system would give the government more clout to control costs. It would free Americans from the fear of losing health care when they lose their jobs. It would free businesses from scrambling to find health coverage for their workers, at ever higher costs."

"The current health-care hodgepodge in this country is a failure."

http://www.dmregister.com/news/stories/c5917686/16786298.html

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The Washington Post
January 6, 2002
by David S. Broder

" .... as long as somewhere between 39 million and 44 million Americans are without health insurance of any kind, it will be impossible to solve the problems of cost and quality in the health care system. It is also clear that tinkering around the edges cannot, for long, withstand the adverse trends that are at work, let alone reverse them. This is an issue that cannot wait for the war on terrorism to end. It needs attention from the president and Congress. And it needs it now."

http://www.washingtonpost.com/wp-dyn/articles/A64872-2002Jan4.html

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The Boston Globe
January 4, 2002
by Diane E. Lewis

Mark Abate, a health care and group benefits consultant at William M. Mercer Inc., noted that "some employers were considering a market-driven approach in which employees would receive catastrophic or high deductible insurance for unexpected health care expenses and a health care spending account for more routine expenses. In all, 29 percent of companies with 20,000 or more workers and 17 percent of all of the companies polled indicated they were somewhat or very likely to establish that plan within two years."

http://www.boston.com/dailyglobe2/004/business/Surveys_say_companies_health_care_costs_will_rise+.shtml

Comment:

To see how these plans may work, we can look at an example provided by the Pacific Business Group on Health for their new "Breakthrough Plan with Definity Health":

"An employee is seriously injured, and her medical expenses total $20,000. The first $1,000 is paid by the employee's PCA and applied toward the deductible. The employee pays the next $500 of the plan deductible. After a total of $1,500 has been spent on primary medical services, the deductible is met and the health coverage feature covers all remaining costs. If the employee chooses preferred network providers, co-payments and deductibles are likely to be low. If she chooses providers from outside the network, her cost-share will be somewhat higher, but care will still be provided. At the end of the calendar year, the employer will establish a new PCA with a $1,000 contribution."

(Note that the $1500 deductible used in this example is much smaller than many analysts expect will be the norm.)

Source: http://www.pbgh.org/breakthrough/default.asp

Caveat emptor!

These plans are being promoted as a pain free method of meeting medical expenses. First the savings account is depleted, and then the patient pays the remainder of the plan deductible. After that, the "health coverage feature covers all remaining costs." But look at what is omitted by this "catastrophic coverage" that "covers all remaining costs." If the patient is lucky enough to have had contracted network providers care for her serious injuries (often a chance occurrence), then she will still have to pay "co-payments and deductibles." If the providers are outside of the network, she will be responsible for all uncovered costs. Those that have used PPO products are aware of the severe financial penalties for using out-of-network providers.

A visit to the website of WellPoint's Blue Cross of California is revealing (http://www.bluecrossca.com/index.asp) . WellPoint has been an innovator in insurance products that has helped to place it in the leadership role as a business model for health care coverage. Blue Cross of California offers only one product to complement medical savings accounts, and that is an EPO or exclusive provider organization. This plan has the same restrictions as PPOs except that there is virtually no coverage for services by providers outside of the exclusive provider list. Don't make the mistake of going to the "wrong" doctor or "wrong" hospital! A new version is to be introduced soon and you can be assured that it will be another very successful business product for WellPoint.

Although considerable concern has been expressed over the large deductibles of these MSA-catastrophic plans, the catastrophic backup being offered should be sounding all alarms. And yet these plans are destined to become the standard based on the initial response of business interests!

Let's put at end to policies that are designed solely to create successful business models for the insurance industry, and let's instead adopt policies that are designed to establish equity in access and coverage for patients.

Kip Sullivan responds to the message on catastrophic plans for MSAs:

"What the press isn't telling the public is that Definity and other defined contribution plans are using managed care tactics. A Definity official told me Definity uses utilization review and profiling, but not gatekeeping. Of course, choice of doc is limited. An article in HR Today indicates Vivius uses capitation. I suspect that means Vivius also uses UR. I would say we have gone from bad to worse if we go from manage-care plans with low deductibles to managed-care plans with large deductibles."

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The New York Times
January 3, 2002
by The Associated Press

"Discount prescription drug cards now available to older Americans offer only meager savings, particularly in urban areas, government figures suggest."

"The administration countered that the GAO study is proof that the Bush plan is needed. By attracting more seniors, the Bush discount cards will allow companies to negotiate much more substantial savings, said Thomas Scully, administrator of the Centers for Medicare and Medicaid Services."

Thomas Scully, CMS administrator:

"The voluntary drug cards that exist in the market for seniors don't deliver any savings. Seniors are not organized at all. They're the only people in the country who pay over-the-counter prices."

http://www.nytimes.com/aponline/health/AP-Medicare-Drug-Cards.html

And from the National Journal:

"... with congressional election campaigns in full swing, Novelli (Bill Novelli, executive director of AARP) says that his group will aggressively remind lawmakers that prescription prices are still high, that millions of seniors have no help with those costs, and that the problem is getting worse. 'We're going to go in for the biggest possible package that we can,' said Novelli. 'We're going to go for it.'"

Comment: And before the next elections, will we see Bush discount cards? Or a real Medicare prescription benefit? And will we be allowed in on the conversation when Mr. Scully explains to Mr. Novelli precisely what he meant when he said that seniors are not organized at all?

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