News

Time for single payer?
By Ruth Rosen  San Francisco Chronicle 12/29/03

Don’t be surprised if health care turns out to be the sleeper issue in the 2004 presidential campaign and if a majority of Americans eventually decide that a single-payer system is the most cost-efficient way to provide health care for everyone.

Why? Because our health system — a fragmented hodgepodge of private and public-health plans — is broken.

HMOs — which pay huge amounts for administrative and bureaucratic costs, advertising and skyrocketing drug prices — no longer can contain costs. They have also turned the health-care system into a blizzard of paperwork.

Physicians who recently resisted a single-payer system have grown increasingly resentful of HMO bureaucrats who micromanage their medical decisions. Inadequate reimbursements are driving some out of business. They also dislike having to consult dozens of drug lists or formularies before
they can prescribe medicine for their patients. They’d rather spend time caring for sick people.

Businesses, which seek a level playing field, may also become supporters of a single-payer system. Consider the inequities they face. General Motors, which has a huge group of retired workers, must pay for their lifetime health costs. Newer companies, however, either don’t offer health-care benefits to workers or retired workers or don’t yet have any retired workers to worry about.

Labor, too, is a natural constituency for a single-payer system. The three-month long grocery workers’ strike in Southern California against major supermarkets has highlighted the burden businesses now bear for paying for their workers’ health care. How can Safeway, which has paid decent wages and benefits, compete with union-busting Wal-Mart, which pays subsistence wages and offers health-care insurance at unaffordable premiums?

It can’t. To avoid a race to the bottom, each employer should not have to pay for their workers’ health care. Instead, through an equitable tax, they should contribute to a single-payer health system.

And don’t forget the 40 million uninsured Americans. Soon after the Medicare bill passed, Senate Majority leader Bill Frist announced that Republicans would next try to address the medical needs of those who lack medical insurance. These are people whose votes could be captured by any candidate who promises to reduce their anxieties about getting health care.

The wealthy, too, may come to view single payer as a better alternative. Why? Because one of the best kept secrets in the United States, according to the American Hospital Association, is that 80 percent of our emergency rooms are overcrowded and the average wait is four hours. The poor, of course, already know this. But when middle class and wealthy Americans with heart attacks or serious injuries discover that they, too, may be diverted from one hospital to another, they may reconsider the value of their “excellent” medical insurance.

The fact is, most hospitals operate with “a just-in-time inventory” that works just fine for an average Tuesday evening in May. But on a Saturday night during the winter flu season, emergency rooms are filled with children and elderly people with high temperatures, along with heart attack victims and people bleeding from knife or gunshot wounds. (Don’t even think about what might happen after a bio-terrorist attack, a fire or an earthquake.) Triage nurses must decide who will receive medical attention. When all the emergency rooms are filled to capacity, some patients lie on gurneys in the hall, waiting for an intensive-care bed and monitor.

By contrast, a single-payer system would reduce the burden on emergency rooms by providing everyone with primary care in physicians’ offices and outpatient facilities.

A single-payer system would also cost less. The overhead for Medicare is only 2 percent; for private insurance it is up to 25 percent.

Health care is a human right, not a privilege. If you don’t believe this now, you might change your mind if and when you find yourself in need of life-saving care in a hospital emergency room.

E-mail Ruth Rosen at rrosen@sfchronicle.com
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/12/29/EDGS53U1CM1.DTL
 
*****
[Extracts] Bush drug proposal enrages veterans
Plan may alienate military retirees by imposing higher fees for prescriptions
By DALE EISMAN 1/01/04Copyright 2004 The Virginian-Pilot
 
WASHINGTON — The Bush administration is considering dramatic increases in the fees military retirees pay for prescription drugs, a step that would roll back a benefit extended 33 months ago and risk alienating an important Republican constituency at the dawn of the 2004 campaign season.
 
Pentagon budget documents indicate that retirees may be asked to pay $10 — up from $3 — for each 90-day generic prescription filled by mail through Tricare, the military’s health insurance program. Tricare’s current $9 co-pay for a three-month supply of each brand-name drug would jump to $20.
 
The proposal also would impose charges for drugs the retirees now receive free at military hospitals and clinics. There would be a $10 fee for each generic prescription and a $20 charge for brand-name drugs dispensed at those facilities.
 
A Pentagon spokesman declined Wednesday to comment on the drug plan, calling it “pre-decisional.” But word of the proposal was being spread at the speed of light by veterans service organizations, who were urging their thousands of members to send calls and letters of protest to the White House and members of Congress.
 
“It’s something that we’re going to look at very closely when we return,” said Tom Gordy, chief of staff for Rep. Ed Schrock, R-Va. The House is to reconvene Jan. 20.
 
“You’re tampering with a benefit that was earned by people putting their lives on the line,” said James F. Lokovic, a retired Air Force chief master sergeant and deputy director of the Air Force Sergeants Association.
 
Lokovic’s 136,000-member association already has sent Bush a letter warning of “significant backlash from millions of retired military voters” if the plan is included in the 2005 defense budget the administration will unveil in a few weeks.
 
“Somebody just isn’t paying attention,” the Military Officers Association of America said in “special alert” sent to its 390,000 members. “The war on terrorism is reminding the nation of servicemembers’ sacrifices every night on the evening news … and yet the administration seems to continue going out of its way to penalize the military community.”
 
The officers association alert and an Internet site run by the sergeants association recall attempts by the administration to impose a $1,200 deductible for care provided to most military retirees at Veterans Affairs hospitals and the Pentagon’s long-running opposition to bills providing for “concurrent receipt” of military pension and VA disability payments.
 
The budget documents circulating Wednesday gave no hint of the current status of the plan or the thinking behind it. Military retirees — those who served 20 years or more — had no prescription drug coverage until April 2001.
 
But the documents indicate that the proposed charges would considerably ease the burden of prescription drug costs on the defense budget. The new co-pays would generate more than $728 million in 2005, the Pentagon estimated, and nearly $4.2 billion by the end of 2009.
 
But spokesmen for veterans groups said the VA fills prescriptions for service-related illnesses and injuries at no charge. Its $7 co-pay applies only for medications given to outpatients for ailments unrelated to their service. And even those prescriptions are free when the veteran receiving them has an annual income of less than $9,690 if single and $12,692 if married.
 
*****
To buy or block cheap drugs — Race to the Canadian border
By Froma Harrop  The Providence Journal  12/31/03

WE ARE NOW WITNESSING an extraordinary game of chicken between the states and the Bush administration. About a dozen states are gunning it toward the Canadian border in pursuit of cheaper prescription drugs. The federal government, meanwhile, is racing to block the way. If the states succeed in defying Congress’s ban on drug imports, everything will change: U.S. drug companies will no longer be able to charge Americans up to twice
what foreigners pay for the same pills.
 
The hottest head on the freeway belongs to New Hampshire’s Republican governor, Craig Benson. He has demanded a federal waiver that would let his state import U.S.-made drugs. And he’s setting up an official Web site to help private citizens buy their prescriptions in Canada.

“We will work within the law wherever possible,” says Benson’s spokesman, implying a right to also ignore the law.

Two days after Benson’s announcement, representatives from 10 states met in Atlanta with Canadian pharmacies to discuss doing business together.  The potential savings are huge. One participant, Illinois, puts the savings from buying drugs in Canada at $94 million. Also attending were Ohio, Oklahoma, North Carolina, Massachusetts, Alabama, Vermont, West Virginia, Delaware and Louisiana.

Drugs are cheaper in Canada because Ottawa negotiates the prices pharmaceutical makers may charge there. Most other countries do likewise. The United States, by contrast, keeps its people captive to whatever price the drug companies can get away with. Need we add that the industry is a very generous contributor to political campaigns?

Such policies are not very popular with the electorate, so the powers in Washington have developed complicated rules designed to hide what they’re up to. For example, the new Medicare law cleverly allows Americans to bring drugs back from Canada — but only if the U.S. Food and Drug Administration deems them safe, which it won’t do.

To calm the natives, the administration has left open a safety valve: It looks the other way when individuals bring back medicines from Canada or Mexico for their own use. Slapping cuffs on Grandma as she steps off the bus from Algodones is not good P.R.

But states and cities are another matter. They are enormous purchasers of drugs for workers, retirees, Medicaid patients and prisoners. Once they start going to Canada for drugs also, the ban becomes meaningless.

The battle is not without its comical moments. Three of New Hampshire’s four congressional delegates voted with the Republican leadership against legalizing drug imports. One of them, Rep. Jeb Bradley, now praises Governor Benson for defying a law he helped pass. The two senators, John Sununu and Judd Gregg, had the good sense not to comment.

Is there a states’-rights issue here? “From a constitutional perspective, it’s a fairly clear-cut case,” says Timothy Conlan, a professor of government at George Mason University. “Congress has the power to regulate interstate and foreign commerce.”

However, the Bush administration is under no obligation to block the road to Canada. “It’s likely that the administration has enough discretion that if it wanted to allow states to do this, it probably could have allowed it,” Conlan adds. And giving the states the green light would have fit in with the president’s stated pro-federalism agenda.

(Although conservatives in Washington speak of promoting states’ rights, they often bar state action when it conflicts with the interests of the private sector. “That pattern is pretty consistent,” Conlan says.)

In discussing this issue, it would help to recognize that the pharmaceutical industry is not like most businesses. The public considers its products a social good and helps pay for them with large taxpayer subsidies. Further, a new medication enjoys many years of patent protection — during which its maker has the exclusive right to sell it.

So there’s no point pretending that Coumadin is like a camera battery — a product whose price can be sensibly set by market forces. The federal government must sit down with the pharmaceutical industry and work out a new arrangement for pricing drugs.

Until then, we will be treated to the weird sight of Americans begging foreign governments for relief on the price of American-made drugs. The states’ mad dash to the Canadian border shows more than a dissatisfaction with Washington policy. It demonstrates a growing contempt for it.

Froma Harrop is a Journal editorial writer and syndicated columnist. She may be reached by e-mail at: fharrop@projo.com.

Posted by pnhp at 02:09 PM | Permalink

The Miami Herald
Dec. 28, 2003
Miami hospice pioneers cash in
By John Dorschner

Starting with a few volunteers and a small office in a Miami Methodist church, the minister and the nurse had a simple, idealistic mission. “We wanted to change the way America took care of terminally ill patients,” said Esther Colliflower, the nurse.

A quarter-century later, they head the largest hospice organization in the country, a for-profit firm specializing in the business of death. They have become fabulously wealthy, and now they are cashing in, selling out to Roto-Rooter in a $410 million deal announced last week.

The minister, Hugh Westbrook, stands to gain about $200 million and Colliflower somewhat less.

For some who work with the dying, these huge sums are unseemly. “We feel strongly that excellence in hospice care is a local, community-based concern
with neighbors, friends and families caring for one another,” said Mike Bell of the nonprofit Hospice of the Florida Suncoast, which serves the Tampa area. “Certainly when it’s a business, there’s a risk decisions might not be guided in a way that puts patient and family care first.”

Westbrook will remain a consultant, receiving $25 million over the next seven years, but control of the firm will pass to Tim O’Toole, a Roto-Rooter executive.

Graying baby boomers and the growing acceptance of hospices appear to make
this a solid growth business. Since the deal was announced Dec. 19, Roto-Rooter stock has shot up more than 35 percent.

“Under new ownership,” (investment analyst Jim) Barrett wrote, “we would expect (Roto-Rooter’s) VITAS’ overhead to be reduced.” Barrett didn’t specify, but a prime target for cuts would be the $5.8 million in annual charity care.

Is Westbrook afraid a bottom-line focus will reduce care for the dying? “We’ve always had fears,” he acknowledged, but said the firm is in good hands.

http://www.miami.com/mld/miamiherald/business/7582675.htm Comment:  PNHP has not only supported an equitable system of funding universal health care, but we have also opposed the for-profit, corporate model in health care which must place the interests of investors above all else, including patients. The Roto-Rooter takeover of this hospice chain exemplifies why we need reform in both of these arenas of concern.

A minister and a nurse dedicated to meeting the needs of the terminally ill represent amongst the noblest of efforts of the healing professions. The hospice movement has been one of the more important advances in the care of those with the greatest needs for relief from suffering. If the story ended here, Westbrook and Colliflower might be considered for secular sainthood. But what happened? The for-profit conversion shifted the prime mission of the organization to its obligatory requirement to enhance shareholder value. Merger and acquisition activities are a major contributor to shareholder value. The surviving entity is mandated to further enhance value. And in hospice care, what could improve the bottom line more than eliminating uncompensated (charity) care?

The for-profit, corporate model must always place shareholders above patients, or risk SEC sanctions. But a public service model will always place the patient first. There has been no exception to this rule, and Roto-Rooter’s anticipated intent to ream out this hospice chain would be only the latest example.

Thus PNHP will continue to oppose for-profit, investor-owned corporate entities in health care. But our other mission of supporting an equitable, efficient method of funding care also applies here. A publicly-owned third party payer is ethically obligated to demand value from the provider of services. Diverting huge sums away from health care and to private investors does not provide health care value. If we had our own universal system of social insurance, we would be in a position to demand value from all providers of health care. Merely introducing an equitable single-payer system would have a suppressive effect on investor-owned entities since they would not be able to provide the same value as non-profit entities.

Let’s establish our own public health insurance program and thereby take control of our health care system. Let’s send Roto-Rooter back to the sewers where they can continue to do what they do well.

Posted by pnhp at 11:54 AM | Permalink

Star Tribune Editorial: Hope, profit/Proper oversight in health care

Reading the Star Tribune’s excellent series of articles on Parker Hughes Cancer Center can’t have been easy for a number of people, chief among them patients of the clinic and their families. For many other readers, the distress comes from a question the series raised: If these descriptions of medical practice run amok were accurate, where was the oversight, from both government agencies and private health-care insurers?

The answer is partly hopeful, mostly unsettling. Parker Hughes is a private enterprise operating in a highly competitive, even cutthroat, field controlled by a few players with lots of money for image advertising and for hiring batteries of lawyers. Moreover, regulatory control almost always occurs after the fact. A lawyer who knows that and who is determined to take advantage of it can get away with a great deal for a very long time. Unless employees or patients of a clinic complain persistently, nothing is likely to happen. Even if many do complain, getting to the truth can be a long, expensive and litigious undertaking. Every “i” must be dotted, every “t” crossed, every legal challenge anticipated. That’s an undertaking which until almost the very end operates out of public view, as is now happening.

Partly the confidentiality is explained by medical care being the issue. Society generally grants professionally licensed health-care professionals wide latitude in exercising their best judgment. If a physician operates on the wrong person or the wrong leg, that’s medical malpractice for which clear remedies are available. But questions about the appropriateness of care are far more difficult to resolve.

Because the community of Minnesota physicians operating in some specialties is small, questions about appropriate care are referred to experts from other states — to avoid bias and to blunt inevitable counteraccusations of vendettas motivated by professional jealousy or competition. That’s expensive and time-consuming. It’s also, by law, confidential. All the public generally learns is the outcome.

Concerns about medical business practices, such as billing improprieties and excessive charges, should be, and indeed sometimes are, raised when those who pay much of the bill — state health officials for Medicaid and private insurers such as Medica, HealthPartners and Blue Cross — review the charges submitted by clinics and physicians. More vigilant review of charges needs to become a matter of course.

When the Legislature convenes early next year, it should examine several issues raised by the Star Tribune series. Most seriously, it should assess whether more sunshine is needed when licensed Minnesota health professionals are accused of wrongdoing. If, for example, an expert evaluation validates a complaint, shouldn’t the public at the least have access to the evaluation — if only to assess any disciplinary action taken as a result? Right now, discipline is too much controlled by the professions themselves, and within the professions there exists a high tolerance for some misconduct, such as inflating credentials or seeking favors from vendors.

More broadly, the Star Tribune has illuminated one more reason why the United States should consider some form of a single-payer health care system. Americans generally get excellent health care. But the patchwork system by which they get it drains a hugely excessive amount of revenue from the economy — even as many millions of people go without any coverage at all.

At every level, escalating health-care costs compete with funding for teachers and schools, police agencies and road repair. In many households, those costs compete with the rent and the telephone. For a variety of complex reasons, normal market economics don’t work in health care. It’s one area in which government generally can do a more efficient job of controlling costs and ensuring good care for all.

Posted by pnhp at 10:13 AM | Permalink

shreveporttimes.com
December 26, 2003
Health care eats up parish pay raises
By Don Walker

Caddo Parish employees will receive an across-the-board 2.2 percent pay raise at the start of the new year that, for many, will be swallowed by a 32.7 percent increase in the amount they pay in monthly premiums for health care insurance.

Caddo Administrator Bill Hanna said the increase is unfortunate, yet unavoidable.

“All of this started back with 9/11. Home insurance, auto insurance went up, too. I don’t think there’s a person in the country who hasn’t been affected, and what caused this to escalate was a terrorist attack.”

http://www.shreveporttimes.com/html/E16C8335-645D-4C76-A4CC-22302D6CBB95.shtml

Comment:  The rhetoric of the Bush administration certainly has been very effective, but apparently we need to work on ours.

_______________________________________________

Posted by pnhp at 01:33 PM | Permalink

The Wall Street Journal
December 23, 2003
Teddy’s Nightmare

The new year will bring something of a revolution in American health care. Insurance companies such as Golden Rule, Fortis and Aetna will soon be marketing Health Savings Accounts (HSAs), which promise a new era of individual choice for health insurance.

HSAs, the saving grace of the Medicare prescription drug bill, are the new and improved version of Medical Savings Accounts. They promise individuals and employers relief from spiraling health costs, and without the need for restrictive HMOs.

The basic idea is to pair an inexpensive insurance policy that has a high deductible — $1,000 or more for an individual, $2,000 for a family — with a tax-free savings account.

After the Mandela government deregulated South Africa’s private insurance market in 1994, HSA-type plans quickly captured about two-thirds of it.

That’s precisely the kind of success that Senator Kennedy and friends fear could happen here. Democrats know that a reinvigorated private health insurance market will end their dream of a Canadian-style health system.

“Once millions of HSAs are established, it will be almost impossible to reverse this program,” says the Web site for Physicians for a National Health Program, which also urges visitors to “CONTACT YOUR REPRESENTATIVES AND SENATORS IMMEDIATELY AND DEMAND THE URGENT REPEAL OF TITLE XII OF THE MEDICARE ACT!” Good to see they’re calm about the whole thing.

Critics have been making a number of dire predictions about the effects of
HSAs, none of which stand up to scrutiny. The most common is that HSAs would
attract a disproportionate number of “healthy and wealthy” individuals, “fragment the risk pool,” and drive up the cost of insurance for those who need it most.

http://online.wsj.com/article_email/0,,SB107214365174988600-H9jeoNmlah2op2vZ32Ib6iBm4,00.html

And…

eHealthInsurance.com
Frequently Asked Questions

What is an Indemnity Plan?

An indemnity plan is commonly known as a fee for service or traditional plan. If you select an Indemnity plan you have the freedom to visit any medical provider. You do not need referrals or authorizations; however, some plans may require you to precertify for certain procedures.Most indemnity plans require you to pay a deductible. After you have paid your deductible, indemnity policies typically pay a percentage of “usual and customary” charges for covered services; often the insurance company pays 80% and you pay 20%. Most plans have an annual out of pocket maximum and once you’ve reached this they will pay 100% of all “usual and customary” charges for covered services.

Many health insurance companies have moved away from indemnity plans and are instead offering managed care plans such as HMOs and PPOs. You may have few or no indemnity plan choices in your area.

http://www.ehealthinsurance.com/ehealthinsurance/FrequentlyAskedQuestions_1.html

And…

Internal Revenue Service
Notice 2004-2

This notice provides guidance on Health Savings Accounts.

Q-3. What is a “high-deductible health plan” (HDHP)?

A-3. Generally, an HDHP is a health plan that satisfies certain requirements
with respect to deductibles and out-of-pocket expenses. Specifically, for
self-only coverage, an HDHP has an annual deductible of at least $1,000 and
annual out-of-pocket expenses required to be paid (deductibles, co-payments
and other amounts, but not premiums) not exceeding $5,000. For family coverage, an HDHP has an annual deductible of at least $2,000 and annual
out-of-pocket expenses required to be paid not exceeding $10,000.

Q-4. What are the special rules for determining whether a health plan that
is a network plan meets the requirements of an HDHP (high-deductible health
plan)?

A-4. A network plan is a plan that generally provides more favorable benefits for services provided by its network of providers than for services provided outside of the network. In the case of a plan using a network of providers, the plan does not fail to be an HDHP (if it would otherwise meet the requirements of an HDHP) solely because the out-of-pocket expense limits for services provided outside of the network exceeds the maximum annual out-of-pocket expense limits allowed for an HDHP. In addition, the plan’s annual deductible for out-of-network services is not taken into account in determining the annual contribution limit. Rather, the annual contribution limit is determined by reference to the deductible for services within the network.

http://www.irs.gov/pub/irs-drop/n-04-2.pdf

Comment: The health policy literature is replete with studies describing the “death spiral” of skyrocketing premiums that result from drawing healthier beneficiaries out of risk pools, leaving higher-cost patients behind. The WSJ editors have exceeded their editorial prerogative when they state that the “dire prediction” of fragmenting the risk pool “fails to stand up to scrutiny.” The editors are entitled to their opinions, but not to their facts.

But it is not only those with current needs who will be exposed by widespread use of HSAs. Healthy individuals purchasing the high-deductible plans will find that they do not provide adequate financial protection should they later have major health care needs. It is important to realize that the traditional high-deductible indemnity plans essentially no longer exist, as indicated on the HealthInsurance.com website. No longer can you buy a plan that has only a 20% coinsurance for all services, and full, 100% coverage after an out-of-pocket maximum.

Currently available and HSA-qualified high-deductible plans are primarily PPO plans with restricted benefits, significant coinsurance, and limited provider lists. Current trends suggest that these restrictions will increase as efforts are made to keep the premiums affordable.

The IRS notice confirms that the maximum out-of-pocket expense of $5000 for individuals and $10,000 for families applies only to care provided under the plan. There is no stop-loss protection for care obtained from non-contracted physicians and hospitals, not to mention the very heavy financial penalties that are assessed for receiving care out of the network of providers.

Thus the only individuals who will be exposed to financial disaster are those with health care needs who are left with the death spiral of premiums, or those with needs who will find that their high-deductible PPO will leave them financially exposed. But those of us who are healthy and who will remain healthy will do just fine. Just don’t get sick.

At least the WSJ editors were correct when they facetiously noted that I was
not calm in my response to Title XII, the HSA provision of the Medicare bill. My histrionics are still applicable:

“CONTACT YOUR REPRESENTATIVES AND SENATORS IMMEDIATELY AND DEMAND THE URGENT REPEAL OF TITLE XII OF THE MEDICARE ACT!”

Don McCanne

Posted by pnhp at 12:08 PM | Permalink

The Washington Post
December 21, 2003
Dean’s Care For All, Built Part by Part
By Ceci Connolly

(In 1994, Vermont Governor Howard) Dean, a doctor by training, would be the nation’s first governor to guarantee health coverage to every state resident. And he would do it in a single legislative session, with one enormous bill.

It was ambitious, bold — and an utter failure.

But it wasn’t the end. Like a pragmatic physician who tries a new therapy when the first fails, Dean devoted much of the next decade to smaller, incremental changes aimed at filling the state’s health care gaps.

It was a slower strategy, but by the close of his tenure, Dean came very close to achieving universal health coverage. Vermont now has one of the nation’s highest rates of health insurance coverage, providing care to virtually every child and more than 90 percent of adults. The national average is 83.7 percent.

As some Democratic presidential rivals are quick to note, Dean’s embrace of
balanced budgets led him to flirt with the Medicare-reduction plans of then-U.S. House Speaker Newt Gingrich (R-Ga.), and Dean sometimes trimmed his own state health programs.

These opponents also said that his policies have exacerbated the financial problems for Vermont hospitals, and despite Dean’s efforts to expand health
care coverage, there remains a yawning insurance gap for residents ages 18
to 29. Most important, Dean’s heavy emphasis on government-run programs,
with their low reimbursement rates, has saddled the business community with
higher costs, according to some health care officials.

“Gov. Howard Dean has presided over a constant expansion in government health programs, without a commensurate increase in funding,” the Burlington Free Press editorialized in December 2000.

Another criticism of Dean’s health care record is that his heavy reliance on
government programs hurt the private sector. Because government reimbursement rates are so low, doctors and hospitals in Vermont have been forced to charge more to private clients — individuals and businesses — to make up the difference. As Dean encouraged families to enroll their children in Dr.Dynasaur, corporate insurance pools were left with a larger proportion of high-risk, more expensive adults.

Dean’s tactics and style could inflame tensions, lawmakers said. On several
occasions, he proposed trimming the very health benefits he instituted, including dental, foot and eye care for Vermont’s low- and moderate-income adults. He fiercely defends this approach.

“I promised the people of Vermont I would not take one person off the program,” he said. “So we did eliminate certain benefits. But that’s better than cutting people.”

http://www.washingtonpost.com/ac2/wp-dyn?pagename=article&node=&contentId=A17383-2003Dec20¬Found=true

Comment: The current emphasis on reducing the numbers of uninsured has created an explosion in the rate of under-insurance. Reducing benefits, increasing cost sharing, inequitably funding risk pools, shifting public program costs to providers which drives up fees for private payers, concentrating high-cost patients in separate risk pools making the premiums unaffordable, are only a few of the problems exacerbated by implementing a policy of incremental expansions of program enrollment without ensuring adequate funding of those programs.

Being insured may not mean much if care remains unaffordable because necessary benefits are not covered or the out-of-pocket expenses are too high. But limited insurance is better than none at all. Is there an alternative? Of course. Comprehensive coverage can be provided for everyone at no significant increase in cost if we were to eliminate the administrative inefficiencies of our multi-payer and non-payer system, and establish a single, universal health program.

Dr. Dean initially supported single payer reform but found that it wasn’t politically feasible. He then demonstrated that a pragmatic, incremental approach was feasible, even though it falls short on many goals. Dr.Dean has said that, as president, he would sign a single payer bill if it made it to his desk. But whoever is president, a single payer bill will never pass Congress without overwhelming public support. That won’t happen until the public really understands the various options. We have a lot of work to do.

There is risk for us. We may discover that the real reason for the lack of reform is that the United States is a nation that does, in fact, uniquely reject egalitarianism. Are you prepared to accept that possibility?

Posted by pnhp at 11:27 AM | Permalink

The New York Times
December 20, 2003
The Ownership Society
By David Brooks

In his State of the Union address, the president will announce measures to foster job creation. In the meantime, he is talking about what he calls the Ownership Society.

This is a bundle of proposals that treat workers as self-reliant pioneers who rise through several employers and careers. To thrive, these pioneers need survival tools. They need to own their own capital reserves, their own retraining programs, their own pensions and their own health insurance.

President Bush has a proposal to combine and simplify the confusing morass
of government savings programs and give individuals greater control over how
they want to spend their tax-sheltered savings. Administration officials hope, in a second term, to let individuals control part of their Social Security pensions and perhaps even their medical savings accounts.

Talking with staff, Bush emphasizes that he wants to use these policies to move from an “anything-goes culture” to a “responsibility culture.” By giving individuals control of their own retraining, their own savings and their own homes, he hopes to inculcate self-reliance, industriousness and responsibility.

http://www.nytimes.com/2003/12/20/opinion/20BROO.html

Comment: Implicit in the shift to a “responsibility culture” through the establishment of the “Ownership Society” is the principle that opportunity is available to all. But universal opportunity means that we must have employment opportunities, living wages, affordable housing, affordable health insurance, enough disposable income to fund retirement accounts, and all of the other affordable opportunities that will make us “self-reliant pioneers.”

It is safe to say that for far too many of us, those opportunities do not exist. It is highly unlikely that the individuals without opportunities can create them by mere volition using their pioneering spirit. These deeply-rooted societal problems cannot be solved by merely praising the virtues of a utopian Ownership Society. These problems require a component of public policies and public programs to give us the “survival tools” needed to accomplish these goals.

We can use health care as an example. Just as mega-corporations are jointly
owned by shareholders, a universal program of health insurance can be jointly owned by the citizens. That would provide everyone with the survival tool for health care.

We can approach the goals of a utopian Ownership Society providing that we
properly balance private and public ownership by adopting public policies
that will accomplish these goals. President Bush needs to show us real policies that will provide all citizens with the survival tools they need to “own their own capital reserves, their own retraining programs, their own pensions and their own health insurance.” But to be effective, some of these will require joint public ownership within our Ownership Society.

Posted by pnhp at 11:05 AM | Permalink

The Pacific Research Institute presents ‘The Prescription drug battle with Canada’ a Panel Debate on Tuesday, January 27, 2004.

Please get more information by going to their website
http://www.pacificresearch.org/events/index.html

Posted by pnhp at 03:01 PM | Permalink

Le Monde diplomatique
December 2003

‘SOCIETY SCORNS THE OLDEST, EXCLUDES THE YOUNGEST AND TAKES INDIVIDUALITY TO EXTREMES‘

France: health as a commodity

French healthcare leads the world, but the government is about to change the financing of the system from public funding to private insurance. This threatens not only the future well-being of the French but the basis of the nation’s social contract.
By MARTINE BULARD

WILL the French social security system soon be just a memory? Using this year’s deficit forecasts, the government is tweaking its arguments to justify structural reform, which has been officially postponed until early 2005. But measures already taken have set the tone, including cuts in reimbursements, a rise in the daily hospital charge and hospital bed closures. This is a traditional package in most developed countries.

Public health systems are being challenged everywhere, whether they are based on employment-related resources and co-run by employers and employees (the Bismarck system in Germany and the Netherlands), state-run and funded by taxation (the Beveridge system in the United Kingdom, Italy and Sweden), or a mixed model (as in France). Inequalities are soaring but so are deficits, although health-benefit cuts were supposed to plug the financial gaps.

The social security deficit curve generally shadows the unemployment curve. In France, if contribution revenue had grown by 6% in 2002 as it did in 2001, there would be no gap. But slumping growth reduces contribution revenue and deepens deficits, prompting austerity programmes that cause falling consumption, stifling growth, thus reducing social security contributions and so on. The pit is bottomless.

This should prompt questions over remedial cuts, which are about as useful as bloodletting. But there is an ideological barrier here. True, there is no global conspiracy, no hidden mastermind imposing the same solution everywhere. However, there are very real pressure groups with a direct interest in the health-benefit bonanza - $3.5 trillion worldwide. Their lobbying targets are international organisations that claim to be neutral, such as the World Bank with its influential 1994 report that explained how social spending would become an unbearable burden for nations and cause lasting changes to security systems (1). The World Trade Organisation (WTO) provided the general agreement on trade in services, a byword for privatisation.

These ideas circulate freely because the experts involved easily change hats. An author of the World Bank report, Estelle James, joined President George Bush Jr’s team to handle privatising health benefits (2). In France the health minister, Jean-François Mattei, and the social affairs minister, François Fillon, asked two private-sector figures - François Chadelat, a senior executive with the insurer Axa, and Alain Coulomb, representing private hospitals – to propose ways to clarify the roles of public and private sectors. Transfers are two-way: Gilles Johanet, director of France’s national social security fund (CNAM), left to run the health and collective insurance division of giant AGF.

The solutions stay the same: cuts in collective spending and the promotion of personal initiative, deemed to yield better performance. In the name of this principle, accounting-driven regulation was introduced in the mid-1980s, promising that by cutting doctors, pharmacies and hospital beds, there would be fewer patients or, at least, lower spending. French governments have tried to achieve this for 25 years, capping the number of doctors and nursing staff. The operation has been more successful than expected. From 2010 more doctors will retire from medicine than will enter it, although public hospitals are already 3,500 doctors short, despite 9,000 foreign practitioners, underpaid and with insecure status.

Public hospitals have lost more beds - 35,352 in seven years- than private ones (18,475). Small local hospitals that could treat common conditions and distribute patients have closed. They would have been useful during this summer’s heatwave and could ease the strain on casualty departments in large towns. Patients must sometimes travel long distances to hospitals that, while superbly equipped, are unsuited to treating ordinary cases. Maternity hospitals have been shut down in the name of safety and women redirected to large complexes often too sophisticated to deal with routine pregnancies: yet there is astonishment at the rising proportion of reimbursements for transport costs.

Spending rises steeply with no reduction in inequalities.The lack of joint regulation in the assignment of doctors is leaving areas unserved: Picardie has only 110 specialists for 100,000 inhabitants compared to 220 in Provence-Alpes-Côte-d’Azur, 234 in Ile-de-France and an average 169 across the whole European Union.

France still ranks first in the world for healthcare, according to the World Health Organisation. Doctors do not yet have to keep patients waiting a year for hip or heart operations, as they do in Britain, or 208 days for a cataract operation, as in Finland, or 128 days as in Denmark (3).

But there are danger signs: in Ile-de-France 60% of patients wait at least two weeks for a magnetic resonance imaging appointment; the experts say that time limit should not be exceeded (4). “The quotas for medical equipment are ridiculous,” says Professor Bernard Debré. “France ranks last in the world for the number of MRIs performed, behind Turkey” (5). People in business, political and media circles have contacts and are unaffected by this.

The lack of preventive medicine, and the way that it is being sidelined where it had been developed in schools and businesses, deepens inequalities further. According to the French research centre for health economics Credes, 14.7% of French people have given up healthcare for financial reasons; 30% of this group are jobless. Despite the creation of Universal health insurance (known in France as CMU), between a quarter and a third of those entitled to it have not been
able to afford it. Working-class households spend half as much as managers’ families on specialist consultations, but twice as much in hospital costs. They seek care later, which costs more. The authors of Inégalités sociales de santé say that 10,000 premature deaths a year could be avoided if blue- and white-collar workers had the same mortality rate as senior managers (6).

The measures in the pipeline will, instead of tackling these injustices, steepen the slide. In 2001 the French business confederation Medef presented a full report on its version of social security: a US-style system with minimal, tax-funded care provision for the poorest and top-up insurance for the rest, as individual or group pol icies provided by mutual societies and insurers. Yet we know the economic outcome of this. The US, the land of optional insurance and always the example quoted, holds the record for health spending. In 2001 the proportion was 13.9% of wealth created, compared to 10.7% in Germany, 9.5% in France and 7.5% in Finland, where free care is the rule (7); anyway, 41 million Americans have no health cover and the problem is now affecting the middle classes. In 2001, according to the New York Times, 1.4 million people, 800,000 of whom earned more than $75,000, lost their health insurance (8). Rising unemployment was a factor but the main cause was insurance premiums, which have soared (9). Patients who want to be reimbursed cannot choose their doctors, who cannot practise as they would like. “Managed care has become the de facto national health policy of the US” (10), writes George Anders, citing paediatricians; insurance companies have forced them to shorten their consultations by some 10 minutes.

The French government, inspired by this model, is seeking to redefine the areas covered by the public and private sectors. Jacques Barrot, of the Union for the Presidential Majority coalition, explains: “We need to distinguish between small risks and heavy risks. The latter must be covered by compulsory insurance and the other risks by top-up or voluntary insurance from mutual societies or private insurers” (11). Such a distinction is medically absurd (a small risk can conceal a serious disease), socially unjust (only the rich would be able to look after themselves) and economically costly (the later care is sought, the more is spent). Chadelat’s report (12), the basis for the government’s work, is written in the same spirit. In proposing a major change in the health cover mechanism in France as it has existed since 1945, he calls for “a basket of care” (minimum care provision with no precise definition), which would be co-funded by the general social-security scheme (compulsory health insurance) and by top-up insurance, mainly from mutual societies. These sources would supply 80% of funds, with the rest covered by extra top-up insurance.

But top-up cover does not exist for some part-time employees and expires when workers lose their jobs or retire. Only 52% of over-65s have it. Moreover regulation of mutual societies is now similar to that of insurers and premiums are likely to grow. Alongside this new share-out, the contributions payable by employers and employees would be cut; this would cost the social security system an estimated ?2bn per full year, more than 2% of its resources.

Total health commoditisation would damage society. The social security system is about more than health and pensions: it shapes the contours of social organisation. It gives those without capital some independence in bad times. It allows people to do without charity or welfare and gain entry to a system of rights. Social security made a leap forward, gradually freeing social relations from the market. To revert to the uncertainty of the individual contract and the madness of the financial markets would be a leap backward. Many young people and women, insecure and with no top-up insurance, but too “wealthy” to qualify for CMU, would have to agree to live in permanent anxiety about the future, unable to make positive plans. The old would have no right to an untroubled retirement. The economist Alain Cotta, noting that 70% of healthcare costs are incurred in the last six months of life, proposed in all seriousness “self-regulation organised by society [which would create] a social function: putting people to death” (13) and a cut-off of healthcare for anyone over 90, which would codify social euthanasia.

A society that scorns the oldest, excludes the youngest and takes individuality to extremes is far from inevitable. Reforms are essential, but also a recognition that health spending will continue to grow. In all countries rising standards of living result in greater demand for care - and for culture and leisure. Technological progress increases the cost of treatment; people live longer and need greater medical supervision; the advent of serious diseases (Aids) or their growing incidence (cancer) demands extra funding. In France the birth rate is rising. In 2002 midwifery costs were one of the highest increases, 11.8%, in social security reimbursements.

In France and other developed countries the share of national wealth devoted to health will rise. This is no great drama or insurmountable hurdle, as long as the debate sticks to genuine issues and a new architecture is built based on new financial resources. Health spending underpins growth. It generates qualified jobs for care provision direct to consumers in hospitals and laboratories, research and industry. Promoting a real prevention policy, especially in schools and the workplace, would also create jobs. Throughout the developed world, generating qualified employment is the best way to increase jobs: in France 100,000 more jobs would mean an extra ?1bn in contributions.

That is why contributions must remain linked to business wealth creation and not be replaced, as some advocate, by the contribution sociale généralisée (CSG), the universal social security tax introduced in 1991 by the Socialist party. The CSG was initially justified as being a tax on capital revenue, not being deducted from salaries; in fact 93% of it is taken from salaries. The exemption of French businesses from contributions, with no positive requirements in return, is freeing masses of money, much of which flows into stock markets. Exemptions jumped from ?1.3bn in 1991 to ?8.8bn in 2001, more than that year’s social security deficit. Exemption cutbacks would allow proper funding reform: use VAT and not salaries as a funding source and adjust contributions to favour companies that created properly-paid and qualified jobs. This would add value to labour without intensifying it or abolishing national holidays.

Aspects of French healthcare need an overhaul, especially the introduction of a more preventive system. Prevention currently costs 2.3% of total spending. Improving it would cost slightly more initially but would soon generate savings. Oral-hygiene pilot schemes in schools in the Seine Saint-Denis département have reduced tooth decay and costly treatments. Mutual societies have conducted other positive experiments.

To make the healthcare system more efficient and economical, the role of drugs needs to be re-evaluated. France is not the world’s biggest consumer, ranking below Sweden, the US, Canada, Finland, Australia and Ireland, but above Germany and Italy (although the French do seem to take the most anti-depressants) (14). Pharmaceutical companies have too much power in the decision-making process and the government has enabled them to fix the price of new drugs. To escape this, transparent and independent commissions, with doctors and representatives of the social security system, mutual societies and patients, should set prices and favour generic products, at present only 10% of French prescriptions compared to 28% in Germany.

We need to redefine the doctor’s role. There is no question of reviewing patients’ freedom of choice and practitioners’ freedom to prescribe. But we must recognise the system’s failings: 14% of GPs prescribe 50% of reimbursed medicines; 40% of specialists and 50% of dentists charge more than the basic rate set by the social-security scheme. Doctors in rural and problem areas struggle to make ends meet at ?20 a consultation, but others do well - radiologists earn an
average of ?14,200 a month gross.

Continuing vocational training remains marginal. Philippe Houcarde, a health economics specialist, advocates more active control - stopping patients from specialist-hopping and limiting doctors’ prescriptions. But he primarily recommends encouraging new forms of practice and pay: different rates according to the scope of the diagnosis and the time spent on it, or flat fees according to the service provided; group practices and experimental clinics open evenings and weekends, run by a rota of doctors who provide minor treatment and refer patients to specialists as necessary, thus absorbing patients from hospital casualty departments.

The system cannot be re-energised to boost performance and save money without democracy. French deputies set annual spending standards with no idea of medical consequences. The genesis of disease and the evolution of pathologies are scarcely studied. The managers of the social security system - unions and employers - are accountable to no one; elections to choose them were suspended in 1983. Patients’ associations are excluded. The system combines state control and bureaucratisation.

Pierre Laroque, father of the French social security system, believed that the creation of universal insurance meant combining an economic policy geared to full employment, a health infrastructure and medical organisation policy that aimed for prevention first and treatment second, and a revenue distribution policy that tended to modify the blind distribution of economic mechanisms (15). His mighty ambition, soon forgotten, is more topical than ever: it is about building a different health system.

Rather than leave all this to the market, it would be better to reduce the insecurity of daily life and build on the solidarity - between young and old, healthy and sick, the single and families - that is at the heart of the social security system.
________________________________________________________

(1) “Averting the old age crisis”, World Bank, Washington DC, 1994. Also La régulation du système de santé, Conseil d’analyse économique, La documentation française, Paris, 2000.

(2) Dean Baker, “The World Bank’s attacks on social security”, Centre for Economic and Policy Research, 7 August 2001, Washington.

(3) “Les systèmes de santé danois, suédois et finlandais”, Etudes et Résultats, n° 214, Direction de la recherche et des études de l’évaluation et des statistiques, January 2003, Paris.

(4) “Les trajectoires des patients en Ile de France”, Questions d’économie de la santé, n° 31, July 2000, Paris.

(5) “Comment soigner un tel malade”, France soir, 2 December 2002.

(6) Annette Leclerc, Didier Fassin, Hélène Grandjean, Monique Kaminski and Thierry Lang, dir, Inégalités sociales de santé, La Découverte/Inserm, Paris, 2000.

(7) “Health data 2003”, second edition, Organisation for Economic Cooperation and Development, July 2003.

(8) “Problem of lost health benefits is reaching into the middle class,” New York Times, 25 November 2002. Available on Commondreams.org.

(9) Milt Freudenheim, “Health benefit costs soar in US,” International Herald Tribune, Paris, 11 September 2003.

(10) “The medicine in our future,” New York Review of Books, 12 June 1997. NYROB’s archives are on subscription.

(11) La Tribune, Paris, 28 October 2002.

(12) “La répartition des interventions entre les assurances obligatoires et complémentaires”, Commission des comptes de la Sécurité sociale, Paris, July 2003.

(13) Journal du Dimanche, Paris, 7 September 2003.

(14) Health Data 2003, op cit.

(15) Henry C Galant, Histoire politique de la Sécurité
sociale française - 1945-1952, Librairie Armand Colin, 1955.

Translated by Paul Jones
________________________________________________________

ALL RIGHTS RESERVED © 1997-2003 Le Monde diplomatique

http://MondeDiplo.com/2003/12/13socialsecurity

Posted by pnhp at 02:32 PM | Permalink

Benemax (A Benefit Management Company)
Consumer Driven Health Care (CDHC)
CDHC presentation slides (excerpts)

“Unleashing the power of free market economics on the healthcare
industry”

Why CDHC: Consumering
Patients shop for quality & price
Providers compete for patient traffic
Patients subject treatment options to cost/benefit analysis

What a CDHC plan does
Varies member cost based on health care behavior
Rewards members with below median health care costs

http://www.benemax.com/presentation-cdhc/cdhc1.html

The American Heritage Dictionary of the English Language
Fourth Edition

Consumering No documents match the query

http://www.bartleby.com/61/

Comment: Although “consumering” apparently rewards patients “with below
median health care costs,” conversely it seems to punish patients with above median health care costs. The opposite of insurance, “consumering” protects the healthy from the costs of those with legitimate health care needs, and further punishes the sick by adding the financial burden of accessing health care.

“Consumering” doesn’t seem to be a very good idea. Let’s not add it to
our dictionaries.

Posted by pnhp at 10:12 AM | Permalink

American Medical News
Dec. 22/29, 2003
Medicare law starts clock on fixing payment formula
By Markian Hawryluk

With a stroke of his pen on Dec. 8, President Bush signed away two years of future cuts in Medicare payments to doctors. But amid the glee over the averted crisis, physician groups realized they have just those two years in which to avoid a disastrous situation.

The Medicare bill signed into law would set updates at a minimum of1.5% in 2004 and 2005. But because the payment update formula was left primarily intact, the extra spending over the next two years will have to be recouped in 2006 and beyond. Unless the pay formula is revised or eliminated by that time, physicians can expect a sharp reduction, or cliff, in payment.

“As the cliff physicians face in 2006 illustrates, a Band-Aid can only stop the hemorrhaging for so long,” said Carl Pepine, MD, president of the American College of cardiology. “The sustainable growth rate formula for making annual updates to Medicare fees is still inherently flawed and does not accurately reflect the cost of physician services…”

http://www.ama-assn.org/amednews/2003/12/22/gvl11222.htm

Comment: For an advance loan for the next two years which will have to be paid back through a reduction in future fees, the AMA agreed to support legislation that is designed to reduce federal funding of the entire Medicare program. Not only will they have to pay off this advance in fees, but they will have a relatively smaller pool of funds from which to draw future reimbursements. How is the AMA going to negotiate a better payment formula when the politicians will protest that we can’t afford to pay for both prescription drugs and physician fee increases?

Physicians who are more than two years away from retirement will find it in their interest to start supporting a universal program of social insurance that will recover $280 billion in administrative waste and spend that on patient care instead. More money for patient care means more money for physicians.

75% of physicians aren’t even AMA members. They should think about joining an organization that has a mission to dramatically improve the way we fund health care: Physicians for a National Health Program. By supporting reform that places the patient first, physicians will fare very well.

PNHP website, including membership information:
http://www.pnhp.org/

Posted by pnhp at 10:40 AM | Permalink

The Henry J. Kaiser Family Foundation
December 2003
Understanding the Health-Care Needs and Experiences of People with Disabilities
By Kristina Hanson, Tricia Neuman and Molly Voris

Although most people with disabilities do have some form of health insurance
coverage, those who are both uninsured and disabled are at a particular disadvantage in the current health-care system. They are more likely than
others to forgo or delay getting necessary care, including the prescription
drugs and preventive services that would reduce their future need for health-care services.

The findings from this survey also demonstrate that all sources of insurance
are not created equal in meeting the needs of people with disabilities. Private insurance is often perceived as the most generous source of coverage, generally serving those with higher incomes. However, even those with private coverage often have significant problems paying for various services due in part to high cost-sharing requirements and the lack of coverage of specific services often needed by people with disabilities, such as personal assistance services.

Despite Medicaid’s relative generosity… specific Medicaid benefits do vary considerably by state… In addition, in the face of rising costs and budget
shortfalls, states are currently looking for ways of slowing growth in program spending, such as curtailing benefits, increasing cost-sharing requirements, and restricting eligibility.

… beneficiaries who rely on Medicare as their sole source of coverage are
far more likely than those with either Medicaid or private insurance to delay care, go without needed equipment, and forgo medicines due to costs.

In conclusion, the findings from this survey highlight the diverse needs of non-elderly adults with disabilities, while also demonstrating the need for significant improvements in the health-care coverage available to this population. Along with extending coverage to particularly disadvantaged groups of people with disabilities without insurance altogether, future policy debates should focus on strengthening the coverage currently offered through both public and private sources of insurance to improve health care and quality of life for Americans with disabilities.

http://www.kff.org/medicare/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=28401

Comment: The disconcerting news is that none of our current programs are
ensuring full access to care for people with disabilities. What should be of
concern to the rest of us is that we, likewise, have no assurances that our
needs would be met should we ever be unfortunate enough to develop a long-term disability. But isn’t that one of the major reasons why we have
health insurance?

Our current policies are aimed at shifting more of the costs to patients, and reducing funding of our risk pools whether they be public programs, employer-sponsored plans or other private plans. Isn’t this moving in the wrong direction?

Let’s now demand equitable and efficient use of our generous health care
resources. We can do this by establishing our own public program of universal health insurance. Then we would all be assured of both health security and financial security should the need arise.

Posted by pnhp at 02:31 PM | Permalink

Sunday, December 14, 2003
National health-care anarchy isn’t serving Americans well
By Froma Harrop
Providence Journal columnist

The next person to call me liberal for advocating a national health plan is in for a tongue-lashing - or I’ll just hand him a copy of this column. What we have now is anarchy. We have government plans, private coverage, no coverage, not enough coverage. There are untreated illnesses, overtreatment, too many pills, pills that cost too much, federal regulators and state regulators.

It happens that the best arguments for universal coverage with a strong federal hand are conservative ones. But conservatives are the last ones to make them. Or, to be more accurate, Richard Nixon was the last conservative to make the case, and that was a long time ago.

Why should conservatives support making health insurance primarily a federal responsibility?

For starters, it would help American business. Asking America’s employers to pay for their workers’ health care makes no sense. Why not ask them to pick up their employees’ supermarket tabs or dry cleaning bills, as well?

The practice started during World War II, when the government froze wages. Factories desperate for workers offered health benefits instead of pay raises. The idea grew, and that’s why today’s employers are funding our allergy shots and heart bypasses.

Many also cover lots of hangers-on - workers’ spouses, children and domestic partners. About two-thirds of Americans younger than 65 now obtain coverage through someone’s employer. And some generous companies cover their retirees, also. General Motors, for example, now pays the medical bills of one-half of 1 percent of all Americans.

Businesses also end up paying for the uninsured. Because law requires hospitals to treat every comer, people without coverage go to hospitals for their medical needs, major and minor. Many don’t pay their hospital bills. Hospitals offset these losses by raising fees for paying customers - that is, the insured. The upshot is higher premiums for employers.

The system burdens America’s businesses in other ways. Companies must hire people just to administer their workers’ medical benefits. And the employer that spends money on good benefits is put at a competitive disadvantage to companies that do not. Health care raises its labor costs.

Our employment-based health-care system costs jobs: Health costs have spurred U.S. companies to move their operations elsewhere. For example, American automakers like making cars in Canada, because the Canadian government pays for medical care.

The cost of insuring workers makes companies wary of hiring more people. When business heats up, they prefer asking current workers to put in more hours. That’s because paying time-and-a-half wages is often cheaper than providing an expensive health-care package to a new worker.

There are strong “family values” arguments for universal coverage. Social conservatives want mothers to stay home with their young children. I know several young mothers who would do so, were it not for the health-insurance problem. They have husbands who work - but in jobs lacking family coverage. These families can plan for a year or two of a parent’s lost wages. But they won’t risk having a family member come down with a serious illness requiring $100,000 worth of medical care and no coverage.

It’s time to shatter several myths about a national health plan. One is that it must be a restrictive single-payer program, like Canada’s. The systems in France and Germany combine a basic government guarantee of coverage with the option of buying fancier care through private insurance.

Another myth is that a national health plan would be expensive. Actually, it would save the U.S. economy money. Our muddled system sends administrative costs skyrocketing and wastes medical resources. As a result, the United States now spends 14 percent of its gross domestic product on health care, versus the 11 percent spent in Germany and 10 percent in France.

A third myth is that workers don’t pay for company health benefits. They do. Money that their employer spends on their health coverage comes out of their paychecks. Without that expense, employers could raise salaries.

So let’s free the American corporation! Let Acme Widgets make widgets and not worry about its foreman’s asthma condition. Let’s free the American mother (or father) to stay at home with the kids and not have to work just for health coverage.

Today’s health-care system offers neither a liberal nor a conservative vision. It’s anarchy, pure and simple.

Froma Harrop is a Providence Journal columnist. Contact her by writing to
fharrop@projo.com.

Posted by pnhp at 11:03 AM | Permalink

Center for Studying Health System Change (HSC)
News Release
Dec. 12, 2003
Health Care Spending Growth Slows Sharply in First Half of 2003

Health care spending growth per privately insured American slowed in the first half of 2003, increasing 8.5 percent, a sharp drop from the 10 Percent increase in the second half of 2002, according to a Center for Studying Health System Change (HSC) study released today.

“Increased patient cost sharing is probably an important factor in the slowing of cost trends, but few experts expect this tool to substantially lower cost trends over the long term,” said Paul B. Ginsburg, Ph.D., coauthor of the study and president of HSC, a nonpartisan policy research organization funded exclusively by The Robert Wood Johnson Foundation.

“Without more effective cost-control measures, the rising cost of health insurance will make coverage unaffordable to more and more Americans,” Ginsburg said.

“As patients are having to share more of the costs, the fact is that more and more patients go without care,” said Paul Ginsburg, president of the Washington, D.C.-based center (Agovino, Associated Press).
HSC release
http://www.hschange.com/CONTENT/634/

Associated Press article by Teresa Agovino:
http://www.chron.com/cs/CDA/ssistory.mpl/health/2289043

And…

The New England Journal of Medicine
December 4, 2003
The Effect of Incentive-Based Formularies on Prescription-Drug
Utilization
and Spending
By Haiden A. Huskamp, et al

In conclusion, we found large effects on the continuation of the use of medications and out-of-pocket expenditures for enrollees associated with the switch by one employer from a one-tier to a three-tier formulary involving across-the-board increases in cost sharing… The discontinuation of the use of medications such as statins and ACE inhibitors that are needed for the treatment of chronic illnesses raises important questions about potentially harmful effects of formulary changes and the associated changes in copayments.

http://content.nejm.org/cgi/content/abstract/349/23/2224

Comment: In order to control the premium increases in private health plans, insurers are reducing benefits and increasing cost sharing.

Conservatives contend that it is essential to make patients sensitive to cost so that they will make wise financial decisions on the care that they really need. Unfortunately, since most patients with significant health care needs have little disposable income, the only real choice that they will have is to do without. Innumerable studies have now confirmed that increased cost sharing
significantly reduces the utilization of beneficial health care services.

The health savings accounts (HSAs) which will go into effect next month will help neither those who deplete their accounts because of chronic disorders
nor those who are unable to fund their accounts. Insurance premiums for these less fortunate individuals will be made affordable only by reducing benefits and increasing cost sharing.

Ironically, those who are able to build large HSAs are precisely those who have the least health care needs. Neglecting the ill to benefit the healthy is not rational health policy.

No matter what we do, under the present fragmented system of funding care the increased trends in cost sharing will make health care unaffordable for moderate and low income individuals with significant health care needs.

The experiment with cost containment through greater cost sharing has already failed miserably when measured by its impact on those with greater needs.

Let’s abandon these perverse efforts and move forward by adopting an equitable, comprehensive, universal system of social insurance. That Will work.

Posted by pnhp at 02:24 PM | Permalink

The New York Times
December 12, 2003
Letters

Health Plan at Wal-Mart

To the Editor:

Re “Wal-Mart’s Health Plan” (letter, Dec. 4):

More than 90 percent of our associates have health insurance, about Half through Wal-Mart and half through other sources like spouses or parents.

We strive to make our health plan affordable and not a burden to taxpayers. That’s why we pay approximately two-thirds of the cost.

Like other employers, we face escalating health care costs, leading to adjustments in premiums…

This crisis needs a national solution.

SUSAN CHAMBERS
Senior V.P., Benefits and Insurance Administration
Wal-Mart Stores
Bentonville, Ark.

http://www.nytimes.com/2003/12/12/opinion/L12WALM.html?pagewanted=print&position=

Comment: And what national solution would that be? Perhaps a single, equitable, affordable, comprehensive program of national health insurance for everyone? Why not? It would work for Wal-Mart, and it would certainly work for all of the rest of us.

Message 2:

Date: Fri, 12 Dec 2003 10:02:08 -0800
Subject:: Additional comment about Wal-Mart

We shouldn’t gloss over the statement by Susan Chambers, Wal-Mart Senior V.P. for Benefits and Insurance Administration, that “This crisis needs a national solution.”

The call for a national solution is a clear call for leveling the Playing field. Establishing equity in health care is a compelling goal. Wal-Mart has made its initial move. We should grab it and run with it.

Don

Posted by pnhp at 01:46 PM | Permalink

Area seniors denounce Medicare drug law. People at meeting say they’re feeling more betrayed and angrier as details come to light about complex measure.

MAKING A POINT: Dr. Brenda Ross, mayor pro tem of Laguna Woods and member of People for a National Health Program, addresses Thursday’s meeting of the Health Care Council of Orange County in Santa Ana, where the changes in Medicare were discussed.

MINDY SCHAUER, THE ORANGE COUNTY REGISTER
• Answering some Medicare questions
By MAYRAV SAAR and DENA BUNIS

The new Medicare prescription-drug bill has given Lenore Rufrano some sleepless nights.

The 76-year-old retired nurse from Mission Viejo has read every word she could get her hands on about the landmark legislation. And it looked like she was going to have to give up the medigap policy that she counts on to fill the gaps in Medicare’s coverage and help her pay for her seven prescriptions.

“For the first time in my life, I started to think about what is more important,” Rufrano said. Could she continue to give her three children and grandchildren the Christmas gifts that she always has? Would going out to lunch once a week become a luxury she couldn’t afford?

As more details about the complicated law come to light, Rufrano has learned that the private medigap policy, which costs her almost $7,000 a year, won’t be taken away from her.

Beginning in 2006 when the prescription-drug plan kicks in, new medigap policies won’t be able to contain drug coverage. But anyone who currently has a medigap policy that includes drugs and wants to keep it will be able to.

“I’m so relieved,” Rufrano said. But she is still miffed at AARP, formerly known as the American Association of Retired Persons, for promoting a bill that she believes will force too many seniors into the managed-care plans that she wants no part of.

“They didn’t ask me. They didn’t ask anyone I know,” Rufrano said of AARP’s decision to support the plan.

EXTRA COVERAGE ALSO AFFECTED
Nine out of 10 people on Medicare have some type of supplemental insurance to help pay what Medicare doesn’t cover. Some have retiree health plans. Some who have low incomes are eligible for Medicaid – Medi-Cal in California – and others buy medigap policies from private insurance companies.

These policies generally pick up costs like the hospital deductible, the deductible and some co-payments for office visits and some home-care expenses. And three of the 10 federally standardized medigap policies offer some prescription drug coverage.

The 10 medigap policies are designated by letters A through J. The A policies cost the least and offer the least coverage. J policies cost the most and have the highest level of benefits.

Here’s what will happen to medigap policies under the new law.
• Policies A through G, which don’t offer drug coverage, will remain the same.
• As of 2006, all new H, I and J policies will not include prescription drug coverage. Anyone who has one of those policies, however, will be able to keep it and the prescription drug coverage as long as they do not enroll in the new Medicare Part D prescription drug plan. Lawmakers wanted to avoid anyone having duplicate coverage.
• As of 2006, two new medigap policies will be added. Policies K and L will have high deductibles and will not cover the deductibles for doctor visits. They will be designed to cover catastrophic costs.

FOR MORE INFORMATION
www.kff.org - This Kaiser Family Foundation site includes a Medicare calculator. Beneficiaries can insert income, drug costs and other information and the computer will calculate the amount of the benefit under the plan.
www.aarp.org - This Web site of the giant seniors organization has information about the Medicare law and the organization’s reasons for its support of the changes.

www.medicare.gov - This is the official U.S. government’s site for Medicare. More information can also be obtained calling (800) 633-4227.

Rufrano has company. A roomful of angry seniors and health-care advocates gathered at a town-hall meeting in Santa Ana on Thursday to rail against the bill and pledge support for the lawmakers who opposed it.

They wereangry at AARP. Angry at the legislators who passed it. Seniors have started sifting through the 7-lb. Medicare bill, and they are growing angrier with each page they read.

“It’s such a travesty, and people won’t know that until they need health care,” said Sandra Hester, a member of the Health Care Council of Orange County, which sponsored the event.

The town-hall meeting drew more than 40 people, including representatives from the office of Rep. Loretta Sanchez, D-Santa Ana.

Sanchez is the only one of the six House members representing Orange County who voted against the Medicare bill. None of those members or their staffs showed up at the forum.

Lawmakers are on recess until late January, and several members are out of the country. Sanchez was in Israel. Staff members of other House members said either they never received the invitation or their schedules were full.

Also absent were representatives from AARP, which lost 15,000 members after it supported the bill. Ernie Powell, advocacy representative for the organization, said AARP recognizes flaws in the bill but supported it as a “first step” toward providing prescription drug entitlements.

“From 1965 until a week and a half ago, there was no prescription drug benefit. There is now a benefit that can be worked on to be made stronger and to be made more beneficial,” Powell said.

Powell said AARP plans to work with Congress to repeal certain aspects of the bill, such as the provision that seniors can no longer buy cheaper drugs from Canada and Mexico.

But many people at the forum said they still felt betrayed. Reading a full-page newspaper ad that AARP took out in support of the bill, Ted Rosenbaum said AARP’s contention that the bill protects traditional Medicare was “an outright lie.”

Rosenbaum drew applause when he urged other seniors in the audience to send complaint letters to the politicians and organizations who supported the bill and ended with a rallying cry indicative of how grave the group considered the new law:

“We shall overcome!” he said.

click to view photo
————————————————————————————————————
CONTACT US: (714) 796-6880 or msaar@ocregister.com

Posted by pnhp at 10:07 AM | Permalink

For Immediate Release Contacts: Quentin Young MD
December 11, 2003 (312) 782-6006

Statement of Dr. Quentin Young on the Medicare Prescription Drug Bill
National Coordinator, Physicians for a National Health Program

The “Medicare reform” legislation signed into law by President Bush on December 8 is a sham and must be repealed at once. Medicare needs a straightforward full drug benefit, based on hard negotiations for the best prices from the drug companies. The current bill not only provides scrooge-like benefits; it also prohibits Medicare from adopting effective measures to contain escalating drug costs (rising 17% a year), assuring that seniors will soon be worse off under the bill than they are today.

The bill’s benefits are ephemeral. It actually worsens the position of millions of seniors and permanently disabled Medicare beneficiaries (such as persons with end-stage renal disease and HIV), and at best offers extremely limited assistance with drug costs. Of the current 6 million Medicare beneficiaries also eligible for Medicaid - the very poorest seniors and disabled persons - about half, 3 million, will lose their current excellent drug coverage through means testing. Millions more seniors who currently have near-full coverage through a former employer or Medigap plan also face higher costs for lower benefits.

The prime beneficiaries of the current legislation are not the aged and infirmed; it is the pharmaceutical industry, which is rewarded for decades of price-gouging and fraud with an additional $137 billion in profits. Wall Street immediately reacted to Congress’ largesse. Drug stock prices soared and the Bill’s Congressional supporters can expect a boost in contributions to their 2004 campaigns.

The bill prohibits the Secretary of HHS from negotiating the best price with manufacturers, despite the fact that other governmental agencies, the Veterans Administration and the Department of Defense, negotiate 40-60% discounts as major purchasers right now. Also, the bill effectively outlaws Canadian imports (with their sharply reduced prices) unless the FDA “certifies” the drugs safety; FDA commissioner McClellan had already declared he would not do this.

But most destructive is the provision of billions of dollars to private Medicare HMO’s to give them the advantage in competition with traditional Medicare. This strategy achieves Newt Gingrich’s malign vision of forcing Medicare to “wither away.”

Medicare HMOs raise Medicare’s costs by “cherry picking,” enrolling the healthy and excluding the sick. Over the last decade they have ratcheted down their benefits while dumping millions of seniors deemed unprofitable.

Add to this the “Health Savings Account” provision which will attract the wealthy and healthy into tax-free schemes. HSA’s will seriously undermine the insurance risk pool for all of us. Risk-pooling is the source of strength, prudence, and effectiveness of national health insurance. The enemies of universal coverage understand this and thus have inserted this poison pill into Medicare “reform.”

There is hope. A recent poll by ABC News/Washington Post found that the more seniors and the public learn about Bush’s Medicare bill, the less they like it. A real drug benefit is needed now more than ever, and is easy to devise. It should be administered by Medicare, with that program’s low (3%) overhead, and take advantage of Medicare’s bargaining power to reverse the skyrocketing costs of medications. It should provide a comprehensive, first-dollar benefit. Seniors in England, Canada, Australia and other industrialized countries already enjoy such benefits. American seniors deserve no less.

######

Physicians for a National Health Program is a 12,000 member organization that makes its headquarters in Chicago. PNHP has spokespeople across the country. For a contact in your area, please call (312) 782-6006. Media are also invited to receive our press releases via e-mail by enrolling at www.pnhp.org.

Dr. Quentin Young is an internist in private practice in Chicago. He is a co-founder and volunteer national coordinator of PNHP for the past decade.

Posted by pnhp at 04:28 PM | Permalink

Pittsburgh Post-Gazette
December 11, 2003
National health insurance inevitable?
Highmark CEO makes the case, says it may be solution to spiraling costs
By Pamela Gaynor

In spite of the wider role Congress created for private insurers in the recently enacted Medicare reform bill, the chief executive officer of the region’s largest health insurer yesterday said he believes the country will inevitably move toward a national health insurance plan for all age groups.

(Dr. Kenneth Melani, CEO of Highmark, Inc., when giving a speech at the University of Pittsburgh’s Graduate School of Public Health)… said a host of factors have driven double-digit increases in health care costs across the country the past four years, including technology, greater consumer demand from an aging population, litigation and labor costs. The increases, he said, had come without corresponding gains in life expectancy, earning much of the technology has proven to have dubious value.

With health care costs now accounting for roughly 15 cents of every dollar of the nation’s economic activity, he predicted a backlash among voters.

At some point, “Democrats will get into office and say the Republicans have made a big mistake. There will be sweeping reform and then we’ll have national health insurance,” Melani said. “That’s where I think we’ll end up.
I can’t say when.”

http://www.post-gazette.com/pg/03345/249907.stm

Comment: Highmark, Inc., a non-profit, Blue Cross Blue Shield affiliate, is the nation’s 11th-largest health insurer. As Highmark’s CEO, Dr. Melani has diligently followed the trends and shifting opinions in health care. As a noted insurance industry leader, his opinions certainly have credibility.

National health insurance is absolutely inevitable. It remains to be seen whether the politicians will have the courage to enact a program that ensures equity, comprehensiveness, affordability, and administrative efficiency through a publicly-administered and publicly-funded model.

It’s our task to be certain that everyone does understand the superiority of the public model.

Posted by pnhp at 01:26 PM | Permalink

CONGRESS Democracy crumbles under cover of darkness
By SHERROD BROWN
Published: Thursday, Dec. 11 2003
(This Op-Ed ran in newspapers across the nation.)

House Republicans bend rules, press for votes during wee hours to escape
the light of accountability.

Never before has the House of Representatives operated in such secrecy:

At 2:54 a.m. on a Friday in March, the House cut veterans benefits by three votes.

At 2:39 a.m. on a Friday in April, the House slashed education and health care by five votes.

At 1:56 a.m. on a Friday in May, the House passed the Leave No Millionaire Behind tax-cut bill by a handful of votes.

At 2:33 a.m. on a Friday in June, the House passed the Medicare privatization and prescription drug bill by one vote.

At 12:57 a.m. on a Friday in July, the House eviscerated Head Start by one vote.

And then, after returning from summer recess, at 12:12 a.m. on a Friday in October, the House voted $87 billion for Iraq.

Always in the middle of the night. Always after the press had passed their deadlines. Always after the American people had turned off the news and gone to bed.

What did the public see? At best, Americans read a small story with a brief explanation of the bill and the vote count in Saturday’s papers.

But what did the public miss? They didn’t see the House votes, which normally take no more than 20 minutes, dragging on for as long as an hour as members of the Republican leadership trolled for enough votes to cobble together a majority.

They didn’t see GOP leaders stalking the floor for whoever was not in line.

They didn’t see Speaker Dennis Hastert and Majority Leader Tom DeLay coerce enough Republican members into switching their votes to produce the desired result.

In other words, they didn’t see the subversion of democracy.

And late last month, they did it again. The most sweeping changes to Medicare in its 38-year history were forced through the House at 5:55 on a Saturday morning.

The debate started at midnight. The roll call began at 3:00 a.m. Most of us voted within the typical 20 minutes. Normally, the speaker would have gaveled the vote closed. But not this time; the Republican-driven bill was losing.

By 4 a.m., the bill had been defeated 216-218, with only one member, Democrat David Wu, not voting. Still, the speaker refused to gavel the vote closed.

Then the assault began.

Hastert, DeLay, Republican Whip Roy Blount, Ways and Means Chairman Bill Thomas, Energy and Commerce Chairman Billy Tauzin - all searched the floor for stray Republicans to bully.

I watched them surround Cincinnati’s Steve Chabot, trying first a carrot, then a stick; but he remained defiant. Next, they aimed at retiring Michigan congressman Nick Smith, whose son is running to succeed him. They promised
support if he changed his vote to yes and threatened his son’s future if he refused. He stood his ground.

Many of the two dozen Republicans who voted against the bill had fled the floor. One Republican hid in the Democratic cloakroom.

By 4:30, the browbeating had moved into the Republican cloakroom, out of sight of C-SPAN cameras and the insomniac public. Republican leaders woke President
George W. Bush, and a White House aide passed a cell phone from one recalcitrant member to another in the cloakroom.

At 5:55, two hours and 55 minutes after the roll call had begun - twice as long as any previous vote in the history of the U.S. House of Representatives – two obscure western Republicans emerged from the cloakroom. They walked, ashen and cowed, down the aisle to the front of the chamber, scrawled their names and district numbers on green cards to change their votes and surrendered the cards
to the clerk.

The speaker gaveled the vote closed; Medicare privatization had passed.

You can do a lot in the middle of the night, under the cover of darkness.

U.S. Congressman Sherrod Brown, a Democrat from Ohio, is the ranking member on the Committee on Energy and the Commerce Subcommittee on Health.

Posted by pnhp at 11:28 AM | Permalink

United States Senate
December 9, 2003
Statements on Introduced Bills and Joint Resolutions
(Page: S16127)

Mr. KENNEDY. Mr. President, today, along with Senator Bob Graham, I am introducing the “Defense of Medicare and Real Prescription Drug Benefit Act.” Congressman John Dingell is introducing companion legislation in the House of Representatives.

S. 1992. A bill to amend the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 to eliminate privatization of the medicare program, to improve the medicare prescription drug benefit, to repeal health savings accounts, and for other purposes; to the Committee on Finance.

Summary: Provisions of the Defense of Medicare and Real Medicare Prescription Drug Benefit Act

Title 1: Defense of Medicare

Repeals the premium support demonstration. Requires risk adjustment between private sector plans and Medicare. Medicare will pay private sector plans an amount reflecting Medicare’s cost for covering an individual, rather than paying HMOs a large markup as a result of failing to adjust for the better health of senior citizens who join HMOs.

Repeals PPO slush fund. Pays all private sector plans an amount equivalent to average Medicare costs, rather than paying an average of 109 percent of Medicare costs, as provided under the current legislation. Phased in over 5 years. Repeals Medicare spending cap.

Title II: Establishment of Real Medicare Prescription Drug benefit Eliminates coverage gap in 2006-2008, beneficiaries will pay 75 percent coinsurance in the coverage gap. In 2009-2011, they will pay 50 percent. In 2012 and subsequent years, they will pay the same 25 percent copayment as
under the initial coverage limit.

Eliminates discriminatory treatment of employer plans. Allows Medicaid wrap-around for dual eligibles. Eliminates assets test. Requires two stand-alone prescription drug plans to avoid federal fallback. Secretary defines classes and categories under any formula.

Repeals prohibition on Medigap coverage of prescription drugs. Modifies current Medigap policies covering drugs to wrap-around new benefit.

Phases out elimination of state “clawback.”

Title III: Reduction in Prescription Drug Prices

Allows reimportation from Canada with certification and inspection of Canadian exporters to assure safety of drugs. Repeals prohibition on government negotiating directly with drug companies for best prices and gives authority for such negotiations.

Title VI: Repeals Health Savings Accounts

http://thomas.loc.gov/cgi-bin/query/F?r108:1:./temp/~r108HTt6fm:e46026:

Sen. Kennedy’s press release:
http://www.senate.gov/~kennedy/statements/03/11/2003C10519.html

Comment: S.1992, the “Defense of Medicare and Real Medicare Prescription Drug Benefit Act,” would provide a bona fide prescription benefit for Medicare, and would protect Medicare as a program of social insurance. It would also repeal the health savings accounts (HSAs) which threaten all of us by reducing the affordability of care for those with the greatest health care needs.

This bill must be passed and signed. If the current Congress and President won’t do it, then we need to replace them with individuals who will.

Posted by pnhp at 11:14 AM | Permalink

This alert is from Health Action NM.

THE TRUTH ABOUT THE RECENTLY ENACTED MEDICARE LEGISLATION

The Senior Citizen’s Law office, Inc. and Health Action New Mexico are very concerned about provisions of the recently enacted Medicare Prescription drug bill, which was signed into law by President Bush on December 8, 2003.

The bill is more about destroying the Medicare program than delivering a comprehensive drug benefit to senior and disabled Americans. The legislation was mostly drafted in secret by Rep. Bill Thomas who excluded most Democratic conferees; the bill contains the position of house Republicans on most major issues rather than provisions of the bi-partisan Senate bill.

Everyone agrees that the bill passed because of AARP’s support, despite the opposition of an overwhelming majority of its members. Senator Domenici, Rep. Pearce, and Rep. Heather Wilson voted in favor of the legislation.

Senator Bingaman and Rep. Udall opposed the legislation. Seniors around the country are denouncing AARP and revoking their membership. You can reach AARP at the following e-mail addresses:

wdnovelli@aarp.org, member@aarp.org . You may also want to call your legislators and chastise them or thank them for their votes. Itemized below are the concerns of SCLO and HANM regarding the legislation.

• Basic Prescription Drug Coverage: Beginning 2006, a complicated prescription drug benefit will be available though with substantial out-of-pocket costs. Coverage will be available only through insurance companies and HMOs. Though enrollment will be “voluntary,” there will be considerable financial pressure to enroll at once. (It will be costly to enroll at a later time.)

• Benefit: Enrollees will pay the following initial costs for the initial benefits described herein. A minimum monthly premium of $35 (premiums may vary), a $250 annual deductible, 25% of costs up to $2,250, 100% of costs up to $5,100 (a gap of $2,850), and 5% of costs above $5,100. (or total out-of-pocket costs of $3,600).

Remember these are the anticipated initial costs and benefits. “Initial’ refers to the fact that these figures will increase each year by at least 10%”. Insurance premiums, which are not set in the bill even for 2006, are projected to rise 65% to $58 a month in 2013.

Enrollees will be required to pay monthly premiums during the period of time that they receive no benefits (the “donut hole”) and must pay the full cost of their medications.

• Low-Income Benefit: Imposes an assets test for the low-income benefit and denies low-income dual eligibles (those who receive both Medicare and Medicaid) the ability to continue to get wrap-around assistance through Medicaid (e.g. if a drug is not on the Medicare formulary but is on the state’s Medicaid formulary, a dually eligible enrollee will not be able to access the Medicaid drug). Also, low-ncome beneficiaries will be required to pay a modest co-payment for medications; under Medicaid there is currently no co-payment. In New Mexico, an estimated 33,000 low-income Medicare beneficiaries will be negatively impacted by the legislation.

• Income-Relating to the Part B Premium: Eliminates the universal guarantee of Medicare and imposes new bureaucracy and an assets test to qualify for the low-income benefit. The assets test raises privacy concerns for millions of Medicare beneficiaries.

• Inflating the Part B Deductible: Allows the Part B deductible to increase at a dramatic rate, at the same time many other added costs are being imposed on Medicare beneficiaries.

• Premium Support: Imposes competitive bidding beginning in 2010 in certain areas of the country, including Albuquerque. Not only are there ongoing problems with respect to plans being in and out of the medicare managed care market, benefit changes, and provider changes on an annual and even a semi-annual basis, but it is anticipated that out-of-pocket costs for seniors in pilot programs will be higher than for seniors in non-pilot locations. The irony is that New Mexico is the poorest state in the country and seniors in Albuquerque will be paying higher Medicare costs than elsewhere.

• Retiree Coverage: There will still be major drop in retiree coverage, which leads to retirees losing a much stronger benefit for a very pathetic benefit. The Congressional Budget Office estimates that 3.8 million retirees, about one-third of all non-federal retirees who have health insurance provided by their former employers, will have their more generous private coverage reduced or terminated. It is anticipated that 2.7 million retirees will lose their benefits after 2006.

• Health Savings Accounts: Gives conservatives one of the main items they want in health care and guarantees there is no further action for years on the uninsured. These tax-sheltered accounts are usable by wealthier and healthier beneficiaries. The HSAs are very problematic from a health policy perspective; their popularity may result in the destruction of the Medicare program.

• State Clawback: Imposes an effective “reverse block grant” on states in their Medicaid programs by requiring states to pay the federal government an amount each year based on some determination of their drug costs in a base year. (If the state spends more than the projected amount, then the state must reimburse the federal government the excess amount.) This provision creates major problems for the Medicaid program (e.g., nursing home care) for years to come.

• Cost Containment: Creates a budget process beginning in 2010 whereby there is a self-proclaimed “budgetary crisis” in Medicare every single year, thereby threatening Medicare from that date forward.

• Fallback: If there is not a private drug plan (PDP) in a region, the fallback is for the federal government to contract with one or more private companies to deliver the drug benefit, rather than the government providing the benefit as originally proposed. The volatility of private companies delivering “benefits” is traditionally a problem.

• Private Plan Slush Fund: The bill provides $12 billion to the Secretary in the form of a slush fund to hand out to managed care providers to try to move people out of traditional Medicare. Consequently, private companies will have an unfair advantage over the vastly more popular original Medicare program.

• Cost Containment: There is none. The bill specifically precludes the government from negotiating lower prices or discounts with drug manufacturers.

• Drug Re-importation: The law restricts the importing of less expensive drugs from Canada, Mexico and other countries.

______________________________________

Health Action New Mexico
P.O. Box 40119
Albuquerque, NM 87196
(505) 342-8081
info@healthactionnm.org

Posted by pnhp at 01:38 PM | Permalink

INDEPTH: HEALTH CARE IN GALVESTON
Galveston, oh Galveston
Rationing health care in Texas
Reporter: Frank Koller, CBC Radio | December 8, 2003

On December 8, 2003, U.S. President George W. Bush signed a $400-billion overhaul of Medicare, the American government-run system to help the elderly with medical care. The new provisions are designed to offer some relief from the soaring costs of prescription drugs in the U.S.

Galveston As the U.S. presidential election campaign heats up, health care is emerging as perhaps the major domestic issue. The already-high costs of private health insurance are rising monthly. But 44 million people – 15 per cent of the American population – have no health insurance coverage at all.
Texas – Bush’s home state – has the highest proportion of uninsured citizens. In Galveston, the situation is so severe the local hospital has been forced to deliver medical care based on patients’ ability to pay.

Income screening

Rosalyn McCray In the financial screening centre of the University of Texas Medical Branch hospital in Galveston, Rosalyn McCray examines the bank statements of a woman desperate to see a doctor. Irene Perez has also brought a notarized letter stating she and her disabled husband earn less than $8,000 a year.

They’ve never had health insurance. Perez hopes to prove she’s so poor the hospital will declare her “medically indigent.” And let her see a doctor.
“It’s very embarrassing because we’ve never in our 20 years of marriage asked for any help,” Perez says. “We own two shrimp boats and worked for ourselves until he lost both of his kidneys. We finally lost everything because I became incapacitated also.”

The University of Texas Medical Branch is the only state-owned hospital left in Texas. For a century, people who couldn’t pay for medical care have come here for help. Some drove a thousand kilometres to sleep in their cars while waiting to see a doctor.

But the public hospital was trapped by a shrinking state budget, soaring costs for prescription drugs – and a flood of uninsured people seeking help. So it undertook what it calls “rationing of medical care.” If potential patients don’t have insurance or a fat wallet, screening officer Rosalyn McCray must decide whether or not they’re admitted. Not everyone gets in.

Heartbreaking stories

“And it can be heartbreaking when you listen to people’s stories – it’s not that we don’t have compassion but you have to do what you have to do to keep the reimbursement going,” McCray says. The hospital saw trouble ahead in the late 1990s as the number of people without health insurance in Galveston began to soar. The new CEO, Dr. John Stobo, tried traditional cost-cutting methods. They weren’t enough. “And so we had to ration health care. That’s not something I came here to do,” Stobo says. “It’s not something I like doing. People initially asked, ‘why are you doing this?’ and my response was we’re not going to be able to deliver any health care if we become indigent as an institution.”

Galveston The new system took several forms. First, the hospital cut in half the number of people it admitted without insurance. Second, they started rigorous financial screening of potential patients – some say the toughest in the U.S.

Dr. Ben Raimer, head of community medicine, designed the original system. “We often liken it to flying on an airplane,” Raimer says. “You have a guaranteed opportunity to travel safely but you have a choice between first class and coach. There may be certain amenities that people choose to have in addition.”

But even when so-called indigent patients are admitted, the scrutiny continues. Almost daily, Dr. Karen Richardson, the hospital’s medical director, makes tough decisions based on a patient’s ability to pay. Today, she approved anti-cancer drugs for a patient on financial assistance – but only prescribed half as many pills as for a patient with insurance. The indigent patient’s case will be reviewed before more treatment is approved. Richardson says a paying patient has an easier time.

“No, that wouldn’t be a question [for a paying patient] that would have been taken care of,” Richardson says. “The medications would have been taken care of and the patient would have been on their way.”

Medically Indigent

In the screening centre, Irene Perez has proven she’s “medically indigent.” Even though she makes only $650 a month, Perez will still have to pay $40 to see a doctor, probably once a week. Rosalyn McCray, the screener, doesn’t think a $40 fee is too much.

“My gut tells me they’re not going to wait. She looks like she’s in quite a bit of pain,” McCray says. “And I don’t think the $40 will be too much of an issue. I think they’re willing to make that sacrifice because she looks like she’s in quite a bit of pain. Quite a bit of pain.”

In theory, this hospital’s not the last resort for the poor in Galveston. In theory, people turned away can get help at free street clinics and the county medical centre. Chief executive officer Dr. John Stobo admits he doesn’t know how theory plays out in the real world.

“Unfortunately, we don’t know that they’re getting the health care in the communities in which they live,” Stobo says. “We try to connect them to the appropriate care-givers but whether or not they get the care they need, I’m not sure … we just don’t have a good way to track it and, in some cases, I suspect they’re not getting the health care they need.”

Street clinic

The Jesse Tree is Galveston’s biggest free street clinic, helping hundreds of people in one of Texas’s poorest cities. Ted Hanley, the clinic’s founder, says $40 is an impossible cost for too many people. It’s creating a sense of helplessness among those who need help the most.

“My deep concern is for the quiet people out there dying because they have chronic illnesses,” Hanley says. “They’re not good self-advocates. They do get the medical care by the time their conditions are already so advanced there’s no coming back.”

One in seven without insurance

One in seven Americans don’t have health insurance and the proportion is increasing. Premiums for private insurance are going up more than 10 per cent a year. Dr. Ana Malinow, a pediatrician in nearby Houston, knows all too well the financial pressure that forced the Galveston hospital to ration care. Malinow says it’s unlikely to change soon.

“In a for-profit [system] there is no incentive to keep costs down, is there?” Malinow says. “So when people say ..oh … in the government we need to be fiscally conservative … blah blah blah … it’s all crap, because they know that what they want is to increase their profits and the only way to be increasing profits is for there to be more money in the system.”

No one at Galveston’s hospital boasts about the health care restrictions. No one waxes poetic about so-called “financial efficiencies.” Many are prophetic, however, that what they’ve had to do represents the cruel logic of a broken national medical care system.

“I can’t imagine there’s a hospital in the United States that isn’t facing this problem,” says Dr. Karen Richardson. “We also feel like we have an advocacy responsibility to shine some light on this issue and talk about what everybody else will soon have to do.”

Posted by pnhp at 10:35 AM | Permalink

Center for American Progress

Claim vs. Fact: Medicare Bill Signing 12/8/03


Claim: “A lot of this happened — this bill happened because of grassroots work. A lot of our fellow citizens took it upon themselves to agitate for change, to lobby on behalf of what’s right” [George W. Bush 12/08/03]

Fact: “Drug companies and their trade associations deployed nearly 700 lobbyists to stamp out any proposals that would result in the federal government negotiating the cost of drugs or otherwise limiting the industry’s astronomical profits.” [Public Citizen Report, 06/03]

Claim: “Some older Americans spend much of their Social Security checks just on their medications. Some cut down on the dosage to make a bottle of pills last longer. Elderly Americans should not have to live with those kinds of fears and hard choices. This new law will ease the burden on seniors and will give them the extra help they need.” [George W. Bush 12/08/03]

Facts: “[U]nder the new plan, seniors in the middle income quintile will pay an average of $1,650 a year in out-of-pocket expenses for prescription drugs in 2006. This figure is nearly 60 percent more than they paid in 2000, even after adjusting for inflation. Expenses are projected to continue to rise so that by 2013 middle-income seniors will be paying more than two and a half times as much for prescription drugs (adjusting for inflation) as they did in 2000.” [CEPR Report, 12/04/03]

“[T]he insurance plan would provide little relief for about 3 million people with moderate assets and incomes near the poverty level and would cost seniors with drug expenses under $835 a year more than they currently spend.” [Boston Globe, 11/18/03]

Claim: “For the first time we are giving seniors peace of mind that they will not have to face unlimited expenses for their medicine.” [George W. Bush 12/08/03]

Fact: “[The] Medicare drug plan could further limit coverage by establishing a list of preferred medicines known as a formulary… Medicare would not have to pay anything for drugs left off the list…if a beneficiary bought drugs not listed on the formulary, the bill says, those costs would not be counted toward the $3,600 limit.” [New York Times, 12/07/03]

Claim: “Bill Novelli, the CEO of AARP, stood strong in representing the people he was supposed to represent.” [George W. Bush 12/08/03]

Fact: “A poll last week by Hart Research showed that 65 percent of AARP members want Congress to go back to the drawing board.” [Alameda Times Star, 12/06/03]

Continued

© Center for American Progress
805 15th Street, NW Suite 400
Washington, D.C. 20005
202-682-1611
progress@americanprogress.org http://www.centerforamericanprogress.org

Claim: “[T]his legislation is a victory for all of America’s seniors.” [George W. Bush 12/08/03]

Facts: “Corporate lobbying groups are emerging as winners, having pushed hard for a bill in order to shift some of their costs to the government…companies can opt in, taking the proposed tax-free federal subsidy and shifting some costs to the government, or opt out and possibly cut or eliminate their own coverage altogether, a trend that is already under way.” [Wall Street Journal, 11/18/03]

“For the drug industry, the legislation is good news…Drug makers believe individual private buyers are less able to push down prices than a centralized government purchaser with a pool of 40 million patients.” [Wall Street Journal, 11/18/03]

“A substantial number of the 6.4 million low-income Medicare beneficiaries who also are eligible for Medicaid and currently receive prescription drug coverage through Medicaid would be made worse off under the Medicare conference agreement.” [Center of Budget and Policy Priorities Report, 11/21/03]

“Millions of Medicare beneficiaries have bought private insurance to fill gaps in Medicare. But a little-noticed provision of the legislation prohibits the sale of any Medigap policy that would help pay drug costs after Jan. 1, 2006, when the new Medicare drug benefit becomes available.” [New York Times, 12/07/03]

“The Congressional Budget Office estimates about 2.7 million seniors could lose benefits that may be more generous than those that will be offered under Medicare.” [USA Today, 11/25/03]

Posted by pnhp at 10:23 AM | Permalink

Ford exec gets new task: Solve health care crisis

BY TOM WALSH
DETROIT FREE PRESS COLUMNIST

Ford Motor Co. Chief Executive Officer Bill Ford is so alarmed soaring hospital and doctor bills are destroying U.S. jobs that he has assigned one of his top executives, Vice Chairman Allan Gilmour, to craft a proposal for fixing the nation’s health care system. Ford and Gilmour would then take the idea to other companies, unions and ultimately, to public officials in Washington, D.C.

The automaker spends about $1,200 on employee and retiree health care for every vehicle it builds, a huge cost that private employers don’t bear in countries with government-funded medical care.

The health care issue “is driving investment decisions away from the U.S., and that’s wrong,” Ford told reporters Tuesday. Ford Motor, General Motors Corp. and other major U.S. industrial firms have provided generous health care benefits to hourly and salaried workers for decades. But the skyrocketing cost of those benefits — which has increased more than 10 percent annually in recent years — has saddled these firms with a competitive gap that Ford said is “so compelling that it’s very tough to offset when you want to make an investment decision” about where to build a plant and create jobs.

“I just think that as a country, if we have a model that isn’t working and a model that’s driving jobs overseas, then we’d better take another look at it,” Ford said.
Ford has spoken out before about the dangers of surging health care costs; he called the problem “intractable” in a May 30 speech at the Detroit Regional Chamber’s leadership conference on Mackinac Island. But he’s upping the ante by putting Gilmour on the case and planning to enlist other allies.

Gilmour, 69, was a highly respected longtime Ford Motor executive whom Bill Ford plucked out of retirement in May 2002 to repair the company’s financial house. During his retirement, Gilmour was chairman of the Henry Ford Health System’s board of directors in Detroit from 1996 to 2002.

Nancy Schlichting, CEO of Henry Ford Health, said Gilmour’s steady hand and sense of humor helped the hospital system navigate through a period of severe cost-cutting in which about 2,000 jobs were eliminated.

“I’ve asked Allan to head up a major health care initiative for us and involve, when the time is right, others in the industry,” Ford said. “He’s uniquely positioned to do that because he knows the issue very well. . . . He’s seen it from both sides. Plus, he’s got great external credibility, so when it’s time for him to interact in Washington, Allan will do so with authority.”

Rick Wagoner, GM’s chairman and CEO, has also decried the corrosive effect of health care costs for U.S. companies, and a GM spokesman said the company would probably be willing to discuss ideas that Ford and Gilmour might advance.

In a recent interview with Fortune magazine, Wagoner said, “We are trying to make a point in Washington that if we’re concerned about job growth in a competitive economy, it’s important to understand that health care costs are a significant competitive disadvantage” for the United States.

Ford said he has no preconceived notion of how to solve the health care crisis.
“I don’t want anyone to say Bill Ford’s out raising the banner for national health care,” he said. “But I do think we need a new model, because if the employers are getting choked with health care, and the hospitals are all losing money and the HMOs claim they’re not making any money, then the system does not seem to be working very well.

“I just think we need a dialogue on it in a national forum that we haven’t had yet. That’s why I hope Allan will be able to help us craft a position.” He said he hasn’t given Gilmour a deadline or timetable.

Despite the rising health care costs, Ford said his troops have done some herculean cost-cutting this year — about $3 billion in all areas of the company. As a result, Ford said the automaker will post a profit of about $1.8 billion this year, despite flat sales. He also said he expects 2004 “to be a better year than we had in ‘03.” He said Ford Motor has beaten Wall Street profit estimates for seven straight quarters, and with cash reserves in excess of $27 billion, “We have the financial flexibility to do whatever we choose.”

Ford said he is “comfortable” with current employment levels. “I don’t anticipate anything new” in terms of head count next year, he said. Ford Motor has cut about 10,000 hourly jobs since 1996 and reduced salaried head count by a similar number during the past three years.

Cost-cutting will continue, however, and include the sourcing of more parts from China. Ford said the company will buy about $1 billion in parts from China next year. The U.S. economy, he said, is “clearly getting stronger. One of the fears I have, though, is whether it will be a full-employment recovery. We do have a lot of manufacturing jobs that are going overseas.”

Ford Motor has been billing 2004 as the “year of the car,” signaling a new emphasis on passenger cars after years of expanding its truck offerings. Most of its near-term new-car designs will be midsize and larger, but Ford said Tuesday that the firm is also exploring a minicar for the U.S. market.

The “Focus has been a very good entry-level vehicle for us, but there is a question, ‘Do we need to do something below Focus?’ ” he said. “And we’re taking a look at that. “We’re fairly far along,” he said. “But we would only do it if we could do it profitably.”

Copyright © 2003 Detroit Free Press Inc.

Posted by pnhp at 09:53 AM | Permalink

Quentin Young, M.D., makes his diagnosis clear—America’s health care system is failing. With more than 44 million Americans lacking health insurance, the argument for universal coverage has never been more relevant, he says. Dr. Young has been fighting to abolish profit-driven managed care for most of his medical career, which has spanned more than 50 years. After graduating from Northwestern Medical School, he completed his residency at Cook County Hospital, where he served as chairman of the Department of Internal Medicine through the early 1980s.

The 80-year-old doctor still practices three days a week in Hyde Park and can often be heard as an expert guest on WBEZ, Chicago public radio. He’s a clinical professor of preventive medicine and community health at the University of Illinois Medical Center and senior attending physician at Michael Reese Hospital. Despite remaining active in the medical community, Dr. Young devotes most of his time to combatting the corporate takeover of medicine in America. In 1980, he founded the Health & Medicine Policy Research Group, of which he is currently chairman. Additionally, Dr. Young has mobilized the Chicago-based Physicians for a National Health Program, acting as the organization’s national coordinator. Currently, PNHP consists of more than 10,000 physicians who support a single payer national health insurance. Dr. Young discusses his health care plan, its goals, obstacles and what America has in its favor.

click here to read the interview in Chicago Life

Posted by pnhp at 09:46 AM | Permalink

Boston Globe

Poison pill

Why the new reform bill will make Medicare’s problems bigger — and even harder to fix

By Jacob S. Hacker and Theodore R. Marmor, 12/7/2003

TOMORROW, PRESIDENT BUSH is set to sign Medicare’s biggest overhaul in 38 years into law. But after watching the shrill yet perfunctory debate that culminated last week in the passage of the bill, even close observers of Washington politics can be forgiven for wondering just what exactly it was all about. On one side, congressional Republicans and President Bush described the $400-billion legislation as a moderate, sensible means of providing long-overdue drug coverage to seniors.

On the other, Democratic opponents — including most House Democrats, Senate minority leader Tom Daschle, and Senator Ted Kennedy, who led an unsuccessful filibuster — decried it as a monstrous giveaway to insurers and drug companies. They also charged that it was a “Trojan horse” aimed at crippling Medicare’s universal benefits in order to foster go-it-alone competition.

All this becomes more understandable when one recognizes that the bill is really two bills. The first provides a much-needed, if modest and excessively complex, drug benefit. But while this new benefit is generous for some low-income seniors, it will end up raising out-of-pocket drug costs for other poor beneficiaries. And because it is poorly designed and does not include effective ways of controlling drug costs, the plan will ultimatelyleave most seniors little better off than they are today, and some worse off.

The second, darker side of the new Medicare bill is a slew of changes that have little or nothing to do with drug coverage and everything to do with special-interest demands and ideological animus toward Medicare. These include huge new subsidies for private insurers, and provisions that ensure that drug companies will be spared from their greatest fear: that Medicare will use its massive buying power to demand reductions in drug prices. Perhaps most ominous, the bill also contains elements that favor private plans and risk further degeneration of Medicare’s all-in-the-same-boat structure.

Six sizable”demonstration projects” are intended to introduce greater competition into Medicare; they will also likely raise costs for seniors who remain in the traditional program.

What is most striking about the bill is not the consistency of its vision, but its deep incoherence. In the name of greater free-market competition, the legislation offers massive new subsidies to the pharmaceutical and insurance industries. In the name of providing greater protection, it threatens Medicare’s guarantee of universal benefits. (Indeed, it even provides more than $6 billion to support Health Savings Accounts outside of Medicare, risking the fragmentation of the broader insurance risk pool.) And in the name of greater cost containment, it encourages the expansion of private plans that have, to date, not saved medicare money, while creating new budgetary rules that could very well make Medicare less equitable and affordable down the road.

Behind these glaring inconsistencies lies the one great fact of contemporary American politics: partisan and ideological polarization. But if the bill were the product of political conflict alone, we would expect not a massive new entitlement with so many contradictions and problems but a more modest, lowest-common-denominator agreement — for example, a bill covering catastrophic drugs costs only. Instead, what we have is a bill driven principally by a mix of high Republican ideals and low political calculations that was crafted almost entirely in isolation from Democratic input and then tweaked just enough to win moderate votes and sidestep potentially hostile public opinion.

This brings us to the most overlooked reason for the unnecessary and self-defeating complexity: the conservative reform agenda itself, which is simultaneously driven by ideological principles that celebrate free competition and the interests of powerful industries that hope to avoid it at all costs. Private insurers and drug companies don’t want true competition: They want a playing field tilted in their favor. And they’re willing to do whatever it takes to seize the advantage, including, according to recent news reports, bidding exorbitant sums for the future lobbying services of the current Medicare administrator, Thomas Scully. Republicans, eager to win campaign funds and hostile to the very idea of Medicare, essentially gave the medical industry what it wanted. But what they produced has about the same intellectual purity as an ad jingle.

To be sure, politics usually requires compromises. But what’s shameful about the present bill is just how deeply the compromises — or, more accurately, the concessions to knee-jerk beliefs and private interests — undercut the stated goal of the bill: drug coverage for seniors. By our back-of-the envelope calculations, the roughly $400 billion in new spending over the next 10 years (not to mention the $140 billion in new premiums paid by Medicare beneficiaries themselves) will buy only about half as much coverage as a sensibly designed bill could. This is not only because of the subsidies for private health plans and for Health Savings Accounts, but also because of the higher overhead costs of private plans (about five to six times higher than for traditional Medicare) and the 20-to-30-percent higher prices for drugs that seniors will have to pay because Medicare is forbidden from using its bargaining power to negotiate better deals.

All this helps explain why the drug benefit itself is so convoluted and ultimately so meager — covering, for example, only a small share of seniors’ expected drug expenses overall, and reimbursing the 300th dollar of drug spending but not the 3,000th. It also helps explain why, according to polls, seniors already don’t like the benefit very much. A recent University of Pennsylvania survey, for example, shows opposition to the bill outweighing support by two percentage points among the general public, but by some 16 points among Americans over 65.

Indeed, a significant proportion of Medicare beneficiaries will almost certainly be worse, not better, off under the bill. This includes several million low-income seniors who will lose the generous coverage they now enjoy under state Medicaid programs. It also includes millions who already have pretty good drug coverage through their former employers — coverage which will likely be dropped, despite the bill’s subsidies for employers that retain coverage.

Even if these clear losses are ignored, all credible estimates suggests that, except for the very poor and very sick, drug spending will consume a larger share of seniors’ incomes in the coming years than it does now, despite the new legislation. This is not just because the benefit is so meager, but also because the bill fails to authorize the negotiation strategies that large corporations and public programs like the veterans’ health plan use to rein in skyrocketing drug prices. Fortunately for Republicans, none of this will become crystal clear until after the 2004 election, because — not coincidentally — the new drug benefit does not kick in until 2006.

onetheless, some hopeful Democrats argue the bill is worth supporting bcause it will, in the long term, be a stepping stone to a good drug benefit and sensible Medicare reforms. Might they have a point? Making the benefit more rational and generous, especially for low-income seniors and those with high but not catastrophic drug costs, is essential. But for three important reasons, the new bill is unlikely to be refined and improved down the line.

The first is the dismal historical record of Medicare’s attempts to encourage private plans within the program. If the past is any guide, the next debate will not concern the expansion of benefits but figuring out how to make the amazingly complex legislation actually work. And there will be considerable pressure from conservatives to delay any major changes until after the demonstration projects designed to showcase the alleged benefits of market competition occur — in 2010.

Furthermore, efforts to upgrade the benefit will run headlong into the massive budget deficit, and into the fact that the profligate legislation has no effective cost-control mechanisms.

Finally, the legislation’s one bow to cost control is guaranteed to create conflict on terrain highly unfavorable to those seeking to expand and rationalize benefits. In a relatively unnoticed provision that wasn’t in either the original House or Senate legislation, the bill creates a new standard for Medicare “insolvency.” It would define the program as insolvent whenever, in two consecutive years, more than 45 percent of its spending comes from general income tax revenues (not incidentally, the most progressive source of Medicare financing) rather than payroll taxes and premiums. When this ceiling is hit, which is likely to happen sometime in the next decade, the law will require the president to propose spending cuts and tax increases within the program. That’s likely to cause benefit cuts and premium hikes, not benefit expansions.

It’s also certain to cause political conflict — which may be the bill’s ultimate contradiction. Republicans hope to take off the table an issue with which they have been battered for years, and they may well do so through 2006. But by pushing through such an unwieldy bill, they are virtually ensuring that Medicare will be the biggest issue in American politics in the coming decades. Sadly, at the present juncture, that seems to promise more acrimony, confusion, and disappointment, rather than the constructive steps forward that Medicare so desperately needs.

Jacob S. Hacker, assistant professor of political science at Yale and a fellow at the New America Foundation, is author most recently of “The Divided Welfare State.” Theodore R. Marmor, professor at Yale School of Management, is author most recently of “The Politics of Medicare” (2d edition).

Posted by pnhp at 09:45 AM | Permalink

Missouri Foundation for Health
Press Release
November 25, 2003
New Report Details Universal Care for Missouri

The study “A Universal Health Care Plan for Missouri” highlights a coverage plan that could be delivered in the state for less than the nearly $30 billion currently spent on health care this year.

The study, commissioned by the Foundation and carried out by Kenneth.Thorpe, Robert W. Woodruff Professor and Chair of the Department of Health Policy and Management at Emory University in Atlanta, examined the impact of a single payer tax-based system on current health expenditures in Missouri.

The study reviewed three possible benefit levels- similar, better and worse than the current average private health insurance policy in the state. Even the more generous plan under the system proposed by Thorpe would save more than a billion dollars from the current Missouri health expenditures.

The proposed plan would be funded by a payroll tax similar to the way the
Federal Medicare program is funded. Businesses that currently provide health
insurance, and their employees, would pay less in taxes than they do now in
premiums. Employers who do not provide health insurance now would pay more
as would the uninsured who would obtain coverage under the plan.

The savings that would allow expansion to cover all residents of the state would be largely derived from lower administrative costs associated with a single payer.

http://www.mffh.org/press_releases/pr-11-25-03.pdf

The report, A Universal Health Care Plan for Missouri
http://www.mffh.org/ShowMe3.pdf

Comment: You would think that our national policymakers would begin to recognize a pattern here. The single payer model has become the golden standard against which all other models of reform should be compared.

Do we really need another study? Or shall we just finally do it!?

Posted by pnhp at 02:17 PM | Permalink

Looting the Future
By PAUL KRUGMAN, NY Times
Published: December 5, 2003

Bush, George W
Republican Party
United States Politics and Government
Budgets and Budgeting

One thing you have to say about George W. Bush: he’s got a great sense of humor. At a recent fund-raiser, according to The Associated Press, he described eliminating weapons of mass destruction from Iraq and ensuring the solvency of Medicare as some of his administration’s accomplishments.

Then came the punch line: “I came to this office to solve problems and not pass them on to future presidents and future generations.” He must have had them rolling in the aisles.

In the early months of the Bush administration, one often heard that “the grown-ups are back in charge.” But if being a grown-up means planning for the future — in fact, if it means anything beyond marital fidelity — then this is the least grown-up administration in American history. It governs like there’s no tomorrow.

Nothing in our national experience prepared us for the spectacle of a government launching a war, increasing farm subsidies and establishing an expensive new Medicare entitlement — and not only failing to come up with a plan to pay for all this spending in the face of budget deficits, but cutting taxes at the same time.

Recent good economic news doesn’t change the verdict. These aren’t temporary measures aimed at getting the economy back on its feet; they’re permanent drains on the budget. Serious estimates show a long-term budget gap, even with a recovery, of at least 25 percent of federal spending. That is, the federal government — including Medicare, which Mr. Bush has given new responsibilities without new resources — is nowhere near solvent.

Then there’s international trade policy. Here’s how the steel story looks from Europe: the administration imposed an illegal tariff for domestic political reasons, then changed its mind when threatened with retaliatory tariffs focused on likely swing states. So the U.S. has squandered its credibility: it is now seen as a nation that honors promises only when it’s politically convenient.

What really makes me wonder whether this republic can be saved, however, is the downward spiral in governance, the hijacking of public policy by private interests.

The new Medicare bill is a huge subsidy for drug and insurance companies, coupled with a small benefit for retirees. In comparison, the energy bill — which stalled last month, but will come back — has a sort of purity: it barely even pretends to be anything other than corporate welfare. Did you hear about the subsidy that will help Shreveport get its first Hooters restaurant?

And it’s not just legislation: hardly a day goes by without an administrative decision that just happens to confer huge benefits on favored corporations, at the public’s expense. For example, last month the Internal Revenue Service dropped its efforts to crack down on the synfuel tax break — a famously abused measure that was supposed to encourage the production of alternative fuels, but has ended up giving companies billions in tax credits for spraying coal with a bit of diesel oil. The I.R.S. denies charges by Bill Henck, one of its own lawyers, that it buckled under political pressure. Coincidentally, according to The Wall Street Journal, Mr. Henck has suddenly found himself among the tiny minority of taxpayers facing an I.R.S. audit.

Awhile back, George Akerlof, the Nobel laureate in economics, described what’s happening to public policy as “a form of looting.” Some scoffed at the time, but now even publications like The Economist, which has consistently made excuses for the administration, are sounding the alarm.

To be fair, the looting is a partly bipartisan affair. More than a few Democrats threw their support behind the Medicare bill, the energy bill or both. But the Bush administration and the Republican leadership in Congress are leading the looting party. What are they thinking?

The prevailing theory among grown-up Republicans — yes, they still exist — seems to be that Mr. Bush is simply doing whatever it takes to win the next election. After that, he’ll put the political operatives in their place, bring in the policy experts and finally get down to the business of running the country.

But I think they’re in denial. Everything we know suggests that Mr. Bush’s people have given as little thought to running America after the election as they gave to running Iraq after the fall of Baghdad. And they will have no idea what to do when things fall apart.  

Posted by pnhp at 11:23 AM | Permalink

Hewitt Associates
Press Release
December 2, 2003
Hewitt Study Shows Employers Critically Concerned with Health Care
Costs and Looking for Creative Solutions

Employers are struggling to cope with continuing double digit health care
cost increases, more interested than ever in consumer-driven plans and actively developing strategies and economic incentives to drive and enable better employee health care decisions, according to a new survey by global human resources outsourcing and consulting firm Hewitt Associates.

Hewitt’s survey of nearly 650 major U.S. companies revealed that companies
anticipate an average health care cost increase of 14 percent for 2004, but can only afford to absorb an increase of 9 percent.

Companies’ interest in implementing consumer-driven health plans as a means to control costs continues to grow, according to Hewitt’s survey. The most common consumer-driven models currently in use or planned for 2004 are customized design plan, which allows employees to customize their benefit options, levels and contributions for physician, hospital and pharmacy benefits (13 percent of companies surveyed) and health accounts plus high deductibles (12 percent).

Consumer-driven health plans that combine a health reimbursement account
with PPO coverage after a bridged deductible are also growing in popularity…
… the number of employees and participants in consumer plans will grow
exponentially over the next five years…

Employer confidence in employees’ taking greater responsibility for making
health care choices is growing…

Employers Look to the Government for Help

While the overwhelming majority of employers do not support national health
care, an increasing number feel that the government should play a limited
role in helping control skyrocketing costs and in making legislative changes to help drive consumerism, such as mandating quality reporting by hospitals and physicians (85 percent), requiring providers to disclose prices publicly (70 percent), mandating uniform provider data and payment reporting if long-term savings outweigh costs (64 percent) and allowing U.S.consumers to purchase prescription drugs from foreign countries (47 percent). More than half of all respondents (58 percent) indicated that they feel the federal government should make Medicare available to retirees ages 55-64 at their own cost.

http://was4.hewitt.com/hewitt/resource/newsroom/pressrel/2003/12-02-03.htm

The Hartford Courant
December 3, 2003
Employers Shift Health Care Costs In New Ways
By Diane Levick

… Hewitt survey …

Though still in the minority, 21 percent of large employers think the government should develop a universal health care system, compared with 17 percent in last year’s survey, according to Hewitt. Half the employers this year oppose a universal system, and the rest weren’t sure.

http://www.ctnow.com/business/hc-healthsurvey1203.artdec03,1,5493792.story?coll=hc-headlines-business

Comment: Pro-market, MBA-type responses would be expected from this survey
of health program managers of large, mostly self-insured employers. So it is
no surprise that support for a universal health care system remains quite
modest, though growing. It is also no surprise that marketplace advocates are willing to compromise their purity by advocating for government solutions that distort or even nullify markets when it is to their benefit.

This pro-market, anti-government bias leaves the thinking of the MBA health
managers confined within their traditional boxes. Their rigid thinking is
leading to conclusions that costs need to be shifted from employers to employees through consumer-driven strategies. But by accepting the market as
being less fallible than the government, it leaves in place market mechanisms that are continuing to drive costs up well in excess of inflation, and that are shifting more costs to the payers as a result of the highly inequitable method that the marketplace uses to fund health care. The MBA health managers need to move their thinking out of the marketplace box, and look also at other solutions that would control costs and ensure equitable funding.

A government-run, taxpayer-financed program of national health insurance
would contain costs and would establish an equitable method of funding
care. And it would do so without the necessity of establishing consumer-driven
financial barriers to beneficial care. And who more than MBAs would understand the benefits of the well-documented administrative efficiency of public insurance when contrasted to private plans?

MBAs instinctively should support a system that would finally contain health
care costs and would do so equitably. The business community would greatly
benefit from a universal program of social insurance. Business leaders
and their MBA advisors need to expand their list of reform options under
consideration. It is our task to be certain that they are more thoroughly
informed on the universal, publicly-funded and publicly-administered
model.

When ideology is set aside, and all options are assessed objectively, employer support of a government insurance system should be an inevitability. In fact, a majority already support expansion of eligibility for Medicare, a government insurance system. We’re part way there.

Posted by pnhp at 05:36 PM | Permalink

The New York Times
December 2, 2003
A Conversation with Steffie Woolhandler
Heal Health Care System? Start Anew
By Judy Foreman

Dr. Steffie Woolhandler… an associate professor at Harvard Medical School and an internist at Cambridge Hospital, wants to change the health care system. Soon, and not in the way Congress just did.

Her plan is simple. Get rid of the private health insurance industry and abolish Medicaid, the government’s health insurance program for the poor. In their stead, set up a national health insurance system that would cover all Americans by expanding Medicare, the old-style Medicare, to include everyone from birth to death.

Dr. Woolhandler’s plan would add prescription drug benefits to Medicare, as the newly passed bill does. But in her plan, drugs would be paid 100 percent by the government, not administered through private insurance plans. She would also abolish co-pays and deductibles for both drugs and medical visits.

Patients would still choose their doctors, who would be paid on a fee-for-service basis. Hospitals would be privately run and would be paid a fixed monthly budget. By getting rid of the high administrative costs of private insurance, the money that people now pay out in premiums would be collected as a new tax.

Q. Is it too late to move ahead on your plan for national health insurance now that Congress has passed the new Medicare bill?

A. Actually, no. The reasons for moving ahead are even larger. We are going
to see more money spent on administrative costs than before. The bill doesn’t even benefit seniors, much less extend benefits to everyone else.

Q. … What, if anything, is going to get a vast majority of doctors on your side?

A. We want to get a real debate going, so the American people can choose. If
no one discusses it, we have deprived the American people of their right to
choose.

http://www.nytimes.com/2003/12/02/health/02CONV.html

Comment: Steffie’s message to us is that our colleagues and the public must understand our model of social insurance and how that contrasts with the current system and with the other options for reform.

There is no question that the vast majority of Americans would choose the single-payer social insurance model if only they really understood it. It’s our job to make sure that they do.

Posted by pnhp at 10:36 AM | Permalink

December 3, 2003 The Real Drug War: Against the Sick Profit Margins and Mortality Rates

By JOANNE MARINER

Here are some numbers to consider: 14 million, 35.9 billion, and one. The first is an estimate of the number of people who will die of AIDS and other treatable diseases over the course of the coming year, most of them in the poor countries of the developing world.

The second figure represents the combined 2002 profits, in dollars, of the ten biggest pharmaceutical companies listed in Fortune magazine’s annual review of America’s largest businesses. The third figure corresponds to the number of countries that, last week, voted against a U.N. resolution on access to drugs in global epidemics such as HIV/AIDS, tuberculosis and malaria. The resolution emphasized that the failure to deliver life-saving drugs to millions of people who are living with HIV/AIDS constitutes a global health emergency. 167 countries voted in favor of the resolution. The single vote against it was cast by the United States.

Sadly, these numbers are closely related. To protect their exorbitant profits, drug companies are fighting the production and distribution of cheap generic versions of patented drugs. Unable to afford the medicines that could save their lives, millions of poor people around the world die of treatable illnesses every year.
And, as the recent U.N. vote exemplifies, the drug companies have a reliable ally. Not only does the U.S. government use its considerable economic power to bully developing countries into restricting access to low-cost generics, it continues to try to change the international rules that allow such generics to be made in the first place.

Unnecessary Deaths,.
In their vulnerability to treatable diseases, the rich and the poor live in different worlds. Every year, millions of people in developing countries die of illnesses that they would likely have survived had they lived in Europe or the United States. A key factor in the enormous global disparities in death rates is poor people’s lack of access to needed drugs.

Consider the case of HIV/AIDS. An estimated 42 million people are living with HIV/AIDS worldwide, 39 million of them in the developing world. India alone has at least 4.5 million people who are HIV-positive, and possibly many more.
In the United States and other rich countries, since the advent of anti-retroviral drug treatment, AIDS has become a manageable disease, not a death sentence. But for the millions living with HIV in the developing world, prospects for effective treatment remain dim.

At present, only a tiny minority of HIV-positive people in poor countries have access to anti-retroviral drugs. For the others, as well as some marginalized populations in rich countries, the cost of treatment remains prohibitively high.
Patent Protections and Profits Nothing in the ingredients of anti-retroviral drug treatment makes it inherently expensive. Indeed, when a combination of generic drugs is used, treatment costs are about $600 per patient per year. But companies that profit from drug sales have an interest in keeping drug costs artificially high. In the United States, the cost of anti-retroviral drugs is generally in the range of $10,000 to $15,000 per patient annually, and people with advanced cases of AIDS may pay far more. Relying on international patent protections, drug companies have been trying to maintain drug prices high globally by restricting the production and distribution of low-cost generic substitutes.

Global patent protections are tied to global rules on trade, specifically, the rules of the World Trade Organization. Although the WTO’s strict intellectual property rules carve out exceptions for national health emergencies, they still go a long way toward limiting poor people’s access to life-saving medicines. And as Oxfam has shown in a paper titled “Patent Injustice,” the problem extends beyond HIV/AIDS. Brand name drugs for a number of major diseases cost several times more than their generic equivalents. The increasing drug resistance of endemic diseases such as tuberculosis and malaria — and the resulting need for access to new drugs — mean that the WTO’s monopolistic pricing rules threaten many millions of the world’s poor.

The Brazil Model
Despite the WTO’s restrictions, some developing countries have made important steps in meeting their peoples’ drug treatment needs. In Brazil, notably, extensive prevention efforts combined with state-funded anti-retroviral treatment have reduced AIDS-related deaths by more than half since 1996. The cornerstone of Brazil’s treatment program has been the local production of generic equivalents of brand name anti-retroviral drugs, which has driven down the cost of treatment enormously.

But Brazil’s successes, and those of countries like it, have been hard fought. TheWTO rules have been a battleground on which Brazil and others have fought a series of high-stakes skirmishes with drug companies. Backed by one of the world’s richest and most politically influential industrial lobbies, the drug companies have enlisted the U.S. government as a loyal ally in the campaign against generics. Through the office of the U.S. Trade Representative, the United States has fought to advance the interests of the pharmaceutical industry, pressuring other governments on a bilateral basis and threatening to seek trade sanctions via the WTO.

The U.S. vote last Wednesday in the Third Committee of the U.N. General Assembly was not too surprising, given this record. Still, it was dismaying to find the United States willing to stand alone against 167 other countries — as if it were a matter of principle to vote against a resolution calling for widespread public access to the drugs necessary to combat global epidemics such as HIV/AIDS, tuberculosis and malaria.

Future Trade Agreements

The U.N. vote is, moreover, a worrisome portent for the future. At present, the U.S. Trade Representative is negotiating a number of bilateral and multilateral trade agreements, including the proposed Free Trade Area of the Americas. Given U.S. advocacy on behalf of pharmaceutical companies’ interests, these agreements are likely to go beyond the WTO’s rules in protecting drug patents.
President George Bush, in a number of his most high-profile speeches, has expressed a rhetorical determination to assist in the global fight against HIV/AIDS. By allowing U.S. officials to lead the world in protecting the commercial interests of drug companies, he betrays his public commitment to this cause.
Joanne Mariner is a New York-based human rights lawyer. She can be reached at: mariner@counterpunch.org

Posted by pnhp at 09:59 AM | Permalink

The Medicare Rights Center’s chart explaining how the new benefit applies to various low-income groups.

click to the chart

Posted by pnhp at 10:48 AM | Permalink

On December 2, 2003, the AARP began running advertisements in national newspapers citing eight benefits of the final Medicare legislation that the President signed into law on December 8. The ad’s headline states that the ad contains “no sound bites… no spin.… no politics… just the facts.”

The following is an analysis of the ad’s claims.1 It should be noted that some of the problematic aspects of the legislation that relate to low-income Medicare beneficiaries and the premium support demonstration, which are described below, would have been more problematic without AARP’s use of its influence to soften the adverse effects of those provisions.

please click here to read the analysis of the ad’s claim

Posted by pnhp at 10:33 AM | Permalink

The Atlanta Journal-Constitution
11/30/03
Condition of health care system has been upgraded
By Newt Gingrich

The historic Medicare and health savings account legislation that the House and Senate have passed, and which President Bush has promised to sign, is an extraordinarily important first step in the transformation of the American health and health care system that will save lives and money.

… the impact of this legislation extends far beyond the drug benefit. Through its creation of health savings accounts, the measure will begin to address the crisis in health care that affects all Americans.

If you are a fiscal conservative who cares about balancing the federal budget, the new legislation may have no more important feature than the health savings accounts. The new account will begin to move us away from the current model in which insurance companies dominate the health care transaction. Instead, the HSA will enable transactions between doctor and patient in which the patient controls how dollars are spent.

… the HSA represents the single most significant transformation that can be made in saving the country from skyrocketing health costs and steadily increasing calls for taxpayers to finance more and more of the health care system through higher taxes.

The next balanced budgets will only be possible once there is a transformation of the health system, and part of the key to this transformation will be the existence of health savings accounts. Without the first dollar interest in the payment of health expenses, there is little incentive on the part of the patient/consumer to scrutinize a doctor’s bill.

Health savings accounts will encourage individuals to shop for health plans that best fit their needs and to make cost-conscious decisions about how they spend their own health dollars as opposed to a third party’s money. Individuals who control their own health dollars will be wise purchasers of health services.

… all Americans will receive the opportunity to take control of their own health care spending so that they can provide better health for themselves and contribute to the better health of the economy.

http://www.ajc.com/opinion/content/opinion/1103/30newt.html

Comment: Laudatory comments about HSAs coming from Newt Gingrich should
alert us all to the intent of this isolated provision that was tacked onto the Medicare drug and “modernization” bill. HSAs are not about Medicare. Instead, they lay the foundation for a fundamental revision of the way we fund health care for all of us.

The individual accounts provide a tax “subsidy” for health care at the marginal tax rate which results in health care funding that is inversely proportional to income, the poor paying more for health care than the rich.

That alone should cause us to reject this model of health care “reform.” The
health policy literature is replete with other examples of the fundamental
flaws of these medical savings accounts.

Of perhaps greater concern is the flexibility that will be allowed in the design of the high-deductible plans. Although the plans would limit out-of-pocket expenses for families at $10,000, this does not include payments made for outside-of-network services. To keep premiums affordable, insurers will fail to provide adequate reimbursement increases for providers, limiting the numbers of providers who are willing to sign the contracts. Also, to provide options with lower premiums, insurers are deliberately diminishing the number of providers available thus saving costs by limiting access. Those families that purchase plans with affordable premiums will find that they do not have the protection of the $10,000 stop-loss limit when they are forced in urgent circumstances to accept available but non-contracted providers. A person with major trauma or an acute myocardial infarction cannot ever be an informed shopper of health care services. Those with high-cost, chronic problems may also find that restricted provider lists could significantly impair accessibility.

The claim that the catastrophic plans will take care of all costs after the HSAs are depleted is a fraud. The managed care PPO products will prove to be severely deficient for those with significant health care needs, but with modest or meager resources. Traditional indemnity catastrophic plans have almost disappeared already and, in the future, will surely not be an affordable option for the average-income individual.

Splitting the health insurance pool into millions of segregated accounts will adversely impact only those who have significant needs by depleting their accounts: the very individuals for whom insurance was designed. Providing catastrophic coverage by marketplace plans that compete on premium pricing (by reducing benefits and increasing cost-sharing) can only result in financial disaster and impaired health care access for the average individual with significant needs.

Title XII, authorizing HSAs, goes into affect one month from today. If it is
not repealed immediately, many of us will be left with the option of shopping for bankruptcy attorneys who will best meet our need to be relieved of a morass of medical bills. But after all, isn’t consumer-directed, personal bankruptcy the American way? Gingrich and friends apparently believe so.

Posted by pnhp at 10:28 AM | Permalink

The Idaho Statesman
November 30, 2003
Doctor who ‘walked the walk’ dies in Boise at 63

Dr. Bob LeBow, a tireless advocate for health-care reform who was severely injured in a 2002 bicycle accident, died Saturday in a Boise hospital.

LeBow, 63, spent more than 30 years working to provide medical services
to those who can least afford them.

LeBow’s accident came shortly after the publication of his book “Health Care Meltdown,” an indictment of a system that grants access to medical care
based on ability to pay.

A former president of Physicians for a National Health Program, LeBow
continued to campaign for health-care reform after his devastating injury.

In August, he spoke at a news conference in Philadelphia, advocating a
national health insurance program. With words that echo his lifelong passion and service, LeBow said, “It is time to put the patient first - not last - in the setting of priorities.”

http://www.idahostatesman.com/story.asp?ID=55031

Health Care Meltdown (Benefiting needy patients at Terry Reilly Health
Services):
http://www.trhs.org/bobsbook/

Comment: In Bob’s own words:

“The U.S. also is the only developed country where getting sick or injured can, and all too frequently does, lead to bankruptcy. …

“Our employer-based health insurance system is outmoded, illogical and needs to be replaced. Perverse incentives make our health care system a poor value for the amount we spend. Health care needs to return to an emphasis on health, not cost or profit. …”

http://www.idahostatesman.com/story.asp?I

Posted by pnhp at 11:44 AM | Permalink

Galen Institute
Consumer Choice Matters, #41
11/25/2003
HSA TSUNAMI
By Greg Scandlen

The new Health Savings Accounts (HSA) provision included in the Medicare bill just passed the Senate 54-44 and soon will be signed by the President. The new law will go into effect January 1, 2004. All 250 million non-elderly Americans will now have access to a Medical Savings Account, and one that is far more attractive than the Archer MSAs that were enacted in 1996.

Market analysis

• There will be a rush of banks, insurance companies and third-party administrators (TPAs) to develop products. The previous restrictions on
  Archer MSAs have been removed. There is no longer a sunset provision,
  there is no limit on employer size or total enrollment.

• All these development efforts will lead to far greater public awareness of the product.

• The individual market will convert to HSAs in droves.

• The small group market will be slower. Small employers are not benefits innovators.

• The fully-insured mid-market is a different story. Companies with 100
  to 1,000 employees are more likely to have staff that concentrates on
  benefits options and has the time to investigate new products. These companies
  have been raising cost-sharing requirements anyway, so the prospect of
  employee responsibility for funding part of the HSA is less of a stretch in this
  segment.

• Self-insured large companies will likely stay with Health Reimbursement
  Arrangements (HRAs). Companies that pay directly for the services consumed
  are unlikely to be attracted to HSAs, which expect an up-front contribution
  of money for all employees whether they are using services or not. HRAs
  have the considerable advantage of not requiring pre-funding.

• The uninsured should find it easier to gain coverage. HSAs will be available to everybody - especially those workers whose employers provide no coverage at all, and who make up the vast majority of the uninsured.

Prospects

The market is ready for this. All of the discussion about consumer directed
health care in the last few years has sensitized corporate decision makers
to the advantage of putting more control in the hands of employees. HSAs
provide them with the perfect opportunity to do exactly that. The year 2004
will probably not see massive enrollment because vendors will need to
work on developing new products and marketing strategies. But by mid-year
there will be an enormous push to gain an early position in this new market
and become the recognized “industry leader.”

The timing couldn’t be better, with an improving economy and widespread
gains in the equities markets. Venture capital will be in great demand
to get the new products off the ground. Get ready for a twelve month race
to the finish line of 12/31/04 and the first-year enrollment numbers.

http://www.galen.org/ccbdocs.asp?docID=569

Comment: The Galen Institute… is a “free-market research organization”
that “was founded in 1995 by Grace-Marie Turner to promote a more
informed public debate over individual freedom, consumer choice, competition,
and diversity in the health sector” (Mission statement, Galen Institute).
Anyone following the health care reform debate recognizes the rhetoric of the
advocates of “consumer-directed,” “free market” health care. Galen has
strongly supported medical savings accounts (now health savings accounts, or
HSAs) as a tool to achieve consumer independence in the free marketplace.

What Galen fails to point out is that HSAs fragment the insurance pools. The
tax advantages accrue to the wealthy, and a tax-favored personal account
appeals to those who do not expect to have high health care bills. By removing the large sector of the healthier and wealthier from the traditional insurance risk pools, the higher-cost individuals remaining drive up premiums making traditional coverage unaffordable for those with the greatest health care needs. HSAs are both regressive tax policy, and cruel health policy which rations care by erecting financial barriers for those with the greatest needs.

For those of us who are healthy, HSAs with catastrophic coverage would serve our purposes well. But those of us who later develop significant disorders will discover why we should all have comprehensive coverage using a common risk pool. Many of us would decide in advance that we want that degree of security and would want to purchase traditional coverage. But we’ll find that traditional coverage will have left the market because of the death spiral of unaffordable premiums.

This fundamental flaw in dividing the risk pool into segregated accounts, favoring the wealthy while penalizing the sick, alone is enough to disqualify HSAs as a rational model of reform. But there are a great many other problems, only a few of which are listed here.

HSAs must be matched with high-deductible insurance. Insurers offer primarily managed care PPOs as the high deductible or “catastrophic” option. PPOs are undergoing transformation in order to keep their premiums affordable. They are using methods often lacking transparency to reduce benefits and increase out-of-pocket cost sharing. Tighter provider lists decrease choices. Greater penalties for using non-providers are now standard. Tiering rates for services shift costs to beneficiaries.

Individual PPO plans often exclude essential benefits such as obstetrical services. Deductibles have become the norm in PPO plans. The cost savings by using a high deductible plan theoretically funds the HSA. But, in fact, the savings now is usually so small that it could not be considered as a major source for HSA funding. When pricing different plans, you will find that the moderate deductibles have very little effect on the premium. Rather, the premium differences are due more to other factors such as the richness of the benefit package, other cost sharing measures, and the differences in competitive pricing in the various service areas.

In the individual market, most insurers will not sell plans to individuals with significant preexisting disorders, often for even simple problems such as allergic rhinitis. The uninsured will be able to access this market only if they have no current or expected needs for health care. Creating an insurance market for the healthy, and letting those with needs fend for themselves, is inhumane health policy at best.

A major flaw in our health care system is the profound administrative waste that diverts funds from patient care. HSAs add a very significant administrative layer and interject more middlemen into the process. Insurers sell administrative services, and HSAs will expand their market. Not only will insurers be involved but bank trustees, third party administrators, various investment managers, and others will all be there quite willing to divert to themselves their unfair share of the health care dollar. And the providers of care will have added to their administrative burden the need to access millions of individual, segregated accounts as they seek compensation for their services, whether by direct billing to the account managers or by the necessity of providing documentation of qualified expenses.

Once the beneficiary is eligible for Medicare, funds may be withdrawn from
the HSAs for non-medical purposes without penalty. For those who remain
healthy, the HSA becomes the equivalent of an individual retirement account
(IRA). Much can be said about the inequitable, regressive tax subsidies of
IRAs, but that will not be discussed here. But it is clearly inappropriate to remove dollars from an equitable health care risk pool and grant them to wealthier individuals. Such regressive tax avoidance schemes certainly should have no place in our health care system.

This program requires that the deductible for the catastrophic coverage
be at lease $1000 for individuals and $2000 for families. Many already
have deductibles at this level or higher. Why should an administratively
cumbersome program be established for expenses that are already being
met by personal reserves? The tax advantages for most would not begin to
offset the extra expenses and nuisance of HSAs.

Again, the worst feature of HSAs is that they effectively shift costs to individuals with the greatest health care needs which will threaten affordability of care. More individuals will be forced into public programs, such as Medicaid, but only if eligible. Public programs targeted to those with greater needs will remain chronically underfunded, again further impairing access.

It is important to understand health savings accounts. They are explained in
Title XII of the Medicare Prescription Drug, Improvement, and Modernization
Act of 2003 (pages 660-678). The bill can be downloaded at:
http://www.house.gov/medicarerx/hr1-conflegtext.pdf

Although there are many other elements of the Medicare bill that are absolutely unacceptable, we have maybe a year or so to change them. But Title XII, which authorizes HSAs, must be repealed immediately because it becomes law in only one month. Once millions of HSAs are established, it will be almost impossible to reverse this program.

CONTACT YOUR REPRESENTATIVES AND SENATORS IMMEDIATELY AND DEMAND THE URGENT REPEAL OF TITLE XII OF THE MEDICARE ACT!

—__—__—

Message: 2
From: “Don McCanne”
To:
Date: Sat, 29 Nov 2003 18:11:11 -0800
Subject: qotd: Bob LeBow

Dear Don and Ida,

I am so sorry to inform you that our great friend Dr. Bob LeBow just
passed away today, at about 11:30. As his fellow warriors, I know you would
want to know and would want to tell the many other friends around the country.
His funeral will be tomorrow at 1:00 at the Relyea Funeral Home at 318 N.
Latah in Boise. We have lost a giant among men.

Ern

Erwin Teuber, Ph.D.
Executive Director
Terry Reilly Health Services
211 16th Avenue North
Nampa, ID 83653
e-mail: eteuber@trhs.org
website: http://www.trhs.org

Posted by pnhp at 11:37 AM | Permalink