News

New York Times Letters to the Editor
January 31, 2003

To the Editor:

To satisfy President Bush's call for universal health insurance, Ted Halstead wants to make it mandatory (Op-Ed, Jan. 31). He wants to enroll the uninsured "in a default private plan by the government, and either billed or subsidized accordingly." This would be tough to enforce.

In Mr. Halstead's model, non- insurance would be disclosed on tax returns next year; what about sick or injured scofflaws in the interim? And what about the millions who don't file Form 1040's?

Despite major government subsidies, Mr. Halstead shuns new regulations. Lower premiums would be only the hoped-for result of insuring more young and healthy participants. In fact, the plan's objective seems simply to finance private insurers, whose more than 14 percent overhead compares unfavorably with Medicare's 2 percent administrative cost.

Wouldn't it be easier and more cost-effective to improve and expand Medicare to cover everyone?
JOHN GLASEL
Hoboken, N.J., Jan. 31, 2003

Forcing all Americans to buy health coverage would not drive down coverage. As the laws of economics tell, increase the demand, and the prices will go up.

Ted Halstead's plan (Op-Ed, Jan. 31) would force millions of Americans who have made a choice about their needs to buy coverage they may or may not need.

In addition, his suggestion that Americans would get better care from the insurance companies once everyone was forced to buy it flies in the face of experience.

If Mr. Halstead's insurance companies want "young and relatively healthy Americans" to buy health insurance, they should focus on lowering the price rather than forcing the government to cover its shortfalls.
CHRISTOPHER BOWEN
Washington, Jan. 31, 2003

I appreciate Ted Halstead's attempt at solving our health care crisis (Op-Ed, Jan. 31). But there is a flaw in his plan.

If we require all young individuals to buy insurance, the premiums would pay for only the medical resources they use. This would have no impact on the cost of health insurance for older individuals. If we require them to pay premiums higher than the resources they use, then we are taxing them to help offset higher costs for older individuals.

It is understandable that the general public does not understand the pricing of health insurance since the cost of medical services are harder to find than Iraq's chemical weapons. But it is becoming increasingly frustrating that most people in a position to affect public policy do not understand the financial aspects of health insurance.
CHRIS S. CARLSON
Milwaukee, Jan. 31, 2003

I commend Ted Halstead's endorsement of universal health coverage (Op-Ed, Jan. 31). However, his idea for putting it into effect is unfeasible on one major count.

Comparing mandatory health insurance to car insurance is misguided in that many Americans do not even own cars. Either they can't afford one, or paying for insurance would cripple their quality of life.

For many, paying for this coverage would be an insurmountable task, even with a reduced cost. Why don't we instead do away with this bureaucracy of privatized for-profit insurance companies? The powers that be could create a national health care system in which the money that was originally going to individual health costs would instead be collected in taxes, and health insurance would be provided for all. For those who cannot afford to pay for health insurance, this would allow them access to proper health care. STEVEN SOBEY
Allston, Mass., Jan. 31, 2003

http://www.nytimes.com/2003/02/03/opinion/L03INSU.html?tntemail0

Posted by pnhp at 10:10 AM | Permalink | Comments (0)

State of Hawaii
House of Representatives
Twenty-Second Legislature, 2003
House Bill No. 1617

Establishes the State Health Authority to provide health care for all Hawaii citizens.

SECTION 1. (excerpt)

While Hawaii was once known for having a low uninsured population, between two and five per cent in 1994, health agencies are now concerned with the growing number of uninsured individuals. The Healthcare Association of Hawaii estimates that the current rate of uninsured individuals is ten per cent. While the Prepaid Health Care Act requires employers to provide health insurance for employees working twenty hours per week or more, there is no such requirement to provide coverage for employees working less than twenty hours per week.

The legislature believes that while the Prepaid Health Care Act served its purpose during the time it was created and many years thereafter, it is now time to consider other options. Increasing health care costs, insurance premiums, employer costs, prescription drug costs, long-term care costs, together with the growing number of uninsured individuals, and inadequate Medicaid reimbursements are creating a need for new and innovative legislation that will provide affordable health care for all of Hawaii's citizens.

A single payer system, where one entity covers all the health care for a specific population either directly or through contracts with insurers, is a viable option for the State to provide health care coverage for all citizens at an affordable cost.

http://www.capitol.hawaii.gov/sessioncurrent/bills/hb1617_.htm

Comment: Currently, the leading proposals for universal health care coverage include some variation of an employer mandate. Hawaii has provided the testing grounds for this model of reform. The experiment failed. Health care costs have not been controlled, and, worse, 10% of the population remains uninsured.

Other nations effectively control their costs through various mechanisms of global budgeting. If we were to maintain our current, generous level of health care spending, global budgeting would still allow adequate funding of comprehensive services for everyone. And, if we were to establish a single program for everyone, the problem of the uninsured would disappear.

Hawaii has a second opportunity to get it right. Let's hope that they do.

Posted by pnhp at 02:30 PM | Permalink | Comments (0)

How not to fix Medicare
Marcia Angell M.D.

Sen. Bill Frist (R-Tenn., whom The New York Times has taken to calling Dr. Frist), the Senate majority leader and President Bush's new fair-haired boy, wants to fix Medicare. This is the same Bill Frist whose father founded a for-profit hospital chain, Hospital Corporation of America (HCA). Headed by Frist's brother, HCA merged with another hospital chain, Columbia, to form the behemoth Columbia/HCA. After riding high for a few years, Columbia/HCA (now again called HCA) came crashing down when it was charged with massively defrauding Medicare and other insurers. So far it has paid $1.7 billion in fines to settle those charges, and its legal troubles are not over.

Not surprisingly, Bush and Frist would fix Medicare by making it more like the fragmented, for-profit insurance system that people under 65 find increasingly unreliable, inadequate and arbitrary. If Democrats engage this issue properly, it should be one of the epic battles of this session of Congress.

It's not clear that Medicare needs fundamental fixing. It succeeds very well in its main purpose, which is to provide nearly every American over the age of 65 with a uniform package of benefits. Those benefits cannot be taken away from anyone or reduced for any reason. And because it is a non-profit, single-payer system, Medicare is fairly efficient, with low overhead costs.

Still, Medicare could use some fixing at the margins. It pays doctors too much for doing high-technology tests and procedures and too little for examining and talking with patients. Its benefit package needs updating to provide long-term care and drug benefits. And its finances need overhauling. More about this shortly.

So is this the kind of fixing Sen. Frist has in mind? Not on your life. Sen. Frist and his White House friends want the very opposite. They want to introduce commercial competition, encourage Medicare recipients to join managed-care plans, cap what Medicare will pay for services and pass more of the costs on to recipients themselves. Yes, they include a prescription-drug benefit, but apparently without any regulation of the pharmaceutical industry's prices or of the drugs covered. Most Republicans favor paying private insurers to offer limited drug coverage under Medicare. Drug companies would remain free to charge whatever they like for expensive, new brand-name drugs often no better and sometimes worse than older, generic drugs. In other words, Sen. Frist and the White House would introduce the blessings of the private health market to Medicare.

Let's take a closer look at those blessings. The majority of people under the age of 65 are covered by employer-sponsored private insurers, mostly through investor-owned managed-care plans. Health benefits vary widely and are often grossly inadequate. The hallmark of this market is the extent to which health dollars are diverted from medical care to corporate profits and overhead. Private insurers keep an average of 14 percent of premiums for their own profits and overhead; they outsource other tasks, such as utilization review and case management, to other for-profit businesses that also divert money from actual care. Compare that with the less than 3 percent overhead costs of Medicare.

Managed-care plans maximize profits in several ways. They try to avoid marketing their products to people likely to get sick. They cut costs by stinting on medical services and making patients pay more out of pocket. They usually limit the choice of doctors or charge higher premiums for the privilege of free choice. No wonder Americans hate managed care.

In fact, surveys have shown that Medicare is far more popular with its recipients than the private health-care system is. Furthermore, despite every effort to reduce costs by limiting services, private insurance premiums are now rising at double-digit rates -- much faster than the rate of inflation for Medicare. Why on earth would anyone want to visit these conditions on Medicare? One might as well wish for locusts.

Furthermore, we have had experience with pushing Medicare recipients into private managed-care plans, and it was a disaster. In the early 1990s, Congress directed Medicare to encourage seniors to enroll in managed-care plans as a means of containing costs. For each senior, Medicare paid health plans 95 percent of the average Medicare costs per beneficiary in that geographic region. If the health-plan sponsors could provide coverage for less, they could pocket what they saved. Seniors were lured by the promise of smaller co-payments and broader benefits, such as coverage for prescription drugs and eyeglasses.

But look at what happened. The plans -- deliberately -- attracted mainly the youngest and healthiest of seniors, people who cost far less than 95 percent of the average. According to one study, Medicare ended up paying 12 percent more for enrollees in managed-care plans than it would have paid for the same patients outside the plans. "Choice" was a bonanza for the managed-care companies, but not for consumers or taxpayers. As patients aged or became seriously ill, they often left the plans and returned to the regular Medicare system, where coverage was usually more accessible and they could choose their own doctors and see specialists if they wanted.

When Medicare officials grasped that they were losing money, not saving it, on managed care, they cut back on reimbursement levels. At that point, deprived of their excess profits, private health plans began to bail out. Many curbed the benefits of Medicare recipients or stopped accepting them altogether (a couple of million seniors were simply dumped). Why would Sen. Frist, or anyone for that matter, want to repeat that failed experiment?

The answer may lie in a conservative ideology that believes private enterprise is always better and -- even in the face of abundant evidence to the contrary -- more efficient in providing just about anything, including a social service such as health care. And it may also lie in Republican gratitude for the lavish financial support the party receives from the health and pharmaceutical industries. But Sen. Frist's own background is surely an important factor. His family is in the for-profit health-care business. Although he himself is said to have put his large interest in HCA into a blind trust (with the approval of the Senate Select Committee on Ethics), it still remains true that whatever is good for HCA is good for Bill Frist. And it is undeniable that Medicare policies affect the fortunes of the company. Yet Frist has become an important voice on health policy in the Senate, and now that he is majority leader, his influence will grow. It is astonishing that this obvious conflict of interest has been so little noted.

How, then, should we shore up Medicare? its fees should be adjusted to reward high-tech medicine less and time spent with patients more. It needs a mechanism for discouraging physicians from providing unnecessary services to generate more income. Other advanced countries with single-payer systems achieve that. In Canada, for example, doctors who are found to do much more than the average number of tests in their specialty may have their practices reviewed.

In addition, the benefit package should be updated to reflect current medical realities. Medicare, remember, was crafted in the mid-1960s, when medicine was quite different. Long-term care for chronic diseases was less important then (the focus was on acute diseases), as were prescription drugs for outpatients (there were not many effective drugs and they were cheap). That is why Medicare does not cover these things. But conditions have changed. Long-term care and outpatient prescription drugs are now not only medically necessary but also very expensive. It makes no sense for Medicare to continue to exclude them. However, any prescription-drug benefit would need to be restricted to the least-expensive effective drugs and include a mechanism for bargaining with drug companies for the best prices. Otherwise it would be an unaffordable windfall for the pharmaceutical industry.

The funding of Medicare also needs some attention. Medicare is divided into two parts. Part A, which covers hospital care and skilled nursing and home health care, is funded by a 2.9 percent payroll tax. Part B, which covers doctors' services and outpatient care, comes out of general tax revenues and monthly payments from recipients. Those payments, now $58.70 per month, have increased over the years. Seniors are also responsible for substantial co-payments for services. The result is that Medicare recipients now pay more out of pocket (in constant dollars) for their health care than they did before Medicare was instituted. That tends to undermine the whole purpose of the program, which is to shield vulnerable seniors from the burdens of illness. I would favor eliminating the monthly Part B premiums and greatly reducing co-payments, as well as shifting more of the cost to general federal revenue.

Whether these reforms would have a net effect of increasing or reducing total Medicare costs is hard to say. Reducing overtreatment by physicians would save money. On the other hand, expanding benefits, eliminating Part B premiums and reducing co-payments would increase costs to the program. Seniors themselves would certainly save money, as would Medicaid, which now pays for much of long-term care. The fact is, countries with single-payer systems get more appropriate care for less overall money. Advances in technology and the aging population may well raise total health-care costs over time. But that's all the more reason to spend health dollars efficiently. And if we Americans want to spend a little more of our gross domestic product on health care, that's our choice.

Sen. Frist and the White House have it exactly backward. Turning Medicare over to the private sector would duplicate all of the health market's arbitrariness, cost shifting and inefficiency. Instead, we should be thinking about strengthening and expanding Medicare as a public program. After all, it's the only part of our health-care system that works even reasonably well. And if irony were not dead, we would surely notice how strange it is that the future of Medicare is in the hands of someone whose family business is paying enormous fines to settle charges of defrauding that very same program.
Marcia Angell M.D.

Copyright © 2003 by The American Prospect, Inc. Preferred Citation: Marcia Angell M.D., "Dr. Frist to the Rescue," The American Prospect vol. 14 no. 2, February 1, 2003. This article may not be resold, reprinted, or redistributed for compensation of any kind without prior written permission from the author. Direct questions about permissions to permissions@prospect.org.

www.prospect.org/print/V14/2/angell-m.html

Posted by pnhp at 11:46 AM | Permalink | Comments (0)

Tuesday, January 28, 2003
By Robbie Dingeman Advertiser Health Writer

State House leaders yesterday proposed an overhaul of the healthcare insurance system in Hawai'i, creating a state authority that would provide universal health coverage for all residents.

Rep. Dennis Arakaki, chairman of the House Health Committee, admitted such a radical change probably would not pass this year. But he said something revolutionary needs to be done to make affordable healthcare more available and to stem rising costs.

Hawai'i has long been viewed as a model state in providing its citizens with health coverage. The Prepaid Health Care Act of 1974 requires that employers pay the bulk of health insurance premiums for full-time employees.

But the share of Hawai'i residents without health coverage increased from 7.5 percent to 11.1 percent between 1997 and 2001, according to the U.S. Census Bureau. Among those who fall through the cracks are retirees and part-time workers.

Arakaki, supported by House Speaker Calvin Say and others, wants to scrap the prepaid health insurance program and replace it with a state authority that would roll all public and private healthcare insurance coverages into a single state-run insurance fund.

As described in House Bill 1617, the authority would collect payments from all insurance mechanisms - private plans such as HMSA, Medicaid, public-worker benefit programs and the medical portions of auto and workers' comp insurance.

"Healthcare spending is at an all-time high; double-digit increases are expected for Medicaid costs and private insurance premiums, an aging population is needing more care and prescription drugs; and the poor economy is making it difficult for any payer to cover it, whether state governments, businesses or individuals," said Arakaki, D-30th (Moanalua, Kalihi Valley, Alewa).

Senate President Robert Bunda was less than enthusiastic about Arakaki's proposal, although he did not know the details.

"The first thing that crosses my mind is when you have any kind of state administration, of course you're talking about more people added to the rolls, you're talking about a bureaucratic maze that people kind of don't want anymore," said Bunda, D-22nd (North Shore, Wahiawa). "There are times when you have a state administrator doing something maybe the private sector should be doing, (and) the process is somewhat slowed down."

Reaction from industry and community representatives was cautious to skeptical.

Cliff Cisco, senior vice president for the Hawai'i Medical Service Association, the state's biggest private health insurer, said such a big change is unlikely to win support quickly.

"This would be a significant move toward government responsibility for all healthcare," Cisco said. "I'm not sure that this community is ready to turn everything over to the government."

Arakaki acknowledged that the proposal is likely to face opposition from businesses and the unions, who might not like the idea of being put into one plan. But he believes businesses, who have complained about the increasing costs of health insurance premiums, might be open to the discussion as a way to slow or stop rising costs.

Greg Marchildon, executive director of AARP Hawai'i, which represents retirees, said the organization sees the need for reform, because "the system in due time is simply going to implode under its own weight."

But Marchildon isn't sure the timing is right for a radical overhaul, because Hawai'i has been effective at insuring most of its residents.

"We are the envy of the rest of the states," he said.

No state has universal health coverage, although there have been ballot initiatives put before voters.

In November, Oregon voters rejected a universal healthcare system that would have been the first in the nation, in which every resident would receive medical coverage for everything from massage therapy and marriage counseling to brain surgery and long-term care. The sponsors of the initiative cited rising numbers of uninsured people and spiraling costs.

Backers of the ballot proposal said they were outspent by powerful special interests, despite strong grassroots support.

"This is going to be a very tough haul," Marchildon said.

Across the country, universal healthcare advocates have been frustrated in bids to revive debate and congressional action in Washington after the Clinton administration's failed attempt to retool healthcare finance in 1993-94.

Oregon's ambitious proposal called for potentially steep increases in payroll and personal income taxes. But supporters said those costs would be offset, because residents no longer would pay premiums for private health insurance. Instead, they would rely on a single-payer system that would reimburse doctors and other providers for their medical bills, with no co-payments or deductibles.

Opponents, including business leaders, insurers and health maintenance organizations, said the plan would have cost as much as $20 billion a year, wreaked economic havoc and caused an exodus of investment and jobs from Oregon.

Rich Meiers, president and chief executive of the Healthcare Association of Hawai'i, representing hospital and other healthcare providers, said it's clear the industry needs to "look at something new," though he stopped short of saying a state-run system would be an improvement.

Costs are going up for consumers and hospitals, while government reimbursements have declined as the numbers of uninsured have gone up, Meiers said.

The Associated Press contributed to this report. Reach Robbie Dingeman at rdingeman@honoluluadvertiser.com or 535-2429.

Article url: http://the.honoluluadvertiser.com/article/2003/Jan/28/ln/ln14a.html

Posted by pnhp at 04:37 PM | Permalink | Comments (1)

By Thomas Oliphant, 1/28/2003

WASHINGTON:PRESIDENT BUSH took office two years ago with a preposterous message against the gauzy backdrop of a phantom budget surplus that we could have it all - lower taxes and more services and benefits.

This week the message hidden in the fog of pre-State of the Union propaganda is that we can't and that Bush wants to attack the services and benefits that make up America's social contract to keep the tax cuts coming.

The best and biggest example is Medicare.

Behind PR words like ''choice'' and ''competition'' and the alleged ''magic of the marketplace'' lies an option for the country's retired people that Bush has rejected. He hasn't rejected it because he considers it bad policy; it was considered an obvious part of a responsible health care policy. Instead, he has rejected it because he places a higher priority on cutting the top income tax rate and eliminating the levy on stock dividends.

The rejected choice would have added a prescription drug benefit to Medicare. It would have required major changes in basic Medicare to reduce the growth in its costs - currently more than $260 billion a year. But the changes would not touch Medicare's essential features, which nearly two generations of retired people have embraced wholeheartedly.

In studying this option, administration officials went to great lengths to estimate how many retired people would choose it. Their conclusion was that virtually everyone would. The idea would have stimulated bipartisan discussion. There would have been vigorous arguments about the scope of the drug coverage and the extent of the cost controls, but the option would have nudged toward agreement.

The rejection of this choice had nothing to do with its merits and everything to do with Bush's domestic priorities. The cost was estimated to be nearly $470 billion over the next decade. In demanding that $100 billion come out of a Medicare initiative, the president changed the politics from center to right.

To protect his tax cuts, Bush came up with a three-pronged hybrid based on coercion and cave-ins to his party's campaign cash cows - insurance companies and their health maintenance organizations, drug companies, and for-profit health care providers. To call these three prongs ''choices'' borders on the obscene.

The first one is fee-for-service Medicare as we know it. Not even Bush would propose eliminating this choice for those in or nearing retirement. The only problem with his initiative is that for those who choose it there would be no prescription drug benefits - none. That is the classic Hobson's Choice - in reality, no choice at all.

To get even a puny drug benefit as well as limited coverage for the catastrophic illnesses that can land a person in a nursing home, there would be two paths open to the elderly.

One is HMOs and the managed care that Americans, with good reason, love to hate. For the growing population of basically healthy Americans in retirement this can be a genuine option were it not for the fact that insurance companies have been dropping coverage under Medicare by the millions recently because they don't like the profit margins. In many parts of the country there are simply no HMOs offering retired people coverage. Bush wants to offer them higher profits and a new, coerced market.

To fill the remaining, cavernous gaps, he is also offering a national alternative run by for-profit companies. The details are sketchy, but this ''coverage'' would reimburse no catastrophic costs up to $6,000 annually. For drugs, a retired person would pay half his costs up to $3,000 and receive no reimbursement for costs between $3,000 and roughly $5,500. For the first time, there would even be a requirement for copayments for home health care - in effect a new tax on the infirm trying to stay out of the hospital.

You can also bet that the Bush proposal will include nothing resembling restraints on soaring drug prices or for-profit provider charges. Given current trends, you could almost imagine every one of Bush's new dollars getting snapped up in higher prices and fees.

This abomination did not emerge out of administration discussions about health care policy. Instead, it emerged out of discussions about budget priorities.

Right now the government's hemorrhaging finances are mostly the result of a slumping economy and the higher costs of war. Down the road, however, the cause of an even greater hemorrhage will be tax cuts.

Something had to give, and Bush has decided that to preserve all those tax cuts, that something should be Medicare and its 40 million elderly beneficiaries.

Thomas Oliphant's e-mail address is oliphant@globe.com.

This story ran on page A15 of the Boston Globe on 1/28/2003. © Copyright 2003 Globe Newspaper Company.

Posted by pnhp at 04:34 PM | Permalink | Comments (0)

The Economics of Health Reconsidered
Second Edition
By Thomas Rice
Health Administration Press, November 2002

The challenges facing health policymakers - to ensure that costs are kept manageable and quality remains acceptable in a world of limited budgets but expanding technological capabilities - are daunting. New and innovative ideas are essential. If analysts misinterpret economic theory as applied to health - by assuming that market forces are necessarily superior to alternative policies - then they will blind themselves to policy options that might actually be better at enhancing social welfare.

http://www.ache.org/pubs/rice2.cfm

Comment: "The Economics of Health Reconsidered" is an extremely important addition to the health policy literature.

For the benefit of non-economists, Professor Rice first describes the traditional economic model of market competition, demand theory, supply theory, and equity and redistribution. He then describes many of the problems with the traditional model and then some of the important implications for health policy. Finally he also discusses the role of government. With academic purity, he describes concepts such as Pareto optimality, the Edgeworth box, revealed preference, elasticity of supply, demand inducement and many other fundamentals of economics.

Why is it important that health care reform activists understand all of this? Virtually every person debating health care reform invokes economic theory, using that theory to explain why his or her model of reform is "better." By providing us with an understanding of normative policy analysis, Dr. Rice helps us recognize that many statements are made that purport to be absolute truths based on fundamental theories in economics when, in reality, they are merely an expression of policy that the advocate believes we SHOULD adopt. Ironically, in many instances, the advocate truly believes that his or her statement cannot be challenged because it adheres rigidly to the "pure laws" of economics, when, in reality, it was merely a statement of personal opinion based often on that person's own social goals.

In the Forward, Professor Uwe Reinhardt states, "... the book and other such critiques should be read as pleas that social goals not be posited inadvertently or surreptitiously in policy analysis, either carelessly through normative economic analysis or through deliberately mischievous use. It is difficult enough at times for economists to see through such tactics; it is well-nigh impossible for even highly educated lay persons - let alone the general public - to see through these tactics."

Everyone who wishes to debate or advocate for health care reform should read "The Economics of Health Reconsidered." It will help us recognize the social goals posited in the economic treatises on health care reform. We should then be able to expose those that have nefarious intents (nefarious from OUR perspective). Undoubtedly we too will continue to err in our careless digressions into normative policy analysis, but perhaps we can be forgiven because of our morally superior, egalitarian social goals (superior from OUR perspective).

Posted by pnhp at 11:30 AM | Permalink | Comments (0)

American Journal of Public Health
January 2003
Medical Care for All the People
By Henry E. Sigerist

The idea of social insurance is by no means new but has a history of over sixty years. It is not a revolutionary but, on the contrary, a basically conservative issue. It does not tend to overthrow the existing economic order but provides a corrective mechanism that mitigates its hardships.

The provision of medical services to the population has two aspects, one economic and one medical. Both must be considered and studied together because they are inseparable. Indeed the best economic plan defeats its own purpose if the money is used to finance a poor type of medical service, and on the other hand the best medical plan must collapse if it is not properly financed. Illness is an unpredictable risk for the individual family, but we know fairly accurately how much illness a large group of people will have, how much medical care they will require, and how many days they will have to spend in hospitals. In other words, we cannot budget the cost of illness for the individual family but we can budget it for the nation. The principle must be to spread the risk among as many people as possible and to pool the resources of as many people as possible. In other words, we must apply the principle of insurance, with which everybody in America is familiar. . . .

The experience of the last fifteen years in the United States has, in my opinion, demonstrated that voluntary health insurance does not solve the problem of the nation. It reaches only certain groups and is always at the mercy of economic fluctuations. . . . . Hence, if we decide to finance medical services through insurance, the insurance system must be compulsory.

http://www.ajph.org/cgi/content/full/93/1/57

Comment: Henry E. Sigerist was the director of the Johns Hopkins University Institute of the History of Medicine. His comments above are excerpted from an article published in the Canadian Journal of Public Health in 1944. The Canadians understood what he had to say. Will we ever understand?

Posted by pnhp at 03:34 PM | Permalink | Comments (0)

The Henry J. Kaiser Family Foundation
January 2003
Paying for Choice:
The Cost Implications of Health Plan Options for People on Medicare
By Rani E. Snyder, Thomas Rice, and Michelle Kitchman

Medicare coverage alone does not provide sufficient financial protection for many program beneficiaries. Thus, the vast majority obtains supplemental coverage from four main sources: former employers, individual "Medigap" insurance policies, Medicaid, and Medicare+Choice plans.

This report examines the financial implications associated with these different choices by calculating how much people on Medicare would spend annually out-of-pocket on costs including-premiums, cost-sharing requirements, and spending for uncovered services-under different supplemental insurance arrangements.

Findings from this report show that the insurance choices that Medicare beneficiaries make have substantial and often dramatic effects on their out-of-pocket medical spending. We found that a number of factors affect how much a person on Medicare would likely spend out-of-pocket.

First, and perhaps not surprisingly, is health status.

Second, type of plan matters in determining beneficiary healthcare costs.

Third, within a particular insurance type, the specific plan chosen affects costs as well.

Fourth, there is a great deal of variation in costs for non-covered services like pharmaceuticals.

Finally, in some instances there are large differences in costs by geographic areas.

Of particular importance is that fact that these costs differences are often hidden because they are not reflected in the premiums paid, but rather through cost-sharing requirements and uncovered services. Thus, when engaging in comparison-shopping, consumers may put too much emphasis on cheaper premiums without considering the more difficult to assess cost-sharing requirements for covered services and costs for other non-covered services.

The supplemental insurance market presents opportunities for Medicare beneficiaries to insure themselves against future health care costs, but the choice is neither easy nor risk-free - particularly for those living on fixed incomes. There are no steadfast rules for beneficiaries to make the "right" choice in selecting a supplemental insurance plan.

http://www.kff.org/content/2003/6060/6060.pdf

Comment: The traditional Medicare program fails to provide sufficient financial protection. Most Medicare beneficiaries who have significant health care needs must rely on supplemental plans to reduce financial barriers to care. This report makes it clear that, in spite of efforts to regulate the supplemental market, beneficiaries are exposed to risk, especially through uncertainties in cost-sharing and in services covered. And current trends are further increasing risk through greater cost-sharing and through a reduction in benefits.

Current political efforts are aimed at preventing any improvement in the traditional Medicare program. The most visible effort is to continue to prohibit pharmaceutical coverage, but to offer this benefit only in the private health plan marketplace. Our politicians wish to use drug coverage as a lure to entice individuals to leave the traditional Medicare program.

Shoving Medicare beneficiaries into the private marketplace can only compound the problems presented in this report. Uncertainties and risk will only increase as the market experiments with variations in premiums, cost-sharing and benefits covered.

Instead of compounding the deficiencies in the Medicare program, let's fix them. In the traditional Medicare program, let's provide comprehensive benefits and eliminate financial barriers to care. Then we can also eliminate the supplemental market that has been increasing costs, but without a commensurate increase in financial and health security.

Posted by pnhp at 09:27 AM | Permalink | Comments (0)

Modern Physician
Jan. 23, 2003
Breaux unveils universal coverage plan
By Elizabeth Thompson Beckley

Every American citizen would be required to purchase a basic level of health insurance in a new plan for universal coverage unveiled today by Sen. John Breaux (D-La.) at a health policy conference in Washington.

The framework of the Breaux plan would give every American the right and the accountability to purchase health insurance at an affordable group rate through policies such as union, church or employer-based plans or coverage pools created by the states. States would get some federal grants to help in organizing these pooling arrangements and the federal government itself would provide fallback plans.

Additionally, every policy would be required to offer a standard benefits package comparable to the plan offered to Congress and federal employees. The federal government would continue to provide financial help for low-income citizens to offset the burden of cost sharing. A new, refundable tax credit would be available in advance for premium subsidies for the poor.

Penalties would exist for those who do not enroll themselves or their children. Breaux cites the possible loss of the personal child tax exemption as a potential example.

He says because the proposal is coming from a "moderate to conservative" Democrat, more Republicans may be willing to take a look at his plan.

http://modernphysician.com/

Comment: Everyone agrees that universal coverage must be the goal. But how you get there and what you have after you are there are absolutely crucial. An individual mandate, with all of the administrative waste of our current system of multiple health plans, using tax credits, and penalizing those who cannot afford to participate is an approach that will significantly increase costs and fall far short of universal coverage.

Comprehensive reform should be supported on the basis of sound policy, and not merely because it is a compromise proposal of a "moderate to conservative Democrat." Compromise, in which flawed policies are adopted because they seem to fall between the extremes supported by the factions, should be rejected, especially when it is possible to agree on sound policies. Instead of negotiating compromise, the factions should be cooperating in achieving desirable goals that all of us support.

The goals in health care reform should include universality, comprehensiveness, assured access, affordability, free choice of providers, efficient administration, and an end to excessive cost escalation. These concepts should not be opposed by moderates merely because of the perception that they originated from the left. Freedom of choice, administrative efficiency, and containing public costs are concepts that are claimed by the political right. So let's reject the mediocrity that is inevitable with compromise and instead begin cooperating on reform that is in the best interests of all of us.

Posted by pnhp at 09:26 AM | Permalink | Comments (0)

January 23, 2003
Chicago Sun-Times
Op-Ed

Senate Majority Leader Bill Frist must recuse himself from health care legislation deliberations.

He comes to his new post with a record of self-interest and partiality for the corporate health care delivery system.

Frist owns $26 million of his family's company, Hospital Corporation of American (HCA), the nation's largest for-profit hospital chain. HCA has the questionable achievement of executing the largest white-collar crime in U.S. history, having been penalized $1.7 billion in fines, so far, for gouging Medicare, health care for our elderly.

It was only a forgiving Bush administration Justice Department that spared the perpetrators prison time. In 1995, Frist supported a Medicare bill to increase for-profit hospital reimbursements by $65 per patient, while reducing not-for-profit reimbursements by $6 per patient. More recently, he has worked to stop a strong patient's bill of rights, and gridlocked a Medicare prescription benefit.

His reward from the health care industry: more campaign finance dollars than all but two Senate colleagues.

Dr. Frist has an ethical imperative to assure the American public that he will not, as majority leader of the Senate, frame health care legislation.

Quentin Young, M.D.,

Physicians For a National Health Program

Posted by pnhp at 09:24 AM | Permalink | Comments (0)

American Journal of Public Health
January 2003
Editorial

Universal Health Insurance in the United States: Reflections on the Past, the Present, and the Future

By Bruce Vladeck, PhD

... advocates of universal health insurance need to reject the proposition that their goals can be achieved through a series of incremental steps. When the concept of incrementalism first began appearing in the political science literature in the United States, the model was the Social Security Act, which began in 1935 in quite a limited form. The original law was confined to old-age benefits and Aid to Families with Dependent Children, but it didn 't have survivor benefits, federal disability benefits, or much in the way of benefits for spouses, and of course didn't contain Medicare or Medicaid. In the 67 years the Social Security Act has been in existence, it has been amended 40 times, and most years the program has had some incremental improvement. Since the founding fathers of Medicare and Medicaid were primarily alumni of the Social Security system's development, it is not surprising that they adopted a similar strategy toward health insurance.

But somehow, over time, this particularistic strategy has been transformed into a normative imperative about how to do politics in the United States. According to this view, the only possible change is incremental: expanding health insurance can only be achieved in incremental steps. But over the last 35 years, incremental expansions in public health insurance have not been sufficient to reduce the number of the uninsured. The private health insurance system has been unraveling at a pace roughly equal to that of expansions in public programs, while population growth has largely been driven by immigration-immigration to a country in which a widely disproportionate share of new Americans lack health insurance.

Meanwhile, as proponents of universal health insurance have been incrementally trudging "sideways," advocates of nonincremental strategies in other spheres of politics and public policy have scored some notable successes, at least from their point of view. For instance, in the mid-1990s the Economic Opportunity Act was repealed, along with many other valuable remnants of the Great Society's legislative outburst of 1965 to 1966. Major parts of the infrastructure through which civil rights were enforced in the 1970s and 1980s have been dismantled. In 1995 to 1996, Congress eliminated entitlement for cash benefits for low-income mothers and their children, along with a whole range of entitlements for legal immigrants. In addition, Congress came very close to eliminating the entitlement status of Medicaid. There have been very significant nonincremental changes in other areas of public policy as well.

Those who worked most strenuously for all those changes had no patience for incrementalism as a prescriptive theory: they always felt that it was a much better strategy to go for broke. They asked for too much, they overreached, on the theory that you are only going to get a fraction of what you ask for anyway, but if you don't ask for enough to start with, you certainly won't get enough.

This is an old political debate, but whatever the advocates of universal health insurance have been doing for the last 30 or 35 years, it obviously hasn't worked very well. There is very little to lose from trying something different. One of the different things that might be tried is to determine in very broad terms what the goals and principles of universal health insurance are by deciding on a set of defining ethical and moral principles and insisting that those goals and objectives be part of every conversation until they are achieved. Perhaps the "Rekindling Reform" initiative will help shape such goals and principles for universal health insurance.

http://www.ajph.org/cgi/content/full/93/1/16

The January issue of the American Journal of Public Health is dedicated to "Rekindling Health Care Reform."

Posted by pnhp at 10:38 AM | Permalink | Comments (0)

The Providence Journal
1/21/03
Editorial
A National Health System

The United States already has a national health plan. It's called Medicare. Medicare does not, of course, cover everyone, but it could. And perhaps someday it will.

The big advantage of a nonprofit, government-run insurer like Medicare is that it spends relatively little on administrative costs.

The problem with American health care... isn't that we're not spending enough. It's that we're wasting resources.

It is possible to have a medical system that delivers top-quality care for everyone without spending more money. It only requires the political courage to displease some powerful interests and an electorate demanding change. Granted, that is a tall order.

http://www.projo.com/opinion/editorials/content/projo_20030121_21edmed.cd19c.html

Posted by pnhp at 11:10 AM | Permalink | Comments (0)

The Kaiser Commission on Medicaid and the Uninsured
The Medicaid Resource Book
July 2002
By Andy Schneider, et al

In total, the states spent $6.6 billion (federal and state funds combined) on (Medicaid) program administration in FY 1997, representing $163 per enrollee and 3.9% of total Medicaid spending.

... these estimates do not include the administrative costs incurred by Medicaid managed care plans. In some states, administrative outlays are folded into capitation payments to MCOs (managed care organizations). These outlays reflect the costs attributable to activities such as utilization review, quality improvement, and data collection and reporting. Although these amounts are not included in the data states report to CMS, one study has reported that HMOs participating in Medicaid had administrative cost ratios of over fourteen percent in 1998. The same study found that HMOs that did not participate in Medicaid had administrative cost ratios of just under 16 percent for that same year.

A... point is made on the managed care side of the program. The increase in state contracting with MCOs on a risk basis, it is argued, creates the need for more, not fewer, administrative resources: "the movement by Medicaid officials to contract with large managed care companies does not, as many originally thought, mean that the staffs of state governments can easily be streamlined. To the contrary, the effective management of managed care puts pressures on state agencies to hire additional personnel. Failure to do so seriously threatens the access of Medicaid enrollees to health care of adequate quality. Whether state agencies will be able to build and sustain adequate staffs to deal with managed care in an era dominated by the dogma of downsizing remains an open question."

For both states and the federal government, Medicaid is a challenging program to administer. Medicaid bears all of the administrative responsibilities of a traditional insurer, which range from determining the scope of benefits it offers to processing claims to monitoring the quality of services it purchases. In addition, Medicaid pays for a much broader array of benefits than private insurers or Medicare and must make income and resource eligibility determinations that those payers do not. Finally, states and the federal government must carry out these responsibilities in an environment of rapid change in the health care marketplace and ever-increasing fiscal stakes.

http://www.kff.org/content/2003/2236/

Comment: Publicly administered health insurance programs have much lower administrative costs than do private health plans. But it is important to realize that much of the efficiency of public programs is lost in our fragmented, duplicative method of funding health care. By using private managed care organizations, significant percentages of public funds are being diverted to private administrative costs. But what is not commonly realized is that the public administrative costs are also increased even more because of the requirement for additional state oversight of the managed care organizations. And this doesn't even take into account the greater administrative burden and costs placed on the providers of health care.

Reform advocates who reject the single payer model because of lack of political feasibility usually support increases in public programs to fill in the voids in coverage. They must keep in mind the fact that advocacy for this model of reform comes at the very high cost of perpetuating and expanding the egregious administrative waste of our system.

Reasonable solutions can be achieved only after the problem is precisely defined. Administrative waste is one of the greatest and most serious problems of our current system. A satisfactory solution must reduce this waste. The single payer model is clearly the most administratively efficient system of funding health care. The burden should be on advocates of other models of reform to prove the superiority of their approach. Lacking that, we should move forward and enact a single payer system now.

Posted by pnhp at 09:50 AM | Permalink | Comments (0)

Los Angeles Times
January 17, 2003
The Unmanaging of Health-Care Costs
By Uwe E. Reinhardt

In referendum after referendum, Americans have shown their distaste for the single-payer approach, such as Canada's, that can control health spending while protecting people from bankruptcy over medical bills with rationing of some high-tech care. Americans showed equal disdain for the Clinton health plan, which sought to control spending more gently with privately managed care, regulated by government.

Now Americans have defeated managed care by employers, virtually the only cost-effective quality approach left for employees.

What Americans want is really quite simple: all the health care they or their doctors can imagine, virtually free, without added taxes for health care and without higher out-of-pocket costs for their "employer-provided" health insurance. That's all. Call it part of the American dream.

As the dreamers watch health care chewing up their paychecks, and as their out-of-pocket payments for health care rise inexorably, the dreamers will stomp their booties in despair and look for a culprit. They need not look beyond the mirror.

http://www.latimes.com/news/opinion/commentary/la-oe-reinhardt17jan17,0,6534 372.story?coll=la%2Dnews%2Dcomment%2Dopinions

Comment: Are the dreamers of their own personal health care utopia the real culprits?

Our message to them has been quite clear. Absolutely everyone can have affordable access to virtually all reasonable, beneficial health care services if only we replaced our flawed, wasteful system of funding care with a more efficient, publicly-administered, single insurance program. That is what they hear from us, but, from their perspective, what is really the truth?

They are intelligent. They know that you cannot add over 40 million individuals to the insurance pool without greatly increasing costs. And they know who will have to pay for that care since most of those without insurance cannot afford to pay their full share now. They also know that if you allow everyone to have all of the care they want, costs will skyrocket because people will automatically overutilize the health care system. Since the system would be publicly funded, people will be taxed to death. The economy will deep six because American businesses cannot afford the high taxes required by such an expensive health care system. Many understand that limiting costs would stifle technological innovation, threatening access to unknown but surely life-saving care at some vague time in the future. And, finally, the government can't do anything right and would wreck our health care system with its burdensome and inefficient bureaucracy.

Any single payer advocate can refute each of these points. But most of us are totally ineffective in convincing individuals that their factual data base is corrupted, and that we have a new information data base that will replace their flawed knowledge with the "real" truth.

Whom do we blame? Is it the dreamers who want health and financial security based on inadequate and untruthful information but on the facts as they understand them? Is it the vested interests that profit from continuing their campaigns of misinformation? Is it the advocates of reform who have failed to communicate adequately the true facts made available to us through health policy science? Is it the politicians who do understand the issues but who are more driven by polls and elections than by policies that would benefit their constituencies? Though this list is incomplete, it seems that we are all culprits.

Is there any hope? The recent Romanow process in Canada revealed that a nation can have a very good grasp of rational health care policy and can maintain solid support of their system in spite of intense political efforts at sabotage. How did Canada manage to arrive at this level of support for their system? It's really quite simple. They've lived with their system for decades, and, through personal experience, they know exactly what it is and how it works. They are not swayed by the vested interests and ideologues that disseminate untrue statements about their system.

Can we ever have that level of understanding in the United States? We can, but it will take a massive grassroots effort in which we all must participate. If we do our best, we will no longer have to accept a share of the blame. On the other hand, if we fail to be a part of the solution, then we will continue to be a part of the problem.

Posted by pnhp at 09:44 AM | Permalink | Comments (0)

The New York Times
January 16, 2003
Frist and Health Care

To the Editor:

Re "Weapon in Health Wars: Frist's Role as a Doctor" (Political Memo, Jan. 11):

I am a practicing pediatrician and emergency physician in a large urban hospital. Accepting Senator Bill Frist as a spokesman for health care reform is difficult for me. He is a businessman-physician who did transplant surgery and made a lot of money in corporatized medicine - not exactly a mainstream medical practitioner.

Most doctors in poll after poll favor a single payer system and are dismayed at the continuing privatization of medical care. It's time for physicians and patients to have the courage to publicly support health care as a right; lacking this principle, our current nonsystem will continue to implode. Does anyone really believe anymore that the marketplace medicine that Dr. Frist represents is working?

David A. Poleski, M.D.
Grosse Ile, Mich.

http://www.nytimes.com/2003/01/16/opinion/L16FRIS.html

Posted by pnhp at 01:48 PM | Permalink | Comments (2)

The New York Times
January 14, 2003
Most States Cutting Back on Medicaid, Survey Finds
By Robert Pear

Two-thirds of the states say they are cutting Medicaid benefits, increasing co-payments, restricting eligibility or removing poor people from the rolls because of soaring costs and plunging revenues.

The Bush administration has opposed any increase in the federal share of Medicaid, saying that the federal government has fiscal problems of its own.

http://www.nytimes.com/2003/01/14/politics/14MEDI.html

Comment: As long as we have a separate health care program for low-income individuals with little political voice, this program will be politically managed and funded as a "welfare program." If we were all in a single, universal health care program, most of us would not tolerate a policy position that seriously underfunds our health care system while reducing taxes for those that will never feel a quality-of-life impact of the tax benefit.

How can a just society adopt policies that further impair access and outcomes for the most vulnerable individuals in our society? Continuing to tolerate this injustice does not speak well for the American ethic.

Posted by pnhp at 01:37 PM | Permalink | Comments (0)

The Commonwealth Fund
January 2003
Small but Significant Steps to Help the Uninsured
By Jeanne M. Lambrew and Arthur Garson, Jr.

This paper suggests a number of low-cost policies that could improve health coverage in this environment by providing discrete groups of people with access to private health insurance, public coverage, or both.

Generally, the policies outlined below would cost less than $1 billion per year-a small amount relative to total spending on Medicare and Medicaid ($260 billion and $270 billion, respectively). Even if all were enacted, they would neither significantly reduce the number of uninsured nor substitute for comprehensive health system reform.

* Extending COBRA continuation coverage to all workers who need it.
* Adding health insurance assistance to unemployment insurance.
* Testing a Federal Employees Health Benefits Program buy-in through a
demonstration.
* Testing an individual insurance tax credit through a demonstration.
* Gradually phasing in public coverage of poor adults.
* Extending private plans' dependent coverage up to age 21.
* Extending Medicaid/CHIP options up to age 21.
* Extending COBRA continuation coverage for early retirees.
* Creating a Medicare buy-in for younger spouses of Medicare beneficiaries.
* Allowing Medicaid to act as a high-risk pool.
* Gradually phasing out Medicare's 24-month waiting period.
* Creating a national health coverage advisory commission.

Conclusion

Small policies cannot cure the myriad problems in the health insurance system in the United States. Solutions will require both significant new funding, since affordability is a major problem, and insurance and delivery system reform, to remove the structural barriers to coverage. The ideas presented in this paper represent a sample of ideas that could be considered in addition to those that have been proposed in Congress and by state officials, researchers, providers, and consumers. They are not incompatible with larger visions for the health system, nor are they intended to substitute or delay action on major reforms. Instead, they aim to break the recent impasse on policy for the uninsured and to make some, albeit limited, progress on reducing the number of uninsured Americans. Success in passing and implementing incremental health policies may, rather than diverting attention away from systemic reform, instill confidence in public policy's ability to take on the larger challenges in improving health insurance coverage in the United States.

http://www.cmwf.org/programs/insurance/lambrew_smallsignificant_585.pdf

Comment: The most important statement in this report: "Even if all were enacted, they would neither significantly reduce the number of uninsured nor substitute for comprehensive health system reform."

The two major pathways to reform include (1) incremental measures, such as those listed, that improve access and equity, and (2) comprehensive reform that assures everyone full, affordable access to health care. To follow one pathway, while publicly opposing the other, constitutes health policy malpractice!

We all need to support modest but politically expedient measures which can be enacted now. But, of much greater importance, we are all ethically mandated to move forward, with all of the forces that we can muster, toward true, comprehensive reform. There can be absolutely no hesitancy nor compromise in this effort.

Those working on modest reforms must continue to do so. But, as we support their efforts, they need to publicly support, in the clearest terms possible, our efforts for comprehensive reform. By unifying our advocacy on behalf of our health care system, we can clarify the confused message that the public is receiving. The public must understand that there is absolutely no substitute for truly comprehensive reform.

Posted by pnhp at 04:34 PM | Permalink | Comments (0)

Published on Monday, January 6, 2003 by CommonDreams.org
by Ralph Nader

Have you been watching the tv news or the tv news magazine shows lately about the sharp increase in medical malpractice insurance premiums and agitated physicians walking off their jobs in some states? If you have, didn't they leave you with the impression that lawsuits against bad doctors were the cause? And these poor old insurance companies being forced to raise those premiums, 30%, 40%, 70% all of a sudden!

Propaganda and slanting the news are going hand in hand these days, choreographed by the hidden persuaders hired by the American Medical Association together with the behind-the-scenes lobbyists of the gouging insurance companies.

Why in the world would some physicians be willing tools of the insurance companies who are gouging them regardless of whether they are competent, caring doctors or the negligent, incompetent few who account for most of the claims by injured patients? Part of the answer is that the insurance companies are scaring many doctors with spectres of litigation volume that simply does not exist.

Malpractice cases filed and actual payments in constant dollars have been level for many years; about nine of ten malpractice harms do not result in any law suits being filed, according to various studies. Yet the human toll is deadly. A Harvard study estimated that gross malpractice just in hospitals takes 80,000 American lives a year plus causing hundreds of thousands of serious injuries.

Good physicians should delve deeper into the way medical malpractice insurers do their accounting, their reserving, and their actual practices. If physicians would total the entire amount of premiums they paid last year and divide it evenly by all the physicians practicing in the United States, the average premium is less than $10,000 per doctor per year. Very manageable.

So why are some doctors paying $50,000 or $100,000 a year to their malpractice insurers? Because the companies have learned in the past thirty years to over-classify their risk pools, thereby reducing their number to specific specialties like obstetrics or orthopedic surgery in order to charge much more. In addition, by not surcharging the few bad physicians in these specialties (known as experience loss rating), the good specialists pay as much as incompetent ones with a large number of payouts to their wounded patients.

There is another political benefit for this kind of over-classification. When obstetricians are gouged, they scream loudly, threaten not to deliver babies or actually go on strike. This makes perfect visuals for television ‚ crying babies, physicians in their garb blaming trial lawyers, who after all still have to persuade juries and judges (the latter being mostly former business lawyers). Meanwhile, the insurance companies are laughing all the way to the bank.

There are no visuals for the slowly dying and other human casualties who receive neither justice nor compassion nor compensation. Nor do people like Donald J. Zuk get any television time. Mr. Zuk, chief executive of SCPIE Holdings Inc., a leading malpractice insurer in the west, told the Wall Street Journal (June 24, 2002) in a very revealing analysis, "I don't like to hear insurance company executives say it's the tort injury-law system ‚ it's self-inflicted."

Neither organized medicine nor the insurance companies are really going after bad doctoring. The AMA's web site does not report any data about incompetent or crooked physicians who give medicine a bad name. And loss prevention is something the insurance companies leave to professors of insurance to talk about.

Instead both lobbies are funding and pressing legislators to enact laws that politicize the courts, tie the hands of judges and juries ‚ the only ones who see, hear and evaluate the evidence before them ‚ and make it harder for innocent men, women and children to bring tragic cases to court and obtain an adequate award.

A favorite way to achieve this callous goal is to put a $250,000 lifetime cap on pain and suffering. Apart from the fact that some insurance executives make that much in one week, every week, from your premium insurance dollars, consider how such a cap wrecks the innocent in California.

Two year old Steve Olson, now twelve, became blind and brain-damaged because the hospital refused to give him a CAT scan that would have detected a growing brain mass. His mother left her job to take care of her son. A jury awarded Steven $7.1 million in non-economic compensation for his life of darkness, pain, and around-the-clock supervision. But the judge was forced by a California law, that these lobbies now want Congress to enact nationwide, to reduce the amount to $250,000.

Don't think for a moment that restricting your court rights will reduce malpractice premiums for physicians. Not only have past restrictions not done so, but insurance industry and company spokespeople have openly said they will not do so and in some cases have raised premiums right after a state enacted restrictions.

There is an obligation for the many good doctors to speak out. Just a few weeks ago, nine of the doctors who walked out of Wheeling Hospital in West Virginia, had cost their insurers at least $6.3 million in malpractice claims. Among the damage they caused , wrote the Charleston Gazette, was operating on the wrong knee, causing the need for a liver transplant by leaving a surgical clip on an artery, and causing a massive and fatal infection by inadvertently slicing into a patient's stomach."

The whole malpractice insurance premium business amounts to about what this country spends on dog food and is one half of one percent of health care costs in this country. Isn't it about time to focus on malpractice prevention first and foremost, instead of pounding on the rights of hundreds of thousands of Americans who leave their doctors far worse than when they greeted them?

If you want to find out more about "questionable doctors" in your area and how little the state medical licensing boards are doing to protect you, log on to www.citizen.org/hrg/

For more information on the malpractice crisis, go to www.centerjd.org And get ready to contact your members of Congress before it is too late.

Posted by pnhp at 09:57 AM | Permalink | Comments (1)

Dorothy Hong is a second year medical student at the University of Southern California. She was raised in mainland China, and her mother teaches at Beijing University. Michael Kennedy, M.D., who teaches at USC, asked her to comment on our prior dialogue on health care in mainland China.

Dorothy Hong:

Hi Dr. Kennedy:

Their arguments are very interesting (U. Reinhardt, E. Christiansen, with a further comment by R. Covell). Both opinions are correct in certain aspects.

As Dr. Christiansen stated: "Hospitals are exceedingly well staffed with an abundance of well-trained physicians and registered nurses." The best hospitals in China are excellent. However, there are very few excellent hospitals. Only a small percentage of people have access to decent health care.

In terms of the health care system, both socialism and capitalism co-exist. It all depends on whom you work for. If you are an employee of a public institution (run by the government), like my father, you and your children (not your spouse) can be covered by the company's health plan. You can go to any hospital in your local area. The government pays the health care expenses. My father had to pay a very reasonable fee to insure my brother and me. Therefore, some lucky citizens are protected by the socialist health care system. However, if you are self-employed or work for a private company the government will not pay for your health care. China does not even have hospitals like the LA County hospitals. Human lives are not very important in the eyes of the government. There are too many people for the government to handle.

The socialist health care in China is good for those who can benefit from it. Both of my parents have to spend a day to do their annual physical exam, and this day is considered as a working day. They do basic screening tests based on your age, and a CBC. During their yearly routine examination, my father found out that he had hypertension, my mother, borderline diabetes.

For the past fifty decades, the Chinese socialist health care system has managed its expenses because only a very small percentage of people can take advantage of it. However, things are changing. My parents are concerned about for how much longer they can have this benefit.

Overall, I agree more with Dr. Covell and Dr. Reinhardt. One of my motivations to study medicine is to take care of my family's health care needs in the future.

Dorothy

Posted by pnhp at 09:50 AM | Permalink | Comments (0)

Health Affairs
Web Exclusive
January 8, 2003
Should Public Policy Seek To Control the Growth of Health Care Spending?
By Henry J. Aaron

Who makes the decisions?

Some observers believe that people can impose such budget constraints through their decisions about the purchase of insurance. This is the way most markets work, and normally they work quite well. In the case of health care, I believe that this view is simply wrong in practice. The inefficiencies of the individual health insurance market are insoluble. More importantly, the incentives and morality of providers and the wishes of patients will defeat private regulation every time because such regulation lacks legitimacy. In one way or another, private agents charged with the task of reining in costs will come a cropper for the same reason that the American public effectively fired managed care. I may-underscore may-join with my fellow citizens to support politically determined limits on care that I or my spouse or child may receive. That is how successful cost control works in other countries. But I will not-underscore not-authorize some corporate executive to do so.

Other countries have shown that government regulation can control the level of health care spending and the pay providers receive. They may have made a Faustian bargain. Clearly, most of them do not think so. Many have wisely begun to try to mobilize market incentives to promote efficient resource allocation. However, none has relied on market incentives to establish overall health care budget constraints. Whatever this means, the United States clearly has not yet found effective ways to hold down health care spending in ways that would not entail far more central government direction than Americans seem willing to accept.

http://www.healthaffairs.org/WebExclusives/Spending_Web_Excl_010803.htm

Posted by pnhp at 09:47 AM | Permalink | Comments (0)

January 4, 2003

By Jamie Court and Frank Smith

Capitol Hill's well-heeled lobbyists and political cognoscenti have proclaimed that with a doctor in charge of the U.S. Senate, health care reform is imminent. Unfortunately for the public, the doctor running the house, Sen. Bill Frist (R-Tenn.), typifies the GOP government's new health care strategy: Care most about the health of corporations that elect you.

If the public does not stop Frist and K Street's hired guns, the gains of the patients' rights movement will be erased and the freedoms of drug companies, HMOs and hospital chains will be expanded at the expense of patients.

Frist sponsored legislation this year limiting legal liability for drug maker Eli Lilly and other manufacturers of a mercury-based additive to vaccines that is linked to autism in children. The provision drew outrage from parents of autistic children as special-interest pandering when it passed as part of the homeland security legislation just after the election. The corporate pork was the first payback for pharmaceutical companies' heavy last-minute financing for key Republican Senate candidates that changed the balance of power in the Senate. The Washington Post also reported that Eli Lilly bought 5,000 copies of Frist's recent book.

As head of the National Republican Senatorial Committee, Frist raised more than $100 million for GOP senators' election campaigns. It is in this fund-raising role that observers say Frist won his new post. In 2003, the debts to these donors, many from the medical-insurance complex, will come due. As Senate majority leader, Frist will have the power to schedule or not schedule votes on legislation, determine committee assignments and control all debate, absent a supermajority against him. Given these powers, it's little wonder there were few words of criticism about this election, even from Senate Democrats.

Frist's ownership and entanglement with one of America's biggest corporate criminals, hospital chain Columbia/HCA, shows his loyalty and should have prevented him from leading the U.S. Senate. In total, the company now called HCA will pay more than $1.7 billion in civil and criminal penalties--the largest amount ever in a health care fraud case.

Frist's family founded the company, which the government prosecuted for massive billing fraud. USA Today reported the U.S. Senate disclosure statements show he owned as much as $25 million in company stock. His wife has more than $1 million in stock.

Frist claims the money is in a blind trust, but when a trust is invested heavily in a company, rather than an industry, it is all too visible.

Last month, Rep. Pete Stark, the senior Democrat on the Ways and Means health subcommittee, stated that the government's HCA settlement may have understated the fraud and could benefit the Frist family greatly.

In the Senate, Frist has used this influence to further HCA's interests by successfully blocking a strong patients' bill of rights, gridlocking a mandatory Medicare prescription drug benefit and promoting arbitrary caps on legal recovery by victims who sue negligent hospitals like HCA.

With the heart and lung transplant surgeon in charge, a whole new set of ''health care'' issues are likely to make the U.S. Senate tick:

* Patients' rights. Instead of expanding patients' new rights to hold HMOs legally accountable for delaying or denying care, the Senate debate will now be about limiting the rights of victims of medical delays and negligence to hold accountable doctors, hospitals and the HMOs they work for.

* Medicare prescription benefit. Rather than force price controls on the pharmaceutical industry that turned the tide for the GOP, the Senate will create a ''voluntary'' prescription drug program with insurers selling a new product to seniors, with new profits.

* Universal coverage. Forget a national Medicare plan for everyone who needs affordable health coverage. The Senate will focus on Medical Savings Accounts, which force the public, instead of insurers, to pay for their health care; bare-bones insurance policies that do not pay for drugs, hospitalization or maternity costs, and mandatory insurance laws that force people to buy an unaffordable, low-quality product.

Beware, America. If the public doesn't lash out, health care reform will mean new burdens on patients and new freedoms for industries.

Jamie Court is executive director of the Santa Monica-based Foundation for Taxpayer and Consumer Rights. Frank Smith is senior fellow at Massachusetts-based Civil Society Institute. They are co-authors of Making A Killing: HMOs and the Threat to Your Health (Common Courage Press).

http://www.suntimes.com/output/otherviews/cst-edt-ref04.html

Posted by pnhp at 01:50 PM | Permalink | Comments (0)

by Doug Ireland
LA Weekly
While TV gushed last week over the Republicans’ new Senate majority leader, Bill Frist, intervening in a traffic accident, portraying the former heart surgeon as a "Good Samaritan," in truth the GOP has simply replaced a racist with a corporate crook.

Frist was born rich, and got richer — thanks to massive criminal fraud by the family business. The basis of the Frist family fortune is HCA Inc. (Hospital Corporation of America), the largest for-profit hospital chain in the country, which was founded by Frist’s father and brother. And, just as Karl Rove was engineering the scuttling of Trent Lott and the elevation of Frist, the Bush Justice Department suddenly ended a near-decadelong federal investigation into how HCA for years had defrauded Medicaid, Medicare and Tricare (the federal program that covers the military and their families), giving the greedy health-care behemoth’s executives a sweetheart settlement that kept them out of the can.

The government’s case was that HCA kept two sets of books and fraudulently overbilled the government. The deal meant that HCA agreed to pay the government $631 million for its lucrative scams — which, on top of previous fines, brought the total government penalties against the health-care conglomerate to a whopping $1.7 billion, the largest fraud settlement in history, breaking the old record set by Drexel Burnham.

The deal also meant that HCA can continue to participate in Medicare. And, as part of the Bushies’ deal shutting down what Deputy Assistant FBI Director Thomas Kubic called "one of the FBI’s highest-priority white-collar crime investigations," no criminal charges were brought against the top HCA execs who presided over the illegal bilking of federal programs designed to aid the poor — and that includes Senator Frist’s brother, Thomas, HCA’s former CEO (and current director), who’s been described by Forbes magazine as "one of the richest men in America," with a personal fortune estimated at close to $2 billion.

What did HCA do? It inflated its expenses and billed the government for the overrun; it billed the government for services ineligible for reimbursement (like advertising and marketing costs). HCA violated both law and medical ethics when, as Forbes put it, "the company increased Medicare billings by exaggerating the seriousness of the illnesses they were treating. It also granted doctors partnerships in company hospitals as a kickback for the doctors’ referring patients to HCA. In addition, it gave doctors ‘loans’ that were never expected to be paid back, free rent, free office furniture — and free drugs from hospital pharmacies."

This is the ethical climate that reigned in the Frist family’s money machine. In an unguarded moment, Senator Frist told the Boston Globe that conversations with his doctor father about the family calling were like "benign versions of the Godfather and Michael Corleone." Apparently the senator considers defrauding the government "benign." So too does the Bush White House, which dictated the Justice Department deal with HCA that let the crooks escape jail just as Frist was being anointed the Senate’s majority leader. A pure coincidence in timing, of course.

The senator has always claimed no current connection to HCA because the $26 million he and his wife hold in the company’s stock is in a so-called "blind trust." But it was the family’s dirty money that bought Frist a place in the Senate. In 1994, Frist — who’d never bothered to vote before first running for the Senate that year — spent some $3.4 million of his personal fortune to buy the seat from Tennessee (HCA’s headquarters) that he now occupies. Moreover, "In the Senate, Frist has used his influence to further HCA’s cause by stopping a strong patients’ bill of rights, gridlocking a mandatory Medicare prescription-drug benefit, and promoting caps on damages for victims who sue negligent hospitals like HCA’s," points out Jamie Court, executive director of the Santa Monica–based Foundation for Taxpayer and Consumer Rights, who adds, "The Senate should not replace a racist with a principal backer of one of the largest corporate swindles ever perpetrated against the American public. If Frist was a patriot first, he would have sold his HCA stock long ago."

But Frist’s pandering to the lobbyists of the voracious health-care industry knows no bounds. "Frist isn’t the senator from Tennessee — he’s the senator from the state of Health Care Industry Influence — he’s gotten more than $2 million from the health-care sector, giving him the dubious distinction of raising more cash from health-care interests than 98 percent of his colleagues," says Nick Nyhart, executive director of Public Campaign.

Consider the special servicing he gave to pharmaceutical giant Eli Lilly. In another example of his "patriotism," Frist engineered the insertion into the Homeland Security bill of a provision that would protect Eli Lilly from lawsuits over Thimerosal, a mercury-based preservative used in its vaccines. Thousands of lawsuits have been filed against Lilly by parents who believe Thimerosal caused autism and other neurological maladies in their kids. The Frist-authored rider shields Lilly by forcing those lawsuits into a special "vaccine court," where they can be easily scuttled, potentially saving Lilly hundreds of millions. The pharmaceutical industry was the largest single contributor to the National Republican Senatorial Campaign Committee that Frist chaired, ladling out some $4 million — and Lilly was the single biggest contributor to the GOP from that industry, having given $1.6 million in the last election cycle, 79 percent of it to Republicans.

The good Dr. Frist voted against patients’ rights to sue their HMOs for failure to provide adequate treatment, and voted to give tax subsidies to HMOs and insurance companies to offer prescription drugs to seniors, rather than providing them through Medicare. Frist has, of course, personally raked it in from the interested industries, gobbling up $123,750 in campaign cash from the HMOs and $265,023 from the pharmaceutical industry. Frist also took $130,204 from the food-processing industry — and then helped kill a bill putting teeth into the USDA’s authority to crack down on processing plants that violate federal standards for bacterial and viral infection of meat and poultry.

There’s a lot more, like this — so much that it leads to an inescapable conclusion: In the Senate, "Good Samaritan" Frist has almost daily violated the injunction of the physicians’ Hippocratic oath: "First, do no harm."

http://www.laweekly.com/ink/03/08/news-ireland.php

Posted by pnhp at 01:46 PM | Permalink | Comments (0)

CBSNews.com
Jan. 9, 2003
When Cure Is Worse Than Disease
By Dick Meyer, Editorial Director of CBSNews.com

The Republicans know exactly what they want to do to control the growth of health care spending; they want to make Medicare and other public programs more like private, market systems. More like managed care. That's what scares me most.

Get this: in 2001, spending by Medicare increased by 7.8 percent, less than the measures of private health care spending. Health insurance premiums went up 10.5 percent and benefits were up 10.1 percent in 2001.

So why would putting more "managed care" in Medicare help control costs when it doesn't work in the private sector. And cost containment is the Republicans' primary goal.

What managed care did bring us medical consumers in the real world was less choice, less personal attention, more bureaucracy and more confusion.

http://www.cbsnews.com/stories/2003/01/09/opinion/meyer/main535869.shtml

Posted by pnhp at 12:29 PM | Permalink | Comments (0)

By Stuart Bramhall MD, past president Health Care for All-Washington

(In October 2002 Dr. Bramhall accepted a locum tenens position as a consultant psychiatrist in Christchurch New Zealand after third party reimbursement problems caused her Seattle practice of 20 years to become insolvent.)

History

New Zealand, with a current population of around 4 million, was one of the first countries in the world to provide universal health care.  Under the Social Security Act of 1938, the government began funding hospitals, although medical and pharmaceutical benefits were not fully effective until 1941. The health systems of New Zealand, the United Kingdom and Canada employ similar models; the government bears ultimate responsibility for the payment for health care, even when it is provided through private institutions.  (In contrast, Germany, France and Japan guarantee universal health care but employ “mixed” systems relying more on non-governmental funding sources, primarily employers and individual patients). 1

Helen Clark, New Zealand’s current Labour prime minister, has always had a strong commitment to universal, publicly accountable health care.  As Minister of Health she was responsible for implementing major reforms under the 1983 Area Health Board Act, restructuring the country’s 27 hospital boards into 14 area health boards with a population-based funding formula.  The restructuring was intended to introduce greater local accountability and administrative efficiency, in the face of escalating health care costs.  The 1983 Act successfully held health expenditure steady from 1980-1990, following a sharp rise during the 1970s. 2

In 1991 under a National (conservative) government, Ms. Clark’s area health boards were swept away and replaced by four regional health authorities headed by government-appointed commissioners.  Hospitals became Crown Health Enterprises with appointed boards of directors, and much health care was funded through market-driven competitive contracting.  It was a radical departure from a system of community involvement in health care which had largely been accepted by both political parties since the establishment of universal health care in the 1930s.

These monetarist reforms largely failed to produce promised benefits, and the new Labour Government elected in 1999 has begun to reverse most of its elements, including a return to community elected District Health Boards. 3

According to the New Zealand National Business Review, the current Labour government has plans to propose an additional tax this year to provide additional health service funding. 4  Taxation methods under consideration include: a general tax, a “social insurance” model (such as a payroll tax or extending the Accident Compensation Corporation, which is primarily employer funded, to include illness as well as injuries), “sin taxes,” and private contributions, such as user-payments and private health insurance.  The last option is unlikely to be enacted because the health insurance industry is not a part of the planning process.

How New Zealand’s National Health Care System Works

Each year the national government of New Zealand decides how much public money will be spent on health care.  These funds are then allocated to the District Health Boards (currently 21).  The national government provides broad guidelines on what services the DHBs must provide.  Some DHBs then purchase these services from a range of providers including public hospitals, non-profit health agencies, iwi (Maori) groups or private organizations.  Other DHBs run public hospitals, preventive services, such as the National Cervical Screening Programme, health promotion activities and public health nursing services.

The first point of contact is usually through a primary health care provider, such as a GP, accident and medical centre, midwife, independent nurse practitioner, Family Planning Clinic, optometrist, dentist or complementary therapist.  Specialists can only be seen after referral from a GP or midwife.  Patients are personally responsible for the GP’s fee, ranging between $35-65 NZD ($13-33 USD).  However specialty care, which is generally delivered through the public hospital outpatient department, is fully covered by the DHB.

Low income (annual income under $9,800 USD for single person living alone) New Zealand residents are eligible for a Community Services Card (CSC).  The government subsidizes GP visits for patients with a CSC – adults with a CSC receive a $15 subsidy, children age 6-18 a $20 subsidy.

A CSC also entitles patient to receive additional subsidies on prescription drugs.  The normal charge to a patient for a subsidized drug is $15 ($10 for children) per prescription, up to 20 prescriptions per year.  Adults and children six and over with a CSC pay $3.00 per prescription.  Children under six with a CSC pay nothing.

There is also a High Use Health Card (HUSC) which allows for additional subsidies for GP visits and prescriptions.  To be eligible for a HUSC, which is not means tested, an individual needs to have visited the doctor more than 12 times in one year.

Families not qualifying for a CSC or a HUSC qualify for a Pharmaceutical Subsidy Card (PSC) after 20 prescriptions and pay only $2 per prescription.

Other Covered services

In addition to specialist inpatient care, other health services are handled as follows:

•    Laboratory tests and x-rays: fully covered by the DHBs through the public hospitals.

•    Physical therapy and osteopathic and chiropractic care:  partially subsidized by the DHBs, provided there is a physician referral.

•    Acupuncture, naturopathy, homeopathy and other alternative therapies:  not covered unless provided by a registered physician or midwife.

•    Dental care:  limited dental services available in some public hospitals in some areas, but the majority of patients pay privately for dental care.

•    Long term care:  nursing home care is based on income and needs assessment, like Medicaid financed nursing home care in the US.  The DHBs fund home health care.

Accident Compensation Corporation

Treatment for accident-related illnesses (including the psychological consequences of childhood sexual abuse) are subsidized by the government funded Accident Compensation Corporation (ACC), which also provides generous time loss benefits.  Copayments for medical services and prescriptions funded through ACC are generally lower than those funded through the DHBs.

Special High Cost Treatment Pool

The Ministry of Health sets aside $6.5 million a year for “one-off” treatments not otherwise funded by the public health system.  District Health Board specialists apply to the Ministry of Health on a patient’s behalf.

These special high cost treatments include highly specialized medical treatments, frequently obtained overseas (examples:  simultaneous pancreas and kidney transplants, separation of Siamese twins, gender reassignment surgery, epilepsy surgery, diode laser treatment for melanoma of the eye).  About four out of every five applications were accepted in 2001 (with around 40 patients receiving funding for treatment).  Some applications were declined because the funding for treatment was available elsewhere in the public health system.

PHARMAC

PHARMAC is the government agency, established in the 1990s, which decides which prescription drugs will be on the Pharmaceutical Schedule to receive full or partial governmental subsidy.  PHARMAC has been a pioneer internationally for its ability to hold down prescription costs.  Before drugs are put on the schedule, there is a strong burden on drug companies to demonstrate not only that their products are effective, but also more cost effective than similar products.  After negotiating with drug companies for the lowest possible price, PHARMAC typically sets a dollar amount for the subsidy of all medicines in what they call “therapeutic sub-groups.”  Usually this amount is set at the manufacturer’s price for the least expensive drug in a given category.  (For example in each category of H2 blockers, calcium channel blockers, ACE inhibitors, proton pump inhibitors, serotonin reuptake inhibitors, atypical antipsychotics, etc., the least expensive medication would be fully subsidized.)  If a brand name drug priced higher than the subsidy is prescribed for a patient,, he or she is required to pay the difference.

The transnational pharmaceutical companies don’t like PHARMAC very much.  They have filed numerous lawsuits alleging “non-competitive price setting,” patent and intellectual property infringement, and restraint of trade.  Numerous drug manufacturers have closed down their New Zealand operations altogether.  All private medical insurers limit claims reimbursement to medications included on the Pharmaceutical Schedule, and significant sales of most medications are impossible unless they are on the schedule.

Unfortunately for mental health consumers, PHARMAC has had difficulty dealing with the fact that psychiatric patients often react differently to different drugs within the same class, making these drugs not truly interchangeable.  It is also unfortunate that historically PHARMAC focused exclusively on the cost of the drugs and not on the total health economics of such illnesses as schizophrenia, bipolar disorder, major depression and obsessive-compulsive disorder.  Unique antidepressants such as Effexor, Wellbutrin and Remeron are essentially unavailable in New Zealand (because they aren’t subsidised), and only after a long fight have Zyprexa, Clozaril and Risperdal been made available.  Fortunately recent PHARMAC policy statements suggests that the agency is beginning to give global health care costs more weight in the approval process.

Emergence of Two Tier Health Care System

Unfortunately, starting in the 1980s New Zealand has been subject to the same neo-liberal, free-market-is-best, structural adjustment forces operating in other industrialized countries.  As in other countries, the primary effects have been deep tax cuts, a freeze in public sector salaries, massive cuts in health care, education and social services (in New Zealand 30% of children live in poverty) and soaring profits for a wealthy elite.  Systematic cuts in health care spending (under both Labour and National Parties) starting in 1984 have led to a significant deterioration in health standards among working and middle class people – and the emergence of a two-tier health system.  An increasingly expensive and exclusive private system caters to the wealthy who can afford their own health insurance, alongside an underfunded and inadequate public system for the mass of the population.

The Public Tier: Effects of Underfunding

The Commonwealth Fund has funded a series of studies comparing New Zealand ‘s health care system to systems in other OECD (Organization for Economic Cooperation and Development countries).

Rank in Spending and Health Parameters: 5

•    New Zealand spends 23% less than the OECD average on health care ($1,352 per capita per year in 1999.

•    New Zealand has lowest average hospital stay of any OECD country (6.5 days) and the lowest per capita spending on pharmaceuticals.

•    In the 1960s New Zealand had the lowest infant mortality in the world.  By 1999 it had dropped to 12th lowest (7.4 deaths per 1,000 live births – more than twice the infant mortality of Japan).  Asthma death, cancer, diabetes and heart disease levels had also increased disproportionately to population levels.

Access to Health Care:

•    New Zealand residents have the highest levels of anxiety about health care of any OECD country surveyed:  42% of New Zealanders feared they wouldn’t be able to afford medical care in the event of illness, 38% worried they would be forced to wait too long for non-emergency care, 38% believed they won’t get advanced care if they become seriously ill. 6

•    In 1998 one out of every four 7 and in 2001 8 one out of every seven New Zealand residents reported going without needed health care due to costs.  In the same study, one out of every five US residents, one out of every 10 Australian residents, one out of every 12 Canadian residents and one out of every 25 UK residents reported going without needed health care due to costs.

•    In 2001 11% of New Zealand adults reported it was very or extremely difficult to see a specialist when needed.  In the same study 17% of US adults, 16 % of Canadians, 13% of Britons and 12% of Australians complained of difficulty seeing a specialist.  47% of New Zealand patients reported that costs posed a barrier to specialist care.  In comparison 49% of US residents, 33% of Australian residents and 5% of Canadian and UK residents reported a cost barrier to specialist care.  Canadian and UK residents were more likely to report long waiting times posing a barrier to specialist care (41% and 46% respectively).

Waiting Times (2001 Data): 9

•    69% of New Zealand patients reported being able to see their doctor the same day.  In comparison 62% of Australian patients, 42% of UK patients, 36% of US patients and 35% of Canadian patients were able to see their doctor the same day.

•    43% of New Zealand patients reported waiting one month or less for elective surgery.  In  comparison 63% of US patients, 51% of Australian patients, 38% of UK patients and 37% of Canadian patients waited one month or less for elective surgery.

•    26% of New Zealand patients reported waiting four months or more for elective surgery.  In comparison 38% of UK patients, 27% of Canadian patients, 23% of Australian patients and 5% of US patients waited four months or more.

The Private Tier: Emergence of Private Insurance

While New Zealand patients still have no difficulty with access to emergency procedures, the cutbacks in public funding for the health care system have resulted in fairly long queues for a variety of elective procedures.  Patients with financial resources avoid waiting by seeking treatment in private hospitals or clinics.  Private insurance, usually Southern Cross, is available to help pay for private medical care.  Because most insurance is purchased by individual patients (rather than employers), the private insurance market in New Zealand is still quite small (only 40% of residents have private coverage), and does not have the clout to dictate physician fees as in the U.S.  Patients are frequently shocked to discover a large gap between the physician or hospital charge and the insurance reimbursement.  Moreover Southern Cross is notorious for denials based “pre-occurring,” as well as “pre-existing” conditions.  Thus treatment for a new gastric ulcer would be denied if a patient had any prior lifetime treatment for gastric ulcer.  Likewise surgery for a recently diagnosed exotropia in a four year old child would be denied – because it’s presumed to be congenital.

Southern Cross subscribers are also extremely unhappy about premium increases between 10 and 50 per cent in 2002.  The company blames premium increases on “escalating claims, computer system glitches and the emergences of two strong competitors in the market.” 10

Mental Health in New Zealand

As in the U.S., Mental health services have traditionally been the Cinderella of the New Zealand health service, characterized by underfunding and national scandals (typically related to violent death attributed to

mental illness).  In the early 1990s a National Mental Health Strategy was introduced, all major New Zealand political parties agreeing that mental health had been underfunded.  Despite improvements in many mental health services, developments have been patchy and there have been major problems recruiting psychiatrists and psychiatric nurses.  Before the 1970s New Zealand trained few psychiatrists and even then part or most of the training took place in Australia, the UK or North America – and most failed to return to practice in New Zealand after their training overseas.

The founding of the Royal Australian and New Zealand College of Psychiatrists in 1978 resulted in an increased number of local psychiatric training posts.  New Zealand now has four academic departments of psychiatry, in Auckland, Wellington, Christchurch and Dunedin, and is probably training sufficient numbers at present to sustain an adequate workforce in the future.  However for at least the next five years there will continue to be many vacancies, which is why most New Zealand mental health services are constantly advertising posts in the UK and North America.

Private Practice Psychiatry

Private psychiatry is extremely limited in New Zealand, primarily because insurance coverage for private psychiatric treatment is virtually non-existent.

Psychiatric Research

Disputes between PHARMAC and several pharmaceutical companies have resulted in less pharmaceutical funding of research in New Zealand than in North America and Europe. Thus New Zealand may be spared the toxic effects of drug company research funding on “evidence based” psychiatry.  Pharmaceutical companies are narrowly focused on newer, higher priced medications with remaining patent life.  Because information about long term effects will not be helpful until after the patent expires, drug companies are primarily interested in 6 to 24 weeks double blind studies.  Information from these studies is helpful in the early marketing of drugs.  There is no incentive for drug companies to fund studies monitoring patients’ long term response or long term side effects of medication.  This is a world-wide problem.

Sydney Wolfe, who edits the Public Citizen Health Letter in the US, has been monitoring frank abuses of drug company funding of research. 11  Examples include so-called “clinical research,” in which psychiatrists are paid, in essence, to recruit patients to take specific medications, and the recent Neurontin scandal (which may result in criminal prosecution of Warner Lambert), in which the company paid doctors to appear as authors of journal articles on off-label uses of Neurontin, when in fact the articles were actually written by non-physicians working under the direction of the company’s marketers.

With little or no pharmaceutical company funding, the Department of Psychological Medicine at the Christchurch School of Medicine receives research funding from the Health Research Council of New Zealand, the University of Otago (the parent university of the school of medicine) and the Mental Health Division of Canterbury DHB.  This department completed major epidemiological studies in the 1980s (based the American National Institute of Mental Health Epidemiological Catchment Area Studies), and clinical trials on depression, bulimia nervosa and anorexia nervosa in the 1990s.  Academic research can continue without major drug company funding.

1 Chernichovsky, Health System Reforms in Industrialized Democracies:  an Emerging Paradigm, Milbank Quarterly, Fall/1995. 2 Political Football, Christchurch Press, Oct. 19, 1999. 3 Joyce, Focus on Psychiatry in New Zealand, British Journal of Psychiatry (2002), 180, 468-470. 4 National Business Review (www.nbr.co.nz), Dec. 6, 2002, page 1. 5 Anderson and Hussey, Multinational Comparisons of Health Systems Data 2000, Commonwealth Fund. 6 Commonwealth Fund 1998 International Health Policy Survey. 7 Ibid. 8 Blendon, DesRoches, Osborn, Schoen, Comparison of Health Care System Views and Experiences in Five Nations 2001: Findings from the Commonwealth Fund 2001 International Health Policy Survey. 9 Ibid. 10 Insurer Reviews Premiums But No Guarantee, Christchurch Press, 10/17/02. 11 Big Pharma Buys Psychiatry:  An Aura of Scandal, Public Citizen Health Letter, 18:7, July 2002.

Posted by pnhp at 03:07 PM | Permalink | Comments (0)

OregonLive.com
01/09/03

In her column of Dec. 29, Debra Saunders discusses the crisis in American medical care and suggests that the Canadian single-payer system is a failure.

I am a college professor at a university just south of the Canadian border in New York. In my advanced honors class, "The Scholar as Citizen," the students are required to conduct research.

Last spring, one of the students researched the notion, accepted by most Americans, that Canadians do not receive adequate medical care. She interviewed 50 Canadians and 50 Americans and asked them if they were satisfied with the medical care they are receiving and whether they would prefer a system like that of the other country.

The student was surprised to find that all 50 Canadians said they were completely satisfied with their own medical care in particular and the Canadian single-payer system in general. None said they would prefer an American-type system. Of the Americans interviewed, most said they were not satisfied with their medical care (40 percent had no care at all).

LAUREL SHARMER Potsdam, N.Y.

Copyright 2003 Oregon Live. All Rights Reserved.

http://www.oregonlive.com/letters/oregonian/index.ssf?/xml/story.ssf/html_standard.xsl?/base/editorial/1042117016257490.xml

Posted by pnhp at 11:32 AM | Permalink | Comments (0)

United States Department of Health & Human Services
News Release
Dec. 31, 2002
HHS Issues New Report Showing More American Children Received Health
Insurance in Early 2002

HHS Secretary Tommy G. Thompson today released a new report showing that the percent of American children with health insurance continued to increase in the first half of 2002, meaning that a half million more children are now covered by insurance than in the previous year.

"More and more children are getting the health care they need, thanks in large measure to our success in working with states to expand health coverage through the SCHIP program," Secretary Thompson said. "We are giving governors the flexibility they need to continue to expand coverage to more children, and our strategy is paying off for children and parents alike."

Overall, 14.2 percent of the population -- 39.4 million Americans of all ages -- was without health insurance coverage in the first half of 2002, about the same as in 2001...

http://www.hhs.gov/news/press/2002pres/20021231.html

Comment: Last week we were saturated with stories about the good news that the SCHIP program increased enrollment in the first half of 2002... and it is good news. But the reporters did not seem to venture beyond the press release supplied by HHS. A few more clicks on the website will show why we can have an increase in insurance coverage for children with little net change in the total numbers of uninsured.

The table on which this press release was based shows that the numbers of uninsured under age 18 decreased by 0.6 million, but the numbers of uninsured between 18 and 64 increased by 0.9 million... and that is bad news.

And now that most states are facing draconian cuts in their budgets, public programs such as SCHIP are threatened. With our current national policy proposals, HHS can now begin preparing next year's hedaline for its "good news" press release: Upper-Income Sector Able to Maintain Insurance Coverage Because of Elimination of Taxes on Dividends.

Table on the number and percent of persons without health insurance coverage, by age group: United States, 1997-2002 http://www.cdc.gov/nchs/about/major/nhis/released200212/table01_1.htm

Posted by pnhp at 11:11 AM | Permalink | Comments (0)

Health Affairs
January/February 2003
Trends In U.S. Health Care Spending, 2001
by Katharine Levit, Cynthia Smith, Cathy Cowan, Helen Lazenby, Art Sensenig,
and Aaron Catlin (from the Centers for Medicare and Medicaid Services)

Abstract

U.S. health care spending grew 8.7 percent to $5,035 per capita in 2001. Total public funding continued to accelerate, increasing 9.4 percent and exceeding private funding growth by 1.2 percentage points. This acceleration was due in part to increased Medicaid spending in the midst of a recession and payment increases for Medicare providers. Prompted by sluggish economic growth and by faster-paced health spending, health spending's share of GDP spiked 0.8 percentage points in 2001 to 14.1 percent.

Conclusion

While health spending accelerated in 2001, growth remains less than the long-run historical rate of 10.2 percent experienced from 1960 to 2000. A gap in growth between health care sponsors' decelerating revenues and increasing health care costs has emerged in 2001, forcing these sponsors to reexamine spending priorities. Many employers may have already taken preemptive actions by 2002 that shift a portion of rising costs to workers. At the same time, federal and state government obligations could increase if a prolonged recession causes the number of uninsured people to rise. States may have to resort to more austere decisions to balance Medicaid budgets in FY 2002 than they did in 2001.

Managed care's influence has waned in the past few years, contributing to acceleration in hospital and overall spending. Hospital spending growth was proportional to its share of total health spending in 2001, a condition not met in recent years. Hospitals are seeing growth in demand for services and higher input prices, including rising wages resulting from shortages of health care workers, which further contributes to escalating costs.

The disparity between GDP growth and health care spending trends caused health spending's share of GDP to spike in 2001. Historically, large increases in the health share of GDP have prompted private initiatives or public policy changes that slowed the pace of health spending growth. In uncertain economic times, health care sponsors may be less able to shoulder the escalating costs of health care, forcing trade-offs between health care and other competing priorities. As health care costs rise, consumers may be asked to contribute more toward existing coverage, or their choice of plans, providers, and benefits may be narrowed.

http://www.healthaffairs.org/1100_table_contents.php

Posted by pnhp at 11:18 AM | Permalink | Comments (0)

he American Journal of Public Health
January 2003
National Health Insurance or Incremental Reform: Aim High, or at Our Feet?
By David U. Himmelstein, MD and Steffie Woolhandler, MD, MPH

Abstract

Single-payer national health insurance could cover the uninsured and upgrade coverage for most Americans without increasing costs; savings on insurance overhead and other bureaucracy would fully offset the costs of improved care. In contrast, proposed incremental reforms are projected to cover a fraction of the uninsured, at great cost.

Moreover, even these projections are suspect; reforms of the past quarter century have not stemmed the erosion of coverage. Despite incrementalists' claims of pragmatism, they have proven unable to shepherd meaningful reform through the political system.

While national health insurance is often dismissed as ultra left by the policy community, it is dead center in public opinion. Polls have consistently shown that at least 40%, and perhaps 60%, of Americans favor such reform.

And from a message by Sen. Edward M. Kennedy:

"Health care is not just another commodity. It is not a gift to be rationed based on the ability to pay. It is time to make universal health insurance a national priority, so that the basic right to health care can finally become a reality for every American."

http://www.ajph.org/current.shtml

Posted by pnhp at 01:40 PM | Permalink | Comments (0)

The Mercury News
Jan. 4, 2003
Garamendi returning, faces industry challenges
By Deborah Lohse

John Garamendi, elected in November to the insurance commissioner job he held a decade ago, has a plateful of problems awaiting him as he takes office Monday in Sacramento.

Most of all, Garamendi -- a Democrat widely viewed as a future gubernatorial candidate -- plans to pound the pulpit for "universal health insurance,'' which he envisions as coverage that every Californian will have whether they are employed or not.

Garamendi plans to continue his decades-long quest for "universal health care" similar to the national systems of Canada or other nations.

"I am going to drive health care," he said -- partly because health care costs affect several other types of insurance and partly because he considers it his would-be legacy as a politician.

"I am a statewide elected official. I have a platform. This is a fundamental problem in society, and I'm going to go after it."

http://www.bayarea.com/mld/mercurynews/business/4873290.htm

Comment: In his last term as California's insurance commissioner, John Garamendi was the individual responsible for requiring Blue Cross to release about $3 billion in past tax benefits at the time of their conversion to for-profit WellPoint. These funds provided the endowments for the California HealthCare Foundation and the California Endowment, and established the precedent that for-profit conversions must include provisions that accrued tax benefits are to be used for the public good.

Keep your eye on California. With a state legislature that is dedicated to universal coverage and an insurance commissioner who is a dedicated activist, passionate about reform, California just might do it.

A few corrections:

John Garamendi was not responsible for the Blue Cross conversion: that was the responsibility of the Dept. of Corporations Commissioner Gary Mendoza, who Garamendi defeated in November.

The Department of Insurance regulates health insurance for fewer than a million Californians by best estimates. This is the Department now headed by Garamendi.

Instead, more than 20 million Californians have their care regulated by the Department of Managed Health Care, created as a result of the efforts of CaPA, Health Access and others in the long fight for the HMO Patient Bill of Rights.

Nonetheless, I have just come from listening to Garamendi's inaugural address in which John took particular care to focus on the importance of health coverage for all and having a single 24 hour source of coverage for all Californians.

Beth Capell, Ph.D.

Don's comment: The refund that John Garamendi supervised was a $1.3 billion refund mandated by California's Prop. 103 (part of which was overturned since the courts ruled that insurers were entitled to reasonable profits).

Sorry. I'm human.

For the LWV biography of John Garamendi:
http://www.smartvoter.org/2002/11/05/ca/state/vote/garamendi_j/bio.html

Posted by pnhp at 01:30 PM | Permalink | Comments (0)

The Washington Post
January 5, 2003
Outlook
They Can See It Coming

We decided to ask forward-looking writers and thinkers: What can't we see that's coming?

Marcia Angell, former editor-in-chief of the New England Journal of Medicine:

I see the rapid collapse of our health-care system in 2003. The inherent failings of this system were partly masked by the prosperity of the late '90s. But with increasing unemployment, businesses no longer have to compete to attract workers by offering full health benefits. They're free to drop benefits altogether or limit them severely, and they can require workers to pick up more of the tab themselves.

So people end up paying for their health care out of pocket or doing without. That's what I mean by the collapse of the system. About the only part that is working is Medicare, and that is a publicly funded, single-payer program within the system.

I don't think we're going to wake up some Tuesday morning and say, "Oh look, the health-care system collapsed," but it will become glaringly obvious over the next year that it is woefully inadequate. And since so much of our health-care dollar is diverted to profits and overhead, it will also become clear that it is grossly inefficient.

The question is what will take its place. Either the United States can join every other advanced nation and develop a national single-payer health-care system, or we can keep going the way we are and eventually have a three-tier system in which the wealthy get whatever health care they want, the middle-class gets some kind of stripped-down managed care, and the rest get nothing. In that respect, we would be just like a Third World country.

A national single-payer system -- essentially Medicare for everyone -- would be both better and cheaper.

Posted by pnhp at 09:28 AM | Permalink | Comments (0)

Los Angeles Times
January 4, 2003
A Rational Health System

Re "Rx for Universal Care," editorial, Dec. 29: Although every caring person agrees that the debate on universal care needs to be moved into the mainstream arena, considerable confusion remains. Should we build on the current system of employer-sponsored plans and public programs or should we replace them with a single-payer system?

Although continuing to use private plans would perpetuate the tremendous administrative excesses that waste resources that should be directed to patient care, fewer public tax dollars would be required to expand coverage to everyone. But most individuals and businesses should be concerned not only about their tax expenditures for health care; they should be concerned about their total health-care expenditures, both public and private. An increase in tax funding should not be objectionable when it is offset by an even greater reduction in private health-care spending.

In a universal system, rationing is determined primarily by the capacity of the system. A system that reduces administrative waste increases its capacity. We may be so averse to the words "tax" and "government rationing" that we may want to continue with a system that wastes more funds and results in greater rationing. But then again, maybe we're ready to agree that rational policy should prevail over rhetoric.

Don McCanne MD President, Physicians for a National Health Program San Juan Capistrano

*

Your editorial has it exactly backward. The plan discussed would cost more money than a single-payer system. It would increase administrative costs and add to the increasing complexity and inconsistencies of the present system. The math is simple: Administrative costs take 3% of the Medicare single-payer health-care dollar; they take 20% to 30% of the health-care dollars of the current multipayer system. The single-payer administrative savings can provide broader coverage for all at much less cost. Any needed increase in taxes would probably not exceed money we are already paying as part of many other insurance coverages: personal auto, homeowners liability, workers compensation, etc.

Your dismissal of a single-payer system on grounds that it has failed to gain needed support is irresponsible. If The Times threw its support behind a single-payer system your reason for rejecting it would immediately become untrue.

George E. Delury Carpinteria

*

Your editorial quotes the head of Blue Shield of California as advocating a mandatory medical insurance system requiring all but the smallest employers to either provide it or contribute to a state insurance pool. There already is a universal medical program being planned in the form of a bill to be carried by state Sen. Sheila Kuehl (D-Santa Monica). This would cover all Californians and be funded by the money already being spent in this state for medical care and health insurance.

The medical insurance industry is opposed to this legislation because it would eliminate all insurance providers that do not provide direct services. The plan would use existing doctors, hospitals, laboratories and other licensed providers of medical services. What would be eliminated are the marketing, competition, redundant administrations, stockholder profits, multiple requirements and billing programs and other costs generated by the for-profit medical insurance system. Except for the relatively small cost of a state oversight and billing system, the money would be spent on patient care and everyone would have medical coverage.

Melvin H. Kirschner MD Van Nuys

*

http://www.latimes.com/news/opinion/letters/la-le-mccanne4jan04,0,1491525.st ory?coll=la%2Dnews%2Dcomment%2Dletters

Los Angeles Times editorial, "Rx for Universal Care," Dec. 29: http://www.latimes.com/news/opinion/editorials/la-ed-health29dec29,0,3837039 .story?coll=la-news-comment-editorials

Comment: In the editorial, "Rx for Universal Care," the Los Angeles Times called for moving the debate on the uninsured into the mainstream. Of great significance, based on today's published responses, the editors apparently believe that the debate must no longer be limited to incremental proposals.

It is time to put every option on the table. The mainstream media can only enhance our prospects for a better health care system for all by imparting more knowledge and understanding of our options. The democratic process is greatly enhanced by having an informed public. The Los Angeles Times is to be commended for its leadership in this process.

Posted by pnhp at 09:18 AM | Permalink | Comments (0)

Uwe Reinhardt's response to Theodore Marmor on physician reimbursement under Medicare:

Actually, I agree with Ted on the second-best solution. It would not be difficult to make the current system work much better--e.g., by taking out the assumed 1% reduction in fees for hypothetical annual productivity gains. In the end, a fee schedule needs to be negotiated. To set a formula and then to put the system on auto pilot for a long time, as we have done, inevitably invites problems.

I think the development of the Medicare fee schedule in the 1980s and 1990s was a solid achievement in policy analysis and implementation. The irony was that the RBRVS Bill Hsiao came up with on the seemingly scientific approach his team used resembled very much the negotiated relative value scales used in Canada. Negotiated fee schedules do tend to reflect the relative work effort that the negotiators believe to go into particular types of activities.

What the AMA now proposed really must be stopped. It is quite mischievous.

Best

UER

Posted by pnhp at 11:34 AM | Permalink | Comments (0)

San Francisco Chronicle
January 2, 2003
The Universal Approach
Affordability is basic in health-care reform
By Jerry Flanagan and Frank Smith

California needs a system-wide plan to resolve growing inequities in health care. One middle-ground solution would be a public-utility model, which would strictly regulate profiteering in health care to achieve universal coverage and cost-efficiency. It would retain private delivery with strict public control and address the public's biggest concern: affordability.

Such a model would appoint an independent commission to implement a three-part plan:

-- Cost control and stability: The overall aim of rate-setting would be to assure that providers, hospitals and health plans are sufficiently reimbursed to maintain financial stability and that net revenues do not exceed reasonable requirements for profit and reinvestment.

-- Universal access: A new state health plan would provide care for all who do not have access to, or choose not to utilize, benefit plans provided by employers. Competition between the state and private plans would help stabilize premium costs.

-- Modernize quality oversight: A single state agency would be responsible for setting quality standards, collecting data and reporting outcomes. Outcome reports would be fed back into the rate-setting process so that providers and plans with the highest outcomes would be rewarded.

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/01/02/ED216823.DTL

Comment: The "public utility" model of health care reform is now receiving considerable attention in California. It emphasizes cost stabilization through regulatory rate setting. And for those without private insurance, it would mandate participation in a public plan.

The most important reason that this model is receiving attention is that it is recognized that our health care system must be made affordable. Although rate setting of prices is an important factor in determining program costs, it is difficult to see how the other factor, utilization rates, would be controlled under this model. It can be anticipated that the number of services would increase, and global health care costs would continue to escalate. Rate setting through quality standards and rewards that addressed over-utilization might have some impact, but we still do not know how to differentiate, with any precision, a high rate of beneficial services from excessive, inappropriate utilization.

Regulated public-utility rates can control electricity, natural gas or water over-utilization through punitive rates for higher utilization levels. But in health care, requiring individuals with greater needs to pay more would impair access due to lack of affordability. Though a health care public-utility commission might set rates, it shouldn't establish policies that prevent appropriate utilization.

The public-utility model might be used to set health plan rates, but then that merely includes the insurer along with the providers in the battle for the division of funds under the global budget that would be determined by the authorized premium rate multiplied by the number of plan participants. (Currently, the insurer escapes this by calculating anticipated payments for plan benefits and then adding on administrative costs and profits.)

Why leave in place the flawed policies, inequities, and expensive administrative inefficiencies inevitable with this fragmented system? Instead, why not accept the concept that a global budget is inevitable, and then allow a public administrative agency to mediate the fight over the funds? At least it would be the patients' health care providers instead of large private insurance bureaucracies that would be receiving the funds. More funds for providers could pay for greater utilization by patients.

Posted by pnhp at 02:50 PM | Permalink | Comments (0)

Uwe Reinhardt, Ph.D., James Madison Professor of Political Economy and Professor of Economic and Public Affairs, Woodrow Wilson School, Princeton University, responds on the AMA proposal to balance bill Medicare patients:

The AMA must be jesting--but then, the AMA has done many humorous things in the recent past, so this scheme is within that tradition.

Suppose a kindly nation decided to give every family in New York City a $2,000 per month subsidy for the rental of an apartment, but allowed landlords to balance bill on top of that allowance anything that the market would bear. Would that make sense? What would happen to rentals in NYC? Yet the analogue is what the AMA is proposing. Basically, they want to undo Medicare, but not give up the lush public subsidy that comes with Medicare. I have trouble keeping a straight face just thinking about it.

If we do want to depart from the current model of price controls--which has been poorly run, I admit--then I'd propose the following:

1. Every physician must use the Medicare relative value scale (RBRVS).

2. But every physician is allowed to set, at the beginning of each year, his or her own monetary conversion factor to be applied to that RBRVS. The physician would have to use the resulting fee schedule for the entire ensuing year, and for all of his or her Medicare patients (in other words, price discrimination among Medicare patients by the individual physician would be prohibited).

3. Each physician's conversion factor would be made public through sundry media, to wit:
a. via an 800 number
b. on a web site
c. by posting it in 5 inch letters visibly in the waiting room of his practice.

This would be a market-based pricing system, in lieu of the current administered price-control system, but it would provide transparency and thereby allow the competition everyone talks about.

I had proposed this scheme to the Physician Payment Review Commission, but it was then brushed aside as a flaky idea. The irony of ironies would be if now the AMA prevailed with its truly ridiculous scheme.

Happy New Year!

Uwe

Here are some brief comments on Uwe's double contribution.

Uwe's brief, sharp analysis of the social foolishness of the AMA's position is very welcome. It has been a long time since the country has had a discussion of what methods to use in paying doctors. Providing a down-payment subsidy on unrestricted fees in a national health insurance program serves no useful purpose other than raising physician incomes. Furthermore, Uwe's suggestion of an effort to model a reasonable income for physicians in any area and use that as the basis of a firm fee schedule, one that assumes a reasonable amount of daily work, and leaves the reasonable physician with a decent income, is also a worthwhile policy to explore. I agree as well with the idea that doctors are either in or out of a major plan like Medicare; the problem he describes here is important. So, in all these ways, I share Uwe's views and none of them raise democratic theory issues, as he worries with tongue and cheek.

I do want to urge, however, that Uwe not spend his time developing the 2nd best option--the market-mirroring one where public presentation of prices would be required along with what I regard as the unimplementable regulation that these published prices be required for all patients. I draw that lesson from months of monitoring my father-in-law's surgical partnership in l967, where the fees they 'charged' had little to do with the fees they ended up accepting. They set high fees, used that in the Medicare program, but in fact they discounted fees all over the place to deal with individual circumstances. Anyway, since Uwe's first-best is in my view best and his second is not a close cousin, I urge further discussion of making the current administered prices model better. After all, the rest of the OECD world has learned how to play the administrative price game; it takes continual adjustment.

Cheers to Uwe

Theodore R. Marmor
Professor of Public Policy & Management
Professor of Political Science
Yale University School of Management

Posted by pnhp at 01:55 PM | Permalink | Comments (0)