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I have practiced medicine in Chicago for more than 50 years, but these days, I spend much of my time advocating for health-care reform. Like Presidents Harry Truman and John Kennedy, I propose that we adopt national health insurance, administered via the government, as with Medicare and Social Security. In policy wonk circles, this sort of reform is known as “single-payer.”

Because there is broad consensus that the present system is broken and costs are unbearable, my essential argument is as follows: We already have all the necessary resources to provide care for everyone, including the 42 million people who are presently uninsured. We also have the means, right now, to assure coverage for prescription drugs, home care for the aging and disabled, and parity in mental health care. What are these resources? First, money. We will spend $1.6 trillion on health care this year, nearly $6,000 per capita, which is twice as much as any other nation. We have abundant facilities and high-tech capability—overly abundant some would say.

Second, we have the knowledge. We have a superbly trained health force of nearly 10 million people, including 600,000 physicians and more than 2 million registered nurses.

The problems in our health system arise from a national penchant to treat health care as a commodity and to blindly pursue a free-market strategy despite the obvious differences between, say, health care and DVD players. In theory, supply meets demand, and vigorous competition increases efficiency and effectiveness. In practice, more than 18,000 people die every year for lack of coverage while costs are skyrocketing and Enron-like scandals are becoming the norm in for-profit health care.

Our health resources hemorrhage into private-insurance bureaucracy (25 cents of every dollar), shocking executive salaries, and, most recently, billions in fines for civil and criminal violations. For example, HCA Inc., the world’s largest for-profit hospital chain, has paid $1.7 billion to various government agencies for defrauding Medicare and Medicaid. HCA, incidentally, was founded by the father and brother of Senate Majority Leader Bill Frist, whose HCA holdings exceed $26 million. Is there a conflict here?

Other nations’ success

Because national health insurance works well for the 20-odd wealthy, industrialized nations of the world—Taiwan’s program adopted in the mid-1990s is the most recent success—it is useful to examine what the obstacles are to single-payer reform in the U.S.

Our American system is employment-based, and business and labor unions won’t forgo this arrangement. Well, guess what? Last fall a remarkable statement was released by the Big Three automakers in Canada. It said, in part, “The [Canadian] public health-care system significantly reduces total labor costs for automobile manufacturing firms, compared to the cost of equivalent private insurance services purchased by U.S.-based automakers; these health insurance savings can amount to several dollars per hour of labor worked. Publicly-funded health care thus accounts for a significant portion of Canada’s overall labor cost advantage in auto assembly, versus the U.S., which in turn has been a significant factor in maintaining and attracting new auto investment to Canada.”

On this side of the border, William Clay Ford Jr., the chairman of Ford Motor Co., said that the rising cost of health benefits is the “biggest issue on our plate that we can’t solve. Health care is out of control. It’s a system that’s broke.”

Further, noting that the U.S. is the only major industrialized country with an employer-based health-care system, Ford said the ever-rising costs of health care put U.S. companies at a competitive disadvantage.

As for labor, the U.S. president of the United Auto Workers, Ron Gettelfinger, asserted in April, “We need a universal, comprehensive, single-payer health-care program to cover every man, woman and child in the United States. You can’t fix the health-care crisis in American at any one bargaining table with any one employer or within any one industry.”

At long last it seems that business and labor are getting the message. Because rising costs, the source of their enlightenment, are only going to worsen, the enormous strength of business and labor may well be moving toward applying political pressure for reform.

Facts dispute certain notions

Despite the American people’s disdain for “government medicine,” the nation’s experience with “government medicine” has largely been favorable: The National Institutes of Health account for our success in biomedical research. Our Centers for Disease Control safeguard the public’s health. Medicare is a lifeline for 33 million seniors. Our public hospitals, such as Cook County, serve millions of the most vulnerable. The American people reject taxes for health insurance schemes. The ideologues have been successful in making new tax levies politically taboo, even when they would eliminate spending for insurance premiums and reduce total health-care spending.

Americans are already paying more per capita in taxes and tax credits for health care than any other nation. The public should recognize that, in addition to other problems, our health system is a colossal rip-off. We pay for national health insurance, but because the resources are squandered, we don’t get it.

Common belief is that national health insurance is not feasible in America. At bottom, this turns out to mean that its powerful opponents in the insurance, drug and medical industry cannot be overcome.

Well, maybe.

But history records the ability of our people to overcome seemingly insurmountable realities, such as human slavery and denial of legal status to American women.

National health insurance deserves bipartisan support: There are just as many uninsured Republicans as Democrats. It would, in the end, make us a healthier and more unified people.

Posted by pnhp at 09:48 AM | Permalink

BALA CYNWYD, Pa. (AP) - June 25, 2003 — It is Dr. Bob LeBow’s sad fate to be trapped on four wheels when he spent so much of his life unbridled on two.

He rode his bike all over the world - in Bolivia, where he served in the Peace Corps.; to the villages of Swaziland and the heights of Tibet; down the rural backroads of Idaho, where he helped build a remarkable medical clinic.

Tested by tragedy, he became a national advocate of universal health insurance. He distilled all his passion into a book that told about patients who suffered because they could not afford a doctor’s care, or a pharmacist’s remedies.

The book was published last July. A week later, his bike betrayed him.

Now he lives at his son’s home in the Philadelphia suburbs, a quadriplegic caught up in the same health care system he railed against. Encumbered by his wheelchair, connected to a ventilator, he is depressed by the prospect of a life in which he cannot be of use to others.

But that is impossible, say the people who know and love him. They say Bob LeBow still touches lives as he did 32 years ago, when he, his wife and two sons arrived in Nampa, Idaho.

There, a charismatic young man named Terry Reilly had set out to tutor the children of migrant farm workers - and ended up opening a health clinic, instead.

The problem, Reilly found, was that his students were often too sick to make progress. So he secured a $271,000 federal grant for the new Community Health Clinics.

LeBow had returned from the Peace Corps and had earned a master’s degree in public health when he heard about Nampa through an old classmate. He was enticed by rural life, and by the opportunity to treat the needy.

Dr. Bob was soft-spoken to the point of mumbling; he had a kind face, with a perpetual five o’clock shadow and glasses often slightly askew. His sweaters always seemed to have holes at the elbows. He hated meetings and often fell asleep during them (though he had an uncanny ability to awaken and contribute when his turn came). In his time off, LeBow traveled to developing countries as a consultant to help build their health care systems. He was mentor to dozens of doctors. He emphasized the importance of preventive medicine, of expanded access to care, of treating patients with dignity and respect.

Dr. Jonathan Bowman, the clinic’s assistant medical director, recalls LeBow’s message to doctors: “You’re actually part of the therapeutic process. You’re helping people get better by showing them you care.”

He practiced what he preached, and patients adored him.

“He was sensitive to the mind, body and spirit. He listened carefully,” said LeBow’s office mate, Dr. Laura Tirrell.

Rosie Reilly recalls how her husband and LeBow “just bounced ideas off each other … and there was nothing that was not doable.”

They delivered babies. They opened an in-house pharmacy. They hired a health educator. They established programs for victims of sexual abuse, for teenagers, for the elderly. They opened more satellite clinics. They improvised - when floors sagged, they used jacks to prop them up.

By 1986, Terry Reilly was a rising political figure; he served a term in the state Senate, a Democrat elected from a Republican stronghold, and he wanted to be lieutenant governor.

He was campaigning on April 10 when the single-engine plane taking him from Coeur d’Alene to Idaho Falls plummeted into a hillside, killing him and two others.

Three months before, on Jan. 10, Bob and wife Gail’s younger son, Tommy, was driving just a mile from home when his car hit a patch of black ice and skidded into a telephone pole. The “soul mate” who had joined Bob on so many bike trips was 16. “Tommy’s death crystalized for me a goal which I had more or less unconsciously strived for before: to alleviate suffering as much as possible. Now it became a conscious personal goal,” Bob LeBow would write in a newspaper column seven years later. First, he testified in favor of a mandatory seat-belt law in Idaho (Tommy wasn’t wearing one); it passed narrowly. Then, he ran for the Legislature - three times, unsuccessfully.

Universal health insurance was his great issue. He had seen too much suffering - a 64-year-old woman with diabetes and high blood pressure who only took her medication twice or three times a week, because it was all she could afford; a farmworker who could not afford a $100 payment to a specialist, and went home, only to be diagnosed months later with tuberculosis.

This was his message, told to voters, told at meetings across the Northwest, told in his capacity as president of Physicians for a National Health Program, told in his book, Health Care Meltdown The current health care system is an expensive failure that serves only the insurance companies and pharmaceutical and health-care industries.

To those who said that his solution - taxpayer-financed national health insurance - meant health care would be rationed, he retorted that it already WAS rationed. The poor were the ones who were denied medicine.

Last July 25, the book was finished, and he carried a copy for an old friend as he rode his bike to work. He was about three miles from home when the brake calipers got caught in the front wheel, sending him flying.

He was wearing a helmet, of course, but he landed face first, breaking his neck. When he stopped breathing, his brain was denied oxygen, and was injured as well.

LeBow’s recovery took him from Boise to Craig Hospital in Denver and finally to Bala Cynwyd, where Ted, his wife Jennifer and their three daughters have turned their home into a hospital for one man.

Bob LeBow had plenty of insurance. But even so, it may not be enough. In less than a year, his care (24 hours a day, seven days a week) has eaten up more than half of the million-dollar lifetime cap on his health insurance.

He is in rehab now. He is learning to use his chin to play computer games, and to draw with a pen in his mouth. These may seem to be small steps, but 10 months ago doctors saw a man whose heart had stopped repeatedly, who couldn’t swallow, who struggled with a few words; this, they said, is probably as good as it will get.

“It’s been very tough,” Bob LeBow says. Sometimes, he’s depressed. “I’d like to live as long as I can be of use to somebody,” he says.

Otherwise, “I’d rather just check out.”

But his spirits are raised by the success of “Health Care Meltdown.” Twelve thousand copies have been sold, and Alan C. Hood & Co. will publish a hardback edition in mid-July.

He has been buoyed, as well, by a loving celebration in Nampa.

Staffers of what is now known as Terry Reilly Health Services were devastated by the accident. They could not bring themselves to touch LeBow’s desk, to move his papers.

Dr. Erwin Teuber, the clinic’s executive director, thought his staff needed to turn the page. For one thing, the clinic needed LeBow’s desk - it has grown to a $9.3 million a year operation, treating more than 18,000 patients in 10 locations.

- So in late May, 150 people congregated at the clinic’s newly christened Dr. Bob LeBow Conference Room. With Bob on the phone, they sang “Happy Birthday” (he would turn 63 on June 16). They presented him with the first Bob LeBow Community Health Award.

And they spoke excitedly of the first Bob LeBow Classic Bike Tour.

On June 14, 232 cyclists pedaled across the Idaho countryside, to clinics LeBow helped build, past fields and mountains he had traversed so many times. Their purpose was his dream: to fund health care for the poor.

More than 2,100 miles away, Gail LeBow put the No. 1 race number at the foot of Bob’s bed, tangible evidence that though he can no longer ride a bike, he can still move mountains.

(Copyright 2003 by The Associated Press. All Rights Reserved.)

Posted by pnhp at 09:11 AM | Permalink

The Commonwealth Fund
Policy Brief
Lessons from Medicare+Choice for Medicare Reform
By Geraldine Dallek, Brian Biles, and Lauren Hersch Nicholas

Lesson 7: Private plans are not less costly than traditional Medicare

The major goal of Medicare reform based on private plans is to use competition to control the growth in overall Medicare costs. The experience from M+C suggests that private plans do not save Medicare money and that, to the contrary, they can increase program costs.

The reasons why M+C (Medicare+Choice) private plans have not succeeded in reducing total Medicare costs include:

• Enrollees in M+C managed care plans have historically been healthier than those who remain in fee-for-service Medicare, and risk-adjusted Medicare payment does not fully compensate for this pattern.

• To attract M+C plans in more rural and non-metropolitan areas, Medicare has increased payments for M+C plans above the level it pays in these areas for traditional Medicare. While this has not led to increased participation by Medicare HMOs, increased rural payments translate into higher Medicare costs for PFFS (private fee-for-service) plan contracts.

• The newer private plans - PFFS plans and demonstration PPOs (preferred provider organizations) - contract in areas where M+C payment rates are higher than traditional Medicare rates.

• Medicare administrative costs average approximately 2 percent, while administrative costs in private plans in employer groups generally exceed 10 percent. In particular, private plans have costs associated with marketing and, in the case of for-profit plans, a return for investors.

New, less-structured PFFS and PPO plans, with broader provider networks and fewer cost containment features, may be even less able than are current M+C HMO plans to limit total costs through reductions in price, rates of hospitalization, and use of specialized services.

The lesson from M+C suggests that it is difficult for private plans to reduce total costs of care from the level of the traditional Medicare program. It is even more difficult for private plans to offer additional benefits, cover marketing and administrative costs, and make a profit while pricing their products below the costs of the Medicare fee-for-service program.

Conclusion

In 1997, it was predicted that 34 percent of Medicare beneficiaries would be enrolled in M+C private plans by 2005. Instead, 11 percent of the Medicare population is enrolled in M+C plans in 2003, down from 16 percent in 1998. Policy experts also projected that M+C plans would expand to all parts of the country, educated beneficiaries would begin to make informed choices based on costs and quality, and competition among plans would reduce overall costs to the Medicare program and to beneficiaries alike.

None of these predictions has occurred. Instead, the M+C program has fostered broad dissatisfaction by private plans, providers, and elderly and disabled beneficiaries. Rather than steady growth, the program has undergone a period of persistent instability and a decline in enrollment.

The history of M+C is a cautionary tale. It offers important lessons for consideration in any new program to expand the use of private plans in Medicare.

http://www.cmwf.org/programs/medfutur/dallek_mclessonsforreform_pb_658.pdf

Comment: How many times have we heard this? Private Medicare plans, whether Medicare + Choice, PPOs, or private fee-for-service plans, all increase costs over the traditional Medicare program. Politicians who make claims to the contrary are simply lying. Call them on it, and demand that they explain the real reasons for supporting private plans. Failing that, fire them in the next election.

Posted by pnhp at 08:27 AM | Permalink

Public Citizen
Press Release
June 23, 2003
Drug Industry Employs 675 Washington Lobbyists, Many with Revolving-Door Connections, New Report Finds

Profits registered by the 10 drug companies on the list (Fortune 500) were equal to more than half the $69.6 billion in profits netted by the entire roster of Fortune 500 companies - when all losses are subtracted from all gains.

“The drug industry contends that it needs high prices to finance the discovery of new, innovative drugs,” Clemente said (Frank Clemente, director of Public Citizen’s Congress Watch). “But a closer look shows that drug-makers make far more money in profits than they spend on research and development.”

http://www.citizen.org/pressroom/release.cfm?ID=1469

Comment: Most of the Republicans in the House and Senate are making every effort to be certain that the traditional Medicare program will not be allowed to provide coverage for prescription drugs (except for a fallback provision in the Senate for rural regions without willing plans, though the House leadership has stated that even this is unacceptable). Coverage would be provided exclusively by private insurance plans, whether as an isolated drug plan or as part of an HMO or PPO.

The Republicans contend that including prescription coverage in the traditional Medicare program would lead to price controls of drugs. But other Medicare providers, including physicians, hospitals, laboratories, and home health agencies already have their fees and prices controlled by Medicare. Why should prescription drugs be the exception?

The explosion in physician fees and hospital charges after the introduction of Medicare led to the switch from usual, customary and reasonable fees to the enactment of mechanisms to control Medicare costs. In recent years we have seen an explosion in drug costs, with truly outrageous profits.

The Republicans are correct. Including drugs in the traditional Medicare program would result in negotiated prices - but fair prices. Isn’t it now time to modernize Medicare by including prescription drugs and making them affordable?

Posted by pnhp at 08:04 AM | Permalink

From The Nation July 7, 2003

By Steve Early

When 3,000 General Electric factory workers and supporters held a contract rally outside GE’s Lynn, Massachusetts, plant on June 7, one question preoccupied the crowd: Would there be another strike over healthcare?

Back in January, these workers—members of Local 201 of the International Union of Electrical Workers-Communications Workers of America (IUE-CWA)—walked out as part of a nationwide protest against higher medical plan co-payments. GE, they discovered, had made $15 billion in 2002, while its healthcare expenses had increased less than the national average. Yet management insisted that all employees pay a bigger share of the cost of their doctor visits, hospital stays, emergency-room care, and prescription drugs.

In a tentative agreement on a new 4-year contract, announced June 15, GE unions were able to blunt the company’s drive for further givebacks, averting a second work stoppage.

But in other workplaces across the nation, healthcare cost shifting continues unabated. Where workers have no union-and 87 percent do not-the burden of medical cost inflation is shifted from management to labor with little fuss for the former, regardless of the financial pain inflicted on the latter. In the unionized sector, industrial strife about health insurance is spreading. Since 2001, state employees in Minnesota, teachers in New Jersey, janitors in Massachusetts, candy makers in Pennsylvania, food processors in Wisconsin, uranium-plant workers in Kentucky, truck builders in Tennessee , and aerospace workers in Texas have all experienced healthcare-related strikes or lockouts-and several are still going on.

Later this summer, major contracts in the telephone and auto industries will be renegotiated. If management tries to reduce health coverage for the hundreds of thousands of workers and pensioners at General Motors, Chrysler, Ford, or Verizon even greater confrontations lie ahead.

How US unions respond to this challenge has important implications for the future of healthcare reform. The actions of organized labor-at the negotiating table or on the picket line-can become a rallying point for all Americans ill-served by our current system of private, job-based medical benefits. When unionized workers resist benefit cuts in a way that projects the broader demand for “healthcare for all,” they help generate pressure for a political solution to the larger problem: how to get affordable coverage for everyone that’s not tied to their age, income, or job. If, however, organized labor chooses piecemeal change and refuses to challenge the link between medical insurance and employment, it will miss the chance to connect with millions of poorly insured and uninsured workers who have no union.

“We need a universal, comprehensive single-payer healthcare program to cover every man, woman and child in the United States,” says new United Auto Workers’ president Ron Gettelfinger, who is pushing Detroit auto makers to support such a plan. “You can’t fix the healthcare crisis in America at any one bargaining table or within any one industry.”

The last time labor had a similar historic opportunity to shape the healthcare reform debate, it made a promising start-and then blew it. In the late 1980s and early 1990s, medical cost inflation was reaching double digits, just like today. Healthcare disputes were causing four out of every five strikes. In monumental battles like the Mine Workers’ yearlong walkout at Pittston, unions that successfully resisted concessions did so by forming alliances with community groups and other unions seeking healthcare reform. Some AFL-CIO affiliates began to do systematic member education about why a tax-supported universal health system like Canada’s would be better for workers than the current patchwork quilt of Medicare, Medicaid and myriad private plans. A number of big unions endorsed single-payer legislation, and through grassroots coalitions like Jobs With Justice, they demonstrated for fundamental change.

Just as this campaign was gaining momentum, the AFL-CIO abruptly switched course. The labor federation embraced Bill and Hillary Clinton’s Health Security Act, an ill-fated scheme that preserved the role of private insurers and was so convoluted that few unions could even explain it to their members. The Clinton bill represented a step backward for labor, mirroring conservative mandated-benefits legislation developed by Richard Nixon in the 1970s to fend off universal coverage based on the model of Medicare. But by 1993, most unions and Democrats were nevertheless rallying around the bill, which sought to shore up a private, job-based benefits system.

Like similar proposals in some states today, Clinton’s approach-obligating employers to pay for a portion of their employees’ health costs-was strikingly out of sync with work-force trends, notably the creation of millions of part-time, temporary and independent-contractor jobs with little or no health coverage. As Marie Gottschalk shows in her incisive study, The Shadow Welfare State: Labor, Business and the Politics of Health Care, labor’s willingness to settle for the Clinton bill reflected crackpot realism at its worst, for the whole “system of employment-based benefits was crumbling just at the moment when the AFL-CIO sought an employer-mandate solution.”

After the Clinton plan flopped, most firms offering health plans devised managed-care fixes of their own, which kept the system’s “crumbling” from becoming a collapse-at least for a few years. But management-imposed limits on employees’ choice of doctors, hospitals and treatment options are no longer restraining costs. Premium increases may reach 15 percent this year, and business wants workers to foot the bill. Private health insurance for 16 million retirees is a primary management target, particularly in troubled industries like steel, where companies blame such “legacy costs” for landing them in or near Chapter 11.

Twenty-five years ago, more than 80 percent of all medium- and large-sized firms offered medical benefits to retirees. Now only 40 percent do—and 1/5 of those firms have eliminated such benefits for new hires. In the ailing steel industry—which has 600,000 pensioners and dependents but only 124,000 ative workers—firms like Bethlehem, LTV, and National Steel plan to save $4.4 billion this year by eliminating retiree health coverage as well. Ex-steel workers will have to pay for it themselves—if they can—out of Social Security or their diminished monthly checks from the Pension Benefit Guaranty Corp., the federal agency now responsible for bankrupt steel makers’ pension liabilities.

Successful union resistance to cost shifting in the past is thus no guarantee that the same group of workers won’t face benefits cuts in the future-even when they retire from a profitable company. Fourteen years ago, a four-month telephone strike preserved fully paid health coverage for then-Nynex workers in the Northeast; now its successor firm, Verizon, wants to cap all retiree medical contributions in bargaining this year-affecting many veterans of the 1989 walk-out who’ve since taken early retirement offers.

The challenge facing unions today is how to broaden their defense of negotiated benefits, for active and retired workers, when a record number of Americans-as many as 75 million at one point during the past two years-have no coverage at all. If struggles against cost shifting are framed narrowly, they will be, in effect, just another special-interest fight against givebacks by workers who already enjoy above-average coverage. However, if resistance to cost shifting is framed in terms of the larger political demand of healthcare for all, these fights could attract much broader labor and community support.

When GE workers struck in January, for example, they saw the big picture. IUE-CWA Local 201 joined forces with Jobs With Justice, as well as senior groups, the state nurses’ association and low-income organizations, to hold a community rally for healthcare reform. Speakers highlighted the medical coverage problems of everyone from immigrant workers to the self-employed to retirees who get bounced around from one collapsing Medicare HMO to another. Pat Lawrence, a member of the Lynn Health Care Task Force, told the crowd, “We’re here to support the GE workers because you will bring attention to those who have no insurance-the elderly, the disadvantaged and the homeless-through your strikes and walkouts.”

Engaging this broader public during benefit disputes requires a candid admission by labor that today’s healthcare crisis can’t be settled at the bargaining table. This is particularly true when a unionized workforce is low-paid, part-time or transient, and lacking strike leverage. In Boston this past fall, despite major community support, a citywide strike by immigrant janitors began to weaken after a month. It ended unhappily for many workers because larger wage increases were sacrificed to pay for expanded medical coverage—a benefit that will only apply to 1,000 part-timers out of 8,000 in the third year of a five-year contract! Given the nature of building services and other low-wage sectors, it’s doubtful that collective bargaining will ever be able to achieve the quality of job-based benefits once enjoyed in traditional bastions of union strength like manufacturing, utilities and construction.

In trucking and the building trades, there’s an additional complication: many union officials don’t want to forsake job-based medical coverage-no mattered how tattered-because they’re in the benefits business themselves. As Gottschalk notes in her account of how labor conservatives have impeded past efforts at comprehensive healthcare reform, over half of all union members are still insured through Taft-Hartley funds, jointly administered by labor and management. Such arrangements have long been defended as a way to promote union loyalty. Unfortunately, by aligning the interests of union officials and insurers, the Taft-Hartley funds give one wing of organized labor what Gottschalk calls “a vested interest in maintaining the status quo.” It also leads to AFL-CIO pronouncements that appear to be a balancing act between single-payer advocates, at the grassroots, and union affiliates more inclined to partnerships with employers that would preserve and extend job-based coverage.

Such internal tensions produce labor-backed legislative proposals-now being pushed in about ten states-that are a very mixed bag. In Ohio, leading unions and the state labor federation are uniting with healthcare professionals and community groups to build the Single Payer Action Network, a coalition seeking a comprehensive solution to the state’s healthcare crisis. In California, however, the AFL-CIO threw its weight behind a far less ambitious pay-or-play bill. This would require employers to offer their workers health insurance or pay into a state-operated pool that would provide alternative coverage. The problem with “pay or play,” says Dan Hodges, chair of California’s Health Care for All (HCA) is that it “creates a two-tiered system in which people covered through their jobs might have adequate benefits but those who get public coverage will receive an explicitly bare-bones package. Since those with the public package will more likely be people of color, the two-tiered system will have a racial character as well.” HCA and the militant California Nurses Association support an alternative bill, which would establish universal, publicly funded coverage.

The finer points of such policy debates are lost on most union members. That’s because unions tend to leave healthcare strategy and lobbying in the hands of experts. In contract talks, negotiators desperately seek new cost-containment schemes to sugarcoat medical plan changes. Meanwhile, labor policy wonks organize events like the current series of AFL-CIO Regional Health Care Conferences-open only to union reps and too narrowly focused on “recent best practice given the current climate.” This top-down, technocratic approach fails to address the need for massive workplace education and debate about healthcare reform. Because that’s been so neglected lately, most trade unionists still think of universal healthcare as something that would benefit someone else. The term “single payer” often draws blank stares [see David Corn, “Healthcare for All-Now,” January 6]. And the concept of a government-run insurance plan strikes many union members as a formula for longer waits, inferior care and higher taxes-rather than real security and relief from out-of-pocket costs.

One group trying to change “the current climate” through rank-and-file education and cross-union activity is Jobs With Justice. On June 5, the group sponsored a statewide Health Care Day of Action in Massachusetts, endorsed by more than fifty unions and community groups. Participating organizations distributed more than 65,000 stickers demanding “Health Care for All” and did the mobilization necessary to get workers-from nurses facing staffing cuts and state workers facing benefits givebacks to utility workers facing slashed retirement coverage-to wear them on the job. This workplace activity was accompanied by informational picketing and rallies calling for a healthcare system that “covers everyone, is publicly financed, and saves money by eliminating bureaucratic waste.”

The most active participants were workers at GE and Verizon who have been-or may soon be-on strike over cost shifting. If 80,000 members of CWA and the International Brotherhood of Electrical workers (IBEW) walk-out in August at Verizon, this could lead to termination of their benefit coverage—a further lesson on why healthcare shouldn’t be controlled by employers. “When a boss cancels everyone’s insurance during a work stoppage, it’s a teachable moment,” says Rand Wilson, a Service Employees International Union staffer in Boston. “It really gets people thinking about what’s wrong with having medical coverage tied to their job. The financial risks and penalties of getting laid off, changing jobs, working part time or retiring early-not to mention going on strike-would all be greatly reduced if we had a Canadian-style system.”

Other unions, like the United Electrical Workers, are following up Health Care Action Day with bargaining table challenges to management. UE developed an Employer Pledge that offers two choices: Either join the union in lobbying for real healthcare reform or continue to pick up the tab for the present for-profit system, with its increasingly high costs and shabby care. In Canada, where labor is fighting to improve a thirty-year-old Medicare-for-all program, the Canadian Auto Workers won business backing for the single-payer approach. In a recent letter signed jointly with the union, GM, Ford and Daimler/Chrysler demanded that Canada’s “publicly funded health care system be preserved and renewed, based on its existing principles of universality, accessibility, portability, comprehensiveness, and public administration.”

Jobs With Justice didn’t attract such corporate support for Health Care Action Day. But the diversity of its labor endorsers shows how widespread conflict over cost shifting has become, in both the private and public sectors. As such disputes intensify, more trade unionists are reaching the conclusion that incremental private-sector solutions aren’t the answer. As Colin Gordon concludes in Dead on Arrival: The Politics of Health Care in Twentieth Century America, “employment-based health insurance, floated as an alternative to public insurance in the middle years of the last century, is now little more than a leaky life raft for politicians clinging to budget-neutral solutions and workers with nowhere else to swim.”

Growing budget deficits, legislative gridlock and huge military expenditures create a daunting context for new healthcare initiatives that would expand public coverage at the state or federal level. Nevertheless, mounting workplace attacks on employee benefits are forcing unions to fight back in a more political way for what workers really need, not just what some leaders think they can get. This represents an important first step toward revitalizing labor involvement in healthcare reform—and projecting unions as a champion of all workers, not just those with a membership card.

(Steve Early is an International Representative for the Communications Workers of America and Jobs with Justice activist. Based in Boston, he has been involved in health care bargaining and strikes at manufacturing and telecom firms.)

Posted by pnhp at 11:17 AM | Permalink

Rube Goldberg would’ve loved the bill now in Congress.
By Theodore Marmor and Jerry L. Mashaw

Not since Medicare was enacted in June 1965 has the program been front-page news so often - and the source of such confusion.

Now, as then, critics claim the reform package is inadequate or misguided, supporters use the language of “acceptable compromise” to soothe worried constituents, and most Americans do not have the foggiest idea what the reform would mean.

In 1965, the enactment of Medicare - a health-care insurance program for people over age 65 - was assured because the Democratic Party had routed the Republicans the year before and Congress was overwhelmingly Democratic. In 2003, changes are again being driven by politics, but this time by the increasing potency of the prescription-drug benefit as a weapon of political warfare that is threatening both Democrats and Republicans if it is not solved.

The Medicare prescription drug benefit issue dominated campaigns for the Senate, the House and, to a lesser extent, the presidency during the last few election cycles. With drug prices escalating and seniors being hit hard, the battle for the votes of the elderly often revolved around this issue.

The result was a confused jumble of Republican and Democratic candidates slamming each other with their competing visions. Now, to take it off the table, they’ve decided to reach a compromise.

To do so, both were prepared to sacrifice crucial features of their traditional policy aspirations. The Democrats agreed to give up a generous drug benefit that would have paid for the lion’s share of pharmaceutical bills. The Republicans agreed to a strategic compromise, no longer insisting that the drug benefit be only for those willing to join private health insurance plans.

The prescription drug coverage that will probably emerge from this Congress will disappoint almost every likely beneficiary. Why? The concessions required of both parties made certain that the available funds for reform could not finance the more generous benefits the parties had advertised.

The Bush administration insisted on a $400-billion budget limit over 10 years, one-half the amount the Democratic reform had presumed. The Republicans had to accept the Democratic demand that benefits be available to all the elderly and disabled, not just those willing to join private insurance plans. All the benefit plans under consideration thus include more eligible recipients than the Republicans had wanted and a much lower budget constraint than the Democrats had presumed.

The result: Either reform would address only catastrophic expenses in the first instance or, to give the impression of wider coverage, it would have convoluted, almost unintelligible, sharing of costs with patients.

We are getting the latter, Rube Goldberg plan. The Senate version of prescription drug coverage features premiums set by federal guidelines, deductibles ($275 a year), co-insurance (50 percent cost-sharing by the recipients up to $4,500 a year) and gaps in coverage (no coverage from $4,500 to $5,800 in drug expenditures).

Few Medicare beneficiaries will be able to make sense of these benefits. They provide neither full protection against financial catastrophe from drug outlays nor the cost savings of a broader plan with workable cost controls.

But is this muddle a step in the right direction, a step likely to lead to revisions over time that would provide adequate coverage at reasonable cost? Medicare’s history of incremental reform in hospital and medical benefits suggests skepticism.

Partial measures on this large a scale typically make incremental adjustments more difficult, because the beneficiaries who are financially able to buy additional gap-filling insurance diminish the squeaky wheels who would pressure Washington for reform. Yet events may force later revision.

The plan is so complex that the government may not be able to implement what Congress passes. And no one knows whether private insurers will believe that participation will be profitable.

The compromise prescription drug bill poised to pass in this Congress fails to achieve anyone’s sensible goals. Whether initial failure will breed later success is far less certain.

Theodore Marmor and Jerry L. Mashaw teach health law and policy at Yale Law School. This piece originally appeared in the Los Angeles Times.

Posted by pnhp at 11:13 AM | Permalink

by DENNIS J. KUCINICH
The Nation

[posted online on June 19, 2003]

The US Centers for Disease Control and Prevention has stated that it wants an exclusive patent on the SARS virus to guarantee the discovery remains in the public domain. That’s the right thing to do. In fact, any eventual vaccine or cure for SARS should also remain in the public domain so access to affordable treatment is possible in the event of a public health emergency. If the patent were held in private hands, it could prevent cooperative efforts among scientists across the globe and complicate efforts to make treatments or vaccines available to the public at large.

Despite, or maybe because of these facts, several laboratories have already filed US patent applications for SARS virus genes, and CDC director Dr. Julie Gerberding said that more than thirty biomedical companies have requested SARS viral samples for their efforts to develop a treatment, vaccine or test. The speed of the patent race is impressive, but this race for profits isn’t good for public health.

What’s the danger if private companies hold the patent? Research is stifled and products are overpriced. Our nation’s experience with prescription drugs should teach us a lesson. We are the only country that grants monopoly rights in the form of patents without asking for anything in return, and as a result, American citizens pay twice as much for the exact same medications as their counterparts across the border. Now faced with global public-health threats like SARS, we must stop foolishly pandering to the pharmaceutical industry and demand balance.

I will soon be introducing legislation that would create a new network of government labs for the research, development and manufacture of pharmaceutical products and biologics. The labs would be responsible for developing new cures and bringing them to the American people in a timely and affordable manner, something that the pharmaceutical industry has glaringly failed to do. Under the leadership of the National Institutes of Health, these government labs would receive direction on public health priorities. Labs would both perform the R&D for new therapies and cures, and form cooperative agreements with educational, research and private institutions.

In return for cooperative agreements to perform R&D, all research data and findings would be made public on a central website, just like the Human Genome Project. When discoveries are made, the patents would be held by the government and nonexclusive licenses would be attached to them. This would allow companies to compete to manufacture pharmaceutical products, just like generic drug companies do now. This would radically bring down the cost of drugs. In 2000, if drugs had not been subject to patent protection, total savings for government and consumers would have been roughly $80 billion.

In addition to making new cures affordable for Americans, this proposal would increase the affordability of cures worldwide. Of the 42 million people with AIDS around the globe, approximately 300,000 are receiving proper treatment. Patents give drug companies monopolies on therapies and cures, thus allowing prices as high as the market will bear. When the price is unbearable, as in poor African nations, it can mean a public health disaster.

Finally, this proposal will improve the quality of R&D by using an “open source” system that makes data and findings publicly available, instead of held secret as proprietary data. This will allow us to tap the collective genius of the world community of scientists. Open source is how the Linux computer operating system has become a competitive force against Microsoft’s Windows. Anyone can download Linux without restriction, and many people catch bugs and submit improvements for the common goal of having the best system for operating our computers.

If smart people across the world do this for computers, can we not do it for the sake of public health? Over time, we have watched the pharmaceutical industry fail on three counts: submitting fewer and fewer drugs to FDA for approval, creating “copycat” drugs instead of truly new cures and raising drug prices higher every year. Our current patent system is what encourages artificial improvements and keeps prices high. It seems clear that one of the keys to public health is establishing public patents. Let’s do it today.

http://www.thenation.com/doc.mhtml?i=20030707&s=kucinich

Posted by pnhp at 09:39 AM | Permalink

Kip Sullivan responds to the following quote of Humphrey Taylor of Harris Interactive from The Health Care Debate We Are Not Having

Humphrey Taylor:

“Increasing productivity, reducing errors, lowering costs, improving lifestyles and prevention, and cutting waste, fraud and abuse are all admirable goals which would make the money go further - but never far enough to avoid the need to ration care.”

Kip Sullivan:

I’m amazed at how often health care experts and insurance industry officials make statements like this with utter confidence. The claim that rationing is inevitable is pure ideology.

Part of the problem is the failure of those who use the term “rationing” in a health policy context to define it, which in turn permits loose usage. “Rationing” in the health policy context, as opposed to most other contexts, currently has two meanings. In the hands of right-wing critics of the health systems of other countries, “rationing” always means denial of NECESSARY medical services. (It’s no fun accusing Canada of denying UNnecessary services to its citizens.) But in the hands of people like Taylor criticizing opinion makers in this county, “rationing” means ANY denial of medical care, necessary or unnecessary.

In every other context that I can think of offhand, one needn’t define “rationing.” That’s because in other contexts we assume that — or at minimum we do not debate the proposition that — if people want the item in question their wants should be respected. Thus, if a history book says sugar was rationed in World War II, or if a newspaper says Cuba is rationing electricity on hot days, we assume that all of the sugar and electricity demanded was needed, or, at minimum, it doesn’t occur to us to question whether all those slobs on the home front really needed all that sugar, or whether the demand for electricity in Cuba was 80 percent legitimate and 20 percent frivolous. Because rationing means in most other contexts denial of necessary or, at minimum, legitimately demanded goods or services, we ought to insist that it be used that way in the health policy context.

Ergo, we should conduct guerilla warfare against “rationing” when it is used to refer to ANY denial of medical services, needed or not needed. It is utterly unenlightening to say that I have been “rationed” if I asked my doctor for a medical service I didn’t need and my doctor refused to order it. We have perfectly good words to describe what has been done to me that don’t imply that I was denied medicine I needed.

Similarly, it is of no interest to me to learn from Taylor that “rationing” occurs all over the industrialized world. Unless speakers like Taylor present some evidence that the health systems of the French, the Canadians, etc. are routinely denying NECESSARY medical services, I consider it meaningless to say that “rationing” is universal.

Kip

Posted by pnhp at 08:33 AM | Permalink

FOR IMMEDIATE RELEASE
June 23, 2003

Contact:
Alan Hood
Tel: (717)267-0867
achood@supernet.com

Peter van Wageningen
Tel: (603)-256-898
hoodbook@sover.net

CHAMBERSBURG, PA, JUNE 20, 2003— In Health Care Meltdown: Confronting Our Myths and Fixing Our Failing System, Dr. Bob LeBow debunks the myths that sustain our current health care morass. LeBow shows how a publicly funded, privately administered National Health Insurance system would do the job better and for less.

“Lack of affordable health insurance is stripping people of their dignity,” says LeBow. “Tax credits, vouchers, federal grants, and subsidies fail. Americans have had enough. They deserve better. Health Care Meltdown proposes the economically viable solution to our nation’s universal crisis.”

Shortly after completing this book, Dr. LeBow was paralyzed in a cycling accident. His own dealings with the unconscionable obstacles the current health care system presents to injured and ill people brought the message home forcefully to his family, friends, and colleagues in the medical profession. After a year of rehabilitation, he has emerged with a stronger determination to educate Americans about the benefits of National Health Insurance.

A graduate of Harvard College and the Johns Hopkins School of Medicine, Robert H. LeBow, M.D., MPH, has been the Medical Director of a community health center in Idaho for more than 25 years. He has devoted most of his career to addressing the problem of health care injustice in the United States. For two years he served as president of Physicians for a National Health Program (PNHP), the organization that advocates for National Health Insurance.

LeBow resides in Pennsylvania with his wife, Gail. Both are available for interviews.

Health Care Meltdown by Robert H. LeBow, M.D.; Hardcover, 6” x 9”, 304 pages; bibliography, glossary, index; ISBN: 0-911469-22-2 ; $25.00; Publication: July 2003

—Available at Bookstores and Online Now—

GROUP SALES— Health Care Meltdown can be ordered directly from the publisher for $25.00 plus $3.50 for postage and handling. Send check or Visa/Mastercard information to Alan C. Hood & Co., Inc., PO Box 775, Chambersburg, PA 17201. Pennsylvania residents must add sales tax. Ask about Group Sales Discount Rates.

Posted by pnhp at 03:03 PM | Permalink

Rudolph Mueller, M.D., author of “As Sick As It Gets,” responds to the Institute of Medicine report on the hidden costs of uninsurance:

It’s interesting to see the IOM report showing that “the best available estimate of the value of uncompensated health care services provided to persons who lack health insurance … is roughly $35 billion annually…and the best estimate…of the diminished health and shorter life spans of Americans who lack health insurance is between $65 and $130 billion for each year of health insurance forgone.” Also estimates “of the cost of the additional health care …to the uninsured once they became insured range from $34 to $69 billion per year”. At least the report shows that lack of health coverage to the uninsured ends up costing society overall more than providing insurance to the uninsured. However I think the IOM significantly underestimated the problem.

What the IOM report failed to report was the extra medical costs sustained in our society from people being underinsured or also previously uninsured. I have seen many patients previously uninsured or underinsured who become seriously ill from lack of timely and affordable medical care. If they survive, they frequently fall into poverty and qualify for Medicaid. Should they live long enough, they reach or continue on in Medicare sicker and more costly to care for than if they had been previously “well insured” or “universally covered”. I now call these additional costs and illnesses “Care Denial Induced Effects” or “CDIE,” and in the book “As Sick As It Gets” these additional direct medical costs reached $160 billion in 1998. The costs of CDIE in 2003 are probably many billions more considering millions of even more Americans are uninsured and underinsured since 1998.

The IOM also recently estimated “18,000” young uninsured adults die from lack of health insurance. Again, I think they have significantly under estimated the losses in our nation. When one compares the potential years of life lost before age 70 in the US vs. the average of the next nine largest wealthy democracies, nearly 200,000 Americans die prematurely every year more than those wealthy nations that have had universal health systems in place for decades.

The people of the United States continue to suffer enormously high medical costs and only mediocre medical outcomes relative to the other wealthy nations. Unfortunately these costs to our society and the human losses are even much greater than what the IOM courageously reports.

Dr. Rudy Mueller

Posted by pnhp at 08:32 AM | Permalink

The Orange County Register
June 22, 2003
Commentary

Lawmakers have strong case for health reform

By Dr. Don McCanne
The San Juan Capistrano resident is President of Physicians for a National Health Program.

Everyone agrees that health-care costs are out of control and that something must be done to ensure access to health care for the growing numbers of uninsured. Although the California Legislature is grappling with these issues, several recent opinion articles in The Orange County Register have protested that the public should not want the government involved in reform, and that we do not want any system of rationing that comprehensive reform might entail.

These opponents of reform are too late. We already have both. Our government spends more of our taxes on health care than is spent in any other industrialized nation. But we are receiving the worst value, primarily because of the profound waste in the private sector. The megabureaucracies of the private plans create an administrative burden that wastes more than enough funds to pay for health care for all of the uninsured. We need new government policies that would redirect health-care dollars to patient care instead.

And rationing? Other nations ration by limiting the capacity of their health-care delivery systems. Since they spend far less than we do, they sometimes end up with delays for elective services such as C-T or MRI scans. Those nations need to spend more to improve capacity. But in the United States we already have adequate capacity in our system.

Nevertheless, we have the worst rationing of all nations, and that is because we ration by the ability to pay for health care. Tens of millions of our citizens potentially go without essential medical care simply because they are uninsured and cannot afford to pay for it. We are the only nation that forces families into bankruptcy court because of medical bills.

This is unnecessary. We can provide access to comprehensive care for everyone without spending one more penny on health care.

Last year, California completed a detailed study of nine models of health-care reform.

Two general concepts evolving from this study have attracted the attention of the legislators.

SB 2 (Burton-Speier) would build on our current system by requiring employers to provide insurance for all employees. Although this is the most expensive proposal studied, primarily because it leaves in place the administrative excesses of our current system, it is considered the least disruptive.

Two bills in the Assembly provide variations of this proposal.

SB 921 (Kuehl) would replace all insurers and other funding sources with a single public program similar to Medicare, but with more comprehensive benefits. Not only is Medicare our most popular insurance program, it also has the lowest administrative costs, and it has been the most effective in limiting health-care cost increases. The study showed that not only would a single insurance program provide comprehensive benefits for everyone, it actually would reduce overall health-care spending for Californians.

The instability caused by rising health-care costs and the increasing numbers of uninsured make reform imperative. The debate is no longer over whether we want the government involved; it already is. The debate now is over which public policies we wish our Legislature to enact to ensure that we are receiving maximum value for our public and private health-care dollars. All Californians need to become informed participants in this debate.

http://www2.ocregister.com/ocrweb/ocr/article.do?id=44682&section=COMMENTARY&subsection=COMMENTARY_COLUMNS&year=2003&month=6&day=22

Posted by pnhp at 09:01 AM | Permalink

The Urban Institute
April 2003
Does the Health Care Safety Net Narrow the Access Gap?
By Brenda C. Spillman, Stephen Zuckerman & Bowen Garrett

The empirical results in this paper find little variation in utilization and access among low- income adults by local safety net conditions, but very large differences by insurance status, after controlling for several individual demographic characteristics. In addition, use and access differences between insured and uninsured adults were found to have relatively little relation to local safety net conditions. These results suggest that expanding insurance coverage would be a more effective tool for increasing access to health care among low-income adults than expanding the safety net.

In other respects as well, the safety net is not a substitute for insurance, since insurance coverage confers greater access to the full range of health care providers. As noted earlier, the limited capacity of specialized safety net providers makes it inevitable that improving access requires participation of all providers as well as support for safety net providers. A recent study based on a survey of medical directors of community health centers found that while they generally reported confidence in their ability to provide needed primary care to all of their patients, they reported far greater obstacles in helping their uninsured patients obtain additional services their clinics could not provide.

Our findings suggest that expanded direct support for key safety net facilities, such as the increased support for community health centers in the Bush administration’s budget proposal, is unlikely to be an effective policy tool for narrowing access and utilization gaps between the insured and the uninsured.

http://www.urban.org/UploadedPDF/310668_DP03-02.pdf

Comment: Safety net institutions are extremely important, but comprehensive health insurance is essential. Current innovative private health insurance products that provide flexibility in benefits and cost-sharing actually threaten affordability of care, and thereby may fail to adequately reduce access and utilization gaps. It is unlikely that the management of the private health plans would make the same effort to close these gaps as would the public administrators of a program of social insurance.

Posted by pnhp at 09:05 AM | Permalink

The Henry J. Kaiser Foundation
Harvard School of Public Health
Press Release
June 19, 2003
New Survey Finds Most Seniors Favor Reforms that Build on Existing Medicare
Program, But Younger Adults Are More Favorable Toward Private Plans

Eighty percent of seniors have a favorable impression of Medicare and more than six in ten (62%) say the program is well-run. About seven in ten (72%) of those ages 65 and over feel seniors should continue to get their health insurance through Medicare rather than through private plans (16%), and 63% favor offering prescription drug coverage through Medicare over offering all benefits including drug coverage through private plans (23%). When it comes to their own insurance coverage, seniors are far more likely to prefer the current Medicare program over private plans (63% vs. 19%).

Younger adults 18-64 are less likely than seniors to have a favorable view of Medicare and to think that it is well-run: 45% of those under 65 say their view is favorable, 23% unfavorable, and one-third don’t know; and just over a third (36%) say it is well-run (31% say not well-run and 32% don’t know). They are generally less familiar with Medicare, with more than half (55%) of adults ages 18-64 incorrectly saying Medicare covers prescription drugs (vs. 16% of seniors) and less than three in ten (28%) knowing that people on Medicare can choose any doctor or hospital they want (vs. 73% of seniors).

A majority of the public (54%) favors a plan that provides seniors with a benefit that is as generous as what most workers get even if it costs taxpayers more, while 38% choose a less generous benefit at a lower government cost. After hearing arguments against their initial position (would you still favor if it meant giving up further tax cuts; still oppose if some seniors would not fill prescriptions because of the cost), 65% favor the more generous plan and 22% the cheaper plan.

http://www.kff.org/content/2003/20030619a/Final_Medicare_Survey_Release.pdf

Comment: You cannot have escaped the news that this latest KFF/Harvard-Blendon poll has demonstrated that most seniors prefer the traditional Medicare program, whereas younger individuals would prefer private plans. But the comments above, selected from their press release, reveal a couple of very important facts.

Younger adults express their opinions based on inadequate and even incorrect perceptions of the Medicare program. Another point is that when they are provided with merely a short phrase that improves their understanding of the policy issues, they change their opinion to one more supportive of beneficial reform.

Although seniors do have a better understanding of the Medicare program, it is still surprising to see that a small but significant minority still don’t understand that the traditional Medicare program does offer free choice of providers and that outpatient prescription drugs are not a benefit of the program.

A well-functioning democracy requires an informed electorate. With solid facts, they’ll do the right thing. We have a lot of work to do.

Posted by pnhp at 12:22 PM | Permalink

Kaiser Daily Health Policy Report
June 18, 2003
House Ways and Means Panel Approves Medicare Reform Bill

The House Ways and Means Committee on June 17 voted 25-15 to approve an approximately $413 billion, 10-year bill (HR 2473) that would attempt to increase participation of private plans in Medicare and offer all beneficiaries a drug benefit, the Wall Street Journal reports (Rogers, Wall Street Journal, 6/18).

The bill also would establish direct price competition between traditional Medicare and private health plans beginning in 2010.

The House bill includes a provision that would increase payments to existing Medicare+Choice health plans up to 3% to 16% above fee-for-service payments in their area, the Journal reports. The increased payments would take effect before 2006, creating an “investment window” in which Republicans believe private plans could compete profitably but also use the increased subsidies to reduce premiums or increase benefits packages to make them more attractive to beneficiaries, according to the Journal.

http://www.kaisernetwork.org/daily_reports/rep_hpolicy_recent_rep.cfm?dr_cat=3&show=yes&dr_DateTime=18-Jun-03

Comment: The fundamental principle that competition reduces costs applies only to a truly free marketplace. Medicare and the private Medicare options do not adjust their costs based on free market forces. In this legislation, the Republicans are suggesting that a free market is created by offering more private plans, and, especially, by requiring the traditional Medicare program to compete with the private plans. But they apparently don’t really believe it.

Even the Republicans seem to understand that market competition isn’t working. Otherwise, why do they have to offer Medicare + Choice HMOs payments that are 3% to 16% above the fee-for-service payments? Every study has confirmed that the private Medicare options have cost more than the traditional program when corrections are made for the fact that the private plans have been successful in selectively marketing to a comparatively healthy subset of Medicare beneficiaries. Efforts to set up competitive Medicare models failed when no insurer would agree to participate. The reason for reinforcing the private options with larger payments is to create a larger private sector that would eventually replace the traditional program. At the current level of funding, the private Medicare sector is shrinking, rather than growing.

Why should we be concerned about giving the traditional Medicare program a stimulus to become “more efficient” by forcing it to compete with private plans? The answer is quite complex, but briefly, healthier patients would end up in the private plans, leaving chronically ill, high-cost patients in the traditional program. These higher costs, in the Republican competitive model, would be passed on to the beneficiaries in the traditional program in the form of higher premiums. This premium “death spiral” would force them out of the traditional program, destroying Medicare as we know it. A private plan Medicare system would deprive patients of choice of their physicians and hospitals, would waste resources in administrative excesses, and, perhaps worst of all, would be subjected to the political forces that would result in diminution of the public funding component of Medicare, severely impairing the equitable nature of this system. For low-income individuals, the inevitable result would be inadequate benefits and unaffordable cost sharing.

Families USA has posted an explanation of the how forcing Medicare to compete would result in the death spiral for the traditional program:

http://www.familiesusa.org/site/PageServer?pagename=Medicare_Central_private_example&JServSessionIdr007=t1imducywy.app5b

Posted by pnhp at 03:02 PM | Permalink

Los Angeles Times
June 18, 2003
CalPERS Members Object to Rate Hike
By Debora Vrana and Ronald D. White

The California Public Employees’ Retirement System is facing a growing member revolt as the giant pension fund Tuesday approved a nearly 17% rate increase in health insurance payments for next year.

Although rising health-care costs are straining many employees and employers nationwide, the situation at CalPERS is especially dire. As one of the nation’s largest buyers of health care, CalPERS for many years used its clout to obtain favorable rates from insurance carriers.

But now its members are balking at escalating costs, and some of the public agencies they work for - already under stress because of the state’s budget problems - are privately threatening to pull out of CalPERS health plans and find cheaper medical coverage on the open market. Those agencies, most of which are clustered in Southern California, tend to have relatively younger and healthier workforces than others.

In turn, any exodus from CalPERS’ health plans would leave those left in the system vulnerable to ever bigger rate increases in the future - a scenario that analysts call “the death spiral.”

http://www.latimes.com/business/la-fi-calpersmo18jun18,1,3674659.story?coll=la-headlines-business-manual

The Orange County Register June 18, 2003 PacifiCare goes after CalPERS members By Nancy Luna

PacifiCare Health Systems launched a campaign Tuesday to woo a large chunk of public agencies in the California Public Employees’ Retirement System, which could raise premiums today by 18 percent.

The Cypress-based health- care organization was dumped last year when CalPERS raised premiums by 25 percent.

http://www2.ocregister.com/ocrweb/ocr/article.do?id=44166&section=BUSINESS&subsection=BUSINESS&year=2003&month=6&day=18

Comment: CalPERS has not only had to face the general increases in health care costs, but it also covers a population that has greater health care expenses because of increasing age and a greater incidence of chronic disease. Last year, in an attempt to reduce the scale of cost increases, CalPERS terminated more expensive contracts, including PacifiCare’s. Now PacifiCare is back with a vengeance, attempting to cherry pick the portion of CalPERS’ contracted agencies that have lower costs because of regional market and other demographic differences. Removing lower cost beneficiaries from CalPERS can only result in even greater premium increases, threatening the affordability of CalPERS’ plans.

Even one of the nation’s largest purchasers of health plans is not immune to the death spiral. Although PacifiCare has become a vulture, this is not to criticize it for seeking revenge at having been cancelled, but rather it is to recognize that this smart move in the marketplace enhances investor value at the cost of patients being dumped into the swirl of the death spiral.

Splitting patients into separate pools, even very large pools such as CalPERS, will always result in inequities. Only a single, universal pool can prevent adverse selection, cost shifting, and the other inequities of multiple plans and programs, public and private. Establishing a monopsony (single purchaser) would not only end these inequities, but it would also establish a mechanism of effective negotiation for fair payment for the providers. We can control costs while making certain that an adequately funded health care system is there when we need it.

Posted by pnhp at 02:08 PM | Permalink

President Bush’s drive to get himself re-elected and electroshock the economy back to life took a new turn last week as Congress, in a heralded display of “bipartisan” politics, embraced a scheme to pay for drugs under Medicare. The idea is for the elderly to pay up to half the cost of drugs in a complicated, stepped program that would cost $400 billion. The government would pay the money to the pharmaceutical industry, which would conduct the program. “It’s a traditional contortionist effort to try to show you’re doing something when the real agenda is to protect corporate drug interests,” said David Himmelstein of Physicians for a National Health Program. “Bush wants to do it though private drug-management firms that take a big cut of anything before giving any benefits. Most seniors still wouldn’t be able to afford drugs, prices would still be high, and they’d be spending a large chunk of federal money to do this.”

There is another problem, as Congressional Quarterly points out, that could end up hurting, not helping, the elderly. Should the government program appear to be too generous, corporations may drop altogether the drug coverage in their medical plans. Corporations currently are cutting back on these costly programs. A December 2002 study from Kaiser Family Associates and Hewitt Associates shows that 13 percent of companies dropped drug coverage over the last couple of years, and 44 percent required employees to increase their share of the cost. The AFL-CIO argues that workers who took wage concessions in labor negotiations so as to get drug coverage once they retired will get screwed.

So in some respects, politicians who are coming to the rescue of the needy elderly actually are just rewarding the pharmaceutical giants, which always have been generous campaign givers, with yet another giant economic boondoggle.

Add that to the $80 billion a year being spent to “democratize” Iraq and the gift of $555 billion over 10 years to the top 1 percent of taxpayers, through the dividend tax refund. (Just that tax break itself exceeds the total of proposed increases for education, health research, defense, and prescription drugs, according to the Center on Budget and Policy Priorities, a mainstream think tank.)

Meanwhile, it turns out that getting our hands on Iraqi oil isn’t going to provide us with needed future energy supplies. Now we’ve got to have more natural gas. Alan Greenspan, chairman of the Federal Reserve system, told a congressional committee last week that he was worried that soaring natural gas prices would contribute to the “erosion” of the economy. Natural gas is a more or less clean fuel in great demand by industry to help it meet air pollution standards. Greenspan urges the U.S. to import more gas as a “safety valve” in case domestic production can’t do the job. That means building more terminals for liquefied-natural-gas tankers hauling gas in its frozen form from the Caspian Sea area and from Australia, Indonesia, and the Russian Far East. Tankers are an extremely dangerous means of transporting gas. If a terrorist successfully attacked one of them, the explosion would be enormous, on the order of a nuclear bomb, some experts have said. At any rate, importing gas by this means will be expensive, and building ports along the East and West coasts will be highly controversial. With that in mind, the best way of importing gas is to carry it by pipeline from Alaska and the Canadian Arctic down through the Mackenzie delta and into the Midwest. A Mackenzie delta pipeline plan has been on and off for literally a quarter of a century.

Greenspan also said, “I do think an overall policy of energy cannot dismiss the issue of nuclear power.” This vague statement was immediately taken by nuclear proponents on Capitol Hill as Greenspan’s endorsement for more nuke plants. Nuclear power was basically discarded in this country in the late 1970s after the Three Mile Island accident. It always has been more expensive than coal and viewed as both dangerous and controversial, if only because of the nightmarish quandary over what to do about radioactive wastes.

Bottom line: Why did we go to war in Iraq?

Posted by pnhp at 09:16 AM | Permalink

Institute of Medicine
The National Academies Press

Hidden Costs, Value Lost
Uninsurance in America

The best available estimate of the value of uncompensated health care services provided to persons who lack health insurance for some or all of a year is roughly $35 billion annually, about 2.8% of total national spending for personal health care services.

The Committee’s best estimate of the aggregate, annualized cost of the diminished health and shorter life spans of Americans who lack health insurance is between $65 and $130 billion for each year of health insurance forgone.

Estimates of the cost of the additional health care that would be provided to the uninsured once they became insured range from $34 to $69 billion per year, assuming no structural changes in the systems of health care financing or delivery, average scope of benefits, or provider payment.

Conclusion

This report and the work of the Committee on the Consequences of Uninsurance not only provide information about the costs resulting from the lack of coverage and some of the costs and benefits of expanding it to everyone, it also presents us with an ethical dilemma. In light of the information and analyses that the Committee has developed about choices we have not made as a society, as well as those we have made to invest heavily in health care, we cannot excuse the unfairness and insufficient compassion with which our society deploys its considerable health care resources and expertise. Providing all members of American society with health insurance coverage would contribute to the realization of democratic ideals of equality of opportunity and mutual concern and respect. By tolerating a society in which a significant minority lacks the health care and coverage that most Americans enjoy, we are missing opportunities to become more fully the nation we claim to be.

http://books.nap.edu/books/030908931X/html/index.html

Posted by pnhp at 01:32 PM | Permalink

Remembering OHIP

In response to Betsy P. Chapman’s May 23 op-ed on health care reform: I remember many things about growing up Canadian, but an ineffectual and inaccessible health care system is not one of them. In fact, I remember almost nothing about the health care system offered free of charge to every resident of the province by the Ontario Health Insurance Plan (OHIP), except that it wove itself into the fabric of my life as a strong, invisible thread. Its reliability and availability was a given.

When I or one of my four siblings needed medical attention, there was never any thought of money - payments or co-payments. My mother called to make an appointment with the family physician whose office was across the street. And we went, usually that day or the next, depending on how serious the ailment. When we arrived at the office, we met with no army of receptionists and office workers as there are here in Maine, positioned to do the work of sustaining the weighty bureaucracy put into place so that the HMO system to function. Our doctor’s nurse-wife simply waved her hand as we showed her our OHIP cards and ushered us in.

I don’t remember ever waiting very long to see the doctor, and when I did, he didn’t asked me whether it was a “sick” visit or a “well” visit, but simply what it was that I needed from him. And he stayed with me as long as was needed to give it. The relationship went on like this for 20 years. My parents aged with him, and his children grew up as we did.

In my recent times, the family practice has been eclipsed, to a large extent, by the walk-in clinic. Conveniently located in shopping malls or plazas, these clinics remain open to serve the public, free of charge, seven days a week, usually 12 hours a day. Again, the simple presentation of an OHIP card gives access to service which is prompt, efficient, and dependable. You can arrange to see the same doctor too. All you need to do is check his or her schedule for that day.

Now that they are older, my parents have had need, on occasion, for greater care than a walk-in clinic can provide (though my father still visits one each week to have his blood pressure monitored). Three years ago, my father was diagnosed with kidney cancer. The specialist thought he could be saved if the affected kidney was removed. It was a matter of weeks before the successful operation took place at one of Toronto’s topnotch hospitals. At the age of 80, he walked out of the hospital completely cured, and with a bill of only five dollars, for a private telephone he had requested for his room.

These days, as I take up my landed immigrant status, I remember with nostalgia the Canadian health care system which served me so well right up into adulthood. I remember with longing its simplicity, efficiency, and freedom from the pecuniary concerns that, in my view, so compromise the current health care system in Maine, with its many health provider “businesses.” Food or medicine - for people of any age in Canada, no choice needed or needs to be made.

I believe in the reciprocity between a society and its people, a lesson I learned growing up in Canada. I grew up in what I would, without hesitation, describe as a caring society. And I believe the new health care proposal represents a step toward establishing the same kind of caring society here in Maine, a society in which healthcare is an invisible thread in the fabric of life. In my opinion, universal healthcare extended to all, free of charge, is not only a good idea, but a basic human right . Its time has come.

Dr. Sandra Hutchison is an author, lecturer and journalist residing in Orono.

Posted by pnhp at 01:17 PM | Permalink

Bangor Daily News, 6-13-03

Dr. Sandra Hutchison’s op-ed, “Remembering OHIP [Ontario Health Insurance Plan]” (BDN, June 5) reminded me of my own experience with “universal health care extended to all” and with its “reliability and availability.”

After completing my residency in New Haven, Conn., in 1964, I practiced pediatrics for six years in Brussels, Belgium. The government had recently established a single-payer health care system that covered 100 percent of the population and respected principles such as freedom to choose your doctor, direct access to specialists, and no interference by the system in medical decisions.

As a physician, I enjoyed the “simplicity and efficiency” of the system. My patients and I enjoyed the “freedom from pecuniary concerns.” Payments for my services were prompt, never questioned, never lowered and never denied. I never called the insurance system for permission to provide care and they never called me; they never asked for and I never sent them a report of any kind. I never had a secretary or a receptionist. With part-time help from my wife, I managed a busy practice well enough without managed care.

The Belgian health system has been in place, basically unchanged, for 40 years. In 2000, it spent $2,269 per inhabitant and 8.7 percent of the gross national product, compared with $4,631 and 13 percent in the United States. My friends and colleagues in Belgium assure me that health care they receive or provide is excellent and dependable.

Robert M. Gossart, M.D.

Salisbury Cove

Posted by pnhp at 01:16 PM | Permalink

The Charlotte Observer
June 5, 2003
Blue Cross last-resort coverage reaches few
By Emery P. Dalesio

While North Carolina’s largest health insurer technically remains its insurer of last resort, it covers only 82 of 29,000 North Carolinians estimated to be otherwise medically uninsurable, a new report says.

The analysts, working for the state Insurance Department, reserved some of their sharpest criticism for the company’s track record with a program meant to cover those with cancer, multiple sclerosis, and other expensive and debilitating conditions.

Blue Cross has been North Carolina’s insurer of last resort for most of its history, though state law doesn’t require it to shoulder that responsibility. Blue Cross entered into an unwritten promise in 1991 to offer a last-resort policy to stave off legislative efforts to create a high-risk health insurance pool, a move the nonprofit then feared would endanger its tax breaks, the report said.

Blue Cross “is not currently honoring the spirit of the agreement or understanding that was originally reached in 1990-’91,” the report said.

Most states have created high-risk health insurance pools, funded with taxpayer money or tax-deductible assessments on insurers, to pay the medical bills of people profit-seeking insurers won’t touch.

http://www.charlotte.com/mld/observer/business/6016760.htm

Comment: Creating separate high-risk pools is utter nonsense. Not only have the state programs failed to function adequately, they also defeat the purpose of risk pooling. The high costs of the few need to be diluted in the pool covering the low costs of the many. The risk pool that makes the most sense is the pool that includes everyone. Short of that, private health plans will always devise methods of avoiding adequate coverage for those who need it the most.

Instead, we need to establish our own universal, public pool. Then we’ll all have access to decent health care.

Posted by pnhp at 12:38 PM | Permalink

The following resolution is being considered by the House of Delegates of the American Medical Association at their meeting in Chicago this week.

American Medical Association House of Delegates

Resolution: 121 (A-03)

Introduced by: Illinois Delegation

Subject: Single Payor

Referred to: Reference Committee A (Kevin T. Flaherty, MD, Chair)

Whereas, A major push for universal health coverage is now underway; and

Whereas, Some individuals in our country think that the best way to achieve universal coverage is through a single payor run by our federal government; and

Whereas, A single payor form of universal coverage will manifest all of the current problems of Medicare, but on a much larger scale; therefore be it

RESOLVED, That our American Medical Association vigorously oppose any single payor program of health care coverage. (Reaffirm HOD Policy)

Fiscal Note: No Significant Fiscal Impact

Received: 5/7/03

http://www.ama-assn.org/ama1/upload/mm/annual03/a121a03.doc

Comment: If we can’t even teach AMA members how to spell “payer,” how can we ever expect them to understand the complexities of the single payer model of reform?

Seriously, the AMA House of Delegates is considering a report on health insurance market regulation. The following recommendations from the report indicate that the AMA still doesn’t seem to grasp the fact that our insurance system should protect patients - all patients - and not private insurers.

Excerpts from the report:

(f) Guaranteed renewability regulations and multi-year contracts may include provisions allowing insurers to single out individuals for rate changes or other incentives related to changes in controllable lifestyle choices.

(g) Guaranteed issue regulations should be rescinded.

(h) Insured individuals wishing to switch plans should be subject to a lesser degree of risk rating and pre-existing conditions limitations than individuals who are newly seeking coverage.

(i) The regulatory environment should enable rather than impede private market innovation in product development and purchasing arrangements. Specifically: (ii) Benefit mandates should be minimized to allow markets to determine benefit packages and permit a wide choice of coverage options.

http://www.ama-assn.org/ama1/upload/mm/annual03/cms7a03.doc

Posted by pnhp at 08:18 AM | Permalink

Portland Press Herald
June 14, 2003
Innovative health bill embraced
By Josie Huang

State lawmakers embraced one of the nation’s most ambitious attempts at health-care reform Friday, passing a bill that promises affordable coverage to all Mainers within five years while controlling health-care spending statewide. National policy analysts have described the bill’s focus on access, cost and quality as groundbreaking at a time when other cash-hungry states are taking slower, more cautious steps.

Others attach “first-in-the-nation” to the bill’s centerpiece, the state-sponsored Dirigo Health insurance program that would use the state’s buying clout to offer low-deductible but comprehensive health plans through private insurance carriers.

Democratic Sen. Sharon Treat, the bill’s chief sponsor in the Senate, said the program aims for the same goal of universal health care as a single-payer health-care system, a controversial measure being studied by a legislative panel. But, she said, Dirigo Health is not “disruptive to the current system we have.”

http://www.pressherald.com/news/statehouse/030614health.shtml?show_results#poll

Comment: Before we begin the celebration we should look at some of the details of Maine’s “universal” health care program. The following points were culled from numerous reports and, therefore, may not provide a precise or entirely accurate description. But they do provide a general perspective of this “first in the nation” program of “affordable coverage for all.”

• The system relies on private health plans which ensures that administrative waste will continue to be a prime feature of Maine’s health care system. Worse, using multiple private plans will perpetuate the inequities that are characteristic of a market that thrives on cost shifting, adverse selection, overt and covert manipulation of benefits and other measures that allow insurers to create inequities largely to benefit their own industry.

• Employers will be expected to contribute about 60% of the costs of the coverage. Maine has a large number of small businesses which already have had difficulties funding adequate health care programs for their employees. Many employers simply will not be able to afford the coverage.

• Lower income individuals who do not qualify for public programs nor meet the definition of poverty will still not be able to afford their portion of the premium, and, consequently, will not be able to participate.

• Medicaid expansion is another feature of the program. Expanding this chronically underfunded program will result in more cost shifting and greater impaired access because of a lack of participation by “unwilling” providers.

• A portion of the funding is through the state give-back provision of the latest tax-cut bill recently passed by Congress. This hardly constitutes a reliable long-term source of funding.

• Another portion of the funding is through an assessment on insurers which the governor states would not be passed on as higher premiums. But consumers always pay business overhead in one form or another.

• Participants would be charged “subsidized fees that would vary according to their ability to pay and the amount of coverage purchased.” Obviously this suggests that those with modest incomes cannot expect to have access to the same level of care as the more affluent would. Does this mean total hip replacements for the affluent and walkers for the poor?

• Part of the funding would be through the savings achieved through decreased utilization of emergency facilities. But the savings will be in marginal costs only which will prove to be a relatively paltry sum. And much of the savings will vanish if no attempt is made to establish evening and weekend clinics when the breadwinner is able to provide transportation for his/her family.

• Prices (not costs) will be controlled for one year only by a voluntary effort to cap price increases to 3.0% for physicians and 3.5% for hospitals. A transitional voluntary cap cannot have any significant long term impact on health care costs.

• If the Dirigo Health program fails, the Legislature is authorized to adopt a “high-risk pool model.” The performance of high-risk pool models in other states has been less than sterling. Very high costs, poor coverage, and long waiting lists have plagued these programs.

Maine is to be admired for its intense efforts to provide health care access for everyone. But the process began with the false premise that all vested interests must be included. Private health plans are the source of many of the problems in health care (administrative excesses, adverse selection, erecting financial barriers to care, limiting choice, inability to contain costs, creating inequities in coverage, etc., etc.). Public administration of the health care system was never a serious consideration, in deference to the health plans. Thus policies were developed to benefit the plans while sacrificing the goal of an affordable, comprehensive and truly universal system.

The California Health Care Options Project has demonstrated that reform models that build on the current system of private health plans and public programs are the most expensive models of reform, and they fail to achieve universality and equity. Dirigo Health is no exception. Maine’s program is particularly weak because it relies very heavily on voluntary compliance with many aspects of the program. Unfortunately, we will continue to hear about Maine’s struggles with its health care system because a program built on an infrastructure of wet noodles cannot possibly perform.

Those of you in Maine who are continuing to craft the single payer model, please do not leave your tables. Maine desperately needs your program, as will soon be evident.

Posted by pnhp at 08:15 AM | Permalink

(The legislative alert appears at the end of this message.)

The Henry J. Kaiser Family Foundation June 2003 Medicare Prescription Drugs Through Private Drug-Only Policies: A Discussion with Actuaries By Health Policy Alternatives, Inc.

… the Kaiser Family Foundation contracted with Health Policy Alternatives, Inc. to convene a panel of health actuaries familiar with the Medicare program and the prescription drug debate.

The objective was to explore the implications of providing prescription drug benefits to Medicare beneficiaries through private, drug-only plans from the perspective of the insurance industry and other potential plan sponsors such as PBMs (pharmacy benefit managers).

… there was consensus among the actuaries interviewed for this project that certain features of a Medicare stand-alone prescription drug proposal would be important to attracting the participation of insurers or PBMs.

1. Freedom to set premiums without arbitrary government limits.

2. Government subsidies of beneficiary premiums that do not erode over time.

3. A one-time beneficiary enrollment opportunity, with aggressive government marketing and beneficiary information efforts to achieve maximum beneficiary participation.

4. Shared risk with the government, at least in the initial years, preferably through risk corridors.

5. Ability to price premiums locally and not nationally.

6. Flexibility to exit the market (no guaranteed renewal as exists for Medigap insurers).

7. Some benefit flexibility, especially with respect to cost-sharing.

8. Flexibility to use cost containment measures, including formularies.

9. Preemption of most state laws and regulations to reduce costs of compliance and make it easier to market on a multi-state or national basis.

10. Government collection and distribution of premiums to reduce the administrative burden of plans, and maximize retention of enrollees.

Whether a Medicare drug-only product would be sustainable as a line of business would depend on plan experience and future government policy, especially maintenance of adequate government subsidies and limited enrollment opportunities.

http://www.kff.org/content/2003/6086/6086.pdf

Comment: In order for this program to work, our government must bear most of the risk, must provide administrative functions and marketing, and must grant flexibility and relief from regulations. The plans must also have the right to shift costs to the Medicare beneficiaries and limit or even deny benefits.

If the plans are insisting that we, as taxpayers, accept the risks and bear the administrative functions normally provided by insurers, and that we, as beneficiaries, grant the plans flexibility to significantly reduce our plan benefits in order to embellish their profits, then what function are they serving other than interjecting themselves as superfluous middlemen? Why on earth do the Republicans and the “bipartisan Democrats” continue to insist that we must use private insurers to administer our own Medicare program? This question should be asked not only of the proposed prescription drug benefit, but also of the private Medicare “carrier” HMOs and the proposed Medicare PPO programs.

Another quote from the report is instructive:

“Even the more enthusiastic of our participants had reservations, however, about participating in a government sponsored program. Based on their experiences with M+C and Medigap, they regarded the government as an unreliable business partner and worried that they could not count on ‘the rules of the game’ remaining constant.”

Which is the “unreliable business partner” here? The health plans promised higher quality at a lower cost. They delivered higher costs while failing to deliver on quality. And now they claim that the government is an “unreliable partner” because of the reluctance to increase funding of the wasteful administrative excesses of the plans.

The plan actuaries are correct. Without taxpayer funding of plan excesses, and without the “flexibility” to adjust profits by denying patients their benefits, the plans cannot justify their existence. So what justification can the politicians provide?

*** Legislative Alert ***

Last night the Senate Finance Committee approved legislation that “would offer Medicare beneficiaries a stand-alone prescription drug benefit delivered through private insurance companies. And they also would offer a new Medicare option that would use preferred provider organizations (PPOs) to deliver comprehensive health coverage.”

http://www.washtimes.com/national/20030613-124454-9969r.htm

Opponents of privatization have indicated that they will accept this compromise in order to deliver on the promise of prescription drug coverage. But this is “barn door” privatization legislation that will not be readily amenable to future legislative correction. Privatization of Medicare is too great of a price to pay for an inadequate and highly defective prescription benefit. We need health policies that protect patients, not insurers.

We must now make every effort to defeat this legislation on the Senate floor, and then go to work to elect legislators who will protect, improve and expand our single payer Medicare program. Affordable, comprehensive health care for everyone is a goal that we must not surrender.

Don McCanne, MD President, Physicians for a National Health Program www.pnhp.org

Posted by pnhp at 08:19 AM | Permalink

SB921 (Kuehl), the Health Care For All Californians Act, a landmark healthcare reform declaring the intent of the legislature to establish a single payer health care system for all California residents at no new cost to the state, passed the California Senate Floor Wednesday morning on a vote of 23 to 14. The bill now moves to the State Assembly.

“The California Health Care Options Project completed last year demonstrated that comprehensive health care coverage could be provided for everyone at a cost lower than that of our current inefficient and inadequate system,” explains Don McCanne, president of Physicians for a National Health Program (PNHP.)

“In SB 921, Sen. Sheila Kuehl has provided the legislative vehicle to enact a single payer system that would finally bring affordable health care to all.”

The California Physicians Alliance(CAPA), the state chapter of Physicians for a National Health Program are active in speaking and writing articles about the need for health care reform in the state.

If you’re interested in supporting single payer health care in California, please contact the California Physicians Alliance at capa@jps.net or call (510) 832-7134.

Note:This bill is, in effect, a committment by the legislature to continue to study the issue, keeping the possibility for reform open, but not making single payer a certainty by any means. Stay tuned and if you live in California, please join the struggle for reform.

Posted by pnhp at 02:49 PM | Permalink

Mercer Risk, Finance & Insurance
Prepared for: National Small Business United
June 2003
Impact of Association Health Plan Legislation on Premiums and Coverage for
Small Employers
By Beth Fritchen FSA, MAAA & Karen Bender FCA, ASA, MAAA

National Small Business United (NSBU) engaged Mercer Risk, Finance &
Insurance (Mercer) to analyze the “Small Business Health Fairness Act of
2003” (H.R. 660 and S. 545). This legislation would encourage the formation
of federally certified Association Health Plans (AHPs) by exempting these
plans from various state laws that govern health insurance sold to small
employers today.

Proponents of H.R. 660 and S. 545 argue that federally certified AHPs would
expand access to affordable health insurance for small employers and reduce
the number of uninsured. Opponents believe the legislation would have the
exact opposite effect - that is, it would cause premiums to rise and the
number of uninsured to increase.

In brief, we found that once federal AHP legislation was fully implemented:

• Health insurance costs would increase significantly for small businesses
  in the state-regulated insurance market.

• AHP legislation would increase, not decrease, the number of uninsured.

• Federal AHPs would gain a pricing advantage through risk-selection, not
  greater administrative efficiency.

• Federal AHPs would insure the healthiest small employers.

• Small employers would face higher premiums overall.

These results indicate that AHP legislation is not a solution to rising
health care costs for small employers. While some firms obtaining coverage
through AHPs may see lower premiums, firms with higher-cost employees would
see their premiums increase. Overall, small employers would pay higher
premiums and the uninsured population would increase if this legislation
were enacted.

http://www.nsbu.org/files/mercer_ahp_report.pdf

Posted by pnhp at 01:00 PM | Permalink

Community: Nampa doctor to be honored by cross-country bike tour

By Nathaniel Hoffman

NAMPA - As Canyon County cyclists train for the first ever Bob LeBow Classic Bike Tour, LeBow continues to train his mind and body after a July 2002 bike accident that left him paralyzed.

LeBow was an avid cyclist who used to commute to his job as medical director of Terry Reilly Health Services in Nampa by bicycle and had ridden his bike all over the world. Now he speaks in short sentences through a ventilator from his son’s home in a Philadelphia suburb.

“Too bad I can’t ride in it,” LeBow said, adding that he was honored the ride was named after him.

LeBow and his wife have race bibs number one and two pinned up near his bed, and their son Ted LeBow and granddaughter Becca are coming to Nampa to ride in the tour on Saturday.

Bob LeBow’s wife, Gail LeBow, said she has seen tandem bicycles that can accommodate quadriplegic people and hopes the couple will one day be able to ride again.

“It’s a very steep learning curve,” Gail LeBow said of all the details that come along with taking care of her husband.

But Bob LeBow, 62, said his stamina has increased from almost zero to the point that he does physical therapy exercises and is learning how to write with a special computer and paint with a mouth stick.

He is learning to use a chin switch and eventually a chin mouse so that he can write on his own and practices on a computer screen mounted to his chair.

“I’ve been gradually improving my writing,” Bob LeBow said.

He published a book shortly before the accident exposing many of the weaknesses in the U.S. health care system, and the book will soon come out in hard cover.

The LeBows said they miss Idaho and the clinic and are glad that people are still thinking about them.

“I’d like to be there,” Bob LeBow said.

For more about the Bob LeBow Classic Bike Tour.

Bob LeBow is a past PNHP president.

Posted by pnhp at 11:58 AM | Permalink

By Marjorie B. Colson
June 11, 2003

I am an 80-year-old American enrolled in a 40-million-member single-payer health plan called Medicare. I have been enrolled in Medicare for 15 years, and while I am not 100 percent satisfied with the program, I wouldn’t trade it for any private health insurance plan anywhere in the world. I have good company, and lots of it. Roughly 40 million people agree with me.

Here’s why:

I know, when I go to the doctor or to the hospital, my bills will be paid. Twice over the past two years, I have been in the hospital as the result of a fall. Once I broke my hip and needed a stay in the hospital, hip surgery and follow-up rehabilitation; and once I fractured an ankle and sprained my feet and one knee, requiring, again, hospitalization and follow-up rehabilitation at a nursing home. For those services, plus many additional weeks of outpatient therapy, I paid nothing.

I feel fairly secure about my health insurance plan, as it is shared by about 40 million people, most of whom are prepared, at the drop of a hat, to take action to foil government officials proposing changes in our plan that might affect us adversely.

I am very familiar with the power of Medicare recipients, being the president of a large senior organization in central Wisconsin, and being responsible on occasion to organize a response to a government action that we feel threatens our health and our quality of life. Something called “Third Rail Politics” has been developed around both the Medicare and Social Security programs as a result of our activism on behalf of ourselves and others like us.

Because my health plan is public, a government plan, I have three elected officials who might be said to sit on the board of my health plan. My representatives are accountable to me and my fellow seniors, and respond to our complaints and problems.

If I were in a private health plan, the board would be made up of individuals appointed by shareholders. Such board members are never accountable to patients of their health insurance or health maintenance companies. Patients, in fact, don’t know who board members are and have no right to try to speak to them about the quality of their care.

I suggest that fellow citizens enrolled in smaller splinter groups called private insurance plans might want to look at the ability of senior and disabled people to defend our programs and ourselves, and consider trying to get into our single-payer plan or a similar government health plan. I can guarantee, after 15 years in Medicare, that it will take a huge worry from your mind.

I have absolute freedom to choose my doctor or other health care provider. I have a government-issued card that guarantees me entrance to the clinic or hospital of my choice. And my membership in the huge Medicare club assures me help and support when I need it.

Like many senior and disabled people on Medicare, I do not currently have a prescription drug benefit. That situation, interestingly, is being remedied (at least partially and temporarily) by the small free market that happens to still exist in the nation. Storefronts and Internet sites selling drugs at Canadian prices are proliferating so rapidly that retail pharmacists are trying to organize to force seniors and disabled people to return to their own more pricey U.S. pharmacy counters. It won’t happen, as more and more Medicare recipients find their own cut-rate pharmacies with Canadian prices. We are creating our own remedy, e-mailing each other as we find new and better drug prices in Canada - a country with a single-payer health care system that serves all of its citizens.

When people talk about how hard it is to repair the broken health care system in the United States, I respond by reminding them that a rational and realistic solution exists:

Single-payer anyone? Join the club.

Marjorie B. Colson lives in Madison and is active with many local groups, including the Dane County SOS Senior Council.

Published: 10:09 AM 6/11/03

http://www.madison.com/captimes/opinion/column/guest/50645.php

Posted by pnhp at 10:36 AM | Permalink

Health Affairs
Web Exclusive
11 June 2003
Tracking Health Care Costs: Trends Stabilize But Remain High In 2002
by Bradley C. Strunk and Paul B. Ginsburg

Health care spending per privately insured person increased 9.6 percent in 2002, a slight reduction from the 10 percent increase in 2001. This is the first time in five years that the spending trend did not accelerate. Nonetheless, health care spending grew nearly four times faster than the U.S. economy grew in 2002 (2.7 percent per capita in nominal terms).

Consumers appear to be facing a second round of sizable increases to cost-sharing requirements in 2003. Recent reports of insurers to Wall Street suggest that employers “bought down” their insurance premiums by an average of roughly 3 percent in 2003. This means that insurance premiums would have increased 3 percent more than they did had employers made no changes to their benefit structures. This increase in cost sharing comes on the heels of a 2-3 percent buy-down in 2002.

http://www.healthaffairs.org/WebExclusives/Strunk_Web_Excl_061103.htm

Comment: Health care spending growth under private health insurance is four times the growth of the U.S. economy. That hardly represents stabilization of health care costs. The fact that private health plans remain incapable of containing health care costs is certainly no reason to celebrate. And the current trend to make health care less affordable by shifting more costs to patients is a sick, perverse solution.

Posted by pnhp at 02:00 PM | Permalink

Donald W. Light, Ph.D. responds on Enthoven’s managed competition model:

Hope springs eternal for Enthoven. He forgets his own previous analyses, where he describes how for-profit HMOs did not set themselves up as group models that would allow such plan - plan competition, but instead all signed up a large proportion of the same physician pools in order to maximize appeal to policy-holders, thereby emasculating his competition model. If only HMOs would behave as the competition model says they are supposed to behave!

Posted by pnhp at 10:37 AM | Permalink

By Robert Kuttner, 6/11/2003

HEART DISEASE runs in part of my family. A beloved uncle died at 50 of a heart attack. One grandmother died in her 60s of congestive heart failure; the other of high blood pressure. Others, happily, have lived into their 90s, and I hope I take after them.

In those years, doctors could do little. There was aspirin for pain, nitroglycerine for temporary relief of ”angina,” and digitalis to stimulate the heart. That was it.

But today my fate is not just a matter of diet, exercise, and genetics. There are statin drugs if my arteries tend to clog, several classes of blood pressure medication, and much more. There are elegant diagnostic tests, like the echocardiogram I recently had, where I could both see my heart and its valves on a monitor and listen to the healthy sloshing of my splendid pump. (I’m fine, Mom, this was a routine screening.) And if things ever get bad, there are delicate angio-procedures, valve jobs, triple and quadruple bypasses, even heart transplants. And they all cost a small fortune, from the $10 pills to the $20,000 surgeries. One thing about aspirin, nitrogylcerine, and digitalis: They were dirt cheap. Science keeps inventing ways to keep us alive and well, and all of us expect nothing but the best.

All of which brings me to the debate about health insurance. There are really two issues here, and they tend to get blurred. The first is how we contain costs. The second is how we cover everybody. Seemingly, the two goals are at odds with each other.

How on earth do you restrain health costs as the population keeps aging and as science keeps marching on, much less if everyone is insured? One easy solution: freeze the state of science at about 1950, and we could insure everyone in the United States for cheap. But who wants that?

The fact is that HMOs and the employers who buy most of the insurance can disguise the ugly word all they want, but much of what they do is a form of rationing. They limit available tests, drugs, and procedures. They punish doctors in the pocketbook for spending more than a few minutes with patients. They make the paper chase so complex that many consumers just give up and don’t fill the prescription, or they go without the procedure (and the richer among us just pay out of pocket). All of these measures can be politely called managed care or ”alignment of incentives,” but all are forms of rationing. And unlike true rationing, in which care is based on dire need, wealthier people can always buy their way out.

We are hearing a lot from the Bush administration that competition is the solution to escalating health costs. You can shop around for a car or a hotel; why not for a health plan?

The reason is that medicine and health insurance are not ordinary commodities. For starters, most private health plans deny consumers meaningful choices. The whole point is to limit the choice of doctors and hospitals to those who give the plan discounts and follow the managed care company’s treatment rules.

Insurance companies also spend a fortune on marketing (to target consumers less likely to get sick), on claims processing, and on profit. One of the worst sources of inefficiency in the whole system is the cost of the fragmentation that comes from having duplicative and parallel private bureaucracies.

Every reputable study, including the most recent one from the bipartisan Congressional Budget Office, shows that the most cost-effective way of spending limited health dollars is through a single universal system, like Medicare. The elderly may be bewildered by the system, but they are no fools. They know that the one oasis of completely secure coverage and fully free choice is conventional Medicare. That is why the Bush administration, despite wanting to herd seniors into HMOs, caved in and agreed to allow (still too skimpy) drug benefits for people who stay with Medicare.

Here’s where the two questions - cost containment and coverage - come together. The best way of cutting avoidable costs (but not cutting care) and also insuring every American is to put everyone in the same universal system. There would still be difficult choices, but nothing like the insecurity, cost-shifting, waste, and profiteering of the present system.

What stands in the way? Only the insurance industry, the drug companies, the Fortune 500, half the American Medical Association, and the Republican Party. That’s all.

Robert Kuttner is co-editor of The American Prospect. His column appears regularly in the Globe.

This story ran on page A23 of the Boston Globe on 6/11/2003.
© Copyright 2003 Globe Newspaper Company.

Posted by pnhp at 09:52 AM | Permalink

American College of Physicians
ObserverWeekly
6-10-03
Access update
New House bill based on ACP proposals to expand access to care

Legislators introduced a bill into the House today to expand health insurance coverage to millions of uninsured Americans. The proposal already has the support of organizations representing more than 300,000 physicians.

The bill is identical to legislation introduced into the Senate last month. Both proposals are modeled after ACP’s seven-year plan to expand access to care to all Americans by 2010.

Reps. Steven LaTourette (R-Ohio) and Marcy Kaptur (D-Ohio) introduced the Health Coverage, Affordability, Responsibility and Equity (HealthCARE) Act of 2003.

The bill would give states new options to expand coverage through existing public programs. It would also give individuals a tax credit to buy coverage from private plans.

The House legislation would expand access to care through the following measures:

• Give states new options to expand safety net programs for the poor.

• Create refundable tax credits to give eligible individuals the same subsidies to buy health insurance that the federal government gives its employees.

• Allow tax credits to be used to buy individual coverage or coverage through a state purchasing pool modeled after the Federal Employees Health Benefit program.

• Give small businesses access to the same types of affordable health plans available through state purchasing arrangements.

• Create an expert commission to recommend additional measures.

Supporters of the legislation include ACP (American College of Physicians), Families USA, the American Academy of Family Physicians, the American Academy of Pediatrics, the American College of Cardiology and the American College of Geriatrics.

http://www.acponline.org/weekly/2003/6/10/index.html?hp#accessbill

The identical bill introduced in the Senate by Sen. Jeff Bingaman (NM), S.1030, HealthCARE Act of 2003, is available at Thomas: http://thomas.loc.gov/, and type in the bill number, S.1030

Comment: It is unlikely that this “bipartisan” bill will engender significant Republican support, especially without the Tom DeLay/Bill Thomas stamp of approval. But if the public demand for comprehensive reform increases much more, this bill could gain traction. And it does have the support of Families USA and several significant physician organizations.

Although this bill might expand coverage, it would do so partly by expanding private plans through an FEHBP model which would leave in place very costly administrative inefficiencies, and would expose low-income individuals covered by this legislation to cost-sharing that could threaten affordability of care. Analyses of similar proposals demonstrate that this is a very costly method of expanding care. And for moderately low-income, uninsured individuals, this bill provides only a committee that will think about their problem.

If such a bill were to pass, it would greatly reduce or even eliminate the pressure to enact reform that would ensure affordable, comprehensive health care for everyone. If we really do want an equitable health care system that meets our goals, we’re simply going to have to replace the private health plans with a single program of social insurance.

Let’s not be distracted by yet another costly but inadequate attempt to achieve a “politically feasible,” compromise proposal.

Posted by pnhp at 08:11 AM | Permalink

Health Affairs
May/June 2003
Taiwan’s New National Health Insurance Program: Genesis And Experience So
Far
by Tsung-Mei Cheng

Taiwan’s NHI is a government-run, single-payer national health insurance scheme, financed through a mix of premiums and taxes, that compensates a mixed public and private delivery system predominantly on a fee-for-service basis. NHI enrollment is mandatory, to ensure adequate risk pooling and the broad-based collection of funds to finance the NHI.

Taiwan’s health care providers obtain their revenues from three sources: (1) payments by the NHI, (2) patient user fees and copayments, and (3) proceeds from the sale of products and services not covered by the NHI.

Experts in Taiwan appear to believe that the absolute level of fees paid by the NHI is too low and that many fees are considered to be below cost. In the absence of effective volume controls, providers’ simplest response to low fees is to expand the volume of services they provide while reducing the resources going into each unit of service (for example, shortened visit length). The BNHI’s chief executive officer, Hong-Jen Chang, remarked that “Taiwan’s doctors are well paid. But they work very, very hard to use volume to make up for the low fees.” Ta-Fu Huang, chairman of the DoH’s Quality Commission, has written extensively about Taiwan’s medical culture of the “three-minute patient visit” with physicians that is typical of doctors in Taiwan. That fee-driven practice style may lead to misdiagnosis, improper treatment, or delays in proper treatment.

A feature that Taiwan’s health system shares with other health systems in Asia is that hospitals are allowed to sell patients drugs at prices far above their acquisition cost, which they negotiate with the drug companies. In the Taiwan vernacular, the resulting profit margins are known as the “drug price black hole.” The U.S. analogue of this practice is the profits oncologists serving Medicare patients can earn on drugs they use in outpatient chemotherapy. Coupled with the PF system of rewarding hospital-based doctors, permitting hospitals to profit from the sale of drugs leads to a serious conflicts of interest, as it invites the overmedication of patients, including a perilous overmedication with antibiotics. According to a December 2002 study report by the DoH, close to half of the doctors in Taiwan prescribe four to five drugs per visit for upper respiratory infections, and 10 percent prescribe more than eight drugs; in only fourteen of 103,024 outpatient visits did the doctor not prescribe any drugs. The CEO of a large private hospital told me that 44 percent of his hospital’s income is derived from the prescription and sale of drugs to patients.

To the detached observer, Taiwan’s current health system conveys a confusing picture. The nation spends only 5.44 percent of its GDP on health care from all sources (or about 6 percent on a more inclusive measure). By the benchmark of the OECD countries, a nation with Taiwan’s current GDP per capita (US $14,188) would be expected to spend somewhere around 7.3 percent of its GDP on health care, give or take half a percentage point. This estimate could be taken to mean that Taiwan’s health system is underfunded. Not surprisingly, there have been calls for increased spending to improve equity and quality.

On the other hand, however, the accusation of widespread supply side-driven, provider-induced use of health care suggests a surplus of capacity, even at the relatively low spending level of only 5.44 percent of GDP. It leads critics of Taiwan’s provider community to argue that allocating a higher percentage of GDP to health care might make the problem of excess capacity even worse and merely increase the profits of providers.

A reconciliation of these contradictory perspectives may be to argue that what is actually in surplus is relatively low-quality care, whose expansion should not be encouraged with added funds. At the same time, it probably is true that a high quality, state-of-the art health system with longer patient visits, more accurate diagnoses, better-equipped hospitals, timely introduction of new drugs and technology, a better information infrastructure, and superior quality all around probably would require more than the current 5.44 percent of GDP. If that interpretation is valid, any move to a higher level of spending should be carefully targeted.

… additional funding should be directed to the development of an IT infrastructure capable of identifying waste, fraud, and abuse and, at the same time, inducing the delivery system to practice high-quality, evidence-based medicine.

http://www.healthaffairs.org/readeragent.php?ID=/usr/local/apache/sites/healthaffairs.org/htdocs/Library/v22n3/s14.pdf

Comment: As we advocate for reform, it is important to understand both the problems that can arise with single payer systems and the solutions to those problems. We need to be able to counter the criticisms of the opponents of reform, and then we will need to be certain that mechanisms will be in place to ensure efficient utilization of our health care resources.

Posted by pnhp at 12:46 PM | Permalink

Health Affairs
Web Exclusive
28 May 2003
Employment-Based Health Insurance Is Failing: Now What?
A strategy, based on managed competition, to free employers from the health
care cost spiral and produce effective managed care.
By Alain C. Enthoven

There are two types of HMOs existing today. “Carrier HMOs” are insurance companies that offer a comprehensive benefit package, characteristic of HMOs, but deliver the services by contracting with independent doctors or medical groups whose main mode of payment remains fee-for-service (FFS). This is in contradistinction to “delivery system HMOs” that are based on their own dedicated medical groups and working mainly under per capita prepayment. The latter are a much more powerful lever for reshaping health care.

“Managed competition” is an alternative to… (current) employer policies. The idea is for the employer to increase competition by offering employees a wide choice of carriers and plan designs, a responsible choice (employees are fully responsible for premium differences), individual choice, informed choice, and multiple choices of delivery systems. If a critical mass of employers were to do this in a market, they could create conditions in which efficient delivery systems could enter, market their superior value for money, and achieve economies of scale. In managed competition, insurers need to be linked with specific, geographically overlapping delivery systems. (Six carrier HMOs, each offering practically every provider in town, would not be “competition” in this sense. The point is competition among delivery systems, not just carriers.)

http://www.healthaffairs.org/WebExclusives/Enthoven_Web_Excl_052803.htm

Comment: In this article, Professor Enthoven identifies many of the problems inherent in the current employment-sponsored, managed care system. He continues to support his model of managed competition as the solution to our wasteful, dysfunctional system. But his model is dependent on the voluntary initiative of a “critical mass” of employers to create a market in which “geographically overlapping” delivery systems, with “economies of scale,” would compete.

Although perhaps an oversimplification, his model suggests that almost all physicians, hospitals, and other providers be placed in several Kaiser-type HMOs within the same community, without significant provider overlap. Even densely-populated urban regions would find difficulties supporting multiple, large, integrated delivery systems. And experience has shown that many suburban and almost all rural areas cannot support even a single integrated delivery system. This does not mean that integrated delivery systems should be excluded as a form of health care delivery, but they can never be relied on as the dominant model in all communities, unless as a universal, public health service model.

There are critical issues that must be addressed during our efforts to reform the funding of health care. Ensuring affordable access to comprehensive services for everyone must be our primary mission. A mission of establishing an artificial business model designed specifically to enhance marketplace competition, regardless of the negative impact on patients, misses our priorities for reform, and should be discarded as the inadequate and highly flawed concept that it is.

Posted by pnhp at 08:39 AM | Permalink

The Henry J. Kaiser Family Foundation
The Federal Employees Health Benefits Program: Program Design, Recent
Performance, and Implications for Medicare Reform
May 2003
Prepared by Mark Merlis

Conclusions

FEHBP (Federal Employees Health Benefits Program) has often been an attractive model for policymakers who wish to increase the roles of competition and private plans in the Medicare program. FEHBP has succeeded in offering varying degrees of health plan choice to a large and diverse population of employees and annuitants, at costs comparable to those for other large employer plans. The program is more flexible and less bureaucratic than Medicare and relies chiefly on the market, rather than regulation, to control costs and assure quality.

Still, the program is not without its shortcomings, some of which have been notable for many years. FEHBP has faced many of the same problems as the Medicare+Choice program:

• FEHBP per capita costs have risen faster than Medicare costs in recent years, though somewhat less rapidly than spending by other employer plans. Only part of the FEHBP spending growth is attributable to rising drug expenditures, and costs would have risen even faster if plans had not reduced benefits. As the OPM Director has acknowledged: “Despite its size, the FEHB Program is not immune to the inflationary pressures that have driven up costs in the health-care industry in recent years.”

• Competition under FEHBP, as under the Medicare+Choice program, has been distorted by pricing problems. Because government contributions to FEHBP plans are not adjusted for demographic factors, health risk, or geography, the net prices offered to participants may reflect enrollee characteristics or plan location, rather than the value of benefits or plan efficiency.

• While many Medicare beneficiaries have no access to Medicare+Choice plans, FEHBP nominally offers enrollees multiple health plan choices everywhere in the country. However, participants in less populous areas may have access only to the national PPO plans, and some of these plans may not always provide meaningful choices among providers. PPOs generally achieve savings by negotiating discounted rates with providers; providers in isolated areas who face limited competition may have little incentive to grant these discounts.

• FEHBP administrative costs, including OPM, agency, and plan costs, can only be estimated, but are probably in the range of 7 to 15 percent of claims, depending on the type of plan. Medicare administrative costs for the fee-for-service program are only about 2 percent of claims. Costs for the Medicare+Choice program are probably comparable to those for similar FEHBP plans.

FEHBP is a model that policymakers are examining as they consider ways of introducing more choice under Medicare or of developing new mechanisms for extending coverage to the uninsured. The FEHBP experience highlights the difficulties in developing a competitive system that operates efficiently and equitably for a nationwide program. And FEHBP’s recent performance suggests that competition alone may not resolve the ongoing dilemma of maintaining comprehensive benefits while controlling spending growth.

http://www.kff.org/content/2003/6081/6081v1.pdf

Comment: Although this report discusses the FEHBP program as a model for Medicare reform, FEHBP is also being proposed by many politicians and other advocates as a model for expanding health care coverage through employer or individual mandates.

FEHBP, “the health care coverage that members of Congress have,” has been touted by many as the ideal model of reform. Although it is the largest and most effective of existing programs that use private insurers, it is also a program with wasteful administrative excesses and with inequities that are inevitable when depending on a variety of plans with variable benefits, pricing and availability. In contrast, an equitable program of social insurance would significantly reduce administrative costs thereby making affordable truly comprehensive benefits for everyone.

Why do we continue to support extreme models of reform, such as the FEHBP proposals, when our own simple program of social insurance would provide affordable, equitable and comprehensive coverage for everyone?

Posted by pnhp at 08:29 AM | Permalink

The Robert Wood Johnson Foundation
The Synthesis Project
May 2003
Tax subsidies for private health insurance: who currently benefits and what
are the implications for new policies?

Policy-makers are considering a variety of new tax credit proposals to expand health insurance coverage. Understanding how current tax subsidies work and their role in supporting employer-sponsored insurance (ESI) is important when designing such policies.

Higher-income workers benefit far more from the current ESI tax subsidy than lower-income workers.

First of all, they are in higher tax brackets. A worker in the 28 percent tax bracket saves 28 percent of the premium cost, while a worker in the 15 percent bracket saves only 15 percent.

They also are more likely to have ESI. Almost 90 percent of workers with income three times the poverty level or higher have ESI, compared to less than one-third of workers with income below the poverty level.

In addition, employers of higher income workers pay a larger percentage of the premium on average, translating into a larger tax exemption for those employees.

Finally, higher-income workers tend to have more coverage-multiple policies, richer benefits, and family rather than individual coverage- increasing premiums and the value of the tax exemption.

Lower-income workers benefit only slightly from the income tax exemption and the Medicare payroll tax exemption. They benefit in the short run from the Social Security payroll tax exemption, but it hurts them in the long run by reducing their retirement income.

The overall impact of the upside down subsidy is striking.

Many economists argue that employers pass on the costs of their contributions for health insurance to workers in the form of lower wages. Under that assumption, the tax subsidy is worth one-third of the premium for families with income above $200,000. These families pay only two percent of their income for health coverage.

In contrast, the subsidy is worth about 10 percent of the premium for families with ESI making less than $10,000. These families pay about 40 percent of their income (including what their employers pay in premiums) for health coverage.

http://www.rwjf.org/publications/synthesis/reports_and_briefs/pdf/no3_policyprimer.pdf

Comment: This report demonstrates that current tax policies designed to support our existing system of employer-sponsored insurance result in profound inequities, disproportionately benefiting the wealthy.

Can modifying tax policy alone correct these inequities? Each adjustment can have an impact on employer participation, employee participation, shifting between individual and employer-sponsored coverage, comprehensiveness of benefit packages, variations in the level of public funding, extent of patient cost-sharing, and endless other potential policies. As each adjustment is made to improve equity, the model will move closer to universal, comprehensive coverage with progressive public funding, and elimination of the link to employment.

Try manipulating the single payer model to include private health plans while preserving the same level of equity that a single payer system would provide. Bet you can’t do it. So why do we keep insisting that we begin with private health plans as we reform health care?

Posted by pnhp at 01:05 PM | Permalink

Army Had the Answer

The best health-care system we two have ever known belonged to the U.S. Army.

Dependents were covered; equipment was up-to- date; doctors had a decent salary based on their level of training and experience; defensive medicine was unnecessary since there were no malpractice suits.

Paperwork was minimal, sensible and manageable.

We could be honest with our patients, young or old.

We saluted the adminstrators, but medical decisions were made by medical people in consultation with all those concerned.

Within those appropriate military requirements, we felt perfectly free to provide proper care and were respected as professionals. And although there were snafus, most doctors had a more-than-satisfactory experience.

Despite some problems, like waiting lines in clinics, most patients were also satisfied.

Therefore, the solution to the current medical malpractice insurance crisis: universal, single- payer, tax-supported health care under the aegis of Medicare — an idea which many doctors support — along with compensation panels (not lawsuits) for serious mistakes. Private insurance schemes should be abolished while the income of the health-care professional is, after compensating them for their schooling and indebtedness, kept within definite limits.

Robert E. Kay, MD
Philadelphia
robertekaymd@mycidco.com

Lindley M. Winston, MD
Malvern
lindleymw@aol.com

Posted by pnhp at 08:45 AM | Permalink

Contacts:
Rakesh Singh, KFF (202)347-5270
Jon Gardner, Health Affairs (301)656-7401

Article in Health Affairs Indicates That Newly Insured Would Use Additional Care Amounting to a 3-6 Percent Increase in Health Spending

WASHINGTON——If the country provided universal coverage under the current health system, the cost of additional medical care provided to the newly insured would increase health spending’s share of gross domestic product by less than one percentage point—or about 3 to 6 percent of total health care spending, according to a new report prepared for the Kaiser Commission on Medicaid and the Uninsured and published today by Health Affairs.

Urban Institute researchers Jack Hadley and John Holahan conclude that this range—$34 billion to $69 billion per year, depending on the approach taken—would mean the “cost of expanding insurance coverage may be a relatively small or at least a very worthwhile investment when considered against the benefits of improved health, increased longevity, and potentially greater national income.” The researchers estimate the cost of expansion to universal coverage would increase health spending from 14.1 percent to between 14.5 and 14.9 percent of GDP.

“This study shows that the direct cost of providing care to the 41 million uninsured would be less than annual inflation in health spending—8.7 percent in 2001, but still would require a commitment of new resources in a time of fiscal deficits,” said Diane Rowland, executive director of KCMU.

The study measures the direct cost of care if all the uninsured were provided coverage and they increased their use of the health system to the same rate as the insured population. It therefore reveals the potential increase in overall health spending, and not what federal legislation would cost. Federal legislation would likely have additional objectives and could use a variety of approaches. Depending on the legislative approach, the Congressional Budget Office would estimate a governmental cost for a proposal, which would be distinct from the estimate in this study.

“While it won’t be inexpensive to cover the uninsured, this paper shows that a major coverage expansion would only be a small fraction of what the United States already spends on health care,” said John Iglehart, founding editor of Health Affairs.

Starting with the well-documented premise that having health insurance increases health care use, the authors set out to calculate the cost of new care that would be used if the uninsured population had coverage. The goal was to establish benchmarks that could be used to test the efficiency of future proposals for expanding insurance coverage by comparing them to the cost of an “average” private or public insurance plan.

The two alternative approaches assessed by the study:

1) One assumed the newly insured’s spending would be similar to that of either lower- or middle-income people covered by the “average” private insurance policy,

2) The other assumed coverage would resemble people covered by the “average” public insurance policy (predominantly the Medicaid or State Children’s Health Insurance Program.

The study findings show that spending for new medical care under a public coverage expansion could cost half as much as under a private coverage approach. Expanding coverage to the entire uninsured population would increase spending by $34 billion under the public coverage standard and $69 billion under the private coverage standard. Including the $99 billion in medical care already used by the uninsured, the total cost of expanding to universal coverage would range from $133 billion to $168 billion.

The two approaches were chosen because of their prevalence in the current system and their distinctive features. Private insurance typically includes cost sharing, a range of covered services, and access to a broad set of medical providers with varying payment rates. Public insurance typically includes limited patient cost sharing, a broad range of services, but limits access to a set of medical providers who are willing to accept lower payment rates.

The Health Affairs article is available at http://www.healthaffairs.org/WebExclusives/Hadley_Web_Excl_060403.htm. The research was supported by KCMU’s Cost of Not Covering the Uninsured project. The Commission convened an expert advisory group to work on developing new information and analyses on the uninsured problem in America. The project has previously released work reporting on the consequences of being uninsured and the amount the nation already spends on care for the uninsured. Work will continue on the financial burden bourne by the uninsured when seeking care and the implications of insurance expansions to the near-elderly.

A webcast of today’s policy briefing releasing the article in Washington, D.C., and a video interview with the authors of the study can be viewed after 5 p.m. EDT at the following link http://www.kaisernetwork.org/healthcast/kff/04jun03.

Health Affairs, published by Project HOPE, is a bimonthly multidisciplinary journal devoted to publishing the leading edge in health policy thought and research.

The Kaiser Commission on Medicaid and the Uninsured (KCMU) serves as a policy institute and forum for analyzing health care coverage and access for the low-income population and assessing options for reform. The Commission is a major initiative of the Henry J. Kaiser Family Foundation and is based at the Foundation’s Washington, DC office. The Henry J. Kaiser Family Foundation is a non-profit, independent national health care philanthropy dedicated to providing information and analysis on health issues to policymakers, the media and the general public. The Foundation is not associated with Kaiser Permanente or Kaiser Industries.

Posted by pnhp at 09:15 AM | Permalink

(unpublished)
Letters to the Editor
The Washington Post

Re: “Universal Health Care Gets Boost,” May 26

The common perception of the health care reform proposals of the Democratic candidates is that, as stated in the Washington Post (Universal Health Care Gets Boost,” May 26), all proposals are “big and ambitious, and are far costlier than anything that has been proposed since Clinton.” But that’s not quite true. The most ambitious proposal, the single payer proposal of Rep. Dennis Kucinich, would provide comprehensive coverage for everyone without increasing health care costs.

California Health and Human Services Agency supervised a study of nine models of health care reform. An independeant analysis demonstrated that all models that build on our current system of private health plans and public programs actually do increase costs. But the models that replace the existing private plans and public programs with a single public payer were shown to be capable of providing comprehensive benefits for everyone while actually reducing total health care costs, primarily by eliminating the profound administrative waste that characterizes our current fragmented system of funding care.

The findings are not a mere theoretical construct. The current issue of Health Affairs includes a report on the single payer system established in Taiwan in 1995. Their program “brought the health care utilization rates of the 41 percent of Taiwan’s hitherto uninsured population up to a par with those of the previously insured population” without increasing costs nor increasing waiting times for health care services.

Single payer reform is often dismissed as not being “politically feasible.” But that is hardly a reason to not take a closer look at it. A single payer system would benefit everyone by covering all essential medical services. It would benefit health care providers by converting administrative waste into resources to pay for more care. It would benefit businesses by providing proven mechanisms to contain health care costs, which is not possible under our current system. It would benefit taxpayers by providing better mechanisms to contain government health care costs. The only losers would be the private health plans. But why should our national policies be designed to protect and nurture this expensive, superfluous, and egregiously wasteful industry, at the cost of so much suffering and even death of those who are left out of our system?

It’s time to set aside politics and closely examine policies that would accomplish our goals of affordable, comprehensive coverage for everyone. The single payer model of reform is the only model that would ensure affordability of a truly universal and comprehensive program. It certainly should be front and center in all debates on reform.

Don McCanne, MD
President, Physicians for a National Health Program
Chicago, IL
www.pnhp.org

Posted by pnhp at 02:21 PM | Permalink

By Robert Kuttner, 5/21/2003

”Make no little plans; they have no magic to stir men’s blood.”— Daniel H. Burnham

WITH ONE EXCEPTION, the health plans released by the Democratic presidential contenders are a set of little plans. They leave the current system largely intact and use subsidies and tax credits to reduce the number of uninsured — as if the whole system were not broken. With slight variations, this is the approach chosen by both former Vermont Governor Howard Dean and Massachusetts Senator John Kerry. And North Carolina Senator John Edwards and Connecticut’s Joe Lieberman will likely do the same. Congressman Dick Gephardt, by contrast, had the nerve to throw a long pass. The problem is that he hurled it in the wrong direction. Gephardt began well. He proposed to repeal Bush’s entire 2001 tax cut. He added another bold feature, opening Medicare to people over 55.

But the rest of his plan mainly gives tax breaks to corporations that provide health coverage for their workers. This sounds good, until you remember that most large corporations already provide some kind of health coverage. For them, the money will be mainly windfall. (Kuttner’s Corollary to Burnham’s Law is that if you’re going to make bold plans, they had better be the right plans.)

Any of the Democratic plans are an improvement on what Bush proposes, which is mainly to shift even more risks to individuals. Reportedly, the Republicans will soon press legislation that is the mother of all bad health bills — privatizing Medicare, turning Medicaid into a limited block grant, limiting malpractice suits, and doing a pro-drug-industry version of prescription coverage.

But the Democrats will need to do more than play defense. They need something bolder to get real political traction from health insurance, let alone to solve the problem.

What is the nature of the health care crisis? For starters, coverage is eroding, even for the insured. There’s a squeeze on corporate profits in a climate of rising health costs. So health costs are being shifted from plan to individual, with the result that many people go without needed treatments that the plan won’t cover and that they can’t afford out of pocket.

The number of people without insurance is also increasing. Smaller businesses won’t provide insurance. More people are self-employed. And as bigger businesses increase the employee share costs, many lower-paid workers decline the insurance because they can’t afford it.

Costs keep escalating for three distinct reasons. Science keeps inventing new tests, new treatments, new drugs, all of which add to the overall costs. The population keeps aging. And the system is stunningly inefficient, with its patchwork of fragmentary health plans and its profiteers taking bites out of each medical transaction.

If we leave intact the present system, with its wasteful fragmentation, billing, underwriting, and insurance company profits, there is only one big place to reap savings — by withholding more care as nonessential and by avoiding the sick.

Yes, there are other containable costs, however they are not the main story. The much-touted crisis in malpractice insurance needs fixing, but it is only a small fraction of the cost problem. And we need to reduce escalating drug costs, by shifting to generics wherever possible and preventing the drug companies from continuing to extend the patents of medicines that should be in the public domain. But that, too, is not the main engine of medical inflation.

The real problem is a system where health insurance is optional for employers and run through private insurers. This leads tens of billions to be wastefully spent, on everything from billing, to second-guessing doctors, to shifting costs, to avoiding subscribers likely to get sick.

Other advanced nations face the same march of science and even more difficult demographic realities — their populations are even older on average, thanks to two generations of better health care. But they are better equipped to contain costs and get the most for their health outlays because they have universal health systems. Yes, there are difficult choices, but they are typically made by panels of doctors, citizens, and ethicists, not by private insurance companies.

The best solution here is national health insurance. We already have it for one segment of the population, through Medicare. The program is easy to understand, and even fits on a bumper sticker: ”Medicare for all.”

Face it: Even incremental proposals by Democrats will be attacked as too costly and entailing too much government. They might as well do it right.

Robert Kuttner is co-editor of The American Prospect. His column appears regularly in the Globe.

This story ran on page A23 of the Boston Globe on 5/21/2003.
© Copyright 2003 Globe Newspaper Company.

http://www.boston.com/dailyglobe2/141/oped/Democrats_must_offer_bolder_health_plans+.shtml

Posted by pnhp at 01:53 PM | Permalink

The Journal of the American Board of Family Practice
May-June 2003
Health Policy

Why Incremental Reforms Will Not Solve the Health Care Crisis

By Don McCanne, MD

Incremental models of reform perpetuate our flawed, fragmented system of funding health care. They perpetuate inequities both in the funding of health care and in the allocation of our health care resources. They limit choice of health care providers. None assures continuity of coverage and care. Many incremental proposals barely have an effect on the numbers of uninsured, and none of them ensure truly universal coverage. All incremental approaches substantially increase health care costs, and most current proposals assure neither financial security nor health security.

In contrast, a single payer program would provide affordable, equitable, comprehensive care for everyone.

Whether through tax policy, public programs, regulatory oversight, mandated coverage, or a combination of these and other interventions, the government will be intimately involved in our health care funding. We can no longer afford to dismiss any valid option because it is a government solution, especially in that all proposals are government solutions. We must decide how we can best use our government resources to be sure that we are receiving the greatest value for our health care investment. Limiting our consideration to various incremental solutions closes the door on the health care reform goals of equity, affordability, and efficiency, and it threatens the goals of universality, provider choice, access, and comprehensiveness. When all are readily achievable, why accept less?

For the full article: http://www.jabfp.org/cgi/content/full/16/3/257

Posted by pnhp at 01:24 PM | Permalink

California Senate Office of Research
May 2003
Growing Gaps in California’s Emergency Room Backup System
Prepared by Peter Hansel

In October 1998, a patient was brought by ambulance to a California hospital emergency room with symptoms of abdominal distress and shortness of breath. The ER physician suspected an abdominal condition requiring surgery. As the patient continued to deteriorate, the physician twice phoned an on-call surgeon asking that he come in immediately to examine the patient. The surgeon repeatedly refused to come in, advising that the patient be admitted for him to see in the morning. As the patient’s blood pressure and pulse rate dropped to life-threatening levels, the ER physician contacted hospital administrators in an apparent effort to compel the surgeon to come in. The patient suffered a cardiac arrhythmia and died despite a resuscitation attempt. The surgeon arrived during the resuscitation attempt.

On a Saturday night in January 2000, a middle-age man came into a California hospital emergency room with an upper gastrointestinal bleed. The ER physician on duty treated the patient, but did not have the expertise to stop the bleeding. A gastroenterologist was asked to come in and perform an emergency endoscopy. Then another, and another, and another, and another. After three hours and six refusals, no GI specialist would come to the ER and the patient was at risk of bleeding to death. Finally, the ER medical director called a GI specialist he personally knew and told him he would pay him $500 in cash if he came in. The specialist accepted, came to the ER, performed the procedure, and stopped the bleeding.

These cases, while isolated, illustrate the growing problems that are occurring with the state’s system of ensuring “on-call” emergency services - backup services provided by specialists to hospital emergency departments.

Problems with access to on-call services are primarily the result of problems with reimbursement of physician specialists who provide on-call services.

http://www.sen.ca.gov/sor/reports/REPORTS_BY_SUBJ/HEALTH/Ab2611.pdf

Comment: With all of the negative news about the deterioration of our health care system, we finally have a report that indicates that health care access improved (in this one instance). And it seems fitting that the policy implication is consistent with other current private solutions to our health care crisis. Without government intervention, emergency services can be obtained through the simple intervention of payment of a bribe. Ah, the magic of the marketplace!

Single payer insurance, anyone?

Posted by pnhp at 01:27 PM | Permalink