News

By Julie Appleby
April 28, 2005

Think your health insurance has you covered? Think again.

Even insured workers can find themselves on the hook for thousands of dollars, often at a time when illness has decreased their income.Few workers realize the limits of their insurance until the bills start coming for: policies that don’t cover rehabilitation care or limit it to a few visits; expensive drugs that come with a 20% charge, rather than a $20 co-pay; separate deductibles for drugs and medical care; doctors at “in-network” hospitals that aren’t members of the insurer’s network, leaving patients vulnerable to thousands of dollars in bills; annual “out-of-pocket maximums” that aren’t always true ceilings on expenses.

Such costs can quickly add up. A drug co-payment of 20%, for example, could cost thousands a year for patients taking some cancer drugs. Avastin, a colon cancer drug, recently went on the market at a price of more than $4,000 a month. Erbitux, another colon cancer treatment, can cost $12,000 or more for a month’s treatment. Gleevec, for leukemia, is more than $2,000 a month.

That’s the reality for Rita Wirsch, a 55-year-old clerical worker in Hamilton, Ohio, who is struggling to pay off about $10,000 in medical bills that her insurance did not cover. The total added up over four years, bill by bill, in amounts from $25 to more than $400 a pop. Three months on disability pay this year after surgery put her further behind.

“I thank God every day that I have insurance,” says Wirsch. “But there’s a problem in the U.S. for hard-working people.”

And it isn’t likely to change.

More workers are facing larger medical bills as employers increase what they must pay for doctor visits, drugs and hospital care in an effort to control health care costs. Some employers are embracing high-deductible policies — requiring workers to pay $1,000 or more a year in expenses before insurance kicks in. Such policies are also common for the self-employed, who buy their own insurance, because premiums are generally lower.

Shifting more costs to the insured is having ripple effects. Hospitals are collecting more upfront from patients, after being left with bad debt by insured patients who failed to pay their deductibles. Insured patients are also attracting charity efforts: The Patient Advocate Foundation, for example, has a program aimed solely at helping insured patients make the co-payments on their prescription drugs. The group pays up to $2,500 annually toward drug co-payments for qualified patients with four conditions: the eye disease macular degeneration, and cancers of the breast, lung or prostate.

“The fully insured middle-class people who become ill with critical or life-threatening illnesses, it can completely ruin their financial health,” says Beth Darnley, chief program officer for the foundation.

Limits of insurance

Many Americans are not prepared. Whether struggling to meet mortgage costs, college tuition and other expenses — or simply buying all the latest gadgets — few are saving enough to weather unexpected bad times. The personal savings rate, the difference between what people earn and what they spend, fell for the second-straight year in 2004 to the lowest level since 1934.But it isn’t just catastrophic illness or accident that leads to financial stress. For some, ordinary medical problems can lead to seemingly insurmountable bills.

“Families are paying more and more for health insurance that covers them less and less,” says Elizabeth Warren, a Harvard professor and co-author of a recent study of bankruptcy filings in five states. The study concluded that medical bills contributed to half of all personal bankruptcies.

The bills, coupled with a low savings rate for most American families, tip about 1 million into bankruptcy each year, Warren says. The average out-of-pocket medical debt for those who filed is about $12,000, and 68% had health insurance at the time of their bankruptcy filing.

Things might soon get tougher for some families. Federal bankruptcy legislation that goes into effect in six months could require many people to repay all or part of their debts, including medical bills.

Some have questioned the bankruptcy study findings. Greg Scandlen a policy analyst with the Galen Institute, a free-market health care research group, says the definition of medical bankruptcy in the study was so broad that the results are not useful in determining whether medical bills were the main source of families’ financial troubles or a small part.

“I’m not denying at all that there’s a problem out there, but this study doesn’t tell us anything about the dimensions of that problem,” Scandlen said.

Several thousand dollars in charges might not sink a highly paid worker, but the middle class and those on the lower end of the pay scale can find themselves spending a significant share of their income on medical care.

A recent report by the Center for Studying Health System Change found that the proportion of low-income, chronically ill patients who were insured but still spent more than 5% of their income on health costs rose from 28% to 42% from 2001 to 2003. The study defined low income as being below 200% of the poverty line, or about $36,800 for a family of four in 2003.

“Bankruptcy is just the tip of the iceberg: 29 million Americans are in medical debt,” says Jennifer Edwards of the Commonwealth Fund, a private foundation that supports research on health and social issues.

A recent Commonwealth study defined those in medical debt as paying bills to health care providers or having large credit card debt or loans against their homes related to medical costs.

Of those, 70% were insured when they got the health care that put them in debt, and nearly half had used up all or most of their savings, Edwards said.

Stretching to pay bills

As do many families, Wirsch recently tapped her retirement fund to help pay the bills.

She has a good clerical job at a Fortune 500 company, earning nearly $13 an hour. And it comes with insurance: a policy with a $2,000 annual deductible for medical and hospital care. Starting this year, the plan added a separate $2,000 deductible for drugs.

This year, she had to take three months off, living on a reduced income from disability payments, while recovering from surgery.

The surgery bills are now added to what she owes from past medical treatments. Her share of the surgeon’s bill: $480. Bills for physical therapy: $155. Prescription refills: $25 to $40. She takes 14 pills a day for diabetes, fibromyalgia, which is a painful muscle condition, and intestinal problems. She asks for free samples from her doctor to help make ends meet.

She now has $5,800 in credit card debt that she says is all from medical bills. Wirsch says she’s making payments on the card, sometimes $10 a month: “That will take me till I’m 100 to pay off.”

Still, she appreciates her health insurance and knows her employer has paid far more than she has.

“Since I started working there 14 years ago, they’ve probably paid out over $80,000 in medical bills for me,” says Wirsch.

Warren says that many of the people in her study of bankruptcies were dealing with non-catastrophic medical problems.

In her study, one man, who was not named, filed for bankruptcy after hurting his knee in a fall. At first he wasn’t worried because he had insurance, which paid 80% of his hospital and surgeon’s bills. But his coverage left him responsible for physical therapy costs, crutches, braces and all drugs.

“His out-of-pocket expenses ran to $12,000,” says Warren. “It wasn’t medically catastrophic, but it was financially catastrophic.”

For Andrea Talaga, 42, of Bolingbrook, Ill., medical and financial troubles are becoming catastrophic. She filed for Chapter 7 bankruptcy protection in 1992 and says she might have to again.

Talaga, a lab technician at a hospital, says she spends $1,225 a month on her share of prescription drugs for her family. She’s diabetic. Her husband, a security officer at a hospital, has high blood pressure and high cholesterol. Both her sons are asthmatic, and one was just diagnosed with major depression. One son’s asthma medication isn’t covered by her insurance: It costs $225 for a 28-dose pack, and he usually uses two packs a month.

She says her husband’s $40,000 salary covers the mortgage and home expenses. Her $25,000 goes for food and medical costs.

“I can’t not take my insulin. My husband can’t go without his high blood pressure medicine,” she says. “My son definitely cannot go without any of his medicine.”

She recently learned her health plan limits mental-health counseling to 20 visits a year. Her son will soon exhaust those benefits.

“How can you cure someone in 20 days if they have mental health issues as severe as my son’s?”

She doesn’t have a solution.

“I wish my employer would back me up and look at people like us,” she says. “I know they still pay a lot for employees, but in the long run, they aren’t looking at the whole picture.”

Posted by pnhp at 02:57 PM | Permalink

By Paul Krugman
April 29, 2005

American health care is unique among advanced countries in its heavy reliance on the private sector. It’s also uniquely inefficient. We spend far more per person on health care than any other country, yet many Americans lack health insurance and don’t receive essential care.

This week yet another report emphasized just how bad a job the American system does at providing basic health care. A study by the Robert Wood Johnson Foundation estimates that 20 million working Americans are uninsured; in Texas, which has the worst record, more than 30 percent of the adults under 65 have no insurance.

And lack of insurance leads to inadequate medical attention. Over a 12-month period, 41 percent of the uninsured were unable to see a doctor when needed because of cost; 56 percent had no personal doctor or health care provider.

Our system is desperately in need of reform. Yet it will be very hard to get useful reform, for two reasons: vested interests and ideology.

I’ll have a lot more to say about vested interests and health care in future columns, but let me emphasize one key point: a lot of big companies are essentially in the business of wasting health care resources.

The most striking inefficiency of our health system is our huge medical bureaucracy, which is mainly occupied in trying to get someone else to pay the bills. A good guess is that two million to three million Americans are employed by insurers and health care providers not to deliver health care, but to pass the buck to other people.

Yet any effort to reduce this waste would hurt powerful, well-organized interests, which have already demonstrated their power to block reform. Remember the “Harry and Louise” ads that doomed the Clinton health plan? The actors may have seemed like regular folks, but the ads were paid for by the Health Insurance Association of America, an industry lobbying group that liked the health care system just the way it was.

But vested interests aren’t the only obstacle to fixing our health care system. We also have a big problem with ideology.

You see, America is ruled by conservatives, and they have a private obsession: they believe that more privatization, not less, is always the answer. And their faith persists even when the evidence clearly points to a private sector gone bad.

I could cite many examples of this obsession at work. But a particularly good illustration of ideology-induced obliviousness is the 2004 Economic Report of the President, which devotes a whole chapter to health care that can be read as a sort of conservative manifesto on the subject.

The main message of that report is that U.S. health care is doing just fine. Never mind the huge expense, the low life expectancy, the high infant mortality; it’s a market-based system, so it must be good.

The report even takes a Panglossian view of uninsured Americans - one that is completely at odds with the grim statistics I cited above - suggesting that “many of them may remain uninsured as a matter of choice,” perhaps because “they are young and healthy and do not see the need for insurance.”

The president’s economists had only one criticism of the system: insurance is too comprehensive, which encourages people to consume too much health care. As they see it, insurance covers too large a percentage of medical costs. The answer to this problem is the creation of, you guessed it, private accounts, which have now superseded tax cuts as the answer to all problems.

Indeed, a new paper by Martin Feldstein of Harvard, which clearly reflects the administration’s views, suggests that Social Security privatization and health savings accounts - tax shelters designed to encourage people to pay medical costs out of their own pockets - are only the beginning. “Investment-based personal accounts,” he says, are the way to go for unemployment insurance and Medicare, too.

O.K., let’s not turn this into a Bush-bashing session. President Bush didn’t cause the crisis in American health care. His health care policies have made things only a little bit worse.

The point, instead, is that even though all the evidence suggests that we would be much better off under a system of universal coverage, any such move will be fiercely opposed, on principle, by conservatives who want us to move in the opposite direction.

And reform will also be opposed by powerful vested interests - my next subject in this series.

E-mail krugman@nytimes.com

Posted by pnhp at 02:48 PM | Permalink

Princeton University Office of Community and State Affairs, 2005 Symposium of New Jersey Issues
April 15, 2005
The Unhealthy State of Health Insurance for American Children
Uwe E. Reinhardt, Ph.D.

A numerical illustration:

Assume that the total gross compensation of a low-skilled worker is now $30,000 and will grow at 3.5% per year for the next decade to about $42,300.

Assume next that the health insurance premium for that worker and his or her family grows at “only” 8% per year, from $10,000 now to about $21,600 ten years hence. That’s 50% of the wage base just for health insurance.

Employers will respond to these trends in two phases:

1. Initially they will shift more and more of the cost of insuring their workers onto the workers themselves.

That won’t solve the problem, of course. It merely shifts the burden of health care from the well-to-do to the poor and from the healthy to the chronically sick. The small wage base of low-wage workers would still have to carry the financial burden of modern health care, and that wage base is just too small a donkey to carry that burden.

2. Eventually they will stop providing health insurance to their employees altogether.

The question then is whether Americans in the upper half of the nation’s income distribution will be willing to pay higher taxes to subsidize those in the bottom third of that distribution, or whether the latter will simply be priced out of health care.

http://web.princeton.edu/sites/pucsa/pucsa_reg/Agenda.htm

Comment: We spin our wheels debating employer mandates, individual mandates, consumer empowerment, and innumerable other policies that might influence costs and coverage. But before we can rationally discuss changes that would make health care accessible and affordable for everyone, we must first answer the question that Prof. Reinhardt poses. Are Americans in the upper half of the nation’s income distribution willing to pay higher taxes to subsidize health care for those in the bottom third of that distribution? If not, we should stop wasting our time and accept the fact that the bottom
third will simply be priced out of health care. It’s as simple as that.

But first we need to be certain that Americans do understand that this is the fundamental issue so that the answer is a truly informed choice. Another quote from Prof. Reinhardt suggests there is great risk that we may not like the answer:

“Government budgets are statements through which a people expresses its moral values. Even as we speak, Congress is poised to abolish all estate taxes on the well-to-do, while it is cutting budgets for Medicaid and other poverty programs. Could there be a clearer statement on the dominant moral values of the American people than the federal budgets of 2001, 2003 and beyond?”

Posted by pnhp at 11:51 AM | Permalink

Passing the Buck
By Paul Krugman
The New York Times
April 22, 2005

Isn’t competition supposed to make the private sector more efficient than the public sector? Well, as the World Health Organization put it in a discussion of Western Europe, private insurers generally don’t compete by delivering care at lower cost. Instead, they “compete on the basis of risk selection” - that is, by turning away people who are likely to have high medical bills and by refusing or delaying any payment they can.

Yet the cost of providing medical care to those denied private insurance doesn’t go away. If individuals are poor, or if medical expenses impoverish them, they are covered by Medicaid. Otherwise, they pay out of pocket or rely on the charity of public hospitals.

So we’ve created a vast and hugely expensive insurance bureaucracy that accomplishes nothing. The resources spent by private insurers don’t reduce overall costs; they simply shift those costs to other people and institutions. It’s perverse but true that this system, which insures only 85 percent of the population, costs much more than we would pay for a system that covered everyone.

Think about how crazy all of this is. At a rough guess, between two million and three million Americans are employed by insurers and health care providers not to deliver health care, but to pass the buck for that care to someone else. And the result of all their exertions is to make the nation poorer and sicker.

Why do we put up with such an expensive, counterproductive health care system? Vested interests play an important role. But we also suffer from ideological blinders: decades of indoctrination in the virtues of market competition and the evils of big government have left many Americans unable to comprehend the idea that sometimes competition is the problem, not the solution.

http://www.nytimes.com/2005/04/22/opinion/22krugman.html?hp

Comment: The debate today rages on as to whether we want to build on the current system, or replace it with a single, universal system. But why would we continue to support an industry that is consuming ever more of our health care dollars when its primary function is to devise methods of shifting the funding of health care from the insurance risk pool to patients and taxpayers? We are paying for a complex and expensive administrative system designed specifically to defeat the function that is the reason for its existence: pooling risk.

To quote further from Krugman’s article: “According to the (World Health Organization), the higher costs of private insurers are ‘mainly due to the extensive bureaucracy required to assess risk, rate premiums, design benefit packages and review, pay or refuse claims.’ Public insurance plans have far less bureaucracy because they don’t try to screen out high-risk clients or charge them higher fees.”

Why then are we even considering the option of expanding our current system? It’s broken beyond repair. Installing a new universal system would be cheaper and more effective. And we would all be healthier, both physically and financially.

Posted by pnhp at 11:44 AM | Permalink

The United Nations
Commission on Human Rights
April 15, 2005

In a resolution (E/CN.4/2005/L.28) on the right of everyone to the enjoyment of the highest attainable standard of physical and mental health, adopted as orally revised and by a roll-call vote of 52 in favour to one against, with no abstentions, the Commission urged States to take steps, individually and through international assistance and cooperation, especially economic and technical, to the maximum of their available resources, with a view to achieving progressively the full realization of the right of everyone to the enjoyment of the highest attainable standard of physical and mental health; and called upon the international community to continue to assist the developing countries in promoting the full realization of the right of everyone to the enjoyment of the highest attainable standard of physical and mental health, including through financial and technical support as well as training of personnel, while recognizing that the primary responsibility for promoting and protecting all human rights rests with States.

The Commission encouraged States to recognize the particular needs of persons with disabilities related to mental disorders, as well as their families, including by reflecting their needs in national health and social policies, such as national poverty reduction strategies; and called upon them to place a gender perspective at the centre of all policies and programmes affecting women’s health. They also called upon States to protect and promote sexual and reproductive health as integral elements of the right of everyone to the enjoyment of the highest attainable standard of physical and mental health and decided to extend, for a period of three years, the mandate of the Special Rapporteur on the right to everyone to the enjoyment of the highest attainable standard of physical and mental health.

The result of the vote was as follows:

In favour (52): Argentina, Armenia, Australia, Bhutan, Brazil, Burkina Faso, Canada, China, Congo, Costa Rica, Cuba, Dominican Republic, Ecuador, Egypt, Eritrea, Ethiopia, Finland, France, Gabon, Germany, Guatemala, Guinea, Honduras, Hungary, India, Indonesia, Ireland, Italy, Japan, Kenya, Malaysia, Mauritania, Mexico, Nepal, Netherlands, Nigeria, Pakistan, Paraguay, Peru, Qatar, Republic of Korea, Romania, Russian Federation, Saudi Arabia, South Africa, Sri Lanka, Sudan, Swaziland, Togo, Ukraine, United Kingdom and Zimbabwe.

Against (1): United States.

David Hohman (United States), speaking in explanation of the vote… said the United States believed that while the progressive realization of economic, social and cultural rights required government action, those rights were not an immediate entitlement to a citizen.

http://www.unog.ch/unog/website/news_media.nsf/(httpNewsByYear_en)/0DC62B805E191CF7C1256FE40050A75D?OpenDocument

Comment: It’s official. “The right of everyone to the enjoyment of the
highest attainable standard of physical and mental health” is “not an immediate entitlement to a citizen” in the United States. We stand alone in denying that right.

Posted by pnhp at 11:38 AM | Permalink

Medicare’s dilemma grows: How far to go in coverage
By Julie Appleby
USA Today
4/21/2005

…an ongoing dilemma for Medicare: whether to pay for a treatment when data on its effectiveness are uncertain or show it to be of limited value. The program… will increasingly face such debates as medical technology advances, baby boomers retire and Medicare confronts vast deficits.

“The question is, are we willing to pay for treatments that have a small chance at success?” says Peter Neumann, associate professor of health policy at the Harvard School of Public Health. “It’s true that we are a wealthy country, but whether we admit it or not, there are limits.”

Should Medicare cover every new $20,000-a month cancer drug? If a treatment is found for Alzheimer’s disease, will it go only to those diagnosed with the disease, or will patients who have normal age-associated memory lapses also be covered? Can the U.S. afford to put a pacemaker or other cardiac device into every patient with heart problems?

Medicare and other insurers are aiming to develop a better understanding of treatment outcomes by studying the results. Medicare, for example, has recently approved some new technologies but will track the patients - either by requiring them to be in clinical trials or by using a databank where medical information can be compiled - to see how well they do.

But cost isn’t the only factor in Medicare’s growing push to gather more data on effectiveness. The head of Medicare, Mark McClellan, says better evidence can help Medicare avoid treatments that don’t work or are dangerous.

“Why shouldn’t a patient who is very desperate say, ‘I’m willing to take a risk of dying from this technology, because I have little to lose’?” asks Princeton economist Uwe Reinhardt. While Medicare and other insurers should not pay for every treatment, regardless of its value, he says that some provision should be made to allow for innovation and experimentation.

http://www.usatoday.com/money/industries/health/2005-04-20-medicare-cover_x.htm

Comment: A common criticism of the Medicare program is that there are excessive delays in approving coverage of new technological advances. But we should keep in mind that new technology has contributed significantly to the continuing escalation of health care costs. So it seems that the Centers for Medicare and Medicaid Services is acting responsibly in requiring adequate evidence that new technology is providing reasonable value for the taxpayer.

It is entirely appropriate to limit coverage of unproven new technology to an experimental protocol until there are adequate data to warrant coverage for everyone.

As patients, each of us may want unlimited access to new, unproven, high tech care, but, as taxpayers, we should be assured that our health care spending on others is responsible.

Posted by pnhp at 11:31 AM | Permalink

Socialized Medicine? From Republicans?
By Matt Miller
Fortune
May 2, 2005

What do General Motors’ woes, the Medicare prescription-drug law, the state and local health-care time bomb…, and Congress’s recent refusal to trim soaring state Medicaid subsidies have in common? They’re all stones on the path toward the nationalization of health-care spending-an idea that’s so easy to slam politically yet so sensible for business that only Republicans can sell it! Before everyone screams, please note that I said health-care spending, not delivery. There’s a difference.

…there’s a potential common agenda lurking beneath today’s health-cost angst. Think of it as a two-step: First, we’d move a chunk of private-sector health costs to government, something business and labor could embrace as a competitiveness booster. Then we’d find ways to guarantee coverage for all while reengineering health-care delivery to lower costs in the long term (without the price controls that stall innovation abroad). Easier said than done, you may say. But seen in this context, the prescription-drug bill last year was the first step in the Republican-led socialization of health spending. Companies have been clobbered funding retiree health plans. The GOP felt their pain, and presto, $750 billion over ten years moved from private to public budgets.

The bigger hurdle may be stereotypes. Business’s sensible drive to get Uncle Sam to take on more of the health burden will run into the nihilistic (but potent) “big government” rhetoric of the GOP-plus the party’s delusion that we can keep federal taxes at 17% to 18% of GDP as the boomers retire. If Republican pols want to help Republican CEOs solve their biggest problems, this caricature of a political philosophy will have to give way to something more grown-up. Just as the Nixon-to-China theory of history says it will ultimately take a Democratic President to fix Social Security, it may take a Republican President to bless the socialization of health spending we need.

http://www.fortune.com/fortune/print/0,15935,1050964,00.html

Comment: It has been said many times. The liberals will educate the nation on the advantages of a universal, publicly funded health insurance program, but it will be the conservatives who enact it. The pro-business argument for it is just too persuasive.

Posted by pnhp at 11:22 AM | Permalink

American Medical News
April 25, 2005
Uninsured a problem hard to grasp, solve
By Joel B. Finkelstein

…disagreement over exactly how many uninsured Americans there are continues to muddy the national debate about how to fix the problem, experts said.

The Census Bureau’s Current Population Survey offers the most-often-cited number of 45 million Americans without health insurance for all of 2003. But a survey by the Dept. of Health and Human Services found that only 28.8 million lacked health insurance that year. The surveys differ in size and methods.

In a separate analysis of the Census Bureau data, HHS suggested there may be as few as 9 million uninsured Americans.

Researchers arrived at that number after deducting individuals who should be in Medicaid, illegal immigrants, young adults with little or no health care costs, and people who could afford health insurance but chose not to buy it.

http://www.ama-assn.org/amednews/2005/04/25/gvsc0425.htm

Comment: The Department of Health and Human Services makes a very important point. Policy decisions should never be made based on raw data alone. An intelligent “administrative analysis” of the data can provide us with a much more rational basis for establishing policy. Thanks to HHS’s expertise, it looks as if we may be faced with establishing policies for only 9 million uninsured rather than the 45 million estimate of the Census Bureau.

Giving this more thought, we’ve been pretty stupid in our approach to health care coverage. Instead of being concerned about the 45 million without insurance, we should have been directing our attention to the real numbers: the 251 million who do have insurance, which is 85% of our population.

About 237 million people (80% of our population) use about $380 billion in health care (20% of our national health care spending). That means that the average health care costs per individual for this 80% of our population is about $1600. Yet the Kaiser Family Foundation survey reported that we spend $3700 per individual in health insurance premiums.

If we had used our data more effectively, we would have reframed the debate quite differently. We should have been asking why anyone in their right mind would pay $3700 to cover $1600 in health care benefits! Quite obviously we should have been establishing policies that would make certain that none of these 237 million have health insurance, since it is clear that the real problem is that we have excessive numbers of individuals covered!

But when we discuss our new brilliant analysis of the raw data, we do have to be careful not to mention the other 20% of our population whose health care costs average $26,000 per person. After all, why should we ever establish policies that benefit the minority at the expense of the majority?

HHS is right. The 9 million without insurance is only 3% of our population. That’s such a small number that we can ignore it. Thank goodness we have an administration which selects brilliant bureaucrats who can provide such clarity in our approach to health policy issues.

And the dead that will result from these policies? Everyone understands that collateral damage is just a fact of life.

Don McCanne, MD
Senior Health Policy Fellow
Physicians for a National Health Program
www.pnhp.org

(Please share this message with others. After all, it’s time that we get our national priorities right!)

Posted by pnhp at 11:15 AM | Permalink

AcademyHealth
March 2005
Managed Care Mandates Fall Short of Curbing California Medicaid Costs
By Bonnie J. Austin, J.D.

Over the past several years, growth in Medicaid spending has far outpaced the growth in state tax revenues and now accounts for nearly 22 percent of total state government spending. Rapid health care cost increases during the 1990s led many state governments to shift Medicaid recipients into managed care plans in an effort to control costs. The conventional wisdom at the time suggested that states would save money as a result. Like many other states, California sought relief through managed care; it passed legislation to foster enrollment and county by county, Medicaid recipients moved from a fee-for-service (FFS) system to managed care plans.

To shed light on the effects of transitioning beneficiaries from FFS Medicaid to Medicaid managed care, Mark Duggan, Ph.D., and colleagues from the University of Maryland and the National Bureau of Economic Research examined how mandatory enrollment in managed care has affected both spending and health outcomes for California Medicaid recipients. They found that despite a dramatic increase in Medicaid managed care enrollment-from less than 12 percent in 1993 to 51 percent in 1999-there was neither a significant reduction in spending nor improved health outcomes.

“Our findings suggest that managed care contracting reduced the efficiency of the Medicaid program in California,” says Duggan. “In fact, Medicaid spending appeared to increase by almost 20 percent following the shift to managed care and persisted long after the mandates first took effect” (suggesting that they are not simply driven by startup costs of a new plan).

The researchers also found that the switch from FFS to managed care did not lead to significant improvements in health outcomes.

Although the burden of administrative costs on the health care system is enormous, Duggan did not have data on these costs. Nevertheless, anecdotal evidence suggests that the shift from FFS to Medicaid managed care contracts resulted in increased administrative costs for the state. Therefore, the increase in Medicaid spending resulting from the shift to Medicaid managed care in this project may be understated.

Clearly, California’s goal of reducing Medicaid expenditures by shifting beneficiaries from FFS to managed care plans was not successful. While these results may not apply across the board, policymakers should consider the possibility that managed care may not be the mechanism through which to curb budget shortfalls.

http://www.hcfo.net/pdf/findings0305.pdf

Comment: Many explanations can be given as to why private takeover of publicly administered health care financing programs have failed to deliver on the promise of higher quality at lower cost. One more quote from this brief provides further insight: “…commercial plans will contract with Medicaid only if they believe that they can earn a profit…”

It may seem obvious that the lesson learned from this (and innumerable other studies) is that we should reject the private plans and work on adopting more efficient, publicly administered health care coverage for all of us. But our resistance to public solutions has caused policymakers to turn elsewhere. They have decided that we should control the costs of coverage simply by reducing what is covered. This works very well for those of us who are and will remain healthy, and it relieves us of the burden of being our brother’s keeper. Why should we assume any greater responsibility?

(That last rhetorical question was prompted, in part, by this quote from an e-mail that I received from a very dedicated physician: “Policy science is behind a lot of stuff that isn’t and won’t happen.”)

:-(

Posted by pnhp at 11:02 AM | Permalink

Statistics Canada
Median waiting times for non-emergency surgeries, household population aged
15 and over, Canada and provinces, 2003

Median waiting time (weeks): 4.3

http://www.statcan.ca/english/freepub/82-401-XIE/2002000/tables/html/at007_en.htm

About Statistics Canada:
http://www.statcan.ca/english/about/abtstc.htm

Comment: Calls for national health insurance in the United States are
frequently countered with the claim that such a transformation would result in excessive delays in care, “like they have in Canada.”

First of all, implied in that comment is the principle that queues should be reduced by removing some individuals from the waiting list. We currently do this up front by the simple measure of making care unaffordable for the uninsured and under-insured. Most policymakers across the political spectrum
believe that this is not ethically acceptable.

But what is the reality in Canada? Emergency surgeries are not a problem; they are provided for immediately. On the other hand, the median time for non-emergency surgery is four weeks, which is an interval that is comparable to that in the United States. The major difference is that queues in the United States are accessible only for those with the ability to pay, whereas, in Canada, no person is excluded based on inability to pay.

It is true that selected elective surgeries may be delayed longer than four weeks (offset by an equal number that have their surgeries in less than four weeks). But it is important to realize that these numbers were for 2003. Since then, Prime Minister Paul Martin made improving access to health care his number one priority in his election campaign. He is already delivering on his promise by providing federal funds to improve capacity in areas where deficiencies exist.

Our current level of health care spending, $1.9 trillion, is more than enough to ensure adequate capacity in our entire system. The opponents of national health insurance simply are not telling the truth when they claim that including everyone will automatically result in excessive delays in care. I won’t call them liars, even if that’s what they really are.

Posted by pnhp at 10:44 AM | Permalink

The Henry J. Kaiser Family Foundation
April 2005
Low-Income Subsidies for the Medicare Prescription Drug Benefit:
The Impact of the Asset Test
By Thomas Rice, Ph.D. and Katherine A. Desmond, M.S.

Conclusions

This study estimates that in 2006, when the new Medicare prescription drug benefit goes into effect, 2.37 million low-income Medicare beneficiaries will not qualify for subsidized coverage because they fail the asset test. As a result, these individuals will face the same “doughnut hole” cost-sharing requirements as wealthier beneficiaries. This means that in addition to paying full monthly premiums, they will be responsible for substantial out-of- pocket costs - e.g., $3,600 of the first $5,100 of annual prescription drug spending on covered drugs in 2006.

The study further examines the types of beneficiaries who will be excluded by the asset test, as well as the types of assets responsible. Perhaps the most noteworthy finding is that the asset test will fall most heavily on those who are widowed. Whereas only 29 percent of Medicare beneficiaries are widowed, nearly half - 46% - of those failing the asset test are widowed and nearly all of these (43% of the 46%) are women. Widows tend to be older, live alone, and have more chronic illnesses necessitating prescription drug purchases, but have less family support as well. Put another way, the life event (death of a husband)leads to reduced income and thus more of a need for subsidies, but as written, the legislation effectively excludes many widows from these subsidies.

It is hardly surprising that most individuals who do not meet the asset test have relatively modest assets, which tend to be bank accounts rather than stocks, mutual funds, and bonds. They have little in the way of private retirement accounts such as IRAs and 401(k)s, real estate beyond their own home, and almost no equity in businesses. This would be expected among a population of low-income individuals.

The study’s findings raise serious questions about the equity of the asset test. During their working years, Americans are encouraged to save for retirement and the possibility that they will face sizable long-term care expenses. Those to whom this message is most salient will have little or no income beyond what they receive from Social Security. By accumulating modest amounts of assets, either through bank accounts or retirement-savings vehicles, these same people have guaranteed that they will not qualify for the low-income Medicare drug subsidies - but the vast majority use prescription drugs every day. Using more common parlance, they find themselves in a “Catch-22.” If they do save, they are disqualified from the subsidies. If they do not save, they will receive the subsidies but will have almost nothing to fall back upon besides their Social Security checks. And this burden tends to fall on the most vulnerable of seniors: older, low-income widows living alone.

This dynamic appears to be inequitable, given the groups of seniors who are most affected, and unfair because it penalizes both savings and widowhood. Modifying or eliminating the asset test would help protect those disadvantaged by low incomes who would be excluded from subsidized prescription drug benefits due to the asset test.

http://www.kff.org/medicare/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=52270

Comment: Is the asset test a good idea? After all, why should taxpayers purchase prescriptions for individuals who have some money set aside in a bank account? And why shouldn’t we make seniors sensitive to the costs of prescription drugs so that they’ll fill only the prescriptions that they really need?

It should be presumed that all prescriptions are selected in consultation with the patient’s health care professional based on an anticipated maintenance or improvement in physical health that exceeds any potential risk of the medication. Thus there should be no prescription that shouldn’t be filled because it’s not really needed. Prescription medication should be rejected only on the basis of lack of benefit, but not on the basis of lack of affordability.

And why shouldn’t we require a spending down of assets before providing protection against prescription drug costs? Requiring a person to deplete their limited assets before they can have affordable access to prescription drugs is simply an inhumane policy.

Means testing of income and assets theoretically is a method of improving equity in access to health care for those with very low incomes and very limited assets. The problem is that those of relatively modest means who fall above the thresholds will be victims of this inequitable method of establishing health benefits. As you adjust the thresholds upwards, eventually benefits become available to individuals who really don’t need financial assistance from taxpayers, creating yet another inequity.

We should begin with the presumption that everyone should be able to receive prescription drugs, and, indeed, any health care that they need. Rather than attempting to create financial equity at the time of accessing the health care system, it is far easier to create equity at the time of funding the system. That is one of the great advantages of social insurance. Everyone receives the health care that they need, while the entire system is funded equitably.

Unfortunately, our national policymakers have a different set of priorities. They wish to reduce the tax burden on those who have no financial barriers to care by reducing health care utilization of the great majority of citizens of modest means. Is that really what America is about?

Posted by pnhp at 01:04 PM | Permalink

The Coastal Research Group
Sixteenth National Conference on
Primary Health Care Access
April 10-12, 2005

The Eleventh J. Jerry Rodos Lecture:

Roxanne Fahrenwald, M.D., Director, Montana Family Medicine Residency:

“The man who says it cannot be done should not interrupt the man doingit.” Chinese proverb

http://www.coastalresearch.org/

Montana Family Medicine Residency:
http://www.aafp.org/residencies/240050001.html

Comment: For those of us frustrated with the relative lack of progress in our attempts at reforming health care, it is refreshing to hear an inspiring story for a change.

Very briefly, Dr. Fahrenwald reported on the successes in the past decade of the Montana Family Medicine Residency program. The program emphasizes equitable health care, including not only the insured but those without coverage or the resources to pay for care, and including those with access problems due to the rural distribution of a significant portion of the population. Training and services in mental health have been added to the program, not only because of current needs in Montana, but also to prepare family medicine physicians for their important role in improving mental health equity. The program ensures competencies in other clinical services, such as obstetrics, essential for rural communities without ready access to urban medical centers.

Quite gratifying is the fact that most of the physicians from this program go to regions where their services are needed, with many of them going to rural areas of Montana. Thus they are strengthening the primary care infrastructure that promotes quality improvement in a cost effective manner.

One concern is that the residency program has access to various funds that are not available to those in private practice. It can be very difficult for those physicians supporting health care equity if they cannot meet their expenses due to expanding problems with uninsurance and underinsurance. So we still need to establish equity in health care funding.

Which brings us back to the quote. We should not be deterred by those who say that comprehensive reform cannot be accomplished because it’s not politically feasible, even if such reform does make sense. We should ignore distracting interruptions as we move on with our task of establishing an equitable system of public financing of health care.

Dr. Fahrenwald recognized what she had to do and just did it. So can we. But, actually, we really do need the support of those who believe that reform makes sense. Maybe, instead, when they “interrupt” us, we should transform that encounter into an opportunity to include them in the process. With all of us working together, we can do it. By adhering to established principles of health policy science, all we have to gain is affordable, comprehensive, high quality care for everyone.

Posted by pnhp at 12:50 PM | Permalink

By Jim Spencer
Wednesday, April 13, 2005

Ask investigative journalist Jim Steele if he is a scorned prophet because he claims the American health care system is terminally ill, and he says two words
:Canadian drugs.

Proof is everywhere that health care in the U.S. is in “Critical Condition,” as Steele and co-author Don Barlett titled their most recent book. But nothing bodes a health care revolution like Americans purchasing Canadian drugs.

Defying federal laws, states and cities have joined private citizens buying Canada’s affordable pharmaceuticals.

Changes in how this country organizes and pays for health care must come from the ground up, Steele said last week as he waited to address a fundraiser for the nonprofit group Health Care for All Colorado. The outlaw purchasing of prescription drugs paves the way for more radical steps.

“There’s a tremendous amount of mythology about the American health care system,” Steele said. “This country has talented people who can provide the best care in the world. But in Canada, if you get sick, you don’t run the risk of losing your house. Here, you do.

“You have freedom of choice to choose your doctor in Canada and Europe. Here, your insurance company cuts deals with doctors and hospitals and sometimes tells you where to go.”

In their book, whose complete title is “Critical Condition: How Health Care in America Became Big Business and Bad Medicine,” Steele and Barlett don’t stump for any specific country’s medical delivery system. Rather, they call for an overhaul of the American model.

The authors suggest a quasi-public United States Health Council, modeled organizationally after the Federal Reserve. The council would standardize health insurance and guarantee at least minimal health care to all Americans.

“We spend a higher percentage of our national wealth on health care than anyone in the world,” Steele said. “And yet we don’t live as long as most of (the world’s industrialized countries).

“This problem doesn’t require more money. We need to redirect what we’re already spending.”

An attempt to make medical care more efficient and affordable by applying market principles is so far past the point of diminishing returns, said Steele, that human suffering now grows nearly as fast as costs.

In a 2004 survey, said Steele, the Center for Studying Health System Change detected a “marked shift” in the willingness of doctors to allow government involvement in reforming health care.

That’s because “a sizable percentage of our population lives outside the health insurance system,” Steele said. “A sizable percentage is underinsured.”

In researching “Critical Condition,” Steele and Barlett found many Americans one illness from financial ruin.

A recent study showed that medical bills played a role in a third of all personal bankruptcies.

Things are getting worse, said Steele. Because of rising costs in medical care, fewer small businesses can afford employees’ health insurance. At the same time, large companies are cutting health benefits while increasing employees’ portions of premiums.

“We have created a monumental bureaucracy in health care,” said Steele. “Some studies say one out of every three dollars goes to bureaucracy.”

This bureaucracy siphons millions of dollars that should be spent on actual treatment. Instead, said Steele, doctors and hospitals spend a fortune trying to get reimbursed by hundreds of insurance plans with different rules.

A single-payer health care system or standardization of insurance companies’ coverages may not yet resonate with U.S. politicians or voters, said Steele. But most Americans are painfully aware of health insurance “customer service” representatives trained to stonewall people trying to get their medical bills paid.

As soon as an affordable alternative to that runaround becomes available, people will latch on to it faster than a cheap dose of Canadian drugs.

And the revolution will continue.

Jim Spencer’s column appears Monday, Wednesday and Friday. He can be reached at 303-820-1771 or jspencer@denverpost.com.

Posted by pnhp at 09:39 AM | Permalink

The Orange County Register
April 10, 2005
Private plans haven’t delivered the cure
By Don R. McCanne, M.D.

Bruce Bodaken, CEO of Blue Shield of California, warns that, unless we reduce health-care costs and provide coverage for the uninsured, we will likely turn to a government-run single-payer system [“’Vicious cycle’ of care,” Business, March 30].

That raises two questions. Why hasn’t Bodaken’s own industry been able to solve the problems during the past half-century that it has had control of health care spending? And what is there about a single-payer system that would cause policy-makers to turn to that option?

Private health plans should be providing us with higher quality at lower cost. But by most measures, we are receiving relatively mediocre care that is rife with error and wasteful excesses, while many are not receiving even the most basic essential services. And over 90 percent of Americans agree that health care costs are out of control. Since private plans are failing us on cost and quality issues, are there any other reasons to keep them in charge?

Do private plans avoid the inherent waste of government bureaucracies?Unfortunately, private plans actually consume a far greater percentage of health care dollars in administrative costs than do public programs such as Medicare. And worse, our fragmented system of funding care places a tremendous,wasteful administrative burden on the providers of health care.

Bodaken exemplifies this inefficiency in admitting that he can’t figure out the benefits of his own personal health plan provided by his own company. Do private plans provide us with choice? The American Medical Association just released a report confirming, by Justice Department standards, that 93 percent of HMO/PPO markets are “highly concentrated.” So much for true market choice of health plans. Besides, the choice we really want is choice of our own physicians and hospitals. Most private plans limit our choice and assess severe financial penalties for failing to use their preselected choices.

If we leave the plans in place, what options do we have? Everyone agrees that the status quo will never do since costs are skyrocketing, access is diminishing and quality is not improving.

Should we relax regulatory oversight, allowing the markets to work more effectively? We know that the plans invariably attempt to sell to the healthy and avoid the sick. That might be appropriate for the marketplace, but it shifts the burden of risk from the plans to the taxpayers.

Should we instead increase regulatory oversight? Requiring that plans jointly guarantee affordable coverage for everyone would create a de facto single-payer system since the plans then would provide primarily only the administrative services that we actually do need for health care financing.

The $1.9 trillion that our nation is already spending on health care is more than enough to pay for comprehensive health care services for everyone. But there is an urgent need for us to demand much more accountability for our health care spending. Just don’t expect it to come from the health plans.

http://www.ocregister.com/ocr/2005/04/10/sections/commentary/READER%20REBUTTALS/article_474432.php

Posted by pnhp at 11:20 AM | Permalink

By John Zicconi Vermont Press Bureau

MONTPELIER A House committee comprised largely of Democrats on Friday adopted a health-care reform plan that restructures key parts of state government to lay the groundwork for a publicly financed, universal-care system paid for with taxes.

The plan calls for primary and preventative care coverage for all Vermonters by July 2007, publicly funded hospital coverage by October 2007, and universal coverage for other medical needs no later than July 2009.

The proposal was immediately criticized by physicians, hospital officials and insurance executives because the proposal calls for sweeping changes to Vermont’s health-care delivery system without saying how much it would cost or what medical procedures would be covered.

Those decisions were put off until next year to allow lawmakers more time to meet with business leaders, health-care officials and Vermont residents to understand better what coverage level they desire and how much they are willing to pay.

“This is a big two step,” said Rep. John Tracy, D-Burlington and chairman of the House Health Care Committee. “This summer and fall is the time for people to have that discussion.”

Governor James Douglas, a Republican, did not wait to blast the proposal.

“When Vermonters take a good hard look at what the House Democrats are proposing they’re going to want a second opinion,” said Douglas, who believes the plan will increase income taxes 134 percent and lead to health-care rationing.

“This plan would dramatically raise taxes and put health care decisions in the hands of politicians and government bureaucrats,” said Douglas, “a prospect I fundamentally and unequivocally oppose.”

Asked if he would veto the bill if it reached his desk unchanged, Douglas dodged the question but said: “I think I am sending a pretty clear message.”

Douglas prefers a much less ambitious approach to health care reform that focuses more on changes to the insurance industry than creating new government programs.

The House Health Care Committee voted 9-2 in favor of the bill. Two of the panel’s four Republicans Christopher Louras of Rutland City and Joseph Baker of West Rutland opposed the measure, which must be reviewed by at least one other House committee before advancing to the floor for debate.

The Senate must also approve the proposal.

Sen. James Leddy, D-Chittenden and chairman of the Senate Health and Welfare Committee, declined to offer an opinion because he had not read the bill. But those who represent Vermont physicians, insurance companies and hospitals criticized the measure.

“We cannot live with this,” said Beatrice Grause, executive director of the Vermont Association of Hospitals and Health Systems who just two weeks ago called an earlier draft of the bill a good first step.

“I’m concerned that the committee’s approach uses over regulation,” Grause said. “To control cost, health-care delivery has to be engineered. And that requires innovation not more regulation.”

The plan calls for the immediate reorganization of state government to create a stand-alone Department of Health Care Administration that will oversee health care regulation, planning and cost control.

Strategies include global budgets for hospitals that are capped at redetermined inflation rates and physician payments that limit the growth of health-care spending. The goal is to lower Vermont’s health-care growth rate from more than 12 percent annually to about 7 percent, committee members said.

The proposal calls for a special panel of House and Senate members to annually decide what medical services the public-system will pay for. Private insurance, either personally purchased or supplied by an employer, would pay for services that are not included.

The plan does not spell out what public coverage would cost and which taxes would be used to pay for it, but committee members said a combination of income and a payroll taxes were the likeliest candidates.

The bill calls for a tax study to make exact recommendations. It also calls for an economic-impact study to determine the affect raising taxes would have on employers, Vermont’s business climate, and the state’s cost of living.

Physicians and insurance officials criticized the plan for setting implementation dates, promising universal coverage and ordering government reorganization before knowing what these impacts will be.

“Do the studies and find out what they say, then determine your direction,” said Leigh Tofferi, spokesman for Blue Cross Blue Shield of Vermont, the state’s largest health care insurance company. “There is no information right now that the new system will be an improvement.”

House Speaker Gaye Symington, D-Jericho, defended the committee’s approach.

“Vermont needs to move forward with this conversation and we can’t do that without putting something on the table to react to,” Symington said. “They have articulated a vision on where they want to go, outlined steps to get there and are inviting Vermonters to come and tell them what they think.”

Baker, the West Rutland Representative who voted against the bill, said he had already heard enough from physicians and others to convince him the proposal was taking the wrong direction.

“What bothered me is I saw fear in some people’s faces,” Baker said. “If we are willing to see fear in people’s faces we are doomed to fail.”

Contact John Zicconi at john.zicconi@timesargus.com or john.zicconi@rutlandherald.com

Posted by pnhp at 01:41 PM | Permalink

The New York Times
April 8, 2005

U.S. Plans New, Deep Cuts in Housing Aid
By David W. Chen

If the changes sought by the administration take effect, they will result in one of the biggest cuts since Washington first began subsidizing housing: as much as $480 million, or 14 percent, of the $3.4 billion federal budget for day-to-day operations, including labor, maintenance, insurance and utilities, at the nation’s 3,100 housing authorities.

“I’ve never seen anything this devastating occur in public housing,” said Stephanie W. Cowart, executive director of the Niagara Falls Housing Authority.

Michael Liu, HUD’s assistant secretary for public and Indian housing, said in an interview that housing agencies had been warned for months that “there was always the possibility of changes,” especially “in an era of tight budgets on the domestic front.”

“For a housing authority that has been on a particular diet for, say, 40 years, facing a different kind of diet, cutting out fats and sugars and other stuff that tastes good - well, it’s tough to change, and that’s a natural reaction,” he said. “But in the long run, it’s going to make us more effective, more efficient.”

“I’m confident that those who are concerned, once they sit down, they’ll get over it, and deal with it,” Mr. Liu said.

http://www.nytimes.com/2005/04/08/nyregion/08housing.html

And…

Hunger-Based Lines Lengthen at the Faith-Based Soup Kitchens By Francis X. Clines. The sight of masses of Americans gratefully chowing down on free food
is indeed a show, an amazingly discreet one that is classified not as outright hunger but as “food insecurity” by government specialists who are busy measuring the growing lines at soup kitchens and food pantries across the nation. There were 25.5 million supplicants regularly lining up in 2002; they were joined by 1.1 million more the next year. And even more arrive as unemployment and other government programs run out.

Most immediately, food charities are pleading against further cuts in the federal emergency food and shelter program, which directly fights hunger. Last year, 48 soup kitchens closed in the city as supplies were exhausted, and hundreds of others reported to be making do by cutting back on daily portions.

Beyond that, however, administrators know that the myriad of severe program cuts looming in Washington - for everything from low-income wage supplements
to health care spending for poor people - can only lead to further cuts down the revenue food chain in statehouses and city halls and, finally, longer lines of people silently begging for food.

http://www.nytimes.com/2005/04/08/opinion/08fri3.html

Comment: How could politicians possibly understand the need for a universal health program if they don’t even understand the need for basic housing and food? Or did the majority of Americans support these policies at the polling booths? If so, have they no shame?

Posted by pnhp at 09:51 AM | Permalink

Health Affairs
April 5, 2005
It’s The Premiums, Stupid: Projections Of The Uninsured Through 2013
By Todd Gilmer and Richard Kronick

Abstract:
Increases in the cost of health care from 1979 to 1999 accounted for the decline in health insurance coverage that occurred during that time period, as our earlier work demonstrated. Here we examine whether the model we presented adequately accounts for the observed changes in health insurance
coverage from 1999 through 2002, and we show that the model accurately
predicted the increase in uninsured people during that time period.

Using the model and projections for national health spending, we project that
the number of nonelderly uninsured Americans will grow from forty-five million
in 2003 to fifty-six million by 2013.

From the Discussion:
In 2001 we published a paper titled “The Calm Before the Storm,” projecting
that the number of uninsured Americans would increase rapidly as a result of
health insurance premiums rising more rapidly than personal incomes. It is clear that a full-force storm blew in from 1999 to 2002 and that the actual path of the percentage uninsured… followed the path we expected based on our estimated relationships between affordability and coverage.

We expect the storm to continue during the next decade. However, based on
CMS spending projections, its ferocity will lessen. The CMS predicts that health spending for insured people under age sixty-five will grow 2.4 percent per year faster than personal incomes from 2002 to 2013. At this “moderate” rate of spending growth, we expect that the number of uninsured people will increase “only” thirteen million over the next decade from its 2002 level, or eleven million from the estimate of forty-five million uninsured people in 2003. Based on estimates from the Institute of Medicine, this will lead to an increase of 4,500 deaths annually and to an increased annual loss of human capital of $16-$32 billion. If the estimated growth rates for health care prices and income are wrong (as they almost certainly are), it seems much more likely to us that affordability will decline more quickly than expected rather than more slowly, and it seems more likely that the number of uninsured people will increase more quickly than projected rather than more slowly.

It is unlikely that we will be able to solve the problem of the uninsured without some form of universal health insurance coverage requiring contributions from some combination of employers, employees, and taxpayers. It is also unlikely that either our current system of employer-sponsored coverage or an alternative system of universal coverage will be sustainable without more effective efforts at cost containment.

http://content.healthaffairs.org/cgi/content/abstract/hlthaff.w5.143

Comment: Professors Gilmer and Kronick have provided objective evidence of
what we instinctively knew. Lack of affordability of insurance premiums has
prevented tens of millions from being covered, and, without major change, the problem will only get worse. A few comments are warranted.

The term “affordability” is often avoided by economists because it is not well defined and includes an element of subjectivity based on varying opinions on what is and what is not affordable. Gilmer and Kronick have demonstrated that there is a degree of objectivity in the concept of affordability since the
“affordability index” (per capita health spending for nonelderly insured adults divided by the median income of nonelderly adult workers) does correlate quite predictably with the percentage uninsured among nonelderly workers. This article provides us with credibility when we state that health care is becoming less and less affordable.

This article also provides us with a prediction of what would happen if we were able to bring the rate in growth of health spending down to the rate of inflation, assuming no other structural reform of health care financing. They project that an additional 13 million will be without insurance in 2013. Of those, 4.4 million would be due merely to the increase in the population, whereas 8.6 million would be due to a further deterioration in affordability. Though many suggest that all will be well if we merely control health care costs, the numbers of uninsured would still expand by 4.4 million. Obviously structural reform must involve more than merely containing costs.

Another crucial point is that the authors’ model implicitly assumes that health insurance premiums will continue to purchase coverage that would provide financial protection against significant medical losses. Unfortunately, current trends could change their model. Competition based on premiums is resulting in a shift of risk to patients. Reports such as the recent Harvard bankruptcy study are demonstrating that we are facing an epidemic of underinsurance. Although this could reduce the upward pressure on premiums and lessen the growth in the uninsured, it could also have the paradoxical affect of causing even more to drop coverage when they recognize that it no longer protects against financial catastrophe. Why invest large sums in insurance premiums when major illness will drain all of your resources anyway?

Gilmer and Kronick are quite right that we need both universal coverage and
more effective cost containment. But our current demand side efforts utilizing private plans can only increase the problem of underinsurance and affordability of health care. We need to change to supply side economics if we expect to have affordable, comprehensive care for everyone.

A single payer system, by design, is universal, comprehensive, and utilizes supply side mechanisms to contain costs. In the United States, the $6423 per
capita that we are already spending on health care supplies some of us with too much care that is not beneficial, while leaving many with unmet needs. But we won’t get our spending right until we decide to adopt supply side funding of a universal system. It won’t be perfect (no system is), but it’ll be vastly superior to what we have.

Or we can continue to do nothing. The lack of insurance will then cost us 22,500 nonelderly adult lives per year. Is that a price that we are willing to pay for our inaction? Before grumbling about another stupid rhetorical question, think about the consequences of merely walking away and going about your usual business. Tens of thousands of people will continue to die.

Posted by pnhp at 12:41 PM | Permalink

Letters to the Editor
Originally published April 2, 2005

Where’s outcry over the lack of health care?

The Terri Schiavo case cut to the core of American hearts and souls. In part, the outpouring of passionate support for her parents’ position was about the individuals involved. In a larger sense, it was about deep concerns many Americans have about the direction our moral life is taking (“As Schiavo saga winds down, leaders pursue broader debate,” March 29).

But one aspect of this moral tension that was not given full consideration in the Schiavo case is access to medical care. More than 45 million Americans lack health care insurance. The Institute of Medicine has estimated that the lack of health insurance is the direct cause of death for more than 18,000 Americans every year.

These 18,000 Americans die because of complications from very treatable diseases, such as hypertension and diabetes. In the Schiavo case, there was conflicting evidence as to whether Terri Schiavo would have wanted to continue chronic tube feedings with her degree of brain damage.

There is absolutely no conflicting evidence about the 45 million Americans who are excluded from health care insurance. They want it, and reside in a nation that denies it to them.

There is absolutely no moral ambiguity about the 18,000 Americans who are sentenced to death every year because our health care system refuses to address their needs.

Why is there no moral outcry about these Americans who unnecessarily die every year? Do they matter as much as Mrs. Schiavo? Where is emergency action by our president and our Congress? Where is the righteous rage from those who fear God?

Terri Schiavo’s care cost, at a conservative estimate, $100,000 per year for 15 years. How many Americans could have been kept alive if equal monies had been spent in treating routine diseases? How can our president and Congress try to pass budget cuts for Medicaid at a time when lack of health insurance benefits is pushing more and more workers into Medicaid?

Does the suffering of millions of the working poor have any meaning to our leaders? I have a deep respect for Christians who saw vital moral issues in continuing the tube feedings for Terri Schiavo. I pray they will be equally able to see the vital moral issues in caring for everyone who needs medical care.
Terri Schiavo’s greatest gift to her country may be in wakening its conscience.

Dr. James A. Cockey
Salisbury

Posted by pnhp at 01:23 PM | Permalink

EMBARGOED for release
Tuesday, April 5, 2004, 12:01 EDT

Contact: Jon Gardner
jgardner@projecthope.org
301-347-3930

More Than One In Four Workers Will Be Uninsured In 2013

As Coverage Becomes More Unaffordable, Health Affairs Article Says

Researchers Base Findings On Relationship Between Growth In Health Care Spending And Personal Income

BETHESDA, MD—More than one in four American workers under age 65 will be uninsured in 2013 (nearly 56 million people); the increase will be driven by workers’ increasing inability to afford health insurance, according to new projections posted today on the Health Affairs Web site.

Authors Todd Gilmer and Richard Kronick of the University of California, San Diego, base their estimates of the uninsured on federal projections of health spending, personal income and other population characteristics. Their work was supported by the California HealthCare Foundation.

Because growth in per capita health spending is expected to outpace median personal income by 2.4 percentage points per year, health care coverage will continue to decline, because more Americans will find it unaffordable. While factors such as changes in employment patterns and demographic shifts have some mild effects on health care coverage, cost has the biggest effect.

For each 1 percent increase in health spending relative to personal income, the number of uninsured people increases by 246,000, the researchers say. As a result, according to their projections, 11 million more people will lack coverage in 2013 than in 2003. Based on estimates from the Institute of Medicine, this is expected to lead to an increase of 4,500 deaths annually and an increased annual loss of human capital of $16-$32 billion.

“Regardless of whether health care benefits are being paid out of employer’s or employee’s pocket, and without regard to the amount of premium contribution that employees are required to make, there is a remarkably tight relationship between affordability and coverage rates,” the authors say.

“It is unlikely that we will be able to solve the problem of the uninsured without some form of universal health insurance requiring contributions from some combination of employers, employees, and taxpayers,” they continue. “It is also unlikely that either our current system of employer-sponsored coverage or an alternative system of universal coverage will be sustainable without more effective efforts at cost containment.”

The authors add that the accuracy of their estimates of health care coverage will depend on how closely actual health spending and personal income mirror the federal government’s projections.

The ten-year projections show a smaller differential between health care spending and personal income than in the recent past. Between 1999 and 2002, per capita health care spending spiked 9.8 percent a year while median personal income rose only 2.2 percent. As a result, the authors say, uninsurance among nonelderly workers rose 1.5 percentage points, from 22.3 percent in 1999 to 23.8 percent in 2002.

Gilmer is an assistant professor in the UCSD School of Medicine’s Department of Family and Preventive Medicine. Kronick is a professor in that department and chief of the Division of Health Care Sciences at UCSD.

You can read the article at content.healthaffairs.org/cgi/content/abstract/hlthaff.w5.143.

Health Affairs, published by Project HOPE, is the leading journal of health policy. Peer-reviewed journal appears bimonthly in print with additional online-only papers published weekly as Health Affairs Web Exclusives at www.healthaffairs.org.

The full text of this Health Affairs Web Exclusive is available free of charge to all Web site visitors for a two-week period following posting, after which it will revert to pay-per-view for nonsubscribers. The abstracts of all articles are free in perpetuity. Support for the publication of this Web Exclusive was provided by the California HealthCare Foundation; Web Exclusives are also supported in part by a grant from the Commonwealth Fund.

You are receiving this e-mail because you registered on the Health Affairs Web site. If you do not wish to receive such notifications in the future, please go to www.healthaffairs.org/1260_opt_in.php to change your e-mail notification options. If the above links are not activated, please highlight the link and press Ctrl-c (Command-c on a Mac) to copy it. Then place your cursor in the address window of your browser, press Ctrl-v (Command-v) to paste.

Posted by pnhp at 12:41 PM | Permalink

The Christian Science Monitor
April 04, 2005
Congress’ implicit healthcare rationing
By John Kitzhaber

As an emergency physician and former governor, I am struck by the towering contradictions - and indeed the hypocrisy - in the controversy over the tragic plight of Terri Schiavo. On the same day that the US House of Representatives voted to involve the federal courts in her case, it also approved a 10-year $92-billion cut in Medicaid funding - $30 billion deeper than the cut recommended by President Bush.

The relationship between these two decisions - virtually unreported by most media - goes to the very heart of why we’re unable to resolve the growing crisis in our healthcare system. While involving the federal courts in an attempt to save the life of one highly visible individual, Congress made a fiscal decision that will deny thousands of other Americans timely access to healthcare, some of whom may die as a result.

http://www.csmonitor.com/2005/0404/p09s02-coop.html

And…

The Daily Princetonian
April 1, 2005
Seeking to understand life, death
By Uwe Reinhardt

Terri Schiavo dies, reads the Washington Post’s news alert on my desktop. After gradually starving her to death, in accordance with American law and our jurists’ interpretation thereof, Schiavo finally has left us.

Unwittingly, she has helped us understand, once again, what a confused, ill-informed, sometimes opportunistically cynical, but ever bizarre nation we are.

Let us start with the seemingly pious politicians and pundits who saw in this case an opportunity to proclaim the sanctity of human life. Really? In a recent series of books on the plight of the millions of Americans without health insurance, the medical and social scientists working with the prestigious institute of Medicine of the U.S. National Academy of Sciences reminded the nation that 18,000 people die each year as a direct result of the lack of health insurance, making it the sixth leading cause of death among people aged 25-64, after cancer, heart disease, injuries, suicide and cerebral vascular disease, but before HIV/AIDS or diabetes. The nation’s infant mortality rate is one of the highest in the OECD nations. Citing the CIA Fact Book 2005, economics professor Alan Krueger reminds us in The New York Times (March 31) that our infant mortality rate is higher even than Cuba’s.

It can fairly be asked what the pundits and politicians who waxed so pious on the sanctity of Schiavo’s life have ever done to avoid this tragic, avoidable loss of human life in the rest of America. If we searched their records, we would discover that many and probably most of them either have countenanced that loss with equanimity, doing little to avoid that loss, or, worse still, have opposed as “socialism” any attempt to provide health insurance to all American children and, indeed, to all people living in this land.

http://www.dailyprincetonian.com/archives/2005/04/01/opinion/12531.shtml

Comment: For Congress to hear, voices must speak.

Posted by pnhp at 09:18 AM | Permalink