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All I Want For Christmas Is Less Charity: Cure the Plight of Care

Archives for 2008

All I Want For Christmas Is Less Charity: Cure the Plight of Care

By ROSE ANN DeMORO
The Tampa Tribune
Sunday, December 21, 2008

The most heartbreaking e-mail alerts that crossed my computer screen this holiday season arrived from an active, progressive union that has set up a fund for medical benefits for widows and orphans of their former members.

Reliance on charity rather than a public safety net symbolizes what has become a perversely unique American solution to social problems, especially in the Bush administration era.

In “Critical Condition,” a searing 2006 indictment of the collapse of our medical system, Donald Bartlett and James Steele described how pervasive this dependence has become. Garage sales, spaghetti feeds, livestock auctions, pancake breakfasts, walkathons, bingo tournaments, pie socials, carwashes, church suppers, raffles, barbecues, basketball shootouts, even hot-air balloon rides, all to help families drowning with un-payable medical bills.

Rather than a coordinated national system, as every other industrialized country has established, our “you’re on your own” society has hit rock bottom in the most basic area of all, the care of our community.

No wonder the United States ranks last among comparable nations in preventable deaths and first in out-of-pocket costs, despite spending twice as much as anyone else on per capita health care.

Much has been said recently about Franklin Roosevelt’s first 100 days, a period that inaugurated a new standard of social action and set the stage for some of the most important reforms in American history.

But it’s also worth remembering FDR’s 1944 call for a second Bill of Rights that included the right for all Americans to quality health care and other basics in jobs, education, housing and food that he said “spell security.” In other words, a collective response to protect and defend everyone, not just the fortunate few.

Counting on personal check writers or online donors certainly relieves others of their responsibility, most notably the insurance companies that are not about to jeopardize that by starting to actually pay for medical care.

And it circumvents the vision of those who think our government should guarantee health care for all of us, much as government assumes responsibility for police, fire, armed services, schools, libraries, mail service, parks, environmental protections, airport security, national museums and prisons.

And even though the government is already in the game, financing or providing medical care for seniors, veterans, the disabled and low-income families, it should operate with less administrative waste, less bureaucracy and without rejecting people based on pre-existing conditions or dumping them when they get sick.

But somehow, a whole lineup of liberal advocacy groups, policy wonks, media pundits and politicians have concluded there is a national “consensus” to fix this broken and dysfunctional health care system by expanding the private insurance system that created the disaster.

That approach, however, would not curtail skyrocketing premiums, deductibles, co-pays or bills for care denied by the insurance companies. In recent testimony to the Senate Finance Committee, Princeton Professor Uwe Reinhardt noted that the current cost of medical services for a typical family of four consumes 26 percent of that family’s gross wages. At the present rate that will soar to 44 percent by 2018.

Perhaps those “consensus” builders are counting on the pancake breakfasts and orphan funds to make up for their policy failures. Or they could channel that giving spirit into joining a broad grass-roots campaign to demand real reform.

Registered nurses will be in the forefront of this movement. It is RNs who every day look patients in the eye and directly experience the pain and degradation of an all-too-often inhumane system. They know that every life counts and are not willing to leave anyone behind.

And they know what it would take to guarantee high quality care for everyone, a streamlined, more effective system than our current nightmare; one based on care, not insurance, by extending Medicare to cover everyone.

In an era when our government has intervened on behalf of Citigroup and AIG and Freddy and Fannie and all those financial wizards on Wall Street, maybe we can bail out the tens of millions of Americans without having to count on auctions or widows’ funds to pay for medical care.

CBO's deficient report on analyzing health insurance proposals

Key Issues in Analyzing Major Health Insurance Proposals

The Congress of the United States
Congressional Budget Office (CBO)
December 2008

Chapter 4 – Proposals Affecting the Choice of an Insurance Plan

Medicare-for-All
Many of the considerations that arise in designing a new option for individuals to enroll in Medicare would also affect the analysis of proposals to establish a single-payer system based on Medicare through which all U.S. residents could obtain their health insurance. In particular, the federal costs of such a proposal would depend primarily on the benefits that the system provided; the rates it used to pay doctors, hospitals, and other providers of health care; and the extent of any premium subsidies it offered to enrollees—all of which could differ from Medicare’s current design. The rules and processes used to determine eligibility for the program and to enroll individuals who are eligible would also have significant implications.
Even under a single-payer system, individuals could have a choice of insurance plans or benefit designs, but the extent and nature of those options would also depend on the features of the proposal. If enrollees were allowed to choose a private health plan paid through Medicare or could purchase supplemental private insurance (as many Medicare enrollees currently do), the rules governing those choices and the possibility of adverse selection would remain important considerations. If, instead, the Medicare plan was the only option offered and all residents were required to enroll in it, then adverse selection would not occur. That approach could reduce the administrative costs that doctors and hospitals currently incur when dealing with multiple insurers. Some enrollees might prefer a different design, however, and the lack of competition from private health plans could take away a benchmark that is commonly used to assess the adequacy of Medicare’s payments and the efficiency of its performance. More generally, that approach would raise important questions about the role of the government in managing the delivery of health care.
CBO Study (196 pages):
http://www.cbo.gov/ftpdocs/99xx/doc9924/12-18-KeyIssues.pdf

Everyone who is participating in the efforts to reform health care financing in the United Sates should have a copy of this CBO report. It describes in considerable detail the various policy decisions that must be made as we approach the goal of affordable health care for everyone, but only those policies that would apply to a multi-payer system of private and public programs.
What is clear is that each policy decision under this scenario increases the administrative complexities of the financing system, and that the inevitable tradeoffs that must be made can only result in compromises that cause us to fall short on our goals of universality, equity, efficiency, quality, access, and affordability. Once the decision is made that we must build on our current system, there is no possible way to avoid spending more money for reform that would fall so short of a high-performance system.
There is a very serious deficiency in this study. In the 167 pages constituting the main body of this report, there are only two paragraphs (above) on a model that would be far less expensive and would come as close as possible to achieving our goals. To say that single payer received short shrift in this important policy document is not simply an understatement; it is a glaring example of the extent to which Congress has gone to glibly dismiss single payer as not being a feasible option. They are going to make policy decisions impacting not only one-sixth of our entire economy, but also the physical and financial well being of each of us.
All of us throughout the nation need to rise up and express our outrage! We need to contact our members of Congress immediately and demand the urgent preparation of a CBO report that describes the policy options, and the impact that they would have, under a single payer national health program. We, the people, deserve the same detailed analysis as was given the multi-payer model catering to the special interests.

CBO’s deficient report on analyzing health insurance proposals

Key Issues in Analyzing Major Health Insurance Proposals

The Congress of the United States
Congressional Budget Office (CBO)
December 2008

Chapter 4 – Proposals Affecting the Choice of an Insurance Plan

Medicare-for-All

Many of the considerations that arise in designing a new option for individuals to enroll in Medicare would also affect the analysis of proposals to establish a single-payer system based on Medicare through which all U.S. residents could obtain their health insurance. In particular, the federal costs of such a proposal would depend primarily on the benefits that the system provided; the rates it used to pay doctors, hospitals, and other providers of health care; and the extent of any premium subsidies it offered to enrollees–all of which could differ from Medicare’s current design. The rules and processes used to determine eligibility for the program and to enroll individuals who are eligible would also have significant implications.

Even under a single-payer system, individuals could have a choice of insurance plans or benefit designs, but the extent and nature of those options would also depend on the features of the proposal. If enrollees were allowed to choose a private health plan paid through Medicare or could purchase supplemental private insurance (as many Medicare enrollees currently do), the rules governing those choices and the possibility of adverse selection would remain important considerations. If, instead, the Medicare plan was the only option offered and all residents were required to enroll in it, then adverse selection would not occur. That approach could reduce the administrative costs that doctors and hospitals currently incur when dealing with multiple insurers. Some enrollees might prefer a different design, however, and the lack of competition from private health plans could take away a benchmark that is commonly used to assess the adequacy of Medicare’s payments and the efficiency of its performance. More generally, that approach would raise important questions about the role of the government in managing the delivery of health care.

CBO Study (196 pages):
http://www.cbo.gov/ftpdocs/99xx/doc9924/12-18-KeyIssues.pdf

Comment:

By Don McCanne, MD

Everyone who is participating in the efforts to reform health care financing in the United Sates should have a copy of this CBO report. It describes in considerable detail the various policy decisions that must be made as we approach the goal of affordable health care for everyone, but only those policies that would apply to a multi-payer system of private and public programs.

What is clear is that each policy decision under this scenario increases the administrative complexities of the financing system, and that the inevitable tradeoffs that must be made can only result in compromises that cause us to fall short on our goals of universality, equity, efficiency, quality, access, and affordability. Once the decision is made that we must build on our current system, there is no possible way to avoid spending more money for reform that would fall so short of a high-performance system.

There is a very serious deficiency in this study. In the 167 pages constituting the main body of this report, there are only two paragraphs (above) on a model that would be far less expensive and would come as close as possible to achieving our goals. To say that single payer received short shrift in this important policy document is not simply an understatement; it is a glaring example of the extent to which Congress has gone to glibly dismiss single payer as not being a feasible option. They are going to make policy decisions impacting not only one-sixth of our entire economy, but also the physical and financial well being of each of us.

All of us throughout the nation need to rise up and express our outrage! We need to contact our members of Congress immediately and demand the urgent preparation of a CBO report that describes the policy options, and the impact that they would have, under a single payer national health program. We, the people, deserve the same detailed analysis as was given the multi-payer model catering to the special interests.

Opinion: Creating a Single-Payer Plan is Best Solution to Health Care Crisis

Robert Wood Johnson Foundation
News Digest
Dec 14, 2008

The rising numbers of unemployed and uninsured mean that “affordable health care has never been more urgently needed,” and “at this critical juncture, a single-payer plan is the only medically, morally and fiscally responsible path to take,” writes Oliver Fein, M.D., associate dean and professor of clinical medicine and public health at Weill Cornell Medical College and president of Physicians for a National Health Program, in an Atlanta Journal-Constitution guest commentary.

The health care reform proposals offered by President-elect Barack Obama, Sen. Edward Kennedy (D-Mass.) and Sen. Max Baucus (D-Mont.) all “share a fatal flaw: they preserve a central role for the private health insurance industry.” Fein points to the mandates in some of the proposed plans as problematic because they require people to purchase “the private health insurance that is failing us today.” And, while some offer a public option modeled on Medicare, private plans continue to “refuse to compete on a level playing field” and instead “cherry-pick healthier patients and insist on more than their share of payment.” Fein argues that private health insurance companies have high overhead costs and “force doctors and hospitals to spend heavily on billing and paperwork.”

Fein proposes getting rid of the private insurance industry, which would save $400 billion a year in administrative costs–“enough to ensure that everyone is covered and to eliminate all co-pays and deductibles.” In its place he suggests implementing a single-payer system that works like Medicare, which “has been a leader in keeping costs down, at least until Washington politicians decided to pay private insurance plans to enroll seniors at a cost 12- to 19-percent higher than traditional Medicare.” A single-payer system would allow patients to choose their preferred doctor and hospital; make it easier for doctors to get paid and allow them to concentrate on providing care; “enhance cost containment through global budgeting”; and emphasize primary care and prevention.

According to Fein, 59 percent of physicians and 62 percent of Americans support the idea of national health insurance. Even opponents of a single-payer plan “often admit it’s the best, most efficient and equitable way to provide quality care” but fear it is not “politically feasible” so prefer to keep it off the table. He concludes, “Medicare for All is within reach, but only if we are prepared to take on the private health insurance industry.” (Fein, Atlanta Journal-Constitution, 12/14/08)

Is anybody listening? Californians Speak Out for a Single Payer Plan

by Joel Moskowitz
IndyBay
Thursday Dec 18th, 2008

In 2007, CaliforniaSpeaks, a statewide initiative led by government and major health foundations, invited 3,500 Californians to discuss their views on health care reform. To the surprise of the organizers, an overwhelming majority expressed its support for single payer (which was explicitly written out of the “discussion guidelines”). Yet somehow, the final report managed to ignore the will of the people. Today, as Americans throughout the country head to house parties to discuss health care reform, invited by Tom Daschle, future Secretary of Health and Human Services, and armed by similarly constraining “discussion guidelines”, the experience of Californians is worth remembering.

On Saturday, August 11, nearly 3,500 people gathered in eight locations to discuss health care reform in California. We were randomly selected to represent the views of 26 million California adults by AmericaSpeaks, a national nonprofit organization that conducts “21st century town meetings” to tackle issues ranging from the design of the World Trade Center site to the rebuilding of New Orleans.

Fifty-eight round tables filled the floor of the Oakland community college gym. Ten of us sat at each table along with a facilitator and a note taker with a laptop computer. We were each provided a wireless keypad to send our votes to a computer that would instantly tally them.

The meeting began with a pep talk from the Governor. Broadcasting from the Los Angeles meeting site via satellite hookup, he seemed larger than life on the two screens in front of us. He attacked his Republican legislative counterparts for holding up the state budget to avoid the health care discussion. He ordered us to help the politicians resolve the health care issue.

Next, the State Senate leader stepped onto the podium directly in front of us to address all eight sites via satellite. In the midst of his remarks, a woman across from me shouted out, “Single Payer! We want Single Payer!” A long burst of applause pervaded the room. Later, I learned that she was an attorney who had worked for the insurance industry until she could not stomach denying people access to needed health care to maximize profit.

We were informed that our task was to review two initiatives: the Governor’s proposal and a bill supported by the Democratic legislators (AB 8). We were told not to discuss “Single Payer,” i.e., government-funded universal health care coverage (like Medicare for all), because the Governor vowed to veto this bill (SB 840) as he vetoed its predecessor (SB 921). He claimed this was too expensive despite a study which showed that it would actually save Californians $8 billion in its first year because it would reduce the insurance industry role and administrative overhead and profits.

Was this “town meeting” convened to let the people of California speak about the health care reforms we wanted as had been promised? Or was this $4.2 million “town meeting” funded by three health foundations so we would rubber stamp a watered-down bill (AB
8) and enable the Governor to sign it into law claiming he was following the will of the people?

After outcries from meeting sites around the state, the organizers agreed to let us discuss Single Payer at the end of the day if we would “play along” and vote on their questions even though many issues would be irrelevant under a single payer plan.

In the end, we discussed and voted on a single payer system. Statewide, 87% supported this proposal. Supporters wanted cost controls, freedom to choose doctors, and quality of care ensured for all. The only measure to receive more support during the meeting was one to expand the government’s role in health care access (93%). The majority who supported this measure, however, wanted a single payer system. There is little doubt that had we been offered the opportunity to choose between the three pending proposals Single Payer (SB 840) would have won by a landslide.

Now, the question is will the final report of this “town meeting” adequately reflect the people’s priority for a single payer plan and will our political leaders in Sacramento act on it?

Joel M. Moskowitz, Ph.D., directs the Center for Family and Community Health in the School of Public Health at the University of California, Berkeley. He was randomly selected to participate in this forum. The background materials and preliminary report are available at http://www.californiaspeaks.org

http://www.indybay.org/newsitems/2008/12/18/18555394.php

Postscript

The final report for CaliforniaSpeaks acknowledged that 51% of participants supported an expanded government program “if it were a government-run program (a.k.a. a single-payer program) and insurance companies were kept out of it.” An additional 5% of participants supported an expanded government program under any conditions. (“CaliforniaSpeaks: The public weighs in on current health care reform proposals”; pg. 7; URL: http://tinyurl.com/3u6bgt ). Thus, the majority (i.e., 56%) of 3,500 randomly selected people who participated in a full-day discussion about health care reform conducted in eight locations across the state of California supported a single-payer system.

Unfortunately, this result was buried on page 7 of the 20 page final report. A subsequent evaluation of CaliforniaSpeaks concluded that “The most common critique, which was received from multiple locations, was in the handling of the single payer option” (“An assessment of the impact of CaliforniaSpeaks on health care reform in California” URL: http://tinyurl.com/4pwx7r). Even though the organizers tried to prevent a discussion of the single-payer option, at the end of the day, the majority of participants supported this option.

CBO's deficient report on analyzing health insurance proposals

Key Issues in Analyzing Major Health Insurance Proposals

The Congress of the United States
Congressional Budget Office (CBO)
December 2008

Chapter 4 – Proposals Affecting the Choice of an Insurance Plan

Medicare-for-All

Many of the considerations that arise in designing a new option for individuals to enroll in Medicare would also affect the analysis of proposals to establish a single-payer system based on Medicare through which all U.S. residents could obtain their health insurance. In particular, the federal costs of such a proposal would depend primarily on the benefits that the system provided; the rates it used to pay doctors, hospitals, and other providers of health care; and the extent of any premium subsidies it offered to enrollees–all of which could differ from Medicare’s current design. The rules and processes used to determine eligibility for the program and to enroll individuals who are eligible would also have significant implications.

Even under a single-payer system, individuals could have a choice of insurance plans or benefit designs, but the extent and nature of those options would also depend on the features of the proposal. If enrollees were allowed to choose a private health plan paid through Medicare or could purchase supplemental private insurance (as many Medicare enrollees currently do), the rules governing those choices and the possibility of adverse selection would remain important considerations. If, instead, the Medicare plan was the only option offered and all residents were required to enroll in it, then adverse selection would not occur. That approach could reduce the administrative costs that doctors and hospitals currently incur when dealing with multiple insurers. Some enrollees might prefer a different design, however, and the lack of competition from private health plans could take away a benchmark that is commonly used to assess the adequacy of Medicare’s payments and the efficiency of its performance. More generally, that approach would raise important questions about the role of the government in managing the delivery of health care.

CBO Study (196 pages):
http://www.cbo.gov/ftpdocs/99xx/doc9924/12-18-KeyIssues.pdf

Comment:

By Don McCanne, MD

Everyone who is participating in the efforts to reform health care financing in the United Sates should have a copy of this CBO report. It describes in considerable detail the various policy decisions that must be made as we approach the goal of affordable health care for everyone, but only those policies that would apply to a multi-payer system of private and public programs.

What is clear is that each policy decision under this scenario increases the administrative complexities of the financing system, and that the inevitable tradeoffs that must be made can only result in compromises that cause us to fall short on our goals of universality, equity, efficiency, quality, access, and affordability. Once the decision is made that we must build on our current system, there is no possible way to avoid spending more money for reform that would fall so short of a high-performance system.

There is a very serious deficiency in this study. In the 167 pages constituting the main body of this report, there are only two paragraphs (above) on a model that would be far less expensive and would come as close as possible to achieving our goals. To say that single payer received short shrift in this important policy document is not simply an understatement; it is a glaring example of the extent to which Congress has gone to glibly dismiss single payer as not being a feasible option. They are going to make policy decisions impacting not only one-sixth of our entire economy, but also the physical and financial well being of each of us.

All of us throughout the nation need to rise up and express our outrage! We need to contact our members of Congress immediately and demand the urgent preparation of a CBO report that describes the policy options, and the impact that they would have, under a single payer national health program. We, the people, deserve the same detailed analysis as was given the multi-payer model catering to the special interests.

U.S. Health Care Costs, Part V: Can Americans Afford Medicare?

By Uwe E. Reinhardt
New York Times
December 19, 2008

Uwe E. Reinhardt is an economist at Princeton. For previous posts in his series on why America pays so much for health care, click here, here, here and here.

It is now generally believed that the federal Medicare program for America’s elderly is “unsustainable” and must be “restructured.” This somber assessment is part of the more general cri de coeur so wondrously phrased some years ago in the title of the Brookings Institution’s monograph “Can America Afford to Grow Old?”

What if we couldn’t? What would we do — push the elderly into the ocean on an ice floe?

Of course America can afford to grow old! We can more easily afford it than most other industrialized nations.

The percentage of the American population age 65 or over is 12.4 now and is projected to rise to about 21 by 2050. Only 7 percent of China’s population is 65 or over now, but that figure will shoot up rapidly to over 22 percent by 2050. And in a number of other industrialized countries — notably in Japan, Germany, Italy and Sweden — the elderly already represent close to 20 percent of the population, a level the United States will not reach until about 2040. Yet the world has not come to an end in these older countries.

It’s hard to say what fraction of America’s gross domestic product future generations should allocate to people too old (or too young) to work, and how much should remain with those who have produced that G.D.P. This is a matter to be resolved by those future generations.

They must decide how well the elderly in their midst should be housed, fed and cared for when sick. Our influence over that allocation is minimal, because future generations can always override our decisions while we cannot override theirs. The best we can do today is to put in place public policies that can help G.D.P. grow now and in the future, to ease the pain of sharing. We could also influence somewhat the age structure of future populations through current and future policies on immigration, although there are limits to that approach, because immigrants, too, grow old.

Fortunately, as is shown in the graphical display below, future generations will most likely have the benefit of G.D.P. growth on their side, which should make it easier for them to house, feed and care for a larger fractions of elderly citizens.

Current G.D.P. per capita in the United States is about $46,500 (tables B-2 and B-34 here), of which Medicare absorbs slightly over 3 percent, leaving about $45,000 of G.D.P. per capita for other things.

Suppose between now and, say, 2050, inflation-adjusted G.D.P. per capita in the United States grows at an annual compound rate of only 1.5 percent per year, which is conservatively below the roughly 2 percent long-run annual growth rate of real G.D.P. per capita over the past several decades. Even at this low growth rate, inflation-adjusted G.D.P. per capita would grow from $46,500 now to about $87,000 by 2050.

According to the Social Security Trustees’ 2008 Report on the Status of the Social Security and Medicare Programs (Chart B), Medicare will absorb about 8.4 percent of G.D.P. by 2050 if it is not restructured.

But even after that 8.4 percent haircut for Medicare in 2050, there would still be close to $80,000 inflation-adjusted G.D.P. per capita left over for other things in that year, which is still 78 percent more than the non-Medicare G.D.P. per capita than we have today.

So what do we mean when we lament that Medicare will not be “affordable” in the future? Do we assume that G.D.P. will be stagnant for the next 40 years?

Those who make such statements, of course, may not even think about real claims on real G.D.P. Instead they may have in mind two quite different propositions.

First, they may argue that even if Medicare were eminently affordable from a purely macroeconomic perspective, its current structure of mainly public financing may not be politically sustainable. There is no question that to allocate as much as 8.4 percent of 2050 G.D.P. to Medicare under its current structure would require sizable tax increases. But social values and preferences can change. Future cohorts of voting retirees and their children in the United States may well countenance the higher levels of taxation already long accepted in other industrialized nations, in return for greater personal financial security.

An alternative proposition may be that, even if (1) sustaining Medicare in its current structure were eminently affordable from a macroeconomic perspective, and (2) it were politically feasible, we still shouldn’t sustain Medicare in its present form because the program wastes real and financial resources.

There is something to the second proposition, as will be explained in detail in my next post to this blog.

Family budgets strained by out-of-pocket health spending

Living on the Edge: Health Care Expenses Strain Family Budgets

By Peter J. Cunningham, Carolyn Miller, and Alwyn Cassil
Center for Studying Health System Change
December 2008
Affordability of medical care is a central focus of health care reform efforts. As health care costs continue to increase and the economy declines sharply, there is very little cushion in family budgets for health care costs, even for families with insurance coverage. Financial pressures on families from medical bills increase sharply when out-of-pocket spending for health care services exceeds 2.5 percent of family income, according to a new national study by the Center for Studying Health System Change (HSC). Low-income families and people in poor health experience financial pressures at even lower levels of spending, largely because they have already accumulated large medical debts they are unable to pay off.
There is little consensus among policy makers on how to set affordability standards in medical care, in part because there is little empirical evidence to guide these decisions. In addition, most of the policy focus has been on identifying affordability standards for insurance premiums, such as in the Massachusetts health reform, with much less attention on affordability standards for out-of-pocket spending on medical services. Some analysts propose setting affordability standards based on the current distribution of out-of-pocket spending for services, such as typical spending levels for a privately insured, middle-income population.
However, a limitation with this approach is that unlike spending for premiums, mortgages, rents, and other household necessities, out-of-pocket spending on medical care is much less predictable, often unexpected and not entirely discretionary. While families may be able to budget for preventive and routine health care needs, high out-of-pocket medical spending by families is more often associated with urgent or serious health conditions, as well as provider recommendations for treatment, rather than discretionary patient choices. Thus, what people actually spend out of pocket on medical care reflects–at least in part–what they need or are prescribed, not necessarily what they can afford.
http://www.hschange.org/CONTENT/1034/

Everyone is concerned about health care costs, and there is now a consensus that we must do something about it.
The leading proposals for health care reform are designed primarily to make health insurance affordable, when what we really need to do is make health care affordable. These proposals use insurance product design and tax policies to try to balance the health benefits provided with the ability of the individual to contribute to the premium. In an effort to keep the premium affordable, patient cost sharing is included as an incentive to reduce utilization of both beneficial and marginal health care services and products.
This study demonstrates a major flaw with this approach. Although the family may be able to budget for a modest component of an insurance premium that remains the same each month, family budgets are now so tight that a mere 2.5 percent of family income that might be required for out-of-pocket cost sharing can be a family budget buster. This study shows that cost sharing can impair both family finances and family health care access.
Financing of our health care system should be totally separated from health care access. Even modest financial barriers to access should be removed from the delivery side of health care. Cost sharing has only a negligible impact on our total national health expenditures yet it can have a serious impact on the finances and health of individuals and their families.
On the financing side, attempting to establish insurance premiums that would be affordable based on family income requires an administratively complex system of matching premiums with benefits and using tax policies to establish equitable contributions by families. This is because we have been fixated on the concept that each family must have a specific, designated private health plan and the financing must fit that plan.
It doesn’t have to be that way. Look at the traditional Medicare program. A single risk pool is established for all Medicare beneficiaries and that pool is financed primarily through equitable taxes. Medicare does have cost sharing, but this study shows us that Medicare would serve us even better if cost sharing were eliminated, fully funding the risk pool to cover payment for all essential services.
The most efficient and equitable method of financing health care for all of us would be to establish one single, universal risk pool and fund it with a system of progressive taxes. We can all pay our fair taxes, but, with fairly spartan family budgets now being the norm, we shouldn’t have to budget medical costs that are less predictable, often unexpected, and frequently in excess of discretionary income.

Only in our failed health care system

CHARLES I. WOHL, M.D.
Berkshire Eagle
Letters
Tuesday, December 16

The extensive layoffs at KB Toys, as described in the Dec. 13 Eagle, will cause far more misery for KB employees than the loss of their jobs alone.

The laid-off workers also lost their medical insurance on the day their jobs ended. Many unemployed KB workers will not receive subsidized health insurance through Commonwealth Care, the Massachusetts health plan, because their incomes before the layoffs exceeded 300 per cent of the poverty level, making them ineligible for subsidized coverage. They must buy health insurance or they face fines; and if they require medical care while uninsured, they face bankruptcy. Adequate health insurance for a family of four can cost around $12,000 per year, unaffordable for many laid-off workers — and for many employed people as well. The only affordable coverage for such people will have high deductibles and co-pays, meaning that many will have to choose between paying for medicine and paying for food and housing.

The KB layoffs are just the tip of the iceberg. As the unemployment rate rises throughout Massachusetts, tens of thousands will remain unemployed long enough to qualify for state subsidized health insurance through Commonwealth Care. When this happens, the Massachusetts health plan, already under great financial stress, will simply run out of money.

What is happening in Massachusetts is a microcosm of the severe economic recession in the U.S. and much of the world. As more Americans lose their jobs and thus their employer-based health insurance, the ranks of the uninsured (now 47 million and counting) and underinsured will swell, meaning that many millions will forego or delay medical care.

This scenario can only happen in America and is the result of our perverse health system in which employer-based health insurance written by private for-profit insurance companies is the predominant form of health coverage for those under age 65. This has lead to a fragmented, inefficient system in which nearly one-third of medical expenditures is consumed by insurance company profits and administrative costs. Medicare overhead is under five per cent. The expense and administrative costs of providing private health insurance for their employees has greatly burdened small and large American businesses, such as the automobile companies, and has made it difficult to compete with foreign companies whose workers are covered by government insurance.

Many small businesses have dropped health insurance for their employees all together or are asking them to contribute to their insurance premiums, which many employees cannot afford to do. And, as we have seen with the laid-off KB workers, when employees lose their jobs they often lose their health insurance. This cannot happen anywhere else in the industrialized world, even though unemployment is rising in Canada and Europe. Every other industrialized country has some form of universal health care. None uses profit making, investor-owned insurance companies like ours to provide health care for their citizens.

Most of my fellow physicians and an even larger proportion of other Americans believe it is time for single-payer national health insurance or “Medicare for All” in the U.S. This system is embodied in a bill in Congress, H.R. 676, sponsored by Rep. John Conyers and 92 other members of Congress. Urge Congressman John Olver to support this legislation.

President-elect Barack Obama has promised to reform the health care system from the grassroots up. As a first step in this effort, Secretary-Designate of Health and Human Services Tom Daschle is organizing Health Care Community Discussions all over the country. One such forum will be at Bagels Too, 166 North St., Pittsfield, on Wednesday, Dec. 17 from 5 p.m. until 7 p.m.. Members of MassCare will be there to discuss health care reform and the Massachusetts health plan and to elicit your views. Your feedback will be transmitted to Secretary-Designate Daschle and, through him, to President-elect Obama’s transition team. We look forward to seeing you there.

Family budgets strained by out-of-pocket health spending

Living on the Edge: Health Care Expenses Strain Family Budgets

By Peter J. Cunningham, Carolyn Miller, and Alwyn Cassil
Center for Studying Health System Change
December 2008

Affordability of medical care is a central focus of health care reform efforts. As health care costs continue to increase and the economy declines sharply, there is very little cushion in family budgets for health care costs, even for families with insurance coverage. Financial pressures on families from medical bills increase sharply when out-of-pocket spending for health care services exceeds 2.5 percent of family income, according to a new national study by the Center for Studying Health System Change (HSC). Low-income families and people in poor health experience financial pressures at even lower levels of spending, largely because they have already accumulated large medical debts they are unable to pay off.

There is little consensus among policy makers on how to set affordability standards in medical care, in part because there is little empirical evidence to guide these decisions. In addition, most of the policy focus has been on identifying affordability standards for insurance premiums, such as in the Massachusetts health reform, with much less attention on affordability standards for out-of-pocket spending on medical services. Some analysts propose setting affordability standards based on the current distribution of out-of-pocket spending for services, such as typical spending levels for a privately insured, middle-income population.

However, a limitation with this approach is that unlike spending for premiums, mortgages, rents, and other household necessities, out-of-pocket spending on medical care is much less predictable, often unexpected and not entirely discretionary. While families may be able to budget for preventive and routine health care needs, high out-of-pocket medical spending by families is more often associated with urgent or serious health conditions, as well as provider recommendations for treatment, rather than discretionary patient choices. Thus, what people actually spend out of pocket on medical care reflects–at least in part–what they need or are prescribed, not necessarily what they can afford.

http://www.hschange.org/CONTENT/1034/

Comment:

By Don McCanne, MD

Everyone is concerned about health care costs, and there is now a consensus that we must do something about it.

The leading proposals for health care reform are designed primarily to make health insurance affordable, when what we really need to do is make health care affordable. These proposals use insurance product design and tax policies to try to balance the health benefits provided with the ability of the individual to contribute to the premium. In an effort to keep the premium affordable, patient cost sharing is included as an incentive to reduce utilization of both beneficial and marginal health care services and products.

This study demonstrates a major flaw with this approach. Although the family may be able to budget for a modest component of an insurance premium that remains the same each month, family budgets are now so tight that a mere 2.5 percent of family income that might be required for out-of-pocket cost sharing can be a family budget buster. This study shows that cost sharing can impair both family finances and family health care access.

Financing of our health care system should be totally separated from health care access. Even modest financial barriers to access should be removed from the delivery side of health care. Cost sharing has only a negligible impact on our total national health expenditures yet it can have a serious impact on the finances and health of individuals and their families.

On the financing side, attempting to establish insurance premiums that would be affordable based on family income requires an administratively complex system of matching premiums with benefits and using tax policies to establish equitable contributions by families. This is because we have been fixated on the concept that each family must have a specific, designated private health plan and the financing must fit that plan.

It doesn’t have to be that way. Look at the traditional Medicare program. A single risk pool is established for all Medicare beneficiaries and that pool is financed primarily through equitable taxes. Medicare does have cost sharing, but this study shows us that Medicare would serve us even better if cost sharing were eliminated, fully funding the risk pool to cover payment for all essential services.

The most efficient and equitable method of financing health care for all of us would be to establish one single, universal risk pool and fund it with a system of progressive taxes. We can all pay our fair taxes, but, with fairly spartan family budgets now being the norm, we shouldn’t have to budget medical costs that are less predictable, often unexpected, and frequently in excess of discretionary income.

The public insurance option and AHIP's battle against it

The Case For Public Plan Choice In National Health Reform

By Jacob S. Hacker, Ph.D.
Berkeley Law Center on Health, Economic, and Family Security
December 16, 2008
This brief has made three main points. First, public health insurance outperforms private insurance in controlling costs while maintaining access and benefits–even when compared with private plans that are regulated to ensure broad coverage. Second, public insurance has also made major strides in quality improvement, and a new public plan working with Medicare alongside private plans would be able to make much greater strides in the future. Third, a competing public plan is essential to set a benchmark for private plans, providing a “check and balance” that ensures private plans, as well as the public plan, uphold high standards.
Even within a reformed system, private plans will continue to have incentives to engage in activities that undermine health security, such as tailoring their benefits or provider networks to discourage less healthy people from enrolling. Moreover, acting alone, private plans have historically paid insufficient attention to obtaining greater value. This is in part because of their limited reach, inherent instability, and the frequent movement of patients in and out of their subscriber base, and in part because of their generally weak incentives to invest in broadly distributed information on quality or to share their performance data with other interested parties. Public plan choice creates an institutional “check and balance,” encouraging private plans to uphold high standards of quality, affordability, and access.
The Case For Public Plan Choice In National Health Reform (27 pages):
http://institute.ourfuture.org/files/Jacob_Hacker_Public_Plan_Choice.pdf
Key Findings (2 pages):
http://institute.ourfuture.org/files/Hacker_Keyfindings.pdf

And…

Insurers Seek Presence at Health Care Sessions

By Robert Pear
The New York Times
December 17, 2008
When supporters of President-elect Barack Obama hold house parties to discuss ways of fixing the health care system over the next two weeks, they may find some unexpected guests.
Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, the main lobby for insurance companies, said the group was “mobilizing our grass-roots coalitions and encouraging industry employees” to participate in meetings for the Obama transition team.
Before Mr. Obama even takes office, insurance companies are raising questions about a central element of his plan that calls for creation of a new public insurance program to compete directly with private insurers. A public program would, they fear, have inherent unfair advantages.
http://www.nytimes.com/2008/12/17/us/politics/17health.html?_r=1&%2334;health%20insurance=&sq=+&st=nyt&%2334;=&scp=1&pagewanted=print

In this window of opportunity for health care reform, the model that has gained traction and is moving forward is reform based on a combination of employer-sponsored plans, an individual mandate to purchase regulated private plans through an insurance pool or insurance exchange, and an option to purchase a public plan based on an improved version of Medicare.
The private insurance industry knows that if it is to survive, it must be willing to accept everyone in both the employer-sponsored and individual markets, and they now have expressed a willingness to do so. They support a market of competing health plans, with one exception. They oppose the creation of a new competing public program because it would have “inherent unfair advantages.”
What are those advantages? Jacob Hacker, in “The Case For Public Plan Choice In National Health Reform,” explains the many reasons why a public plan is superior to the private plans in providing greater value through higher quality, better access, and greater effectiveness in controlling costs. He states that, by establishing a level playing field, the public plan option would set a benchmark as a standard for private plan performance.
The private plans profess to believe in market competition. Why should they object to a level playing field? Read this paper and you’ll find twenty pages of reasons on why they cannot compete with a public program.
So we’re once again back to the argument that we cannot go straight to a single payer national health program because it is not politically feasible. But what about the feasibility of a public option in a multi-payer system? The insurance industry is opposed because the government has “unfair advantages.” The Republicans say that they are cooperating on a bipartisan approach to reform, but once the doors close, they have made it very clear that a public option will never be approved. Hacker tells us why the public option is absolutely essential in the multi-payer model, but AHIP and the Republicans tell us that it will never happen (and they have the Senate votes to prevent it).
This report is well worth downloading since it explains so well why we need to change to a public insurance program. With minimal editing, such as removing comments about competing private plan innovation, we could use it as a treatise for a new and improved Medicare – a single payer national health program.
The HCAN coalition could use the unedited version to advocate for the multi-payer model, and we could use the edited version to advocate for single payer. Since neither approach is “feasible,” why don’t we just go for broke? To Medicare for All in one single leap!

The public insurance option and AHIP’s battle against it

The Case For Public Plan Choice In National Health Reform

By Jacob S. Hacker, Ph.D.
Berkeley Law Center on Health, Economic, and Family Security
December 16, 2008

This brief has made three main points. First, public health insurance outperforms private insurance in controlling costs while maintaining access and benefits–even when compared with private plans that are regulated to ensure broad coverage. Second, public insurance has also made major strides in quality improvement, and a new public plan working with Medicare alongside private plans would be able to make much greater strides in the future. Third, a competing public plan is essential to set a benchmark for private plans, providing a “check and balance” that ensures private plans, as well as the public plan, uphold high standards.

Even within a reformed system, private plans will continue to have incentives to engage in activities that undermine health security, such as tailoring their benefits or provider networks to discourage less healthy people from enrolling. Moreover, acting alone, private plans have historically paid insufficient attention to obtaining greater value. This is in part because of their limited reach, inherent instability, and the frequent movement of patients in and out of their subscriber base, and in part because of their generally weak incentives to invest in broadly distributed information on quality or to share their performance data with other interested parties. Public plan choice creates an institutional “check and balance,” encouraging private plans to uphold high standards of quality, affordability, and access.

The Case For Public Plan Choice In National Health Reform (27 pages):
http://institute.ourfuture.org/files/Jacob_Hacker_Public_Plan_Choice.pdf

Key Findings (2 pages):
http://institute.ourfuture.org/files/Hacker_Keyfindings.pdf

And…

Insurers Seek Presence at Health Care Sessions

By Robert Pear
The New York Times
December 17, 2008

When supporters of President-elect Barack Obama hold house parties to discuss ways of fixing the health care system over the next two weeks, they may find some unexpected guests.

Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, the main lobby for insurance companies, said the group was “mobilizing our grass-roots coalitions and encouraging industry employees” to participate in meetings for the Obama transition team.

Before Mr. Obama even takes office, insurance companies are raising questions about a central element of his plan that calls for creation of a new public insurance program to compete directly with private insurers. A public program would, they fear, have inherent unfair advantages.

http://www.nytimes.com/2008/12/17/us/politics/17health.html?_r=1&%2334;health%20insurance=&sq=+&st=nyt&%2334;=&scp=1&pagewanted=print

Comment:

By Don McCanne, MD

In this window of opportunity for health care reform, the model that has gained traction and is moving forward is reform based on a combination of employer-sponsored plans, an individual mandate to purchase regulated private plans through an insurance pool or insurance exchange, and an option to purchase a public plan based on an improved version of Medicare.

The private insurance industry knows that if it is to survive, it must be willing to accept everyone in both the employer-sponsored and individual markets, and they now have expressed a willingness to do so. They support a market of competing health plans, with one exception. They oppose the creation of a new competing public program because it would have “inherent unfair advantages.”

What are those advantages? Jacob Hacker, in “The Case For Public Plan Choice In National Health Reform,” explains the many reasons why a public plan is superior to the private plans in providing greater value through higher quality, better access, and greater effectiveness in controlling costs. He states that, by establishing a level playing field, the public plan option would set a benchmark as a standard for private plan performance.

The private plans profess to believe in market competition. Why should they object to a level playing field? Read this paper and you’ll find twenty pages of reasons on why they cannot compete with a public program.

So we’re once again back to the argument that we cannot go straight to a single payer national health program because it is not politically feasible. But what about the feasibility of a public option in a multi-payer system? The insurance industry is opposed because the government has “unfair advantages.” The Republicans say that they are cooperating on a bipartisan approach to reform, but once the doors close, they have made it very clear that a public option will never be approved. Hacker tells us why the public option is absolutely essential in the multi-payer model, but AHIP and the Republicans tell us that it will never happen (and they have the Senate votes to prevent it).

This report is well worth downloading since it explains so well why we need to change to a public insurance program. With minimal editing, such as removing comments about competing private plan innovation, we could use it as a treatise for a new and improved Medicare – a single payer national health program.

The HCAN coalition could use the unedited version to advocate for the multi-payer model, and we could use the edited version to advocate for single payer. Since neither approach is “feasible,” why don’t we just go for broke? To Medicare for All in one single leap!