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BC Calif creates dual networks to cheat patients and physicians

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BC Calif creates dual networks to cheat patients and physicians

Physicians Urged to Carefully Review Blue Cross Contract Amendment

California Physician
September 15, 2008

Physicians contracted with Blue Cross of California were recently notified of the insurer’s intent to amend its Prudent Buyer contract to include Anthem’s Select PPO product, effective January 1, 2009.

The addendum in question requires contracted physicians to always refer Anthem Select PPO Members to other participating Select PPO providers, unless they have obtained authorization to refer out of network. Physicians should be aware that the underlying Prudent Buyer contract authorizes Blue Cross to unilaterally lower the physicians’ fee schedule as a penalty for referring to out of network providers. For this reason, it is important for physicians to determine if colleagues you frequently refer to and those who refer to you participate in the Select PPO network.

http://www.calphys.org/html/cc763.asp

Addendum:
http://www.calphys.org/assets/applets/bc_addendum_091508.pdf

Comment:

By Don McCanne, MD

Those supporting health care reform based on the model of private health plans competing in the marketplace have looked to Blue Cross of California (BCC) as the nation’s leader in innovative market solutions. BCC has been very effective in providing insurance products with competitive premiums by using these innovations to limit what is paid for health care benefits, in an environment of ever-increasing health care costs.

By far the most important innovation was to establish preferred provider lists of physicians and hospitals that agreed to accept contracted reimbursement rates. The providers accepted lower rates, and patients were financially penalized if they used providers outside of the contracted networks. No attempt will be made to address here the many other innovations that allowed BCC to reduce what it pays for health care, but more does need to be said about this new innovation in its preferred provider networks.

Largely because of its competitive premiums made possible by its leverage in being able to sign up physicians and hospitals in its Prudent Buyer PPO plans, BCC has been one of the most successful programs in California, success being defined from a business perspective. Its success has been so great that it is now in a position to be able to make itself its own competitor, but, as we’ll see this is not competition that is designed to benefit the patient/consumer, but rather to benefit the Anthem/WellPoint shareholders of which BCC is a subsidiary.

In addition to its well established Prudent Buyer PPO, it now also has established Anthem Select PPO, a product designed to be more competitive by offering even lower premiums. The Anthem Select PPO has established a separate contract with a much smaller number of physicians and hospitals who have agree to even lower reimbursement rates (presumably lower, though that is proprietary information). Besides lower rates, BCC also benefits by making access more difficult for patients by sharply limiting the number of Select providers available.

Patients may not realize it, but they are penalized when they continue to use their Blue Cross Prudent Buyer providers if those providers have not also signed up to be part of Anthem Select PPO. They may think they have access to the Prudent Buyer PPO list, but if the corner of their card says “A Select Network Product,” they are restricted to a much more limited choice if they expect to receive the full benefits of their plan (that is, full underinsurance benefits).

The new BCC innovation spelled out in the addendum and in the underlying Prudent Buyer contract establishes financial penalties for physicians who continue to refer to their established Prudent Buyer colleagues and hospitals without first checking to be certain that they are on the much more exclusive Anthem Select PPO list.

BCC has provided a potential out. Physicians can obtain prior authorization to refer Select patients to the Prudent Buyer providers. But talk about abusive administrative excesses! BCC is requiring the burdensome prior authorization process merely to cross refer within its own two artificially segregated networks!

The process is hardly transparent. Most physicians and their staff members will not notice “A Select Network Product” on the corner of the card. They will make the Prudent Buyer referrals as usual. When the claim is paid, the disallowed amount will be adjusted off, without the staff realizing that the adjustment is greater than it would have been had a referral been made within the more restricted Select list. The patient will receive a statement of benefits with a larger amount listed as their own responsibility, not realizing that they are being penalized for using a Prudent Buyer provider who did not also have a Select contract.

Thus Blue Cross of California has set up within its own Prudent Buyer program two separate PPO lists that it uses to play against each other for the purpose of cheating the patient, cheating the physician, and cheating the hospital. Only the shareholders benefit.

Some may feel that “cheat” is too strong of a word, but cheating is depriving by trickery, and that is exactly what BCC is doing.

For those who still believe that we can patch together reform by using private insurance plans, please read John Geyman’s “Do Not Resuscitate: Why the Health Insurance Industry Is Dying, and How We Must Replace It” (Common Courage Press).

McCain's Radical Agenda

By BOB HERBERT
New York Times
Published: September 16, 2008

Talk about a shock to the system. Has anyone bothered to notice the radical changes that John McCain and Sarah Palin are planning for the nation’s health insurance system?

These are changes that will set in motion nothing less than the dismantling of the employer-based coverage that protects most American families.

A study coming out Tuesday from scholars at Columbia, Harvard, Purdue and Michigan projects that 20 million Americans who have employment-based health insurance would lose it under the McCain plan.

There is nothing secret about Senator McCain’s far-reaching proposals, but they haven’t gotten much attention because the chatter in this campaign has mostly been about nonsense — lipstick, celebrities and “Drill, baby, drill!”

For starters, the McCain health plan would treat employer-paid health benefits as income that employees would have to pay taxes on.

“It means your employer is going to have to make an estimate on how much the employer is paying for health insurance on your behalf, and you are going to have to pay taxes on that money,” said Sherry Glied, an economist who chairs the Department of Health Policy and Management at Columbia University’s Mailman School of Public Health.

Ms. Glied is one of the four scholars who have just completed an independent joint study of the plan. Their findings are being published on the Web site of the policy journal, Health Affairs.

According to the study: “The McCain plan will force millions of Americans into the weakest segment of the private insurance system — the nongroup market — where cost-sharing is high, covered services are limited and people will lose access to benefits they have now.”

The net effect of the plan, the study said, “almost certainly will be to increase family costs for medical care.”

Under the McCain plan (now the McCain-Palin plan) employees who continue to receive employer-paid health benefits would look at their pay stubs each week or each month and find that additional money had been withheld to cover the taxes on the value of their benefits.

While there might be less money in the paycheck, that would not be anything to worry about, according to Senator McCain. That’s because the government would be offering all taxpayers a refundable tax credit — $2,500 for a single worker and $5,000 per family — to be used “to help pay for your health care.”

You may think this is a good move or a bad one — but it’s a monumental change in the way health coverage would be provided to scores of millions of Americans. Why not more attention?

The whole idea of the McCain plan is to get families out of employer-paid health coverage and into the health insurance marketplace, where naked competition is supposed to take care of all ills. (We’re seeing in the Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers and Merrill Lynch fiascos just how well the unfettered marketplace has been working.)

Taxing employer-paid health benefits is the first step in this transition, the equivalent of injecting poison into the system. It’s the beginning of the end.

When younger, healthier workers start seeing additional taxes taken out of their paychecks, some (perhaps many) will opt out of the employer-based plans — either to buy cheaper insurance on their own or to go without coverage.

That will leave employers with a pool of older, less healthy workers to cover. That coverage will necessarily be more expensive, which will encourage more and more employers to give up on the idea of providing coverage at all.

The upshot is that many more Americans — millions more — will find themselves on their own in the bewildering and often treacherous health insurance marketplace. As Senator McCain has said: “I believe the key to real reform is to restore control over our health care system to the patients themselves.”

Yet another radical element of McCain’s plan is his proposal to undermine state health insurance regulations by allowing consumers to buy insurance from sellers anywhere in the country. So a requirement in one state that insurers cover, for example, vaccinations, or annual physicals, or breast examinations, would essentially be meaningless.

In a refrain we’ve heard many times in recent years, Mr. McCain said he is committed to ridding the market of these “needless and costly” insurance regulations.

This entire McCain health insurance transformation is right out of the right-wing Republicans’ ideological playbook: fewer regulations; let the market decide; and send unsophisticated consumers into the crucible alone.

You would think that with some of the most venerable houses on Wall Street crumbling like sand castles right before our eyes, we’d be a little wary about spreading this toxic formula even further into the health care system.

But we’re not even paying much attention.

Small book on 'single payer' packs surprising wallop

FOR IMMEDIATE RELEASE
Sept. 16, 2008

Contact:
Mark Almberg, (312) 782-6006, mark@pnhp.org

10 Excellent Reasons for National Health Care

Edited by Mary E. O’Brien, M.D., and Martha Livingston, Ph.D.
Foreward by Rep. John Conyers Jr.
The New Press, August 2008
Paperback, 176 pp., $13.95

While the public is accustomed to seeing a fresh crop of books by presidential candidates during each election cycle — autobiographies, collections of platitudes or sometimes more visionary musings — it’s less common for them to come across popular and well-researched policy books on the burning issues of the day.

Even rarer are election-year policy books that are well-written, widely accessible and likely to have staying power long after the last vote is cast.

“10 Excellent Reasons for National Health Care,” however, is just such a book. Edited by Mary O’Brien, M.D., and Martha Livingston, Ph.D. — both health policy experts and leaders of Physicians for a National Health Program (PNHP) — this new offering from The New Press delivers exactly what it promises: 10 persuasive, evidence-based arguments for a single-payer national health insurance program in the United States.

Sixteen contributors, including Rep. John Conyers (D-Mich.), United Methodist Church leader James Winkler, California Nurses Association leader Rose Ann DeMoro and Steelworkers President Leo Gerard, make the case for single payer in a compact, pocket-sized paperback.

National health insurance is good for our health, they say. It’s cost effective and will save money. It will assure high-quality care for all, rich or poor. It’s the moral thing to do. It will let doctors and nurses focus on patients, not paperwork. It will diminish racial disparities. It will reduce medical debt. It will benefit both labor and business.

And, as Joanne Landy and Dr. Oliver Fein of PNHP argue, single payer is what nearly two-thirds of Americans want.

In each case, the argument is fleshed out with facts and statistics, sometimes accompanied by charts and even the occasional cartoon. Several contain dramatic patient stories. Dr. Claudia Fegan, for example, relates her frustration with trying to get an insurance company to approve an urgently needed detox treatment for a patient, ultimately finding herself pleading with an emergency room physician to administer a time-critical injection.

Drs. Olveen Carrasquillo and Jaime Torres vividly describe what they call “medical apartheid” in our present setup, a multi-tiered “system of segregated care and unequal access faced by poor and predominantly minority patients,” including undocumented immigrants.

All of these problems would be effectively resolved under an expanded and improved Medicare for all, the contributors argue. The main obstacle to achieving this goal, however, is the influence of the for-profit, private health insurance industry.

Despite the obstacles to reform, “10 Excellent Reasons” is pervaded by a spirit of confidence that national health insurance can be won, an optimism that most readers will find contagious. It’s a powerful tool for single-payer advocacy. It also includes a valuable list of additional resources at the end.

In his foreword, Rep. Conyers sums it up: “This insightful book will provide you with the information you need to be an informed participant in the public debate about how to achieve health care for all, [and] work toward the only sensible solution to our health care crisis: a single-payer national health insurance program.”

* * * *

Mary O’Brien, M.D., is a board-certified attending physician at Columbia University Health Services and a faculty member at the Columbia College of Physicians and Surgeons. She is on the board of directors of the New York Metro chapter of Physicians for a National Health Program.

Martha Livingston, Ph.D., is associate professor of health and society at the State University of New York College at Old Westbury. She is vice-chair of the board of directors of the New York Metro chapter of PNHP.

“10 Excellent Reasons for National Health Care” can be ordered from your local bookseller or from Amazon.com, among other places. In searching for the book on Amazon, use the numeric 10 as the first word in the title or search under the names of Mary O’Brien, Martha Livingston or John Conyers.

To inquire about ordering multiple copies, call Physicians for a National Health Program at (312) 782-6006.

McCain’s Radical Agenda

By BOB HERBERT
New York Times
Published: September 16, 2008

Talk about a shock to the system. Has anyone bothered to notice the radical changes that John McCain and Sarah Palin are planning for the nation’s health insurance system?

These are changes that will set in motion nothing less than the dismantling of the employer-based coverage that protects most American families.

A study coming out Tuesday from scholars at Columbia, Harvard, Purdue and Michigan projects that 20 million Americans who have employment-based health insurance would lose it under the McCain plan.

There is nothing secret about Senator McCain’s far-reaching proposals, but they haven’t gotten much attention because the chatter in this campaign has mostly been about nonsense — lipstick, celebrities and “Drill, baby, drill!”

For starters, the McCain health plan would treat employer-paid health benefits as income that employees would have to pay taxes on.

“It means your employer is going to have to make an estimate on how much the employer is paying for health insurance on your behalf, and you are going to have to pay taxes on that money,” said Sherry Glied, an economist who chairs the Department of Health Policy and Management at Columbia University’s Mailman School of Public Health.

Ms. Glied is one of the four scholars who have just completed an independent joint study of the plan. Their findings are being published on the Web site of the policy journal, Health Affairs.

According to the study: “The McCain plan will force millions of Americans into the weakest segment of the private insurance system — the nongroup market — where cost-sharing is high, covered services are limited and people will lose access to benefits they have now.”

The net effect of the plan, the study said, “almost certainly will be to increase family costs for medical care.”

Under the McCain plan (now the McCain-Palin plan) employees who continue to receive employer-paid health benefits would look at their pay stubs each week or each month and find that additional money had been withheld to cover the taxes on the value of their benefits.

While there might be less money in the paycheck, that would not be anything to worry about, according to Senator McCain. That’s because the government would be offering all taxpayers a refundable tax credit — $2,500 for a single worker and $5,000 per family — to be used “to help pay for your health care.”

You may think this is a good move or a bad one — but it’s a monumental change in the way health coverage would be provided to scores of millions of Americans. Why not more attention?

The whole idea of the McCain plan is to get families out of employer-paid health coverage and into the health insurance marketplace, where naked competition is supposed to take care of all ills. (We’re seeing in the Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers and Merrill Lynch fiascos just how well the unfettered marketplace has been working.)

Taxing employer-paid health benefits is the first step in this transition, the equivalent of injecting poison into the system. It’s the beginning of the end.

When younger, healthier workers start seeing additional taxes taken out of their paychecks, some (perhaps many) will opt out of the employer-based plans — either to buy cheaper insurance on their own or to go without coverage.

That will leave employers with a pool of older, less healthy workers to cover. That coverage will necessarily be more expensive, which will encourage more and more employers to give up on the idea of providing coverage at all.

The upshot is that many more Americans — millions more — will find themselves on their own in the bewildering and often treacherous health insurance marketplace. As Senator McCain has said: “I believe the key to real reform is to restore control over our health care system to the patients themselves.”

Yet another radical element of McCain’s plan is his proposal to undermine state health insurance regulations by allowing consumers to buy insurance from sellers anywhere in the country. So a requirement in one state that insurers cover, for example, vaccinations, or annual physicals, or breast examinations, would essentially be meaningless.

In a refrain we’ve heard many times in recent years, Mr. McCain said he is committed to ridding the market of these “needless and costly” insurance regulations.

This entire McCain health insurance transformation is right out of the right-wing Republicans’ ideological playbook: fewer regulations; let the market decide; and send unsophisticated consumers into the crucible alone.

You would think that with some of the most venerable houses on Wall Street crumbling like sand castles right before our eyes, we’d be a little wary about spreading this toxic formula even further into the health care system.

But we’re not even paying much attention.

F. A. Hayek on social insurance

The Road to Serfdom

By Friedrich A. Hayek
Quote from the condensed version as it appeared in the April 1945 edition of Reader’s Digest
There is no reason why, in a society which has reached the general level of wealth ours has, (the certainty of a given minimum of sustenance) should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision.
http://www.iea.org.uk/files/upld-publication43pdf?.pdf
The Road to Serfdom
http://www.press.uchicago.edu/presssite/metadata.epl?mode=synopsis&bookkey=206047

“The Road to Serfdom,” the work of Nobel Laureate F. A. Hayek, has been one of the most influential books of the last century. It has been an inspiration to those who are opposed to socialism and who support free markets and libertarianism. The teachings of Hayek are frequently cited by those opposing government involvement in health insurance markets. But what did Hayek actually say?
He acknowledges that there are “common hazards of life against which few can make adequate provision.” All other nations have decided that the potential need for health care is one of those common hazards.
He recognizes that such hazards can be provided for by “a comprehensive system of social insurance.” Although the specifics of social insurance programs for health care can vary, they have in common a fund that provides for the payment of health care, an equitable source of payments made into that fund, and automatic inclusion of the individuals for which the fund was designed. It appears from his statement that Hayek would include all members of a society except perhaps those who are capable of making adequate provision for themselves.
He recognizes that the state should help organize such a comprehensive system of social insurance. Hayek was quite familiar with social insurance since his country of birth, Austria, had social insurance programs dating back to the nineteenth century.
Although an avid supporter of free markets, Hayek understood that even in a wealthy society the state should help organize a comprehensive system of social insurance.
Perhaps we should ask the free market advocates opposed to comprehensive social insurance to retrieve from their libraries their copies of “The Road to Serfdom,” and read them again. Although they don’t listen to us, just perhaps they may listen to Friedrich Hayek.

F. A. Hayek on social insurance

The Road to Serfdom

By Friedrich A. Hayek

Quote from the condensed version as it appeared in the April 1945 edition of Reader’s Digest:

There is no reason why, in a society which has reached the general level of wealth ours has, (the certainty of a given minimum of sustenance) should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision.

http://www.iea.org.uk/files/upld-publication43pdf?.pdf

The Road to Serfdom
http://www.press.uchicago.edu/presssite/metadata.epl?mode=synopsis&bookkey=206047

Comment:

By Don McCanne, MD

“The Road to Serfdom,” the work of Nobel Laureate F. A. Hayek, has been one of the most influential books of the last century. It has been an inspiration to those who are opposed to socialism and who support free markets and libertarianism. The teachings of Hayek are frequently cited by those opposing government involvement in health insurance markets. But what did Hayek actually say?

He acknowledges that there are “common hazards of life against which few can make adequate provision.” All other nations have decided that the potential need for health care is one of those common hazards.

He recognizes that such hazards can be provided for by “a comprehensive system of social insurance.” Although the specifics of social insurance programs for health care can vary, they have in common a fund that provides for the payment of health care, an equitable source of payments made into that fund, and automatic inclusion of the individuals for which the fund was designed. It appears from his statement that Hayek would include all members of a society except perhaps those who are capable of making adequate provision for themselves.

He recognizes that the state should help organize such a comprehensive system of social insurance. Hayek was quite familiar with social insurance since his country of birth, Austria, had social insurance programs dating back to the nineteenth century.

Although an avid supporter of free markets, Hayek understood that even in a wealthy society the state should help organize a comprehensive system of social insurance.

Perhaps we should ask the free market advocates opposed to comprehensive social insurance to retrieve from their libraries their copies of “The Road to Serfdom,” and read them again. Although they don’t listen to us, just perhaps they may listen to Friedrich Hayek.

Look before you leap into McCain's idea of health coverage

By James C. Mitchiner
Other Voices
The Ann Arbor News
September 11, 2008

At first glance, it sounds like a great idea: Scrap the employer-based health insurance system in favor of individually chosen private health plans, allow individuals to purchase such plans across state borders and from groups that currently don’t sell insurance (such as faith-based organizations), and use refundable income tax credits to help pay the premiums.

Hold down costs through strategies such as competition between plans, disease management programs, prevention and wellness initiatives, and expansion of information technology. Make people prudent health care consumers by expanding Health Savings Accounts. And for those with chronic diseases, who are medically uninsurable, give them “guaranteed access plans” through federally blessed (but state-subsidized) high-risk pools. For those of you who don’t recognize this radical approach to reforming American health care, it is the gist of the plan offered by Republican presidential candidate John McCain.

Unfortunately, it won’t work.

Let’s look first at the income tax credits. The idea is for individuals and families to use these credits to purchase health insurance plans in the non-group market, i.e., from a private insurer not sponsored by your employer. Premiums would be kept reasonable because plans would compete with each other to sell health insurance to those who valued it, or at least to individuals deemed “good risks” (read: healthy people).

And what level of credits are we talking about? Senator McCain proposes credits of just $2,500 per individual, or $5,000 per family.

Given that the average annual family health insurance premium in 2007 was over $12,000, it seems to me that $5,000 is woefully inadequate. Some, in fact, have compared the effect of these tax credits to that of throwing a 10-foot rope to a man stuck in a 40-foot hole. Just to make up the difference between the credit and the premium cost, a middle class family of four with a household income of $70,000 would have to fork over 10 percent of that income, a commitment that would seriously impact the family budget.

Let us suppose, however, that a worker could find and purchase a policy for only $5,000 per year. What would it look like? My guess is that it would have either multiple coverage restrictions (non-coverage for pre-existing conditions, a prolonged waiting period before insurance became effective) or significant financial limitations (high deductibles or co-pays, puny lifetime maximums), which defeat the purpose of having insurance in the first place. Clearly, private insurers cannot make a profit by selling comprehensive insurance at premiums the average individual can afford.

Perhaps the most significant objection to tax credits, however, is that they don’t address the serious flaws inherent in for-profit insurance.

Credits would be used to purchase the same policies currently sold by private insurers, policies that are rife with administrative waste, limit which doctors you can see, restrict when and where you can be hospitalized, and impose considerable cost-sharing responsibilities on their policyholders.

The economic literature appears to back me up. In 1999, MIT economist Jonathan Gruber and colleague Larry Levitt did a simulation analysis of tax credits. They found that a subsidy of $2,000 per individual and $4,000 per family would cover no more than 30 percent of the uninsured, at a cost of almost $40 billion. More recently, the Employment Policies Institute looked at the economic impact of tax credits in terms of reducing the number of uninsured and the attendant costs. The EPI found that the credit would be used by seven times as many already insured individuals as it would by newly insured persons, at a public cost of $19.8 billion. Overall, only 1.6 million would gain coverage, at an economically inefficient price tag of $12,644 each.

Beyond tax credits, other aspects of the McCain plan are flawed.

Disease management programs, personal health and wellness programs, and electronic medical recordkeeping, while pushed by insurers and intuitively conducive to cost control, nonetheless have not been shown to have a widespread effect on holding down health care expenses.

Neither have Health Savings Accounts, which have an affinity for the healthy and wealthy, who tend to use them as convenient tax shelters.

And any guaranteed access plan for the medically uninsurable that depends on state funding is suspect, given the current precarious situation with most state budgets.

The time has come for us to stop pretending that we can reform American health care through incremental tweaks in the current system. I really see no way to accomplish the three goals of reform – expanded access, consumer choice and cost control – without ending the hegemony of the for-profit insurance industry.

This means we have to replace our shamefully inefficient multipayer system with a national, single-payer alternative, one that creates affordable access to medical care for those who are locked out, eliminates racial and ethnic disparities, and allows Americans (rather than insurers or the government) to choose their own physicians and hospitals. Doing so will not come fast and will not be easy. But when it does come, and I believe it will, the result will be well worth the effort expended.

The writer, an Ann Arbor resident, is the president of the Washtenaw County Medical Society.

No on Prop. 101: It's a false pitch that blocks reform

By Phil Lopes and George Pauk
Tucson Citizen
Guest Opinion: Health Care Choice
Published: 09.15.2008

When Arizona voters cast their ballots this November, one of the questions they face is whether to vote yes or no on Proposition 101, the misnamed Freedom of Choice in Health Care Act. They should definitely vote no.

Prop. 101 is a constitutional amendment that would forbid restrictions on “a person’s freedom of choice of private health care systems or private plans of any type.”

Sounds like more freedom, doesn’t it? In fact, Prop. 101 protects the private health insurance industry.

Its passage would give the industry a privileged place in our state’s basic law. The result would be less freedom for average Arizonans, not more.

Remember, this is the industry that diverts about 31 cents of every health care dollar toward administrative costs, including big payouts for shareholder profits, marketing expenses and outlandish executive salaries.

Prop. 101 would limit Arizonans’ choices to plans offered by these private insurers, and it would block any steps toward badly needed health care reform.
Let’s step back for a moment and ask: What kind of choices do people want in health care?

They want access to comprehensive, affordable, high-quality care. They want to choose their health practitioner. They want to choose their hospital or other service delivery site.

Under our current health insurance system, Arizonans have none of these choices.

The U.S. Census Bureau reported last month that 45.7 million Americans – including 1.2 million Arizonans – lacked health insurance in 2007.

Employer-sponsored coverage continues to shrink, as do employee health benefits. Access to care, and availability of care, especially in rural areas, is diminishing.

The Commonwealth Fund, a research group, estimates that another 25 million people were “underinsured” last year – i.e., they had insurance but still wouldn’t be able to afford care in the event of a serious illness or injury.

Health insurers are further restricting what they cover – what they’ll pay for and what they won’t – and they increasingly impose big deductibles and co-pays.

They are also constantly changing their lists of “in-network” doctors and hospitals.

Choice of doctor or hospital? What a quaint idea! Just see what happens when you go “out of network.”

Thus, in the name of “freedom” and “choice,” Prop. 101 would give us neither. It would further push Arizonans into the iron grip of an industry that is failing us – an industry in which many put profits above the delivery of sorely needed health care.

There are many potential unintended consequences of Prop. 101.

For instance, if the Arizona Department of Insurance determines that a particular health insurance carrier does not meet set criteria for fiscal solvency and wants to bar it from offering unsound policies, the department would be prohibited from doing so if only one person in the state wanted to purchase this policy.

Wouldn’t it be better if every resident were guaranteed comprehensive, high-quality health care – at least as good as what is offered to our state employees?

If each person could choose his own health practitioner, hospital or clinic (working within our private delivery system), allowing continuity of care, better follow-ups and fewer medical errors?

Wouldn’t it be better if our state’s residents didn’t have to worry about crushing medical bills because they knew a social insurance fund would cover the costs? If every Arizonan were in one big pool, spreading the risk more equitably?

If health care costs were controlled by, for example, bulk purchasing of drugs and medical supplies?

Such a plan exists: the Arizona Health Security Act. Its enactment by our Legislature would go a long way toward curing our state’s health care ills.

It’s practical, fair and eminently realistic.

But take note: The passage of Prop. 101 would prevent Arizonans from choosing that better path, among others. And it’s being bankrolled by at least $434,000 – mainly from business interests, much of it from out-of-state.

In a recent newspaper interview, Dr. Eric Novack, a Phoenix-based orthopedic surgeon and leading proponent of the measure, conceded that Prop. 101 would constitutionally preclude “certain options.”

So the real aim is to preclude certain choices, Dr. Novack?

Arizona voters should not be deceived. They should vote “no” on Prop. 101.

State Rep. Phil Lopes represents Legislative District 27 (central, west and southwest Tucson), is leader of the House Democrats and is the sponsor of the Arizona Health Security Act. George Pauk is an internal medicine physician in Phoenix and a member of Physicians for a National Health Program (www.pnhp.org).

How Many Are Underinsured? Trends Among U.S. Adults, 2003 and 2007

Authors: Cathy Schoen, M.S., Sara R. Collins, Ph.D., Jennifer L. Kriss, Michelle M. Doty, Ph.D.
Summary Writer(s): Deborah Lorber
Health Affairs
June 10, 2008 | Volume 102

In the Literature

The number of underinsured U.S. adults–that is, people who have health coverage that does not adequately protect them from high medical expenses–has risen dramatically, a Commonwealth Fund study finds. As of 2007, there were an estimated 25 million underinsured adults in the United States, up 60 percent from 2003.

Much of this growth comes from the ranks of the middle class. While low-income people remain vulnerable, middle-income families have been hit hardest. For adults with incomes above 200 percent of the federal poverty level (about $40,000 per year for a family), the underinsured rates nearly tripled since 2003.

These results and others are published in How Many Are Underinsured? Trends Among U.S. Adults, 2003 and 2007, (Health Affairs Web Exclusive, June 10, 2008), by The Commonwealth Fund’s Cathy Schoen, Sara R. Collins, Jennifer L. Kriss, and Michelle M. Doty.

Middle-Income Uninsured Rate Rising

The authors analyzed data from the Commonwealth Fund 2007 Biennial Health Insurance Survey, which interviewed adults ages 19 and older from June through October 2007. Respondents were identified as underinsured if they spent 10 percent of more of their income (or 5 percent if they were low-income) on out-of-pocket medical expenses, or if they had deductibles that equaled 5 percent or more of their income. An estimated 14 percent of all nonelderly adults were underinsured in 2007, and more than one of four were uninsured for all or part of the year. Adding these two groups together, 75 million adults–42 percent of the under-65 population–had either no insurance or inadequate insurance in 2007, up from 35 percent in 2003.

Lack of adequate insurance coverage, the study finds, is not a problem limited to low-income people. Adults with incomes below the poverty level were at the highest risk of being uninsured or underinsured, but “insurance erosion has spread up the income distribution well in to the middle-income range,” the authors say. For those with annual incomes of $40,000 to $59,000, the underinsured percentage rate reached double digits in 2007. Barely half of those with incomes of 200 percent to 299 percent of the poverty level were insured all year with adequate coverage.

Underinsured Go Without Needed Care

In terms of access problems and financial stress, underinsured people–even though they have coverage all year–report experiences similar to the uninsured. More than half of the underinsured (53%) and two-thirds of the uninsured (68%) went without needed care–including not seeing a doctor when sick, not filling prescriptions, and not following up on recommended tests or treatment. Only 31 percent of insured adults went without such care.

About half of the underinsured (45%) and uninsured (51%) reported difficulty paying bills, being contacted by collection agencies for unpaid bills, or changing their way of life to pay medical bills. Many reported that they took on a loan, a mortgage against their home, or credit card debt to pay their bills, suggesting “that these financial difficulties had the potential to linger into the future.” In contrast, only 21 percent of insured adults reported financial stress related to medical bills.

Benefit Design Matters

The sharp increase in the number of underinsured adults, say the authors, is partly due to design changes in insurance benefits that leave individuals financially vulnerable. Underinsured adults were more likely than those with adequate insurance to report benefit limits–for example, restrictions on the total amount a plan would pay for medical care or on the number of physicians’ visits allowed. They were also far more likely to report high deductibles: one-quarter had annual per-person deductibles of $1,000 or more. Despite benefit limits and higher deductibles, underinsured adults often reported high annual premium costs, in line with those reported by more adequately insured people.

“Benefit design matters,” the researchers conclude. Having a policy with substantial cost-sharing relative to income can undermine access to care and erode family finances. While improving insurance coverage is a worthy goal, it is important for policymakers to consider cost-sharing provisions, scope of benefits, and income when exploring coverage mandates, they say. Health care reform in Massachusetts, for example, includes graduated cost-sharing, as well as premium assistance for those with incomes up to 300 percent of the poverty level.

The goal is high-quality care and improved outcomes–not just coverage, write the authors. “[T]here is growing recognition of the need for coherent strategies that combine coverage with payment and other policies to change directions and move toward a more inclusive and higher-performing, high-value health system.”

Citation

C. Schoen, S. R. Collins, J. L. Kriss, M. M. Doty, How Many Are Underinsured? Trends Among U.S. Adults, 2003 and 2007, Health Affairs Web Exclusive, June 10, 2008 w298-w309

Hundreds Gather in Albany to Launch Statewide Single Payer Health Care Coalition

New State Coalition Urges Lawmakers to Adopt a Single Payer Universal Health Care System

Single Payer New York Media Release
For Release: September 13, 2008

Doctors, nurses, consumers and community activists from throughout New York State came together in Albany today to create a statewide coalition to push for adoption of a single payer health care system at the federal and state levels. Single Payer NY will help coordinate grassroots education and outreach activities in support of single payer throughout the state. They already have county coordinators in two dozen counties.

“The American people overwhelmingly want health care for all. Labor, including the NYS AFL-CIO, have said they want health care to be a right through passage of HR 676. A majority of doctors now want a single payer national health care system because they are fed up dealing with the bureaucracy, delay and confusion of the private health care system. Everyone who studies the issue says of course it makes sense to eliminate the huge waste and expense of private health insurance. For once, we need elected officials to do what is right for Americans, not what is right for the insurance and drug companies,” said stated Mike Keenan, President, Troy Area Labor Council and a Vice President of the Capital District Area Labor Federation, AFL-CIO. The Troy Area Labor Council, AFL-CIO represents 10,000 union members and their families in Rensselaer County. The Capital District Area Labor Federation, AFL-CIO represents 100,000 union members throughout the Capital District Region.

A recent national survey by Indiana University of 2,193 doctors found a solid majority, almost 60 percent, supporting government legislation to establish national health insurance (NHI) — a 10 percent increase in support since 2002. Public opinion polls have consistently shown strong public support for a universal health care system. For instance, a March 2007 poll by CBS/ NY Times found that 64 percent of the respondents said the government should guarantee health insurance for all; 27 percent said it should not. An overwhelming majority in the poll said the health care system needed fundamental change or total reorganization.

“It is critical that New York reform its dysfunctional system in favor of one that guarantees health care access to all New Yorkers,” said Tina Gerardi, RN, chief executive officer of the New York State Nurses Association. “Access to comprehensive, quality, affordable, health care is a right, not a privilege, and must no longer be a function of income or employment status. We wholeheartedly support the mission of the Single Payer New York coalition to bring about change in the right direction.”

HR 676 (Conyers), known as Medicare for all, has 91 cosponsors, including NY Congressional representatives Engel, Hinchey, Maloney, McNulty, Nader, Owens, Rangel, Serrano, Towns, Weiner and Velazquez.

Among the dozens of groups helping to create Single Payer New York are: New York State Nurses Association, Troy Area Labor Council, Capital District Area Labor Federation, AFL-CIO, Hunger Action Network of New York State Tompkins County Health Care Task Force, Capital District Alliance for Universal Health Care, Health Care-NOW, Albany Presbytery, various chapters of the Physicians for a National Health Program, League of Women Voters of Saratoga County, Long Island Coalition for a National Health Plan, Rochester Interfaith Health Care Coalition, Green Party of NYS, and New York StateWide Senior Action

“The US spends more than twice as much on health care as the average of other developed nations, all of which boast universal coverage. Why is the U. S. so different? The short answer is that we alone treat health care as a commodity distributed according to the ability to pay, rather than as a social service to be distributed according to medical need,” said Mark Dunlea, Executive Director of Hunger Action Network of NYS.

“Instead of overcrowded emergency rooms, let’s plan for easy access to urgent care. Instead of harried doctors, let’s begin a restoration of physician and patient autonomy. Instead of medical debt forcing medical students into specialties, let’s have realistic and compassionate medical education funding. A great nation deserves a great healthcare system for all. Let us begin to create the system we want and need,” Richard Propp, MD, Chair Capital District Alliance for Universal Healthcare, Inc.

Nearly 50 million Americans are currently without health insurance, more than 75 million went without insurance for some length of time within the past two years, and tens of millions more have inadequate coverage. More than 18,000 Americans die annually due to a lack of insurance. Dr. Martin Luther KingJr. noted that “of all the forms of inequality, injustice in health care is the most shocking and inhumane.”

It is estimated that a single payer national health care program could save as much as $350 billion a year (New England Journal of Medicine, 2003) by eliminating the system of private health insurance. As much as a third of every health care dollar going through private health insurance goes to pay for their overhead, profits, marketing costs and excessive CEO salaries. Doctors on average have to hire 2.5 staff people just to deal with the conflicting paperwork, rules and bureaucracy of private health insurance.

A key point of Single Payer New York is that private forprofit health insurance is a core problem and therefore can not be part of the solution. Donna Smith was featured in Michael Moore’s movie SICKO. She and husband were forced to move back in with their children due to their higher medical bill.

“Having health insurance no longer means having peace of mind. If you get sick and you are insured you may find yourself underinsured or worse — unable to get necessary care. You may have premiums rising so high that you can no longer afford both housing and health insurance. You may have deductibles and co-pays that effectively and efficiently squeeze you away from seeking care. You may have collectors pursuing medical debt hound you to the point of garnishment and humiliation — as we did. You may have an employer that no longer wants you covered by the group health insurance plan with rising premiums and huge deductibles. And you may not know these things until in the grip of a health care crisis with no options and no ability to dig out,” said Smith. “Half measures will not do. Universal, free health care must become reality,” she added.

“A prime benefit of a national single payer system is that it would save several hundred billion dollars annually by eliminating the high overhead and profits of the private, investor-owned insurance industry. Doctors and hospitals would be freed from the burdens and expenses of paperwork created by having to deal with multiple insurers with different rules – often rules designed to avoid payment,” added Dunlea. “We are the only industrialized country to allow for-profit insurance companies to be middlemen in our health system. In their drive to enroll healthy (and profitable) patients and screen out the sick, private insurance waste vast sum on billing, marketing, underwriting, utilization review and other activities that enhance profits but divert resources from care and hassle patients and physicians,” Dunlea added.

Single Payer is defined as financing health care expenditures for the entire population through a single source, presumably the government, with funds collected through progressive taxation of citizens and businesses. While the groups want to see a single payer system (e.g., HR 676) enacted at the federal level, they are also urging the state to adopt a single payer system as soon as possible. Single payer legislation (A7354 Gottfried / S3107 Schneiderman) is pending in both the Assembly and Senate. A majority of Assembly members (85) are co-sponsors of the single payer bill. This fall the State will complete a study of the various ways to provide health care to all. The Governor is then expected to make a recommendation to lawmakers.

While the United States has very skilled health providers, our health care system performs poorly, with its overall quality only ranked 37th by the World Health Organization. US spending on health care is now over 2.1 trillion dollars — nearly $7,000 per person. This is more the double the world average of $2,571. This amounts to a whopping 15.5% of our GNP on health care — far more than any other country — which puts our businesses at a competitive disadvantage in the international marketplace.

A number of state legislators issued statements in support of the organizing effort.

Assembly Health Committee Chair Richard Gottfried said “H.R. 676 is the best solution for America’s health care system. Universal, publicly-sponsored, and publicly-funded health coverage is the answer for those who have coverage, for the uninsured, for health care providers, for employers, and for taxpayers. It’s the right thing to do, whether nationally or at the state level.”

“I am proud to support the formation of the Single Payer New York coalition. The 2.6 million uninsured New Yorkers can’t afford to wait for a new Democratic president or a new Congress to get the health care they deserve. It is imperative that New York State act now to ensure that every New Yorker has access to high quality, affordable health care. Working together through the Single Payer New York coalition, I am hopeful that we can make universal health care a reality in New York State,” said Senator Eric T. Schneiderman, lead sponsor of the single payer bill in the State Senate. Gottfried is the lead sponsor in the Assembly.

“As a strong proponent of Universal Single Payer health care, I am thrilled to hear that this new coalition, Single Payer New York, is forming. The timing is ideal, as I believe many New Yorkers and Americans now understand that we are paying more for health care than other countries, but with worse outcomes overall. It is time to turn that public understanding and frustration into political action. My congratulations and thanks for taking on this critical task.,” said Barbara Lifton, Assemblymember, 125th District

“Health care is not just another issue for me, it’s a value. I believe it is everyone’s right to accessible, affordable, quality health care. In 2006, 2.8 million people in New York State, including 500,000 children, went without health insurance. We can do better, and we must do better. The United States Congress must pass H.R. 676. H.R. 676 would provide quality health insurance coverage for everyone for just about everything, restore our right to choose health care providers, cut red tape, save billions and end outside interference in personal medical decisions. As Assistant Speaker of the Assembly, a co-sponsor of a resolution urging Congress to pass H.R. 676, and a co-sponsor of Assembly legislation to create a single payer system in our state, I know how a single payer system could help all New Yorkers. I join with my friends in labor, the New York State Nurses Association, women’s organizations, and the entire coalition known as Single Payer New York in calling for a health care system that puts patients ahead of profits,” said Assemblymember Rhoda S. Jacobs, 42nd Assembly District.

Assemblywoman Donna Lupardo (D-Endwell) added, “With 2.5 million uninsured New Yorkers, we need to address this inequity as soon as possible. While we are waiting for leadership in Washington, it is important that we develop the grass roots support necessary to keep the issue of health care in the forefront. I applaud the efforts of Single Payer New York in championing the health care reform we need here in New York and across the country.”

Look before you leap into McCain’s idea of health coverage

By James C. Mitchiner
Other Voices
The Ann Arbor News
September 11, 2008

At first glance, it sounds like a great idea: Scrap the employer-based health insurance system in favor of individually chosen private health plans, allow individuals to purchase such plans across state borders and from groups that currently don’t sell insurance (such as faith-based organizations), and use refundable income tax credits to help pay the premiums.

Hold down costs through strategies such as competition between plans, disease management programs, prevention and wellness initiatives, and expansion of information technology. Make people prudent health care consumers by expanding Health Savings Accounts. And for those with chronic diseases, who are medically uninsurable, give them “guaranteed access plans” through federally blessed (but state-subsidized) high-risk pools. For those of you who don’t recognize this radical approach to reforming American health care, it is the gist of the plan offered by Republican presidential candidate John McCain.

Unfortunately, it won’t work.

Let’s look first at the income tax credits. The idea is for individuals and families to use these credits to purchase health insurance plans in the non-group market, i.e., from a private insurer not sponsored by your employer. Premiums would be kept reasonable because plans would compete with each other to sell health insurance to those who valued it, or at least to individuals deemed “good risks” (read: healthy people).

And what level of credits are we talking about? Senator McCain proposes credits of just $2,500 per individual, or $5,000 per family.

Given that the average annual family health insurance premium in 2007 was over $12,000, it seems to me that $5,000 is woefully inadequate. Some, in fact, have compared the effect of these tax credits to that of throwing a 10-foot rope to a man stuck in a 40-foot hole. Just to make up the difference between the credit and the premium cost, a middle class family of four with a household income of $70,000 would have to fork over 10 percent of that income, a commitment that would seriously impact the family budget.

Let us suppose, however, that a worker could find and purchase a policy for only $5,000 per year. What would it look like? My guess is that it would have either multiple coverage restrictions (non-coverage for pre-existing conditions, a prolonged waiting period before insurance became effective) or significant financial limitations (high deductibles or co-pays, puny lifetime maximums), which defeat the purpose of having insurance in the first place. Clearly, private insurers cannot make a profit by selling comprehensive insurance at premiums the average individual can afford.

Perhaps the most significant objection to tax credits, however, is that they don’t address the serious flaws inherent in for-profit insurance.

Credits would be used to purchase the same policies currently sold by private insurers, policies that are rife with administrative waste, limit which doctors you can see, restrict when and where you can be hospitalized, and impose considerable cost-sharing responsibilities on their policyholders.

The economic literature appears to back me up. In 1999, MIT economist Jonathan Gruber and colleague Larry Levitt did a simulation analysis of tax credits. They found that a subsidy of $2,000 per individual and $4,000 per family would cover no more than 30 percent of the uninsured, at a cost of almost $40 billion. More recently, the Employment Policies Institute looked at the economic impact of tax credits in terms of reducing the number of uninsured and the attendant costs. The EPI found that the credit would be used by seven times as many already insured individuals as it would by newly insured persons, at a public cost of $19.8 billion. Overall, only 1.6 million would gain coverage, at an economically inefficient price tag of $12,644 each.

Beyond tax credits, other aspects of the McCain plan are flawed.

Disease management programs, personal health and wellness programs, and electronic medical recordkeeping, while pushed by insurers and intuitively conducive to cost control, nonetheless have not been shown to have a widespread effect on holding down health care expenses.

Neither have Health Savings Accounts, which have an affinity for the healthy and wealthy, who tend to use them as convenient tax shelters.

And any guaranteed access plan for the medically uninsurable that depends on state funding is suspect, given the current precarious situation with most state budgets.

The time has come for us to stop pretending that we can reform American health care through incremental tweaks in the current system. I really see no way to accomplish the three goals of reform – expanded access, consumer choice and cost control – without ending the hegemony of the for-profit insurance industry.

This means we have to replace our shamefully inefficient multipayer system with a national, single-payer alternative, one that creates affordable access to medical care for those who are locked out, eliminates racial and ethnic disparities, and allows Americans (rather than insurers or the government) to choose their own physicians and hospitals. Doing so will not come fast and will not be easy. But when it does come, and I believe it will, the result will be well worth the effort expended.

The writer, an Ann Arbor resident, is the president of the Washtenaw County Medical Society.

No on Prop. 101: It’s a false pitch that blocks reform

By Phil Lopes and George Pauk
Tucson Citizen
Guest Opinion: Health Care Choice
Published: 09.15.2008

When Arizona voters cast their ballots this November, one of the questions they face is whether to vote yes or no on Proposition 101, the misnamed Freedom of Choice in Health Care Act. They should definitely vote no.

Prop. 101 is a constitutional amendment that would forbid restrictions on “a person’s freedom of choice of private health care systems or private plans of any type.”

Sounds like more freedom, doesn’t it? In fact, Prop. 101 protects the private health insurance industry.

Its passage would give the industry a privileged place in our state’s basic law. The result would be less freedom for average Arizonans, not more.

Remember, this is the industry that diverts about 31 cents of every health care dollar toward administrative costs, including big payouts for shareholder profits, marketing expenses and outlandish executive salaries.

Prop. 101 would limit Arizonans’ choices to plans offered by these private insurers, and it would block any steps toward badly needed health care reform.
Let’s step back for a moment and ask: What kind of choices do people want in health care?

They want access to comprehensive, affordable, high-quality care. They want to choose their health practitioner. They want to choose their hospital or other service delivery site.

Under our current health insurance system, Arizonans have none of these choices.

The U.S. Census Bureau reported last month that 45.7 million Americans – including 1.2 million Arizonans – lacked health insurance in 2007.

Employer-sponsored coverage continues to shrink, as do employee health benefits. Access to care, and availability of care, especially in rural areas, is diminishing.

The Commonwealth Fund, a research group, estimates that another 25 million people were “underinsured” last year – i.e., they had insurance but still wouldn’t be able to afford care in the event of a serious illness or injury.

Health insurers are further restricting what they cover – what they’ll pay for and what they won’t – and they increasingly impose big deductibles and co-pays.

They are also constantly changing their lists of “in-network” doctors and hospitals.

Choice of doctor or hospital? What a quaint idea! Just see what happens when you go “out of network.”

Thus, in the name of “freedom” and “choice,” Prop. 101 would give us neither. It would further push Arizonans into the iron grip of an industry that is failing us – an industry in which many put profits above the delivery of sorely needed health care.

There are many potential unintended consequences of Prop. 101.

For instance, if the Arizona Department of Insurance determines that a particular health insurance carrier does not meet set criteria for fiscal solvency and wants to bar it from offering unsound policies, the department would be prohibited from doing so if only one person in the state wanted to purchase this policy.

Wouldn’t it be better if every resident were guaranteed comprehensive, high-quality health care – at least as good as what is offered to our state employees?

If each person could choose his own health practitioner, hospital or clinic (working within our private delivery system), allowing continuity of care, better follow-ups and fewer medical errors?

Wouldn’t it be better if our state’s residents didn’t have to worry about crushing medical bills because they knew a social insurance fund would cover the costs? If every Arizonan were in one big pool, spreading the risk more equitably?

If health care costs were controlled by, for example, bulk purchasing of drugs and medical supplies?

Such a plan exists: the Arizona Health Security Act. Its enactment by our Legislature would go a long way toward curing our state’s health care ills.

It’s practical, fair and eminently realistic.

But take note: The passage of Prop. 101 would prevent Arizonans from choosing that better path, among others. And it’s being bankrolled by at least $434,000 – mainly from business interests, much of it from out-of-state.

In a recent newspaper interview, Dr. Eric Novack, a Phoenix-based orthopedic surgeon and leading proponent of the measure, conceded that Prop. 101 would constitutionally preclude “certain options.”

So the real aim is to preclude certain choices, Dr. Novack?

Arizona voters should not be deceived. They should vote “no” on Prop. 101.

State Rep. Phil Lopes represents Legislative District 27 (central, west and southwest Tucson), is leader of the House Democrats and is the sponsor of the Arizona Health Security Act. George Pauk is an internal medicine physician in Phoenix and a member of Physicians for a National Health Program (www.pnhp.org).