PNHP

Response to TNR's Jonathan Cohn

Archives for 2008

Response to TNR's Jonathan Cohn

Disputations: Is Single-Payer Health Care The Best Option?

The problem with split-the-difference incremental reform.

by Don McCanne
The New Republic
July 16, 2008
The enthusiasm for the model of reform described by Jacob Hacker and endorsed by the Health Care for America Now (HCAN) coalition, which Jonathan Cohn wrote about in his recent New Republic piece “Single-Minded,” is understandable. It is a model that attempts to align policy with politics, allegedly meeting the previously unattainable threshold of feasibility. But is it feasible, and will it even work?
Anyone who really believes in this model understands that the private insurance plans would have to be very tightly regulated to reduce the profound deficiencies in our current insurance markets. The current private insurance business model depends on selling the insurers’ products to the large numbers of us who are healthy, especially the healthy workforce and their healthy families, while avoiding the need to contribute to the risk pools that cover those who have greater health care needs. Those costs are largely passed on to taxpayers through government programs.
Other nations that use private plans require effective pooling between plans through various regulatory mechanisms, reducing the problem of adverse selection and ensuring that premiums or taxes are adequate to pay for the care for those with greater needs. Even if the pools are nominally segregated, they function more like a universal risk pool through mechanisms such as risk adjustment and post-claims inter-insurance transfers.
The United States has a unique problem that would make it much more difficult to require private insurers to participate in a quasi-universal risk pool. On a per capita basis, we pay far more for health care than do other nations. Average-income individuals in other nations that use private plans can still afford premiums (or their tax equivalents). In those countries, only low-income individuals require some form of government subsidy for their care.
Compare that with the United States. For healthy risk pools, such as those of employer-sponsored plans, premiums are no longer affordable for average-income individuals and families, whether paid directly by the insured, or nominally by the employer. Imagine a tightly regulated insurance market that ended adverse selection and required benefits at a level that would prevent financial hardship for those with health care needs. The private insurers would find it absolutely impossible to provide us with compliant products that had affordable premiums.
Because of our very high costs, we must accept the fact that the insurance function is no longer simply a transfer from the many who are healthy to the fewer with health care needs, but it now must also include a partial transfer from the wealthy to middle- and lower-income individuals with needs. There is no alternative to this wealth transfer, and that alone creates doubt as to whether a model of highly regulated private plans is politically feasible.
We have to get over the idea that financing should be through premiums set by the actuarial value of the benefits in the insurance products. Those premiums are no longer affordable for most of us, and the complexities of income-related adjustments, whether through premium adjustments or tax credits, create an administrative nightmare. It is time that we separate the financing of the universal risk pool from the health care benefit package. The tax system provides us with the most equitable and efficient method of financing our global health care costs.
Perhaps a more compelling reason that the private insurance model no longer works is that it is very ineffective in slowing the increases in health care costs, and everyone agrees that affordability is now a major problem. Most of the current political cost-saving proposals would have very little impact on total costs. We need to address the true major cost drivers: the profound administrative excesses, the lack of an adequate primary care infrastructure, the waste of non-beneficial high-tech excesses, and the lack of a rational system of health care pricing. Even in a regulated environment, it would be very difficult for a multitude of private insurers and public programs to have much impact on these excess costs. Most economists agree that a monopsony, or single purchaser of health care products and services, would be most effective in extracting value through a negotiated realignment of incentives in our health care purchasing.
This debate that is taking place within the progressive community is missing the center of the feasibility dispute. It is implied that the Hacker/HCAN progressive model would be just fine if the single payer advocates would come to their senses and join in. It ignores the fact that this model is simply not politically feasible: it loses the support of market enthusiasts because of its dependency on tight regulatory control, intrusion by a government insurance program, and the necessity of a massive infusion of tax funds.
If you are going to accept that those changes are necessary to provide adequate coverage for everyone, then you might as well go ahead and establish a much more efficient and effective single payer national health program. Some may argue that explicit calls for income transfer and bureaucratic control of spending are what limit the political feasibility of the single payer model, but the private plans/public option model would have to incorporate the same principles, and their advocates should be very frank about that upfront.
So, the bottom line? We need reform that provides everyone the health care that they need, without financial barriers that would impede access. We can attempt to maneuver around the ubiquitous mines and trap doors of the political common ground of Hacker/HCAN, and still end up short if we survive. Or we can go straight to a proven model that would accomplish all of our financing goals–a single payer national health program.
For the full article:
http://tnr.com/politics/story.html?id=7aa401b5-f1f4-4564-921c-00f97b917605%20

The real debate over health care reform today centers over one fundamental choice. Are we going to continue to try to finance health care through private plans competing in the marketplace, a guarantee that access and equity problems would only grow worse, or are we going to use our own government resources to fix our financing system so that it works for everyone?
This shouldn’t even be a debate. Financial hardship, physical suffering and even death will increase without significant government intervention.
Unfortunately, a much less important debate has erupted within the community of those supporting a government role in ensuring that everyone has affordable access to all necessary health care. That debate is over whether or not private health plans should play a role in a reformed health care financing system.
Eliminating a socialized-medicine national health service from the list of options, that leaves us with two basic choices. We can either radically transform the private health plans into a system of social insurance, or we can replace the plans with a Medicare-like single payer national health program. Either would work, but the trade-offs are significant.
Systems using private plans are more expensive, largely because of greater administrative complexity. Equity is more difficult to achieve in a multi-payer system. A system of universal risk pooling would have to be superimposed on the private plans, making us wonder why we would even want to keep them since they would no longer be providing their insurance function of transferring risk.
Today, affordability is a concern for everyone. Health care will never again be affordable for all of us unless we adopt structural changes within our health care delivery system. As stated in the TNR article, “We need to address the true major cost drivers: the profound administrative excesses, the lack of an adequate primary care infrastructure, the waste of non-beneficial high-tech excesses, and the lack of a rational system of health care pricing.” Realigning incentives to accomplish these goals would be a relatively straightforward task for a single payer government monopsony. In contrast, a market of competing private plans would not have the power of a monopsony and would have to rely on the government to achieve these same goals.
Those supporting the private plan/public option model need to be explicit in describing their model, beginning with simple concepts such as how they would prevent adverse selection in the public option. If we are going to have an equitable and effective health care financing system for all of us, then their task of radically transforming the private insurance industry so that it would actually work is far greater than our task of improving Medicare and then providing it to everyone. Let’s hear how they would do it.

Response to TNR's Jonathan Cohn

Disputations: Is Single-Payer Health Care The Best Option?

The problem with split-the-difference incremental reform.

by Don McCanne
The New Republic
July 16, 2008

The enthusiasm for the model of reform described by Jacob Hacker and endorsed by the Health Care for America Now (HCAN) coalition, which Jonathan Cohn wrote about in his recent New Republic piece “Single-Minded,” is understandable. It is a model that attempts to align policy with politics, allegedly meeting the previously unattainable threshold of feasibility. But is it feasible, and will it even work?

Anyone who really believes in this model understands that the private insurance plans would have to be very tightly regulated to reduce the profound deficiencies in our current insurance markets. The current private insurance business model depends on selling the insurers’ products to the large numbers of us who are healthy, especially the healthy workforce and their healthy families, while avoiding the need to contribute to the risk pools that cover those who have greater health care needs. Those costs are largely passed on to taxpayers through government programs.

Other nations that use private plans require effective pooling between plans through various regulatory mechanisms, reducing the problem of adverse selection and ensuring that premiums or taxes are adequate to pay for the care for those with greater needs. Even if the pools are nominally segregated, they function more like a universal risk pool through mechanisms such as risk adjustment and post-claims inter-insurance transfers.

The United States has a unique problem that would make it much more difficult to require private insurers to participate in a quasi-universal risk pool. On a per capita basis, we pay far more for health care than do other nations. Average-income individuals in other nations that use private plans can still afford premiums (or their tax equivalents). In those countries, only low-income individuals require some form of government subsidy for their care.

Compare that with the United States. For healthy risk pools, such as those of employer-sponsored plans, premiums are no longer affordable for average-income individuals and families, whether paid directly by the insured, or nominally by the employer. Imagine a tightly regulated insurance market that ended adverse selection and required benefits at a level that would prevent financial hardship for those with health care needs. The private insurers would find it absolutely impossible to provide us with compliant products that had affordable premiums.

Because of our very high costs, we must accept the fact that the insurance function is no longer simply a transfer from the many who are healthy to the fewer with health care needs, but it now must also include a partial transfer from the wealthy to middle- and lower-income individuals with needs. There is no alternative to this wealth transfer, and that alone creates doubt as to whether a model of highly regulated private plans is politically feasible.

We have to get over the idea that financing should be through premiums set by the actuarial value of the benefits in the insurance products. Those premiums are no longer affordable for most of us, and the complexities of income-related adjustments, whether through premium adjustments or tax credits, create an administrative nightmare. It is time that we separate the financing of the universal risk pool from the health care benefit package. The tax system provides us with the most equitable and efficient method of financing our global health care costs.

Perhaps a more compelling reason that the private insurance model no longer works is that it is very ineffective in slowing the increases in health care costs, and everyone agrees that affordability is now a major problem. Most of the current political cost-saving proposals would have very little impact on total costs. We need to address the true major cost drivers: the profound administrative excesses, the lack of an adequate primary care infrastructure, the waste of non-beneficial high-tech excesses, and the lack of a rational system of health care pricing. Even in a regulated environment, it would be very difficult for a multitude of private insurers and public programs to have much impact on these excess costs. Most economists agree that a monopsony, or single purchaser of health care products and services, would be most effective in extracting value through a negotiated realignment of incentives in our health care purchasing.

This debate that is taking place within the progressive community is missing the center of the feasibility dispute. It is implied that the Hacker/HCAN progressive model would be just fine if the single payer advocates would come to their senses and join in. It ignores the fact that this model is simply not politically feasible: it loses the support of market enthusiasts because of its dependency on tight regulatory control, intrusion by a government insurance program, and the necessity of a massive infusion of tax funds.

If you are going to accept that those changes are necessary to provide adequate coverage for everyone, then you might as well go ahead and establish a much more efficient and effective single payer national health program. Some may argue that explicit calls for income transfer and bureaucratic control of spending are what limit the political feasibility of the single payer model, but the private plans/public option model would have to incorporate the same principles, and their advocates should be very frank about that upfront.

So, the bottom line? We need reform that provides everyone the health care that they need, without financial barriers that would impede access. We can attempt to maneuver around the ubiquitous mines and trap doors of the political common ground of Hacker/HCAN, and still end up short if we survive. Or we can go straight to a proven model that would accomplish all of our financing goals–a single payer national health program.

For the full article:
http://tnr.com/politics/story.html?id=7aa401b5-f1f4-4564-921c-00f97b917605%20

Comment:

By Don McCanne, MD

The real debate over health care reform today centers over one fundamental choice. Are we going to continue to try to finance health care through private plans competing in the marketplace, a guarantee that access and equity problems would only grow worse, or are we going to use our own government resources to fix our financing system so that it works for everyone?

This shouldn’t even be a debate. Financial hardship, physical suffering and even death will increase without significant government intervention.

Unfortunately, a much less important debate has erupted within the community of those supporting a government role in ensuring that everyone has affordable access to all necessary health care. That debate is over whether or not private health plans should play a role in a reformed health care financing system.

Eliminating a socialized-medicine national health service from the list of options, that leaves us with two basic choices. We can either radically transform the private health plans into a system of social insurance, or we can replace the plans with a Medicare-like single payer national health program. Either would work, but the trade-offs are significant.

Systems using private plans are more expensive, largely because of greater administrative complexity. Equity is more difficult to achieve in a multi-payer system. A system of universal risk pooling would have to be superimposed on the private plans, making us wonder why we would even want to keep them since they would no longer be providing their insurance function of transferring risk.

Today, affordability is a concern for everyone. Health care will never again be affordable for all of us unless we adopt structural changes within our health care delivery system. As stated in the TNR article, “We need to address the true major cost drivers: the profound administrative excesses, the lack of an adequate primary care infrastructure, the waste of non-beneficial high-tech excesses, and the lack of a rational system of health care pricing.” Realigning incentives to accomplish these goals would be a relatively straightforward task for a single payer government monopsony. In contrast, a market of competing private plans would not have the power of a monopsony and would have to rely on the government to achieve these same goals.

Those supporting the private plan/public option model need to be explicit in describing their model, beginning with simple concepts such as how they would prevent adverse selection in the public option. If we are going to have an equitable and effective health care financing system for all of us, then their task of radically transforming the private insurance industry so that it would actually work is far greater than our task of improving Medicare and then providing it to everyone. Let’s hear how they would do it.

Response to Health Care for America Now Campaign

NY Metro Chapter, Physicians for a National Health Program

The American health care system is in deep trouble. Everyone recognizes that it needs substantial reform. For too many Americans, health care is simply unaffordable. As each year passes, millions more are added to the rolls of the uninsured and underinsured. Physicians for a National Health Program believes that only a real structural change, to a publicly-financed single payer program, can effectively address its many problems.

Now a number of progressive public interest organizations and labor unions have announced a health care reform campaign called Health Care for America Now ( www.healthcareforamericanow.org). We welcome the attention they are bringing to the critical problems of the health care system. We applaud their recognition that the reliance on private insurance companies lies at the heart of the problems we face, and that it is the responsibility of government to assure access to affordable health care for everyone. The more that Americans understand that government must play a key role in the necessary reform, and that the private insurance industry is incapable of providing us with the health care we need, the sooner we will get the reforms that must take place.

Unfortunately, although the founders of HCAN correctly identify the problem, the remedy they offer — a choice of private plans and a new public plan with government playing a “watchdog” role — takes us away from actually achieving decent health care for everyone in this country. Past attempts by many states to increase access and improve coverage by regulating the insurance companies have all failed miserably. As long as they are “players” in our health care, these insurers will use their power and influence to see to it that there is no meaningful regulation of their behavior. Time and again in this country’s history, we have seen such regulation founder as the regulators become captives of those they are supposed to regulate.

Under the HCAN plan, private health insurance would remain a nightmare for consumers and physicians with continuing co-pays, deductibles, delays, and denials of coverage. The cost of what is already the world’s most expensive system would continue to climb, with no effective cost control mechanisms in place. Those who think they are insured will still find, when they are sick, that their insurance has failed them and that they can’t afford the care they need.

In short, what the Campaign is proposing would add hundreds of billions of dollars to the cost of the system and yet would fail to solve the many problems Americans face in trying to get care. We will only solve these problems when we get the private insurance companies out of our health care. Only a publicly-funded system modeled on the very popular Medicare program can cover everyone while making it possible to contain the continually rising cost of care.

We believe that the leaders of many of the organizations involved in HCAN, as well as many of their members, know that creating a single payer system is the only truly workable remedy for what ails our health care system. Instead of adopting an approach that appears to be politically expedient, we urge them to support the only program that can truly accomplish their goal of quality affordable health care for everyone: a single payer national health program.

The Untold Health Care Story: How They Crippled Medicare

By Lillian B. Rubin
Dissent Magazine
Summer 2008

http://dissentmagazine.org/article/?article=1230

Until recently, my husband and I had been seeing one of those “Oh-I’m-so-glad-he’s-my-doctor” physicians for two decades. Then one day the mail brought the announcement that the office was closing its doors and that the four doctors who had been in the practice were either retiring or leaving San Francisco. They enclosed a list of doctors who, they said, had indicated they had room in their practices. So started my search for a new primary-care physician.

I looked the list over, saw a familiar name, and dialed the number. “Yes,” the receptionist assured me, “doctor is taking new patients.” It was all very friendly; I made an appointment; she set about recording the necessary information, and then the crucial question. “What insurance do you have?” “Medicare and AARP” (one of the several medi-gap insurance plans to which those of us who can afford it subscribe), I replied. I heard a small intake of breath, a ten-second silence that felt like much more, and then, “Oh, you should have told me before that you’re Medicare; doctor isn’t taking new Medicare patients.” And with that she severed the connection and, I assume, wiped my appointment off the book.

I was surprised at the brusque refusal, shaken a bit, but not yet worried. San Francisco is a city that seduces with its charms, and with a major medical school within its borders and two more less than an hour’s drive away, we have plenty of well-trained physicians practicing here. How hard could it be to find a good internist? Very hard, it turned out, as I worked my way down a list of a dozen doctors – some referred by my retiring internist, some recommended by friends or friends of friends.

Since the medical community in the city knew of the shuttering of the office where I’d been cared for, they were prepared for calls like mine. Some announced on their voice mail: “The doctor isn’t taking any new Medicare patients”; some asked the fatal question about insurance before responding to my request for an appointment; and a few waited until they had noted all my personal information before asking the question. Twelve calls; twelve refusals to take Medicare.

Stunned, I sat at my desk looking at the list and wondering, What happened to the Medicare I once knew, to the physicians for whom it was simply another part of their practice, to the government that once supported it fully before the right-wing mania for privatization set in? Big questions. But my immediate concern was to find a doctor who would be available when my husband or I needed her or him.

Because I’m reasonably well-known in this community, I decided to get past the front desk by writing to each of these physicians directly. I laid out my credentials and accomplishments as if I were applying for a grant or a job; I dropped some reputable names of people, lay and professional, who had given me permission to do so, while at the same time assuring the doctors to whom I was pleading my case that I continued to be very active and was in vigorous good health. It was an exercise in the absurd. There I was, looking for a doctor to oversee my health and at the same time assuring any who would listen that I wouldn’t need them.

Two weeks later, I was getting desperate. The actual closure of the medical office was looming, and I still had not heard from a single physician on my list. I began to call the offices to ask if the doctor had received and read the letter I sent. I was brushed off in the first five with a curt reminder that “The doctor isn’t taking new Medicare patients.” Finally, on the sixth call, the woman on the other end of the line said she’d ask the doctor and call me back. An hour later, she called to say that he had read my letter, was “intrigued,” and would like to meet me.

We met, he agreed to take us on, and finally we had a doctor. But what, I wondered, happens to ordinary folk who don’t write letters and who, if they did, wouldn’t “intrigue” the person at the other end? Was this just something happening here in San Francisco where some doctors are charging a thousand-dollar fee for the privilege of becoming a patient and an annual membership payment of $500 thereafter?

As my story got out, the answers came pouring in. Friends and acquaintances around the country had similar tales to tell, sometimes their own experiences, sometimes about a friend or family member. Doctors from New York to California were either refusing to take new Medicare patients or making it so hard to get into their offices that it was no better than a direct refusal.

While this Medicare drama played out in my own life, health care was center stage in the long, drawn-out political theater known as the Democratic Party’s primaries. As Senators Barack Obama and Hillary Clinton argued about the fine points of their respective universal-health-care promises, President George W. Bush released plans to reduce budget deficits on the backs of America’s old folks by calling for $208 billion in mandatory budget reductions, with Medicare taking the biggest hit. In addition to cutting services and doctors’ payments, the administration seeks to slow the pace of Medicare growth from 7 percent to 5 percent over the next five years – cuts that come during the very period when Medicare rolls will grow exponentially as the first of the baby boomers become eligible for coverage, and about which no candidate of either party has expressed any outrage.

THE HISTORY of the struggle for health care in the United States is a long and bitter one, going back to 1945 when President Harry Truman asked the Congress to enact a national insurance program “to assure the right to adequate medical care and protection from the economic fears of sickness.” A coalition of conservative groups, led by the implacable opposition of the American Medical Association (AMA) and fueled by the insurance and pharmaceutical industries, denounced the Truman plan as “socialistic,” stoked public fears about freedom and choice, and defeated the legislation.

By 1952, Truman, acknowledging that he couldn’t win health care for all, tried softening the opposition with a compromise proposal, one that would provide care only for those age sixty-five and over who were receiving Social Security. But if the universal health care plan was outright socialism, the new, more limited legislation was nothing less than a foot in the socialist door, and the same forces that had fought so fiercely before joined once again to defeat the scaled- back proposal.

The same scenario was repeated in 1960 when, with the support of President John F. Kennedy, Medicare’s backers introduced yet another bill to provide health care for America’s aged. Only this time, the AMA, with the help of the wives of physicians across the country, organized what was known as “Operation Coffee Cup” and enlisted a B-movie actor named Ronald Reagan, who was then host of the popular Sunday night television program General Electric Theater, to warn, “One of the traditional methods of imposing statism or socialism on a people has been by way of medicine.”

Reflecting on the campaign against Medicare, Drew Pearson, a well-known Washington columnist at the time, wrote

Ronald Reagan of Hollywood has pitted his mellifluous voice against President Kennedy in the battle for medical aid for the elderly. As a result it looks as if the old folks would lose out. He has caused such a deluge of mail to swamp Congress that Congressmen want to postpone action on the medical bill until 1962. What they don’t know, of course, is that Ron Reagan is behind the mail; also that the American Medical Association is paying for it. . . . Just how [Reagan’s] background qualifies him as an expert on medical care for the elderly remains a mystery. Nevertheless, thanks to a deal with the AMA, and the acquiescence of General Electric, Ronald may be able to out influence the President of the United States with Congress.

It took President Lyndon Johnson, a former Senate leader who knew where all the congressional bodies were buried, to twist enough arms in Congress to stiffen its spine. On July 30, 1965, the years of struggle finally paid off. President Johnson signed into law Title XVIII of the Social Security Act establishing Medicare and its companion program, Medicaid, which insures indigent Americans. The nation had its first (and still only) government-sponsored, single-payer medical system. Former President Harry Truman was the first person to enroll in the program. The fee for Medicare Part B, which covers doctors visits (Part A covers hospital care), was $3 a month. Today, there’s a deductible of $135 before Medicare picks up 80 percent of the bill, and a monthly premium of $96.40 for those earning up to $82,000, ($164,000 for a couple filing a joint return). After that, the premiums go up proportionate to income.

While Medicare was a bare-bones program at first, covering hospital and doctor visits, it was expanded repeatedly over the next twenty-five years to cover disabled persons of any age, people with end-stage renal disease, recipients of the Supplemental Security Income (SSI) program for the elderly and disabled poor, chiropractic services, home health care, hospice, and more.

DESPITE THE immense popular support for Medicare, the program continued to grate on conservative sensibilities, and by the early 1980s the conservatism of the Reagan administration – its distaste for what it called “social engineering,” which meant any federally financed benefit programs – began to make itself felt. But the same voices that were railing against entitlements like Medicare were silent when the program was amended to cover the federal judiciary, members of Congress, and the president. No cries of socialism arose, no concerns about the cost of entitlements, no jeremiads about freedom and choice were heard from the congressional opposition or President Reagan when it was their turn to get government-sponsored health care.

With all the controversy, however, it wasn’t until 1995, after the Clinton administration’s failed attempt at universal health care, that the Republican Congress, urged on by Speaker of the House Newt Gingrich and backed strongly by the insurance companies, passed the Medicare Reform Bill, which was much less a step toward reform than a walk toward privatization. But it couldn’t have happened without the support from some Democrats and the signature of President Bill Clinton, who seemed to have lost his veto pen that day. True, he didn’t have the votes to sustain a veto, but that hasn’t stopped George W. Bush from sending back to Congress legislation that offends his principles, leaving those bills to languish on the stalemated congressional back burner with no hope of passage anytime soon.

Ultimately, the alleged reforms meant, among other things, an increased reliance on private insurance companies – subsidized by the federal government – for the delivery of care. It looked like a good deal at first, with grand promises from the insurance companies of more care for less money, and Medicare recipients flocked to the health maintenance organizations, my husband and I among them. But it wasn’t long before many of us found out that an insurance company’s public relations campaign has little relation to reality, and their promises melted away before the imperative of the bottom line. So, for example, when my husband developed a persistent urinary-tract infection that our primary care doctor kept treating unsuccessfully, I finally asked him why he wasn’t referring the problem to a urologist. He hemmed and hawed, shifted his feet, dropped his eyes, and finally said almost shamefacedly, “These HMOs are making it harder and harder to make that kind of referral.” I immediately switched back to Medicare, where a physician’s judgment is still generally the deciding factor in specialist care.

By 1997, two years after the so-called reforms were instituted, Senator Ted Kennedy and Representative Richard Gephardt were so outraged by the continued assault on Medicare that they wrote in a Washington Post op-ed piece,

Republicans in Congress – and, unfortunately, a few Democrats too – want to go beyond the bipartisan budget agreement and subject Medicare to death by countless cuts by increasing the cost of care, skimming off the healthiest and wealthiest participants, raising the age of eligibility, means- testing the program and turning major parts of Medicare over to the tender mercies of private insurance companies and managed-care firms.

Then came the Bush years. From its earliest days, this administration’s hostility to Medicare and Social Security has been no secret. It lost the fight to privatize Social Security, but the war against Medicare continues as it pushes people into HMOs by increasing the monthly cost for Medicare, cutting services, and reducing payments to hospitals and doctors until the very existence of the program is threatened. As long ago as 2005, an AMA survey reported that nearly 40 percent of 5,486 physicians said that if the projected 5 percent cuts were to pass, they would “curtail the number of new Medicare patients they accept into their practices.”

In the intervening years the situation has only gotten worse. A recent national survey of a thousand practicing physicians, released by the Medical Group Management Association, reports that in anticipation of the proposed 10.6 percent further payment reductions to take effect on July 1, 2008, 60 percent of the respondents reported that they were either limiting the number of Medicare patients or refusing to accept them altogether. One Oregon physician reported that he was “routinely turning away Medicare patients so desperate to find a doctor that they offered to pay for excess charges out-of-pocket,” a practice prohibited by Medicare law. Another whose Florida practice is made up of over 50 percent Medicare patients, agonized over dropping people who, he said, had become “like old friends after 28 years in practice.” But if the payments are slashed again, he explained, “I’ll have no choice. It’s a business, and if I can’t pay the bills, I can’t survive.” Chilling news for those of us now in Medicare, and worse yet for the Baby Boomers who will become eligible in the next few years.

True, some may argue that doctors already make more money than most Americans, and it’s hard to listen to their grievances with much sympathy. But doctors are at the heart of the success of Medicare, and until the Bush administration’s escalation of the war against the program, they took care of the nation’s elders without complaint. Moreover, their grievances gain force and legitimacy when we notice that the administration’s proposed budget cuts target doctors, hospitals, and a variety of patient services but don’t lay a glove on payments to the private insurance companies and their HMOs, even though many independent experts say federal payments to those plans are far too high and the service they provide much too low.

Unfortunately, the election campaign now under way offers little hope of substantial improvement in the health care crisis that now afflicts this nation. For despite what the privatization of Medicare has taught us about the incompatibility of for-profit insurance companies with quality patient care, and despite the fact that federal subsidies to these corporations are substantially more costly to taxpayers than the government-run Medicare, no candidate dares to propose the only universal health care plan that will work: a government-sponsored, single-payer system along the lines of the original Medicare [1] Ironically, a recent study conducted by the Indiana University School of Medicine’s Center for Health Policy and Professionalism Research Policy and published in the Annals of Internal Medicine (April 2008) reports that in a survey of 2,200 physicians, 59 percent now support legislation to establish national health insurance. Reflecting on his analysis of the data, Dr. Ronald Ackerman, co-author of the study, concluded that “across the board, physicians feel that our fragmented and for-profit insurance system is obstructing good patient care, and a majority now support national insurance as the remedy.” – a program that worked just fine until a coalition of conservative forces, insurance companies, the pharmaceutical industry, and right-leaning and/or fearful Democrats disassembled it. [2] All this, and I haven’t even mentioned the huge multi-billion-dollar boondoggle the federal government handed the insurance companies and the pharmaceutical industry with Medicare Part D, the prescription drug benefit that went into effect on January 1, 2006. It would take another whole article to discuss the many-tiered problems with this program.

FOOTNOTES:

[1] Ironically, a recent study conducted by the Indiana University School of Medicine’s Center for Health Policy and Professionalism Research Policy and published in the Annals of Internal Medicine (April 2008) reports that in a survey of 2,200 physicians, 59 percent now support legislation to establish national health insurance. Reflecting on his analysis of the data, Dr. Ronald Ackerman, co-author of the study, concluded that “across the board, physicians feel that our fragmented and for-profit insurance system is obstructing good patient care, and a majority now support national insurance as the remedy.”

[2] All this, and I haven’t even mentioned the huge multi-billion-dollar boondoggle the federal government handed the insurance companies and the pharmaceutical industry with Medicare Part D, the prescription drug benefit that went into effect on January 1, 2006. It would take another whole article to discuss the many- tiered problems with this program.

[Lillian B. Rubin is with the Institute for the Study of Social Change, University of California, Berkeley. She is a sociologist, psychologist, and author of numerous books, including, most recently, 60 on Up: The Truth about Aging in America (Beacon Press, 2007).]

Dr. Steffie Woolhandler on the Presidential Candidates & Single-Payer in the 2008 Elections

Dr. Steffie Woolhandler, co-founder of Physicians for National Health Program (PNHP), a group of over 15,000 physicians nationwide who support a single-payer health care system, spoke on June 26 in Chicago at the PNHP offices. She spoke about the presidential candidates’ health plans and single-payer in the 2008 elections. She is an associate professor at Harvard Medical School and an internist at Cambridge Hospital in Cambridge, Mass. The transcript below was prepared by Elizabeth Lalasz of Chicago; it was subsequently edited by Dr. Woolhandler.

I’ve been asked to make some comments on the upcoming Presidential elections and developing a strategy around them. I am an expert in health policy, not on political strategy. But I want to talk a little about where I see us going in the single-payer movement within the broader political context.

I am paradoxically optimistic about the political situation right now. I say paradoxically because if we look at the actual health policy proposals of Obama and McCain, they are not good.

Let’s start with McCain. He has said that he is going to continue most of the proposals of the Bush Administration, and perhaps accelerate the privatization of Medicare. He does not use the word privatization – but he’s been very clear that he is going to push for more “competition” and “choice” within Medicare, euphemisms for privatization.

He’s also very big on consumer-directed health care – bare-bones health plans with big co-payments and deductibles – as a way to save money. He has put forward a fairly desultory proposal about refundable tax credits, after many months during which no concrete proposals for health reform appeared on his web site. His come-lately proposal would offer a refundable tax credit of $2,500 for an individual, $5,000 for a family, far too little to afford adequate coverage.

What he doesn’t say on his web site is how he would fund the tax credit. So we are left wondering. If McCain goes with a Bush-style plan – and many pundits talk as if that is the case – then the tax credits would be funded by caps on, or even eliminating the tax-deductibility of employer-based insurance. This would cause a very sharp contraction in employer-based coverage.

McCain’s proposes what I would call the “voucherization” of health care; families would get a fixed tax credit (or a fixed amount of tax deductibility of an employer-sponsored plan) and above that there would be no further direct or indirect government subsidies for health care. So, it is essentially turning the current open-ended government tax subsidy into a limited government voucher. In essence, this is akin to a switch from a defined benefit system to a defined contribution system.

For those not familiar with this concept, let’s back up a little bit and discuss pensions. Retirees used to get pensions with a defined benefit, say 60 percent of your salary for as long as you lived. But few of us will get such pensions in the future. Nowadays, we get something called a defined contribution, at my institution, the employer puts 6 percent of my salary into a retirement plan. It turns out 6 percent of my salary summed up over 30 working years is a whole lot less money than what you would need to generate 60 percent of my salary for the rest of my life. So, the new pension arrangements, like the Bush/McCain health proposals, are actually a massive cutback disguised as a shift from a defined benefit to a defined contribution.

Needless to say, the concept of switching from defined benefit to defined contribution has been very popular with Republican leaders. There’s been an effort to move Medicare in that direction (under the moniker “premium support”) where the federal government would pay $6,000-$8,000 toward each senior’s coverage, but would not guarantee the full future costs of care. McCain’s plan seems to represent a similar effort within the commercial (non-elderly) health insurance market to push people into defined contribution rather than defined benefit arrangements.

We could spend more time on the many other problems with McCain’s proposals, but to be honest I don’t think it’s worth focusing too much on its details because it doesn’t appear that even McCain is serious about his health plan. He was under pressure to come up with something, and hence his staff produced a plan. Like President Bush, I doubt that McCain has any intention of actually pursuing his tax credit plan.

As for Obama his health proposal is not a universal health care plan; in fact, he doesn’t even claim that it is. He would greatly expand Medicaid and Medicaid-like programs. Medicaid expansion is of course, better than no Medicaid expansion; those of us who work in the public sector know that. But we also know that Medicaid and Medicaid-like expansions have been tried over and over for the last thirty years, and the number of uninsured and underinsured has continued to increase.

Immediately after such Medicaid expansions, we usually see a small, and short-lived drop in the number of uninsured. We are seeing that in Massachusetts right now. As long as we keep pumping money into Medicaid or similar programs, we can push down the number of uninsured a little bit. But that’s not a viable, long-term strategy because it’s not affordable. Obama does propose devoting significant new money to the expansion of Medicaid and S-CHIP (State Children’s Health Insurance Program), but, as in the past, such expansions yield small and temporary improvement.

Obama is also talking about an employer mandate – requiring employers to cover their workers – but has provided few details about exactly what would be required. Even in a wealthy and liberal state like Massachusetts, employers were able to block the implementation of an effective employer mandate (even though a law requiring employers to cover their workers was passed in 1988).

In fact the only mandate Obama is clear about is a mandate that parents be required to buy health insurance for their children. But this would leave tens of millions of American adults uninsured if the Obama plan goes though as he proposes it.

So, my optimism is not based on Obama’s proposal and it’s certainly not based on McCain’s proposal. My optimism is based on something taught to me by a nurse in the Boston-area and a longtime single-payer activist. She used to say, “People say politics is the art of the possible, but they are wrong. Politics is the art of creating the possible. And what is possible is about what people believe is possible.”

I believe the biggest impediment to our work over the last decade has not been the lack of a good program, because we know what a good single-payer program would look like. We have H.R. 676. We can look to Canada and places in northwestern Europe. So we have good models and we have a good program.

The problem is the lack of hope – the lack of a sense of possibility. People hate the health insurance system and they know things need to change. But people don’t believe things can change.

So, what we really need is an infusion of hope. Even if Obama can’t deliver on his proposals, when he raises peoples’ expectation they begin to believe that change is possible, and that’s a real force for change.

In some ways President Kennedy provides an example of this. He was not all that liberal, or effective as a leader of social change. But his election let people think that change was possible, and helped ignite the social movements of the Sixties. It gave new impetus to the Civil Rights movement, and certainly helped ignite the social currents that gave rise to the women’s and anti-war movements. His election raised people’s sense of possibility and that force pushed social change further, and faster John Kennedy envisioned.

I think we’re at a similar moment now. Many people view Obama as someone new and exciting; he brings a sense of possibility and optimism we have not seen in this country’s political culture for a long time.

The question we need to address is what do single-payer advocates do now? How do we use this opportunity to open up a thoroughgoing health reform debate, and pave the way for progress. Now, even more than in periods when reform was not really on the agenda, we need to articulate the single-payer message. As Obama and Congress take up the health reform debate early in the next administration, there must be a clear-eyed vision for reform that can work on the table. We must spread the word that the single-payer alternative has wide support, and a track record of success. While the alternatives are merely replays of failed proposals from the past.

Confronting the cost of health care

By Amy Kotlarz
Catholic Courier
July 1, 2008

An estimated 18,000 people in the United States die unnecessarily each year because they have no health insurance, according to the nonprofit Institute of Medicine of the National Academies.

Robin Salerno is trying her best to not become one of them. But Salerno has adrenal cancer, no insurance and few options.

A resident of Wolcott, Wayne County, she works six days a week at a local diner, earning about $17,000 a year. That’s too much to qualify for Medicaid or Family Health Plus.

Salerno might qualify for Healthy NY, an insurance program for small businesses and workers whose jobs don’t offer insurance, but services for her cancer might not be covered for a year.

“If I wait a year, I might not be around,” said Salerno, 50.

The cheapest private-market plan in Wayne County would cost her $767 a month — half of her monthly income.

Instead, she has been paying out-of-pocket for medications, doctor’s visits and such tests as MRIs and CT scans. Portions of her tests have been paid by the U.S. Department of Health and Human Services’ Hill Burton funds program for free or low-cost care — and by financial help from her mother.

Salerno is not alone in her struggle with the U.S. health-care system. Grassroots groups across the state and nation have been working to reform the health-care system, which some say is becoming increasingly unaffordable due to rising health costs.

This year’s presidential campaign also has fueled the debate, with both presumptive presidential nominees drafting health-care reform plans, details of which are available on their respective Web sites.

Reform proposals

Presumptive Republican nominee John McCain’s plan would allow consumers to direct how their health-care dollars would be used, create a guaranteed coverage plan for the uninsured and sick, create a tax credit to offset the cost of insurance, and expand the benefits of health-savings accounts.

Presumptive Democratic nominee Barack Obama’s plan would create a national health plan available to all and funded in part by employers who do not offer health insurance. He would also implement a health-insurance exchange that would help individuals to buy private insurance plans.

New York state also took up the issue in July 2007 when its departments of health and insurance formed the Partnership for Coverage panel to study obstacles to health coverage. According to its Web site at www.partnership4coverage.ny.gov, the panel’s ultimate goal is to develop, evaluate and recommend proposals for achieving universal coverage by building on existing programs.

The panel led hearings across the state during the fall of 2007.

“While many promoted expansion of public programs, others cautioned about the cost of such expansions, the impact on the state budget and the public tax burden and concern about replacing private dollars with public dollars,” stated the panel’s May 28 report to Gov. David Paterson, summarizing the findings of its hearings.

Escalating costs

The report notes that the Washington, D.C.-based Urban Institute was hired in December as a consultant to develop and study several models of proposals for universal coverage. As part of their work with the Partnership for Coverage, the state departments of health and insurance also are considering ways to contain health-care costs.

The state Catholic conference has also recommended this approach.

“Attempts to address the issue of the uninsured cannot succeed unless and until we examine the causes for the high costs of health services,” said Ron Guglielmo, director for health care for the New York State Catholic Conference, during testimony to the state panel.

According to the Kaiser Family Foundation, U.S. health-care spending grew 6.7 percent in 2006 to about $7,026 per resident, accounting for 16 percent of the nation’s gross domestic product. Per-capita health-care spending has more than doubled since 1990. And, according to the Centers for Medicare and Medicaid Services, health-care spending is projected to rise to more than $12,750 per person by 2016.

Longer life spans, more intensive treatment of chronic illness, increasingly expensive prescription drugs and technology, an aging population and higher administrative costs are driving these cost increases, the foundation said.

Fidelis Care, the New York state Catholic bishops’ health-insurance plan, has provided thousands of New Yorkers with health coverage through Child Health Plus, Family Health Plus and Medicaid programs. Yet millions of state residents aren’t eligible for these programs and still cannot afford private insurance, acknowledged Mark Lane, Fidelis Care president and CEO.

“There are 3 million people in New York state who can’t afford (insurance) or who have decided not to have it,” Lane said. “For the vast majority, affordability is an issue.”

No easy answers

Lane said there are several ways to make health insurance more affordable, but that each poses its own combination of benefits and drawbacks. Among the possible trade-offs inherent in the various plans are reducing benefits to cover more people; capping medical costs and freezing providers’ reimbursement rates; mandating that everyone obtain insurance; and rationing care to limit high-cost or high-risk procedures.

“There are no easy solutions,” he said.

The high administrative cost of health insurance is the target of several reform proposals. Dr. Leon N. Zoghlin of Hilton, a retired family-practice physician who volunteers at the St. Joseph’s Neighborhood Center on South Avenue in Rochester, contends that insurance-company bureaucracy and profit margins have led to higher costs for medical care.

Zoghlin is a member of Physicians for a National Health Program, which advocates a single-payer system in which the government or a single nonprofit entity would pay private doctors and hospitals to deliver health care.

Critics of single-payer systems charge that such a system would usher in socialized medicine, but Zoghlin notes that single-payer health proposals do not call for the government to own all the resources and means for production and distribution, as it does with respect to the U.S. Veteran’s Administration.

“We would funnel all our funds through the government, but care would be delivered by private sources or community not-for-profit sources, like hospitals,” Zoghlin said.

Zoghlin points to the single-payer insurance systems of many other developed countries and the lower administrative costs of Medicare, which is a single-payer system for the elderly and disabled, as compared to the costs of private insurance. He said he believes businesses are warming to a single-payer system because of spiraling health-insurance costs, and that doctors increasingly support the idea due to frustration with insurance-company denials and low reimbursements.

Yet some worry that proposals calling for increased government control over health care would lead to a loss of quality, a rationing of care, longer wait times or other negative consequences.

“I’m fearful that if the government takes over the health industry, then that would be the end of it,” said Dick Hastings of Perinton, who attended a May 8 talk in Rochester on health-care reform.

For its part, the Partnership for Coverage panel said advocates of a single-payer system need to provide more specifics on how such a model would operate in New York state.

Insurers told the panel that the state’s restrictive regulations on health-maintenance organizations and other mandates have made coverage plans for small businesses and individuals unaffordable. Empire and Excellus Blue Cross Blue Shield, for example, presented proposals to change state regulations to allow HMOs to merge the markets for individuals and small businesses, potentially decreasing the cost of such plans, and to add lower-priced consumer-directed plans.

Standards-based approaches

Rather than endorsing specific plans for reform, such organizations as the Catholic Health Association and the American Cancer Society are advocating standards for reform. Not surprisingly, the Catholic Health Association frames the debate in moral terms.

“This debate really speaks to our values and national priorities,” said Jeff Tieman, CHA’s senior director of health-reform initiatives, during a May 8 talk as part of the Downtown Community Forum at St. Mary Parish in Rochester.

Tieman delivered similar talks to the board and management of St. Joseph’s Hospital in Elmira May 8 and to the Catholic Media Convention in Toronto, Canada, May 29.

Tieman noted that the consequences of allowing large numbers of people to remain uninsured or underinsured include delayed treatment; expensive and inappropriate treatment in emergency rooms; and emotional and economic tolls on families. About half of bankruptcies are due to medical debt, he said, and 80 percent of the uninsured are members of working families.

CHA asserts that health care should be available and accessible to all; oriented toward health and prevention; sufficiently and fairly financed; transparent and driven by consensus; patient centered; and safe, effective and designed to deliver quality.

“This is a matter of community health and well-being,” Tieman said May 29. “We don’t want to be surrounded by sick people. We want to be surrounded by people who are healthy.”

Hillary Clarke, regional advocacy director and federal-issues manager for the Eastern Division of the American Cancer Society, said her agency’s standards for evaluating health-care proposals are: adequacy of coverage, availability based on medical history and inclusive eligibility standards, affordability for those with limited means and administrative simplicity. The society was one of many organizations that presented its agenda for health-care reform to the Partnership for Coverage panel.

In the case of cancer and other debilitating diseases, Clarke noted that even those who have insurance may struggle to afford coverage or lose their coverage if they are unable to work due to treatments.

“Any of us is one bad diagnosis away from a bad financial disaster,” Clarke said.

Some clergy and health representatives from the Greater Rochester Community of Churches began developing their own standards for health-care reform during a June 10 breakfast at Colgate Rochester Crozier Divinity School. The breakfast was sponsored by the Healthcare Education Project, which is a collaboration of Greater New York Hospital Association and the 1199 SEIU Healthcare Workers East, a union of health-care workers.

One advocate suggested the group work together on systemic change.

“I believe we make no headway in improving health care by blaming or accusing anybody or any health-care institution,” observed Sister of St. Joseph Christine Wagner, director of St. Joseph’s Neighborhood Center on South Avenue in Rochester.

Sister Wagner told of a physician from the Democratic Republic of Congo who toured the center. He had been tasked with rebuilding his country’s health-care system after it was destroyed by civil war.

His perspective helped her reconsider her ministry, she said.

“We are blessed with the resources we have,” she said. “All we need to do is put these resources together.”

http://www.catholic-courier.com

Copyright (c) 2008 Rochester Catholic Press Association, Inc. May not be published, broadcast, rewritten or otherwise distributed, including but not limited to such means as framing or any other digital copying or distribution method, in whole or in part without the publisher’s consent.

Response to TNR’s Jonathan Cohn

Disputations: Is Single-Payer Health Care The Best Option?

The problem with split-the-difference incremental reform.

by Don McCanne
The New Republic
July 16, 2008

The enthusiasm for the model of reform described by Jacob Hacker and endorsed by the Health Care for America Now (HCAN) coalition, which Jonathan Cohn wrote about in his recent New Republic piece “Single-Minded,” is understandable. It is a model that attempts to align policy with politics, allegedly meeting the previously unattainable threshold of feasibility. But is it feasible, and will it even work?

Anyone who really believes in this model understands that the private insurance plans would have to be very tightly regulated to reduce the profound deficiencies in our current insurance markets. The current private insurance business model depends on selling the insurers’ products to the large numbers of us who are healthy, especially the healthy workforce and their healthy families, while avoiding the need to contribute to the risk pools that cover those who have greater health care needs. Those costs are largely passed on to taxpayers through government programs.

Other nations that use private plans require effective pooling between plans through various regulatory mechanisms, reducing the problem of adverse selection and ensuring that premiums or taxes are adequate to pay for the care for those with greater needs. Even if the pools are nominally segregated, they function more like a universal risk pool through mechanisms such as risk adjustment and post-claims inter-insurance transfers.

The United States has a unique problem that would make it much more difficult to require private insurers to participate in a quasi-universal risk pool. On a per capita basis, we pay far more for health care than do other nations. Average-income individuals in other nations that use private plans can still afford premiums (or their tax equivalents). In those countries, only low-income individuals require some form of government subsidy for their care.

Compare that with the United States. For healthy risk pools, such as those of employer-sponsored plans, premiums are no longer affordable for average-income individuals and families, whether paid directly by the insured, or nominally by the employer. Imagine a tightly regulated insurance market that ended adverse selection and required benefits at a level that would prevent financial hardship for those with health care needs. The private insurers would find it absolutely impossible to provide us with compliant products that had affordable premiums.

Because of our very high costs, we must accept the fact that the insurance function is no longer simply a transfer from the many who are healthy to the fewer with health care needs, but it now must also include a partial transfer from the wealthy to middle- and lower-income individuals with needs. There is no alternative to this wealth transfer, and that alone creates doubt as to whether a model of highly regulated private plans is politically feasible.

We have to get over the idea that financing should be through premiums set by the actuarial value of the benefits in the insurance products. Those premiums are no longer affordable for most of us, and the complexities of income-related adjustments, whether through premium adjustments or tax credits, create an administrative nightmare. It is time that we separate the financing of the universal risk pool from the health care benefit package. The tax system provides us with the most equitable and efficient method of financing our global health care costs.

Perhaps a more compelling reason that the private insurance model no longer works is that it is very ineffective in slowing the increases in health care costs, and everyone agrees that affordability is now a major problem. Most of the current political cost-saving proposals would have very little impact on total costs. We need to address the true major cost drivers: the profound administrative excesses, the lack of an adequate primary care infrastructure, the waste of non-beneficial high-tech excesses, and the lack of a rational system of health care pricing. Even in a regulated environment, it would be very difficult for a multitude of private insurers and public programs to have much impact on these excess costs. Most economists agree that a monopsony, or single purchaser of health care products and services, would be most effective in extracting value through a negotiated realignment of incentives in our health care purchasing.

This debate that is taking place within the progressive community is missing the center of the feasibility dispute. It is implied that the Hacker/HCAN progressive model would be just fine if the single payer advocates would come to their senses and join in. It ignores the fact that this model is simply not politically feasible: it loses the support of market enthusiasts because of its dependency on tight regulatory control, intrusion by a government insurance program, and the necessity of a massive infusion of tax funds.

If you are going to accept that those changes are necessary to provide adequate coverage for everyone, then you might as well go ahead and establish a much more efficient and effective single payer national health program. Some may argue that explicit calls for income transfer and bureaucratic control of spending are what limit the political feasibility of the single payer model, but the private plans/public option model would have to incorporate the same principles, and their advocates should be very frank about that upfront.

So, the bottom line? We need reform that provides everyone the health care that they need, without financial barriers that would impede access. We can attempt to maneuver around the ubiquitous mines and trap doors of the political common ground of Hacker/HCAN, and still end up short if we survive. Or we can go straight to a proven model that would accomplish all of our financing goals–a single payer national health program.

For the full article:
http://tnr.com/politics/story.html?id=7aa401b5-f1f4-4564-921c-00f97b917605%20

Comment:

By Don McCanne, MD

The real debate over health care reform today centers over one fundamental choice. Are we going to continue to try to finance health care through private plans competing in the marketplace, a guarantee that access and equity problems would only grow worse, or are we going to use our own government resources to fix our financing system so that it works for everyone?

This shouldn’t even be a debate. Financial hardship, physical suffering and even death will increase without significant government intervention.

Unfortunately, a much less important debate has erupted within the community of those supporting a government role in ensuring that everyone has affordable access to all necessary health care. That debate is over whether or not private health plans should play a role in a reformed health care financing system.

Eliminating a socialized-medicine national health service from the list of options, that leaves us with two basic choices. We can either radically transform the private health plans into a system of social insurance, or we can replace the plans with a Medicare-like single payer national health program. Either would work, but the trade-offs are significant.

Systems using private plans are more expensive, largely because of greater administrative complexity. Equity is more difficult to achieve in a multi-payer system. A system of universal risk pooling would have to be superimposed on the private plans, making us wonder why we would even want to keep them since they would no longer be providing their insurance function of transferring risk.

Today, affordability is a concern for everyone. Health care will never again be affordable for all of us unless we adopt structural changes within our health care delivery system. As stated in the TNR article, “We need to address the true major cost drivers: the profound administrative excesses, the lack of an adequate primary care infrastructure, the waste of non-beneficial high-tech excesses, and the lack of a rational system of health care pricing.” Realigning incentives to accomplish these goals would be a relatively straightforward task for a single payer government monopsony. In contrast, a market of competing private plans would not have the power of a monopsony and would have to rely on the government to achieve these same goals.

Those supporting the private plan/public option model need to be explicit in describing their model, beginning with simple concepts such as how they would prevent adverse selection in the public option. If we are going to have an equitable and effective health care financing system for all of us, then their task of radically transforming the private insurance industry so that it would actually work is far greater than our task of improving Medicare and then providing it to everyone. Let’s hear how they would do it.

Dr. Steffie Woolhandler on the Presidential Candidates & Single-Payer in the 2008 Elections

Dr. Steffie Woolhandler, co-founder of Physicians for National Health Program (PNHP), a group of over 15,000 physicians nationwide who support a single-payer health care system, spoke on June 26 in Chicago at the PNHP offices. She spoke about the presidential candidates’ health plans and single-payer in the 2008 elections. She is an associate professor at Harvard Medical School and an internist at Cambridge Hospital in Cambridge, Mass. The transcript below was prepared by Elizabeth Lalasz of Chicago; it was subsequently edited by Dr. Woolhandler.

I’ve been asked to make some comments on the upcoming Presidential elections and developing a strategy around them. I am an expert in health policy, not on political strategy. But I want to talk a little about where I see us going in the single-payer movement within the broader political context.

I am paradoxically optimistic about the political situation right now. I say paradoxically because if we look at the actual health policy proposals of Obama and McCain, they are not good.

Let’s start with McCain. He has said that he is going to continue most of the proposals of the Bush Administration, and perhaps accelerate the privatization of Medicare. He does not use the word privatization – but he’s been very clear that he is going to push for more “competition” and “choice” within Medicare, euphemisms for privatization.

He’s also very big on consumer-directed health care – bare-bones health plans with big co-payments and deductibles – as a way to save money. He has put forward a fairly desultory proposal about refundable tax credits, after many months during which no concrete proposals for health reform appeared on his web site. His come-lately proposal would offer a refundable tax credit of $2,500 for an individual, $5,000 for a family, far too little to afford adequate coverage.

What he doesn’t say on his web site is how he would fund the tax credit. So we are left wondering. If McCain goes with a Bush-style plan – and many pundits talk as if that is the case – then the tax credits would be funded by caps on, or even eliminating the tax-deductibility of employer-based insurance. This would cause a very sharp contraction in employer-based coverage.

McCain’s proposes what I would call the “voucherization” of health care; families would get a fixed tax credit (or a fixed amount of tax deductibility of an employer-sponsored plan) and above that there would be no further direct or indirect government subsidies for health care. So, it is essentially turning the current open-ended government tax subsidy into a limited government voucher. In essence, this is akin to a switch from a defined benefit system to a defined contribution system.

For those not familiar with this concept, let’s back up a little bit and discuss pensions. Retirees used to get pensions with a defined benefit, say 60 percent of your salary for as long as you lived. But few of us will get such pensions in the future. Nowadays, we get something called a defined contribution, at my institution, the employer puts 6 percent of my salary into a retirement plan. It turns out 6 percent of my salary summed up over 30 working years is a whole lot less money than what you would need to generate 60 percent of my salary for the rest of my life. So, the new pension arrangements, like the Bush/McCain health proposals, are actually a massive cutback disguised as a shift from a defined benefit to a defined contribution.

Needless to say, the concept of switching from defined benefit to defined contribution has been very popular with Republican leaders. There’s been an effort to move Medicare in that direction (under the moniker “premium support”) where the federal government would pay $6,000-$8,000 toward each senior’s coverage, but would not guarantee the full future costs of care. McCain’s plan seems to represent a similar effort within the commercial (non-elderly) health insurance market to push people into defined contribution rather than defined benefit arrangements.

We could spend more time on the many other problems with McCain’s proposals, but to be honest I don’t think it’s worth focusing too much on its details because it doesn’t appear that even McCain is serious about his health plan. He was under pressure to come up with something, and hence his staff produced a plan. Like President Bush, I doubt that McCain has any intention of actually pursuing his tax credit plan.

As for Obama his health proposal is not a universal health care plan; in fact, he doesn’t even claim that it is. He would greatly expand Medicaid and Medicaid-like programs. Medicaid expansion is of course, better than no Medicaid expansion; those of us who work in the public sector know that. But we also know that Medicaid and Medicaid-like expansions have been tried over and over for the last thirty years, and the number of uninsured and underinsured has continued to increase.

Immediately after such Medicaid expansions, we usually see a small, and short-lived drop in the number of uninsured. We are seeing that in Massachusetts right now. As long as we keep pumping money into Medicaid or similar programs, we can push down the number of uninsured a little bit. But that’s not a viable, long-term strategy because it’s not affordable. Obama does propose devoting significant new money to the expansion of Medicaid and S-CHIP (State Children’s Health Insurance Program), but, as in the past, such expansions yield small and temporary improvement.

Obama is also talking about an employer mandate – requiring employers to cover their workers – but has provided few details about exactly what would be required. Even in a wealthy and liberal state like Massachusetts, employers were able to block the implementation of an effective employer mandate (even though a law requiring employers to cover their workers was passed in 1988).

In fact the only mandate Obama is clear about is a mandate that parents be required to buy health insurance for their children. But this would leave tens of millions of American adults uninsured if the Obama plan goes though as he proposes it.

So, my optimism is not based on Obama’s proposal and it’s certainly not based on McCain’s proposal. My optimism is based on something taught to me by a nurse in the Boston-area and a longtime single-payer activist. She used to say, “People say politics is the art of the possible, but they are wrong. Politics is the art of creating the possible. And what is possible is about what people believe is possible.”

I believe the biggest impediment to our work over the last decade has not been the lack of a good program, because we know what a good single-payer program would look like. We have H.R. 676. We can look to Canada and places in northwestern Europe. So we have good models and we have a good program.

The problem is the lack of hope – the lack of a sense of possibility. People hate the health insurance system and they know things need to change. But people don’t believe things can change.

So, what we really need is an infusion of hope. Even if Obama can’t deliver on his proposals, when he raises peoples’ expectation they begin to believe that change is possible, and that’s a real force for change.

In some ways President Kennedy provides an example of this. He was not all that liberal, or effective as a leader of social change. But his election let people think that change was possible, and helped ignite the social movements of the Sixties. It gave new impetus to the Civil Rights movement, and certainly helped ignite the social currents that gave rise to the women’s and anti-war movements. His election raised people’s sense of possibility and that force pushed social change further, and faster John Kennedy envisioned.

I think we’re at a similar moment now. Many people view Obama as someone new and exciting; he brings a sense of possibility and optimism we have not seen in this country’s political culture for a long time.

The question we need to address is what do single-payer advocates do now? How do we use this opportunity to open up a thoroughgoing health reform debate, and pave the way for progress. Now, even more than in periods when reform was not really on the agenda, we need to articulate the single-payer message. As Obama and Congress take up the health reform debate early in the next administration, there must be a clear-eyed vision for reform that can work on the table. We must spread the word that the single-payer alternative has wide support, and a track record of success. While the alternatives are merely replays of failed proposals from the past.

National health insurance makes the green journal

National Health Insurance: Could It Work in the US?

By James E. Dalen, MD, MPH, Joseph S. Alpert, MD
The American Journal of Medicine
July 2008
National health insurance covers the entire population of many European countries at a much lower cost than US health care. Could such a system of national health insurance work in the US? We already have such a system — it is called Medicare, and it has worked very well for more than 40 years! Medicare pays the private sector to deliver quality health care to more than 44 million Americans. Those who stick with traditional Medicare have free choice of physicians and hospitals. Nearly every US physician and nearly every hospital in the US has elected to participate in Medicare.
In a 2003 Pew poll, 67% favored government guaranteed national health insurance even if meant higher taxes, and a 2007 New York Times/CBS poll reported that 64% stated that the Federal government should guarantee health insurance for all Americans. Maybe the American people are ahead of their legislators!
http://download.journals.elsevierhealth.com/pdfs/journals/0002-9343/PIIS0002934308002465.pdf

Reading a message in support of a Medicare-like national health insurance program is certainly not a new experience for single payer advocates. What is astonishing is that this was published in “the green journal,” The American Journal of Medicine, one of the most prestigious medical publications in this nation. Furthermore, it was coauthored by the Editor-in-Chief, Joseph Alpert.
National health insurance is no longer a fringe concept. The American people have made it mainstream. It has become an imperative. We now need to elect legislators who understand that.

qotd: National health insurance makes the green journal

National Health Insurance: Could It Work in the US?

By James E. Dalen, MD, MPH, Joseph S. Alpert, MD
The American Journal of Medicine
July 2008

National health insurance covers the entire population of many European countries at a much lower cost than US health care. Could such a system of national health insurance work in the US? We already have such a system — it is called Medicare, and it has worked very well for more than 40 years! Medicare pays the private sector to deliver quality health care to more than 44 million Americans. Those who stick with traditional Medicare have free choice of physicians and hospitals. Nearly every US physician and nearly every hospital in the US has elected to participate in Medicare.

In a 2003 Pew poll, 67% favored government guaranteed national health insurance even if meant higher taxes, and a 2007 New York Times/CBS poll reported that 64% stated that the Federal government should guarantee health insurance for all Americans. Maybe the American people are ahead of their legislators!

http://download.journals.elsevierhealth.com/pdfs/journals/0002-9343/PIIS0002934308002465.pdf

Comment:

By Don McCanne, MD

Reading a message in support of a Medicare-like national health insurance program is certainly not a new experience for single payer advocates. What is astonishing is that this was published in “the green journal,” The American Journal of Medicine, one of the most prestigious medical publications in this nation. Furthermore, it was coauthored by the Editor-in-Chief, Joseph Alpert.

National health insurance is no longer a fringe concept. The American people have made it mainstream. It has become an imperative. We now need to elect legislators who understand that.

National Health Insurance: Could It Work in the US?

COMMENTARY
The American Journal of Medicine

The US health care system, which depends on private, for-profit health insurance, is not working. It is time for national health insurance!1,2

One would expect that the US, with its well educated population; high standard of living; well trained physicians, nurses, and other health professionals; and well equipped hospitals and diagnostic facilities would provide optimalcare to all its citizens.

A further reason why Americans should expect optimal health care is that the US spends much more for health care than any other country. We pay about twice as much as other countries. In 2005, the per capita health care expense was $6401 for Americans, compared to an average of $3114 in 30 industrial nations in the Organization for Economic Co-operation and Development.3 And, our health care costs keep escalating faster than the rate of inflation.4

We pay more; but we get less for our money! We do not have the world’s best health care. The World Health Organization ranked the US health care system the 37th best of 191 countries, and last among 17 industrialized countries in 2000.5 Our health outcomes: life expectancy, infant mortality, and immunization rates are well behind other industrialized nations.3 In a 2000 survey, 60% of our citizens said that they were dissatisfied with their health care.5

The major reason that our health outcomes are poor is that more than 46 million Americans have limited access to care because they don’t have health insurance.6 Millions of others have inadequate access because they have inadequate insurance. A New York Times/CBS poll in 2007 found that 28% of Americans were without health insurance at some time in 2007, and 61% who were uninsured did not obtain needed care.7

Even though we spend more on health care than any other country, we are the only industrialized country that does not ensure access to health care to all its citizens. The primary source of health insurance in the US is employment-based private (for-profit) insurance which covers 61% of the non-elderly population.6 However, the number covered by employment-based insurance is decreasing8 because some employers, especially small employers, can not afford to provide insurance. The cost of health insurance continues to exceed the rate of inflation. From 2002 until 2007 the cost increased by 78% while the inflation rate increased by 17%.9 As the cost increases some employers stop providing health insurance, or provide insurance with fewer benefits and higher co-pays. Others shift a larger percent of the premium to their employees forcing some employees to drop their health insurance.

More than half of the uninsured are employed, or the dependents of employed persons.6 They lack insurance because their employer doesn’t provide it, and they can’t afford private health insurance. Private health insurance for a family can cost more than $12,000 per year.8 For many older Americans, and for those with “prior conditions” (ie, any known health problem!), the cost of insurance, if it is available, can be out of reach.

Given the high cost of health care, very, very few Americans can afford to pay for health care out of pocket. As a result, Americans without health insurance receive less primary and preventive care and have poorer health outcomes. The bottom line is that the mortality rate for the uninsured is higher than for the insured.10

Our fragmented system of health care, with thousands of health insurance providers, has enormous administrative costs, and for some providers, enormous profits. Only about two-thirds of private health insurance premiums are spent on health care; the rest goes to administrative costs, costs of billing, and profits for the insurance company.11 The overhead in our health care system is more than twice that of countries with a single payer. Administrative costs account for 31% of all health care expenditures in the US, but only 17% in Canada’s single payer health care system.12

In addition, we pay more than twice what other countries do for prescription drugs,13 because, unlike most of the rest of the world, we have no controls on the price of prescription drugs. The Medicare Modernization Act legislation forbids Medicare from negotiating prices with drug companies.14 Many Americans with chronic conditions can’t afford the prescription drugs that can prevent strokes and heart attacks and other conditions leading to death or hospitalization. Multiple studies have shown that many Americans fail to fill or renew prescriptions, or take fewer doses than prescribed because of the costs.15,16

The combination of the excess administrative costs, excess profits, and the excess cost of prescription drugs in the US health care system greatly exceeds what it would cost to provide health care to all uninsured Americans.17 We can decrease health care costs and provide health care to all Americans by adopting mandatory national, non-profit health insurance. The insurance could be financed by a payroll tax shared by the employee and the employer. Premiums would be community-based; that is, they would not be dependent on age or medical history. Patients would have free choice of physicians who would be paid fee-for-service, and have free choice of hospitals and other health care providers.

National health insurance covers the entire population of many European countries at a much lower cost than US health care.18-20 Could such a system of national health insurance work in the US? We already have such a system–it is called Medicare, and it has worked very well for more than 40 years! Medicare pays the private sector to deliver quality health care to more than 44 million Americans. Those who stick with traditional Medicare have free choice of physicians and hospitals. Nearly every US physician and nearly every hospital in the US has elected to participate in Medicare. The administrative costs of Medicare are only 2%21 compared with 12% with for-profit health insurers.12

In a 2003 Pew poll, 67% favored government guaranteed national health insurance even if meant higher taxes,22 and a 2007 New York Times/CBS poll reported that 64% stated that the Federal government should guarantee health insurance for all Americans.7 Maybe the American people are ahead of their legislators!

Why not Medicare for all Americans? It works!

James E. Dalen, MD, MPH
Professor Emeritus of Medicine and Public Health
University of Arizona

Joseph S. Alpert, MD
Professor of Medicine
University of Arizona College of Medicine
Editor-in-Chief, The American Journal of Medicine

References

1. Dalen JE. Health care in America; the good, the bad, and the ugly. Arch Intern Med. 2000;60:2573-2576.
2. Alpert JS. Medical refugees in America. Arch Intern Med. 2000;160: 417-418.
3. Organisation for Economic Co-operation and Development. OECD Health Data, 2007.
4. Catlin A, Cowan C, Heffler S, et al. National health spending in 2005: the slowdown continues. Health Aff. 2007;26:142-153.
5. Blendon RJ, Kim M, Benson JM. The public versus the World Health Organization on health system performance. Health Aff. 2001;20: 10-20.
6. Henry J. Kaiser Foundation. Health insurance coverage in America. 2006 data update. October, 2007. Available at: http://www.kff.org/uninsured/upload/7451-03.pdf. Accessed June 10, 2008.
7. Toner R, Elder J, Thee M, et al. Most support U.S. guarantee of health care. The New York Times March 2, 2007.
8. Henry J. Kaiser Family Foundation. Survey of Employer Health Benefits 2007. September 11, 2006. Available at: http://www.kff.org/insurance/7672upload7693pdf. Accessed February 11, 2008.
9. Kaiser Family Foundation. Trends in Health Care Costs and Spending. September 2007. Available at: http://www.kff.org/insurance/upload/7692pdf. Accessed February 11, 2008.
10. Muennig P, Franks P, Gold M. The cost effectiveness of health insurance. Am J Prev Med. 2005;28:59-64.
11. Kahn JG, Kronick R, Kreger M, Gans DN. The cost of health insurance administration in California: estimates for insurers, physicians, and hospitals. Health Aff. 2005;24:1629-1639.
12. Woolhandler S, Campbell T, Himmelstein DU. Costs of health care administration in the United States and Canada. N Engl J Med. 2003; 349:768-775.
13. Anderson GF, Shea DG, Hussey PS, et al. Doughnut holes and price controls. Health Aff. 2004;W4:396-404.
14. Dalen JE, Hartz DJ. Medicare prescription drug coverage: a very long wait for a very modest benefit. Arch Intern Med. 2005;18:325-329.
15. Rector TS, Venus PJ. Do drug benefits help Medicare beneficiaries afford prescribed drugs? Health Aff. 2004;23:213-222.
16. Tseng CW, Brook RH, Keeler E, et al. Cost-lowering strategies used by Medicare beneficiaries who exceed drug benefit caps and have a gap in drug coverage. JAMA. 2004;292:952-960.
17. Himmelstein DU, Woolhandler S. National health insurance or incremental reform: aim high, or at our feet? Am J Public Health. 2003; 93:102-105.
18. Rodwin VG. The health care system under French national health insurance: lessons for health reform in the United States. Am J Public Health. 2003;93:31-37.
19. Reinhardt UE. “Mangled competition” and “managed whatever.” Health Aff. 1999;18:92-94.
20. Christiansen T. A SWOT analysis of the organization and financing of the Danish health care system. Health Policy. 2002;59:99-106.
21. Wilensky GR, Newhouse JP. Medicare: what’s right? what’s wrong? what’s next? Health Aff. 1999;18:92-107.
22. The Pew Research Center. Bush approval slips-fix economy, say voters. August, 2003.

Uwe Reinhardt on the Dutch system

Americans down on the U.S. health-care system

By Kristen Gerencher
MarketWatch
July 13, 2008
Americans are fed up with the headaches in their system, but that’s generally not due to the quality of care they receive, said Uwe Reinhardt, professor of economic and public affairs at Princeton University.
“What Americans are upset about is the unbelievable hassle of having to select health insurance, maybe not getting it … losing insurance when they lose their job,” Reinhardt said. “The American citizen is massively insecure.”
Doctors and nurses routinely hear demoralizing news that U.S. medicine is inferior “when the real problem is the way we finance health care and the hassle of claiming insurance,” he said.
The Dutch financing system has been transitioning to a new model in the last year, where residents contribute payroll taxes into a central fund, Reinhardt said. Then they receive a voucher to buy coverage from nonprofit or for-profit private insurers.
“The system is so tightly regulated and so many transfers are made among people to make sure everyone can afford the insurance and everyone has access to the same care that it’s really just a social insurance system in disguise,” Reinhardt said. “It’s not even vaguely close to the U.S. system.”
http://www.marketwatch.com/news/story/vital-signs-americans-rate-us/story.aspx?guid=%7B86F29D04-FC2D-466F-ADF6-2435468CE406%7D&dist=hpts

The United States currently has a private insurance system that has proven to be quite inadequate in ensuring that all of us receive the health care that we need. Some single out the new Dutch system as a model demonstrating that private plans could work for us if we merely improve the insurance markets and provide a competing public insurance option.
As Professor Reinhardt states, the Dutch system is not even vaguely close to the U.S. system, but rather is a social insurance system in disguise. Merely expanding our private plans to cover more people would not in any way emulate the Dutch system.
Some claim that a single payer system is not politically feasible because it would be too disruptive to our existing health care financing system. Yet they concede that the private insurance industry would have to undergo a massive transformation to eliminate the profound inefficiencies, inadequacies and inequities in our current system. Tight regulation of a totally transformed private insurance industry would certainly be disruptive to these players in our current financing system.
Is disruption really all that bad? The technology industry advances and thrives on innovative disruptions. New, improved, lower-cost technology replaces older, less effective, and more expensive technology. New technology is certainly disruptive to the establishment, but we shed few tears for those older companies that are no longer relevant and are replaced by newer firms.
Our current private insurance industry is functioning so poorly that, at a minimum, it requires wholesale disruption by being transformed into a highly-regulated program of social insurance. But then why should we try to revive an obsolete, last-century system of health care financing when a modern, single payer national health program would be so much more efficient?
Isn’t single payer precisely the disruptive innovation that we now need? And really, who would shed tears over the demise of the private insurers as we know them?