May 20, 2011
Dear PNHP colleagues and friends,
There’s been a flurry of activities by single-payer advocates – physicians and others – over the past several weeks. We’ll touch on only a few of them here:
1. Vermont governor to sign health reform bill May 26
2. Hoosiers rip WellPoint’s greed at shareholders meeting
3. New article sounds alarm on rise of for-profit hospice companies
4. Proposed Medicare, Medicaid cuts prompt outcry and calls for single payer
5. Sen. Sanders introduces Senate single-payer bill, S. 915
6. PNHP staff promotions announced
1. Vermont health bill to become law. Next Thursday, May 26, Gov. Peter Shumlin of Vermont will sign “An Act Relating to a Universal and Unified Health System.” The bill passed the Legislature in early May, after months of debate that included vigorous advocacy for single-payer reform by physicians and health professional students, among others. While the bill falls well short of a creating a single-payer system, as the PNHP board noted last month, its supporters claim it could lead to such a system several years down the road.
PNHP will issue a statement on the legislation next week. In the meantime, a concise summary of what the bill does and doesn’t do – and some of the obstacles it faces – appears in a story titled “Single Payer in Vermont? Well, Not Exactly.” Amednews also had a useful round-up; it’s one of several recent stories quoting PNHP leaders saying the bill’s an important first step, but only if it’s followed by steps leading to a true single-payer plan. The actual text of the bill starts on line 18 of this 213-page file.
In a somewhat related development, California’s Universal Health Care Act, S.B. 810, sponsored by state Sen. Mark Leno, passed a crucial hurdle last week when it passed out of the Senate Health Committee in a 5-3 vote. PNHP activists helped mobilize support for its passage out of committee.
2. WellPoint confronted on greed. When Karen Green Stone, a leader of Hoosiers for a Common Sense Health Care Program, PNHP’s Indiana affiliate, took the floor at the annual shareholders meeting of the giant health insurer WellPoint in Indianapolis this week, she made a blistering indictment of the company’s greed, its cruelly deceptive PR practices and the eye-popping compensation it gave to CEO Angela Braly last year.
On the CEO’s pay, Green Stone said, “Angela, it takes 285 public school teachers in Indiana who earn an average of $47,000 a year to equal your 2010 compensation package of $13.4 million. Would you kindly tell us why you are entitled to so much more than them?” Braly replied that her pay was appropriate. The dramatic exchange was picked up by the Indianapolis Business Journal. You can read the full text of Green Stone’s stirring 2-minute speech and more at PNHP’s blog. (By the way, in 2010, the combined declared profits of the five largest for-profit insurers – WellPoint, Aetna, Cigna, Humana and UnitedHealth – were $11.7 billion. The figure is expected to be even higher in 2011.)
Later that day, single-payer activists rallied outside WellPoint’s headquarters to hear speakers that included Donna Smith of National Nurses United, who wrote about it, and Dr. Rob Stone, coordinator of the Indiana group and national board member of PNHP.
3. Troubling questions on for-profit hospice care. Besides Dr. Rob Stone’s role at the WellPoint events, he was also in the news this week as the co-author of “In the Business of Dying: Questioning the Commercialization of Hospice,” in the Journal of Law, Medicine and Ethics. The article cites growing ethical and quality concerns as end-of-life hospice care, once the domain of charitable groups, has become increasingly dominated by investor-owned chains that cherry-pick patients and cut labor costs in order to maximize profits. PNHP’s news release on the article, which contains a link to the full text of the study, appears below. Also below is a commentary by Drs. Steffie Woolhandler and David Himmelstein on their recent research about Massachusetts’ medical bankruptcy rate and its implications for the federal health law.
4. Medicare under threat. The outcry over the proposal by House Speaker Rep. Paul Ryan, R-Wis., to dismantle Medicare and convert Medicaid into a block-grant program has included actions, statements and opinion pieces by PNHP chapters, leaders and activists denouncing such moves. PNHP affiliates in Wisconsin and Arizona are among the many chapters who actively worked to oppose such cuts, even as they acknowledge that both the Medicare and Medicaid programs contain serious flaws. Echoing a theme of PNHP’s, including Dr. Margaret Flowers’ testimony at the Deficit Commission last year, John Nichols of The Nation recently wrote that Medicare and other social insurance programs shouldn’t be cut, but should instead be replaced by a single-payer system, an improved Medicare for all. Rep. John Conyers Jr. made a similar argument in an op-ed yesterday. PNHP activists are encouraged to speak out and to write opinion pieces and letters to the editor on this theme.
5. Sanders introduces Senate single-payer bill. On May 10, Sen. Bernie Sanders, I-Vt., introduced his national single-payer legislation, the American Health Security Act of 2011, S. 915, into the Senate. PNHP President Garrett Adam’s comments on this welcome development can be found here. PNHP activists are encouraged to visit or otherwise contact their congressional representatives to urge them to support single-payer legislation in the House (especially Rep. Conyers’ bill, H.R. 676, which today has 55 co-sponsors) and in the Senate (S. 915). House members are scheduled to be in their home districts the week of June 6-10 and June 27-July 1.
6. PNHP staff promotions. PNHP President Dr. Garrett Adams made the following announcement this week: “The PNHP Board of Directors is very pleased to announce promotions of two of our wonderful staff members. After 20 years of dedicated and brilliant advocacy for single-payer national health insurance at PNHP, Dr. Ida Hellander finally gets her ‘dream job’ as PNHP’s new Director of Policy and Programs. For the first time, Ida now will devote herself full time to health policy for the benefit of PNHP and the single-payer movement. Matthew Petty, currently PNHP’s Administrative Director and our second-most-senior staff member, has accomplished efficiencies in the office and managed our finances extremely well. He recently brought in a large grant to PNHP. Matt will become PNHP’s new Director of Operations.”
Cordially,
Quentin D. Young
National Coordinator
Mark Almberg
Communications Director
FOR IMMEDIATE RELEASE
May 18, 2011
Rise of for-profit hospice industry raises troubling questions, new study says
Ethical and quality concerns grow as end-of-life hospice care, once the province of charitable organizations, is increasingly dominated by investor-owned chains that cherry-pick patients and cut labor costs in order to maximize profits
A new survey of hospice care in the United States says that the rapidly growing role of for-profit companies in providing end-of-life care for terminally ill patients raises serious concerns about whose interests are being served under such a commercial arrangement: those of shareholders or those of dying patients and their loved ones.
“Under a corporate model of hospice care, there’s an inherent conflict of interest between a company’s drive to maximize profits and a patient’s need for the kind of holistic, multidisciplinary and compassionate care originally envisioned by the founders of the modern hospice movement,” said Dr. Robert Stone, an emergency medicine physician in Bloomington, Ind.
Stone, who serves as assistant medical director at a hospital hospice program at Indiana University, is co-author of “In the Business of Dying: Questioning the Commercialization of Hospice,” a newly published article in the Journal of Law, Medicine and Ethics. Joshua Perry, a professor of business law and ethics at Indiana University, is the lead author of the article.
Stone and Perry point out that the for-profit hospice industry grew by 128 percent from 2001 to 2008, while the nonprofit sector grew by only 1 percent and government-sponsored hospices increased by 25 percent. The for-profit sector now accounts for 52 percent of hospices.
“Research shows that for-profit hospices, and especially publicly traded chain providers, generate higher revenues than their nonprofit counterparts,” Stone said. “They do this in part, studies show, by selectively recruiting longer-term patients, most of whom do not have cancer, thereby gaming the Medicare payment system.” Medicare currently pays hospice providers a fixed per diem payment throughout a patient’s stay, regardless of whether services are provided on any given day, he said.
“Hospice patients’ use of services are greatest on the first day of hospice care, when services are being set up, and in the last few days of life, when round-the-clock nursing care may be required,” Stone said. “Hospices that recruit longer-term patients will be overpaid and will drain funds from the hospice program that should be going to patient care.”
Stone continued: “Typically, the for-profit companies also pay lower salaries and benefits to a less-skilled staff, and employ fewer registered nurses. This raises quality concerns.”
Such practices not only undermine the Samaritan traditions of the hospice movement, he said, but also put nonprofit hospices at a competitive disadvantage, threatening their financial survival. Nonprofits have been shown to provide a greater range of services than their for-profit counterparts, including continuous home care and bereavement services, he said.
Stone and Perry point to research documenting ethically questionable marketing practices used by for-profit hospice companies, including instances of company representatives going into nursing homes and offering free pens and coffee cups to staff and subsequently paying a commission to staff members who refer patients to them.
While more research on hospice quality needs to be done, Stone said, comparative studies of U.S. hospitals, dialysis centers and nursing homes have shown that nonprofit institutions, on average, provide a higher quality of care than do for-profits.
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“In the Business of Dying: Questioning the Commercialization of Hospice,” Joshua E. Perry, J.D., M.T.S., and Robert C. Stone, M.D., Journal of Law, Medicine and Ethics, Summer 2011.
A copy of the manuscript of the study can be found here.
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Physicians for a National Health Program (www.pnhp.org) is an 18,000-member organization advocating a nonprofit, single-payer national health insurance program for the United States. PNHP had no role in funding the study mentioned above. To speak with a physician/spokesperson in your area, visit www.pnhp.org/stateactions or call (312) 782-6006.
Obama Health Law Unlikely to Stem Medical Bankruptcies
By Steffie Woolhandler and David Himmelstein
CommonDreams, May 11, 2011
When President Obama kicked off his health reform push, he highlighted our research finding that 2 million Americans suffer medical bankruptcy each year, promising to end this disgrace. Our latest figures warn that his reform won’t stanch the flow of medical debtors.
The Affordable Care Act (ACA) passed by Congress in March 2010 was modeled after Massachusetts’ 2006 health reform plan – a plan that’s now been up and running for more than three years. So Massachusetts offers a preview of what to expect when the ACA is fully implemented in 2014.
Unfortunately, medical bankruptcies haven’t dropped much – if at all – in Massachusetts. When we surveyed bankruptcy filers there in August 2009, 53 percent cited illness or medical bills as a cause of their bankruptcy, a percentage that’s statistically indistinguishable from the 59 percent figure we found in
early 2007. Indeed, because the total number of bankruptcies soared in 2009, the actual number of medical bankruptcies increased from 7,504 in 2007 to 10,093 in 2009.
Why are so many people still suffering medical bankruptcies despite Massachusetts’ health reform? While only 4 percent of the state’s residents remain uninsured, much of the new coverage is so skimpy that serious illness leaves families with crushing medical bills.
For instance, the cheapest (and most commonly purchased) coverage available to a 56-year-old Bostonian through the state’s health insurance exchange costs $5,616. Yet, if you’re sick the policy doesn’t start paying bills until you’ve paid a $2,000 deductible. And even after that you’re responsible for 20 percent of the next $15,000 in medical expenses.
Little wonder that many insured families hit by illness are pushed over the edge financially by the double whammy of lost income and medical bills; 89 percent of Massachusetts families who suffered medical bankruptcy had coverage.
The insurance required under the federal ACA is no better than Massachusetts’ bare-bones plans. And as employers emulate this inadequate coverage, the race to the bottom leaves an increasing number of Americans UNDER-insured. Public workers are just the latest group to see their coverage downsized. What used to be called “health insurance” is now labeled “Cadillac coverage” – and reserved for those who drive Mercedes.
Because the ACA left private insurers in charge, it can’t offer Americans real protection against financial disaster due to illness. Too much is squandered on insurers’ overhead and the bloated bureaucracy they impose on patients, doctors and hospitals. Hence, even if reform works as planned, millions of families will continue to purchase private insurance in good faith, only to discover, too late, that it’s a defective product – an umbrella that melts in a downpour.
And the administration is weakening the modest consumer protections the bill imposed on private plans. It’s waived the minimum coverage standards for 1,040 plans covering 2.6 million Americans, including thousands of McDonald’s workers whose insurance covers only $2,000 in medical expenses annually. (The worker pays a premium of $728 for this faux coverage.) Meanwhile, insurers in Maine have already been exempted from the ACA’s paltry requirement that they spend at least 80 percent of premiums on medical care, with eight more states in line for similar exemptions.
While the ACA can’t live up to its “affordable care” moniker, a single-payer reform could save $400 billion annually on administrative costs, enough to offer every American first-dollar, comprehensive coverage. While U.S. insurers fight tooth and nail against the 20 percent limit on overhead, Canada’s single-payer program runs for 1 percent. (U.S. Medicare’s overhead is 3 percent.) Bureaucratic savings are a key reason why Canada can cover everyone and provide care at least as good as that received by insured Americans, while spending half as much per capita as we do.
We’ve lectured at seminars attended by hundreds of U.S. bankruptcy judges, where our medical bankruptcy findings are greeted by nods of recognition and an avalanche of heart-wrenching anecdotes confirming our statistical findings. The reaction was quite different at a bankruptcy seminar in Toronto early this year. None of the Canadian judges in the room could recall a single case.
Dr. Steffie Woolhandler is a co-founder of Physicians for a National Health Program. She is professor of public health at the City University of New York and visiting professor of medicine at Harvard Medical School. She is also a primary care physician at Cambridge Hospital in Cambridge, Mass. She worked in 1990-91 as a Robert Wood Johnson Foundation health policy fellow at the Institute of Medicine and the U.S. Congress. Dr. Woolhandler is a frequent speaker and has written extensively on health policy. Dr. Woolhandler is a principal author of many PNHP articles published in the JAMA, the New England Journal of Medicine, and other professional journals. She has also testified before Congress numerous times.
Dr. David Himmelstein is a co-founder of Physicians for a National Health Program, co-edits PNHP’s newsletter and is a principal author of PNHP articles published in the JAMA and the New England Journal of Medicine in conjunction with Dr. Steffie Woolhandler. He is professor of public health at the City University of New York and associate professor of medicine at Harvard Medical School. He serves as the chief of the division of social and community medicine at Cambridge Hospital where he practices primary care internal medicine, and also serves as co-director of the Center for National Health Program Studies at Cambridge Hospital/Harvard Medical School.