PNHP

Editorial: Unions should lead on health

Editorial: Unions should lead on health

The Capital Times
Madison, WI.
March 6, 2007

The AFL-CIO executive board is this week considering where the labor movement as a whole should line up on health care, which Americans tell pollsters is their No. 1 domestic policy concern. Hopefully, the labor leaders who gather in Las Vegas starting today will follow the lead of the Wisconsin AFL-CIO and go for the bold.

Wisconsin’s state labor federation backs the United States National Health Insurance Act (HR 676), which would establish a single-payer health insurance system with guaranteed coverage for all Americans. Sponsored by U.S. Rep. John Conyers, D-Mich., the act would create a publicly financed, privately delivered health care system by expanding access to the existing Medicare program to all U.S. residents.

Advocates say the goal of the legislation is to ensure that all Americans, regardless of employment, income or health care status, will have a legal guarantee for access to the highest quality and most cost-effective health care services.

Honest measures, from Canada and other developed nations, suggest that a single-payer system is superior to the current U.S. system, which fails to cover 47 million Americans and provides inadequate coverage to a similar number of their fellow citizens.

But Americans do not need to borrow a plan from Canada or elsewhere. As supporters of HR 676 remind us: America already has a great single-payer system, Medicare. It simply needs to be expanded.

In addition to Wisconsin’s federation of labor, state federations in 16 other states have backed HR 676. So too have 63 regional labor councils and hundreds of local unions. Four international unions, including the United Auto Workers, an important player in Wisconsin, have joined the call.

Under Wisconsin AFL-CIO President David Newby, our state federation has been a leader for real health care reform.

Now the national AFL-CIO must become a leader on these issues.

It should do so not for reasons of symbolism or rhetoric. It should do so because, with an election year coming, Democratic candidates for president will be angling for the AFL-CIO endorsement.

The AFL-CIO should sign on for a single-payer system. Then the national federation should in combination with state and local union leaders make it abundantly clear to New York Sen. Hillary Clinton, Illinois Sen. Barack Obama, former North Carolina Sen. John Edwards and others pursuing the Democratic nomination that it is impossible to seek the presidency as a champion of labor without embracing HR 676 and campaigning on a promise to stop tinkering around the edges of the health care crisis and address it head-on.

When he was speaking vaguely the other day about the need for fundamental reform of our health care system, Obama said, “We can’t afford another disappointing charade in 2008, 2009 and 2010. It’s not only tiresome, it’s wrong.”

That’s right. But even Obama has failed to take a bold stand in favor of single-payer.

Labor needs to show Obama the way, just as it must similarly aid Clinton, Edwards and the others in the race for the presidency. The Democratic nominee for president in 2008 must offer us the promise of real reform not just rhetoric. And labor can make that happen.

The Myth of Value-Based Pricing — So Far

BIOTECH


Posting by Donald Light, PhD
Princeton University
Health Affairs blog
February 20, 2007

At last policymakers and readers are being set straight that the prices of drugs are not related to the immense costs of research and development but to “what the market will bear,” as James Robinson put it in his Health Affairs Blog post last fall. Never mind that pharmaceutical executives told Congress and everyone else the opposite for 50 years to wrest government protections from the normal price competition. Apparently we’ve all been duped since the Kefauver hearings over 45 years ago, and industry-supported analysts keep issuing ever higher estimates of $1.2 billion and $1.7 billion R&D cost per average new drug. Since industry data show full recovery of R&D costs, with strong profits, year after year, does this mean these estimates are exercises in false rhetoric?

How can the market know what it will bear if pricing is usually covert and value unknown? Why does the “free market” in the United States result in the highest prices in the world, according to the recent report by the Congressional Budget Office? Do those prices reflect true value? This is impossible because, as Robinson writes, “No one knows how to define value in health care,…much less how to measure it.” Thus biotech and pharmaceutical prices cannot be based on value.

Meantime, the sellers are busy recruiting and supporting health economists to define value, measure it, and produce articles “proving” that the value of their drugs is two to four times greater than current prices. In their hands, the value of a life-year has quadrupled in the past five years, thus inflating the value of products. So far then, “value-based pricing” means the sellers define and measure value, tell us how valuable their products are, and provide the basis for still higher prices.

Is this why Robinson writes that we should not feel sticker shock when companies charge $35,000 per year for Herceptin, $50,000 for Avastin, or $120,000 for Erbitux? We now know that such prices are not based on sunk R&D costs. And we’ve learned they can’t be based on undefined and unmeasured value; so what are these prices based on? Many physicians and patients feel they are based on the exertion of pure power by drug companies who have the drugs that people need.

One common answer by economists is that price is related to expected R&D costs, but then expected costs can be whatever the seller says they are, like the $1.2 billion estimate, which is based on trial costs about 12 times greater than companies report to the IRS in audited statements and trial sizes 4 times greater than independent sources like the FDA. Divide the industry-claimed costs by 12 and then 4 and you get cost-estimates 1/48th as large. For biotech companies and investors, the best indication that future R&D is worth the cost and risk is how rapidly and profitably they recover their past investments in R&D. But that brings us full circle back to what we are told prices are not based on, and it’s a completely different argument than value pricing. More important, pharmaceutical and biotech companies never provide figures to show how prices or revenues are actually related, either to past or future R&D costs. This is the beauty of using theories to describe how reality works! The advantage of economic sociology is that it starts with detailed description and draws empirical conclusions.

For these reasons, “value-based pricing” is a myth, at least so far. To make it a reality we would need at least something like the tables in Consumer Reports Best Buy Drugs. They compare effectiveness, safety and price for different classes of drugs. Take statins for people with a mild cholesterol problem who want to lower their LDL cholesterol less than 30% without changing their lifestyle. Several drugs are rated as equally effective and safe. Patients or their plan could buy Lovastatin 40mg for $58 a month. Or for 59% more they could pay $92 for Lipitor and achieve comparable results. The price for an equivalent supply of Zocor is 79% higher ($104), and for Mevacor the price is 164% higher ($153). But Mevacor 40 is just Lovastatin 40 with a brand name. Apparently the name is worth $95 more.

If we compare how much physicians prescribe each of these five statins, we will get an indication of how far we are from buying on value, even when comparing price and value is simple. Something quite different is going on. It’s time to forget arguments based on theory and look closely at the organization and dynamics of the multi-level, segmented markets involved.

Click here to read Donald Light’s Original Post

Massachusetts redefines "affordable"

Insurers slice rates on health premiums

By Jeffrey Krasner
The Boston Globe
March 4, 2007

Governor Deval Patrick yesterday unveiled significantly lower prices for the health insurance plans that uninsured residents will be required to buy starting July 1.

The annual deductible for the basic plan would be steep: $2,000 for an individual and $4,000 for a family.

Performing a calculation… shows an average monthly premium for residents of Eastern Massachusetts of $305. That indicates a decrease of nearly 20 percent in premiums from the earlier bids.

But each plan offers a range of prices based on age. Plans for young adults with more limited coverage are much less expensive. Residents older than 56 will pay more for coverage. The highest-priced plan for those in Eastern Massachusetts, for people ages 56 to 64 with prescription coverage, is from Blue Cross Blue Shield and has a proposed monthly premium of $504.69.

James Roosevelt Jr., the chief executive of Tufts Health Plan, said… (that) Tufts was able to lower prices in part by limiting its hospital network to those that could provide lower-cost, high-quality care. “For example, for cardiac care, we have Mount Auburn Hospital in Cambridge rather than Massachusetts General Hospital,” Roosevelt said.

http://www.boston.com/business/globe/articles/2007/03/04/insurers_slice_rates_on_health_premiums/?page=full

And…

High deductibles a healthcare worry

By Alice Dembner
The Boston Globe
March 5, 2007

In its attempt to make health insurance premiums affordable, a state board is giving the go-ahead to plans with high deductibles, but that is causing concern that many newly insured people may avoid getting treated when they’re sick or may run up onerous debts to pay their medical bills.

Board officials have said a high deductible is necessary to keep the monthly premiums as low as possible and potentially entice more people to comply with the state mandate to obtain health insurance.

But, research shows high deductibles deter people from getting needed treatment, including preventive care, and can plunge those without savings into debt.

“The state is going to have to make some difficult trade-offs between comprehensiveness of benefits and affordability of coverage, at least in the short-run,” said Nancy Turnbull, president of the Blue Cross Blue Shield of Massachusetts Foundation, which helped shape the universal coverage law. “High deductibles are a blunt and crude way to make coverage affordable. In the future, I hope we can find other ways.”

The new minimal plans are targeted at 160,000 to 200,000 Massachusetts residents without insurance who earn more than $29,400 a year.

John McDonough, executive director of the advocacy group Health Care For All, worries that the board’s proposal could undermine the goal of universal insurance because people “in marginal circumstances” will be “coerced into paying premiums for a policy they won’t be able to use.”

One board member who supports a higher deductible to reduce the premium nonetheless acknowledges it is not ideal.

“It’s not the policy that optimizes health,” said Jonathan Gruber, an economist at the Massachusetts Institute of Technology who has studied the impact of deductibles. “But, we can’t insist everyone who has no insurance get the policy that optimizes their health. They’re going to revolt.”

“The main thing is no one should be bankrupted by medical costs in Massachusetts,” he added. “Let’s get them into the system and get them real insurance, and then maybe they’ll be interested in buying something better.”

http://www.boston.com/news/local/massachusetts/articles/2007/03/05/high_deductibles_a_healthcare_worry/?page=full

Comment:

By Don McCanne, MD

At an average premium of $305 per month, plus a $2,000 deductible, a person earning $29,400 per year must pay $5,660 before receiving help with medical bills. That leaves less than $2,000 per month to live on. That’s affordable? And don’t even think about receiving care at Massachusetts General Hospital.

The contortions that the policy community goes through to avoid endorsing single payer reform could not be better exemplified than by the comments of Jonathan Gruber, a highly respected MIT economist: “Let’s get them into the system… and then maybe they’ll be interested in buying something better.”

Sure, Professor Gruber.

Massachusetts redefines “affordable”

Insurers slice rates on health premiums

By Jeffrey Krasner
The Boston Globe
March 4, 2007

Governor Deval Patrick yesterday unveiled significantly lower prices for the health insurance plans that uninsured residents will be required to buy starting July 1.

The annual deductible for the basic plan would be steep: $2,000 for an individual and $4,000 for a family.

Performing a calculation… shows an average monthly premium for residents of Eastern Massachusetts of $305. That indicates a decrease of nearly 20 percent in premiums from the earlier bids.

But each plan offers a range of prices based on age. Plans for young adults with more limited coverage are much less expensive. Residents older than 56 will pay more for coverage. The highest-priced plan for those in Eastern Massachusetts, for people ages 56 to 64 with prescription coverage, is from Blue Cross Blue Shield and has a proposed monthly premium of $504.69.

James Roosevelt Jr., the chief executive of Tufts Health Plan, said… (that) Tufts was able to lower prices in part by limiting its hospital network to those that could provide lower-cost, high-quality care. “For example, for cardiac care, we have Mount Auburn Hospital in Cambridge rather than Massachusetts General Hospital,” Roosevelt said.

http://www.boston.com/business/globe/articles/2007/03/04/insurers_slice_rates_on_health_premiums/?page=full

And…

High deductibles a healthcare worry

By Alice Dembner
The Boston Globe
March 5, 2007

In its attempt to make health insurance premiums affordable, a state board is giving the go-ahead to plans with high deductibles, but that is causing concern that many newly insured people may avoid getting treated when they’re sick or may run up onerous debts to pay their medical bills.

Board officials have said a high deductible is necessary to keep the monthly premiums as low as possible and potentially entice more people to comply with the state mandate to obtain health insurance.

But, research shows high deductibles deter people from getting needed treatment, including preventive care, and can plunge those without savings into debt.

“The state is going to have to make some difficult trade-offs between comprehensiveness of benefits and affordability of coverage, at least in the short-run,” said Nancy Turnbull, president of the Blue Cross Blue Shield of Massachusetts Foundation, which helped shape the universal coverage law. “High deductibles are a blunt and crude way to make coverage affordable. In the future, I hope we can find other ways.”

The new minimal plans are targeted at 160,000 to 200,000 Massachusetts residents without insurance who earn more than $29,400 a year.

John McDonough, executive director of the advocacy group Health Care For All, worries that the board’s proposal could undermine the goal of universal insurance because people “in marginal circumstances” will be “coerced into paying premiums for a policy they won’t be able to use.”

One board member who supports a higher deductible to reduce the premium nonetheless acknowledges it is not ideal.

“It’s not the policy that optimizes health,” said Jonathan Gruber, an economist at the Massachusetts Institute of Technology who has studied the impact of deductibles. “But, we can’t insist everyone who has no insurance get the policy that optimizes their health. They’re going to revolt.”

“The main thing is no one should be bankrupted by medical costs in Massachusetts,” he added. “Let’s get them into the system and get them real insurance, and then maybe they’ll be interested in buying something better.”

http://www.boston.com/news/local/massachusetts/articles/2007/03/05/high_deductibles_a_healthcare_worry/?page=full

Comment:

By Don McCanne, MD

At an average premium of $305 per month, plus a $2,000 deductible, a person earning $29,400 per year must pay $5,660 before receiving help with medical bills. That leaves less than $2,000 per month to live on. That’s affordable? And don’t even think about receiving care at Massachusetts General Hospital.

The contortions that the policy community goes through to avoid endorsing single payer reform could not be better exemplified than by the comments of Jonathan Gruber, a highly respected MIT economist: “Let’s get them into the system… and then maybe they’ll be interested in buying something better.”

Sure, Professor Gruber.

Public opinion on health care reform

The New York Times/CBS News Poll
Feb. 23-27, 2007

22. Thinking about the country as a whole, are you generally satisfied or dissatisfied with the cost of health care in this country? Would you say you are very (satisfied/dissatisfied) or somewhat (satisfied/dissatisfied)?

3% – Very satisfied
11% – Somewhat satisfied
22% – Somewhat dissatisfied
59% – Very dissatisfied
4% – DK/NA

24. If you had to say, which do you think is a more serious problem right now — keeping health care costs down for average Americans, OR providing health insurance for Americans who do not have any insurance?

31% – Keeping costs down
65% – Providing for uninsured
5% – DK/NA

25. How serious a problem is it for the United States that many Americans do not have health insurance — very serious, somewhat serious, not too serious, or not at all serious?

70% – Very serious
25% – Somewhat serious
3% – Not too serious
1% – Not at all serious
1% – DK/NA

27. Do you think the federal government should guarantee health insurance for all Americans, or isn’t this the responsibility of the federal government?

64% – Guarantee
27% – Not responsibility
9% – DK/NA

30. If you had to choose, which do you think is more important for the country to do right now, maintain the tax cuts enacted in recent years or make sure all Americans have access to health care?

18% – Cutting taxes
76% – Access to health insurance
1% – Neither
2% – Both
4% – DK/NA

31. Would you be willing or not willing to pay higher taxes so that all Americans have health insurance that they can’t lose no matter what?

60% – Willing
34% – Not willing
6% – DK/NA

37. Do you think it would be fair or unfair for the government in Washington to require all Americans to participate in a national health care plan, funded by taxpayers?

43% – Fair
48% – Unfair
9% – DK/NA

38. Which do you think would be better for the country: 1. Having one health insurance program covering all Americans that would be administered by the government and paid for by taxpayers, OR 2. Keeping the current system where many people get their insurance from private employers and some have no insurance.

47% – One program
38% – Current system
4% – Combination (vol.)
2% – Neither (vol.)
8% – DK/NA

39. Some people have suggested requiring all Americans to have health insurance. Under this plan, employers would be required to provide insurance for all their workers or pay into a fund that would be used to buy insurance for people who do not have insurance. Does this sound like a good idea to you, a bad idea or are you unsure?

36% – Good idea
17% – Bad idea
46% – Unsure
2% – DK/NA

49. Do you think the government would do a better or worse job than private insurance companies in providing medical coverage?

30% – Better
44% – Worse
3% – Same (vol.)
22% – DK/NA

http://graphics8.nytimes.com/packages/pdf/national/03022007_poll.pdf

Comment:

By Don McCanne, MD

Polls continue to show that Americans are very concerned about the problem of the uninsured and about our high health care costs. They believe that the government should guarantee insurance for everyone, and a clear majority are even willing to pay more taxes to accomplish that.

Although we have decided that the problems are very serious and that they must be fixed, we remain divided as to the appropriate respective roles of the government and the private insurance plans. Especially noteworthy in this poll is the fact that only 30 percent of Americans believe that the government would do a better job than the private insurance plans in providing medical coverage.

This lack of confidence in the government isn’t strictly due to anti-government ideology. To the contrary, 64 percent believe that the government should be involved in guaranteeing insurance for everyone. It is much more likely that that those who are healthy and insured believe that their private health plans will work for them should major problems arise. Although they are concerned about increases in premiums, cost sharing, and reduction in benefits, they have not really given much thought as to how the government could address those issues more effectively. The fact that 48 percent believe that it would be unfair for the government to require all Americans to participate in a national health care plan does demonstrate that there is still concern about making the government the exclusive provider of health insurance.

Privately insured individuals incorrectly assume that most of their health cost spending is for the premiums they and their employers pay and the out-of-pocket expenses for themselves and their families. What they don’t realize is that two-thirds of health costs are being paid through the tax system, though with little transparency. They believe that the private plans are funding much of our health care when the heavy weight is actually being carried by us as taxpayers.

Just to list a few other issues that most people don’t think of when they express a preference for private health plans: profound administrative waste, cost shifting, fragmentation of risk pools, medical underwriting, insurance rescission, lifetime caps on coverage, restricted choice of physicians and hospitals, cream skimming, lack of impact on infrastructure to reduce waste and improve value, inability to provide adequate financial security at affordable premiums, inequitable regressive financing of health care, necessity to perpetuate demeaning and underfunded welfare programs, inadequacies of mandates to purchase private insurance, tax dollars wasted on private Medicare Advantage plans, and… (this list is endless!).

So the decision has been made that we must reform health care. We still need to agree on whether that should be through a universal program of government insurance or through an expansion of our inequitable, wasteful, fragmented system of a multitude of private plans and public programs. Polls such as this are being used to suggest that solutions perpetuating the role of private insurers have greater political feasibility. Thus most proposals accept the deficiencies of private plans, such as those listed above, as a tradeoff for increasing the probability of enacting some type of reform, no matter how flawed. Rather than crafting reform to fit misperceptions, shouldn’t we be attempting to change perceptions to align them with reality?

The ultimate decision may default to the government solution once the policy community wakes up and reframes the problem from the straw man of affordable insurance premiums to the blatantly obvious problem of affordable health care. The private insurers have no solutions for the latter, except to dump the real costs onto the taxpayers. Since we’re already paying those, why should we continue to pay the private insurers so much to merely stand on the sidelines and watch? They disappear when it’s their time to play.

Poll Shows Majority Back Health Care for All

By ROBIN TONER and JANET ELDER
New York Times
March 1, 2007

A majority of Americans say the federal government should guarantee health insurance to every American, especially children, and are willing to pay higher taxes to do it, according to the latest New York Times/CBS News Poll.

While the war in Iraq remains the overarching issue in the early stages of the 2008 campaign, access to affordable health care is at the top of the public’s domestic agenda, ranked as far more important than immigration, cutting taxes or promoting traditional values. Only 24 percent said they were satisfied with President Bush’s handling of the issue, despite his recent initiatives, and 62 percent said the Democrats — not the Republicans — were more likely to improve the health care system.

Americans showed a striking willingness in the poll to make tradeoffs for a better health care system, including paying as much as $500 more in taxes a year and forgoing future tax cuts. But the same divisions that doomed the last attempt at creating universal health insurance, under the Clinton administration, are still apparent. Americans remain divided, largely along party lines, over whether the government should require everyone to participate in a national health care plan, and over whether the government would do a better job than the private insurance industry in providing coverage.

Looking ahead to the presidential campaign, 36 percent of Americans said they had confidence in the ability of Senator Hillary Rodham Clinton, the New York Democrat, to “make the right decisions on health care,” while 49 percent said they were uneasy about it. But Mrs. Clinton, who presents herself as a sadder but wiser candidate on health care, retained the confidence of nearly 6 in 10 Democrats on the issue, despite the politically devastating collapse 13 years ago of the national health initiative she helped develop early in her husband’s presidency.

The poll helps explain why health care already looms large in the presidential campaign, and in statehouses from California, where Gov. Arnold Schwarzenegger, a Republican, has proposed a sweeping coverage plan, to Massachusetts, now implementing a program passed under Mitt Romney, the former governor and current Republican presidential candidate. Nearly 47 million Americans, or more than 15 percent of the population, now go without health insurance, up 6.8 million since 2000.

Former Senator John Edwards of North Carolina, the Democratic presidential candidate, recently unveiled his own attempt at a consensus plan — requiring everyone to have insurance and requiring employers to provide it or pay into a fund that would do so. Nearly 4 in 10 said that was a good idea; nearly half said they were unsure.

While Democrats are traditionally strong supporters of expanding health coverage, this survey found many Republicans and independents in agreement.

“I think everybody should have some kind of health care available to them,” said Diane Manning, 66, of Vancouver, Wash., who described herself as an independent.

“I don’t necessarily think that socialized medicine is the answer, but I think everyone should have that right,” said Ms. Manning, who participated in the poll and agreed to a follow-up interview “And there are so many people that don’t.”

The poll also found overwhelming support behind the Childrens’ Health Insurance Program, which covers many low and moderate income children and is up for renewal in Congress this year. Eighty-four percent of those polled said they supported expanding the current program to cover all uninsured children, now estimated at more than eight million. A similar majority said they thought the lack of health insurance for many children was a “very serious” problem for the country.

The nationwide telephone poll was conducted Friday through Tuesday with 1,281 adults, and has a margin of sampling error of plus or minus 3 percentage points.

The poll found Americans across party lines willing to make some sacrifice to insure that every American has access to health insurance. Sixty percent, including 62 percent of independents and 46 percent of Republicans, said they would be willing to pay more in taxes. Half said they would be willing to pay as much as $500 a year more.

Nearly 8 in 10 said they thought it was more important to provide universal access to health insurance than to extend the tax cuts of recent years; 18 percent said the tax cuts were more important.

“I wouldn’t want to pay a lot of taxes, but if it was spread out and everyone paid their fair share, it would be fine,” said Don Galvan, 50, a computer programmer from Ringwood, N.J., who considers himself an independent. “Everybody should have some kind of medical coverage, in case they or their children get sick. Especially children.”

Most Americans in the poll said they were satisfied with the quality of their health care, but there was widespread concern about costs. Nearly half of those with insurance said their employer had cut back on benefits or required them to pay more for their benefits in recent years. A quarter of those with insurance said someone in their household had gone without a medical test or treatment because insurance would not cover it. Six in 10 of those without insurance said someone in their household had gone without care because of the cost.

That level of concern helps explain the striking support for substantial change: Nearly two-thirds said the federal government should guarantee health insurance for all Americans. They were then asked, “What if that meant that the cost of your own health insurance would go up?” Forty-eight percent said they would still support it.

Moreover, an overwhelming majority said the health care system needed either fundamental change or to be completely rebuilt, just as they did in the early 1990s, when a deep recession and soaring health care costs galvanized the public and spurred the Clinton health care drive. But now, as then, this concern did not translate into a consensus on what should replace it.

One question offered a choice between the current system and a national health insurance program covering everyone, administered by the government and financed by taxpayers. Thirty-eight percent said they preferred the current system, while 47 percent preferred a government-run approach.

Nearly half said they thought it would be unfair to require all Americans to participate in a national health care plan, financed by taxpayers.

Robert Blendon, an expert at Harvard on public opinion and health, said politicians have to find some compromise between these philosophical divisions on the role of government, which are deep-seated in American culture, or “We’re going to have the same train wreck we did before.” The Clinton plan, itself an attempt at a compromise, collapsed under the weight of attacks from an array of interests, including the insurance industry, which warned that it amounted to a big government takeover.

Mr. Blendon noted that many politicians, like Mr. Schwarzenegger, were seeking a blend between the private market and the government in their health plans.

Marina Stefan and Marjorie Connelly contributed reporting.

Millions of AFL-CIO Members Support Universal, Single-Payer Health Insurance

By Harry Kelber
The Labor Educator

When the AFL-CIO Executive Council meets March 6-8 in Las Vegas, it will be deciding what to do about the nation’s most important domestic problem, health insurance for all Americans. It should recognize the wishes of millions of union members and endorse and campaign for the United States National Health Insurance Act (H.R. 676) that would establish a single-payer health insurance system with guaranteed coverage for all Americans.

The Council will surely be impressed by the grass-roots, extraordinary support for H.R. 676. Union members in 40 states, represented by 239 labor organizations that include four international unions, 17 state federations, 63 central labor councils and scores of local unions, favor the single-payer measure, which eliminates profiteering by insurance companies, pharmaceutical companies and HMOs.

H.R. 676 would create a publicly-financed, privately-delivered health care system that uses the already existing Medicare program by expanding it and improving it for all U.S. residents. The goal of the legislation is to ensure that all Americans, regardless of employment, income or health care status, will have a legal guarantee for access to the highest quality and cost effective health care services.

The four AFL-CIO international unions that have officially endorsed H.R. 676 are: United Auto Workers, International Longshore Workers Union, United Association of Plumbers and Pipe Fitters, and the National Association of Letter Carriers. In addition, there are many members in virtually every international union who support the bill.

The 17 state federations that have signed on for H.R. 676 (originally introduced by Rep. John Conyers, a pro-labor congressman from Michigan) are: Connecticut, Delaware, Florida, Kentucky, Minnesota, Missouri, North Carolina, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Vermont, Washington State, West Virginia, Wisconsin and Wyoming.

AFL-CIO Can Reclaim Image as Workers’ Champion

The Council’s endorsement would put the single-payer plan in the forefront of the national debate about how to reform the health care system. It would make organized labor a principal player in the debate, giving new hope to the 47 million Americans that have no health care coverage and the millions who are being exploited by insurance and drug companies.

An AFL-CIO campaign for H.R. 676 would receive an immediate and enthusiastic response from tens of thousands of union members across the country, who would gladly volunteer for a cause that means so much for working families. The “talking points” for H.R. 676. are numerous and persuasive: Under single-payer, everyone is guaranteed choice of physician, as well as comprehensive and uniform coverage. Whether you’re rich or poor, you get the same level of treatment.

Even if you are unemployed or lose or change your job, your health coverage goes with you. It ends the insurance companies’ interference with care. There is no denial of coverage due to pre-existing conditions or cancellation of policies for “unreported” minor health problems.

The amount of money that single-payer can save will be enormous. Insurance agencies and drug companies are notorious for their high administrative costs, exorbitant executive salaries, and profits for the stockholders. And perhaps best of all, the single-payer system doesn’t have to start from scratch. It builds on Medicare, which has served millions of Americans for four decades.

All of the current proposals on health care, including President Bush’s, rely on “market forces,” allowing the for-profit companies to continue their exploitive control of an industry that serves a vital human need.

By endorsing H.R. 676 and waging a full-scale campaign for its passage, the AFL-CIO can regain the respectful attention it once had in Washington and across the country. It could probably serve as a boost for the Employee Free Choice Act.

The Executive Council’s decision on national health insurance may be as important as any it has made in years. Let’s hope it is the right one.

Our two weekly columns and their archives (LaborTalk and The World of Labor) can be viewed and downloaded at our website: http://www.laboreducator.org.

Medicare Advantage private fee-for-service plans

Medicare Advantage

Kaiser Family Foundation
February 2007

Most of the 43 million elderly and disabled people on Medicare (81%) have their health bills paid by the traditional fee-for-service program; 19% (8.3 million) receive their Medicare benefits through private health plans that receive payments from Medicare, now generally known as “Medicare Advantage” plans.

Private fee-for-service plans (PFFS) differ from Medicare HMOs and PPOs in that they are not required to establish provider networks or to adopt utilization management strategies, and do not coordinate care like most other Medicare Advantage plans.

In 2006, Medicare began to pay plans under a bidding process. Plans bid against county level benchmarks established by CMS based on the prior year’s MA county payment rate, increased by the projected national growth rate in per capita Medicare spending.

Many plans have expanded services to rural and other areas with benchmarks that are high relative to Medicare FFS spending because these areas were given increases in payment rates under earlier law.

MedPAC analysis based on July 2006 enrollment data shows that Medicare payments to private health plans on behalf of enrollees average 112% of FFS costs for the counties where MA enrollees reside. PFFS plans–prevalent in rural areas where the benchmark rate is significantly higher than Medicare FFS costs–are paid 119% of FFS costs before adjusting for enrollee risk.

http://www.kff.org/medicare/upload/2052-09.pdf

Comment:

By Don McCanne, MD

Of the various Medicare Advantage plans, the private fee-for-service plans most closely resemble the traditional fee-for-service Medicare program. Just as with the traditional Medicare program, the patient can receive care on a fee-for-service basis from any physician willing to accept payment from the plan.

If the private fee-for-service plans work like the traditional Medicare program, then why is the government paying them 119 percent of the costs of the traditional program? That’s much more than the other Medicare Advantage plans receive. Weren’t the private sector plans authorized because they would be much more efficient than the traditional Medicare program run by a government bureaucracy? Aren’t they supposed to be saving the taxpayers money?

Medicare regulations do require that a small portion of the excess payments be used to increase benefits, and so these plans may also offer prescription drug coverage or extra days in the hospital, or a reduction in premiums paid. (They do not need to use very much of the 19 percent overpayment, but only 75 percent of the amount by which the plan’s bid is below the benchmark for the region.)

Why should private plans be paid so much more for duplicating what our more efficient traditional Medicare program is already doing?

Why should patients in the traditional Medicare program be deprived of benefits, such as drug coverage, that are made possible by this deliberate overpayment to the private plans?

Why do our legislators tell us that there isn’t enough money to improve benefits in the traditional program, when they can find plenty of money to reward these plans so generously?

Why do we even have to ask these questions?

What every policy expert knows, but won't say

Profit For Some Or Care For All

By Diane Archer
TomPaine.com
February 27, 2007

The health insurance industry is full of surprises, but history and experience show that insurers will never surprise us with a good, affordable health care system for America. No cocktail of regulations, subsidies and tax credits will provide health security to the uninsured, underinsured and anxiously insured–virtually all Americans.

Unlike private insurance, Medicare works for older and disabled Americans because it pools risk and does not punish people financially because they need costly health care services. It works because it has predictable benefits and offers reliable coverage. And it works because coverage is automatic, unlike Medicaid and SCHIP, ensuring all eligible persons coverage and protecting them against the risk of losing coverage for failing to sign up or recertify.

Of course, every health policy expert out there knows that a publicly administered system would guarantee all Americans good, affordable health care at far less cost than we can ever achieve through private insurers, and they’ll say so at the dinner table. It’s time they went public.

http://www.tompaine.com/articles/2007/02/27/profit_for_some_or_care_for_all.php

Comment:

By Don McCanne, MD

Request to the policy community: Please come out of the closet. We need you!

National progressive political group campaigns for single payer national health insurance

Let's Make History

Tim Carpenter
PDA Executive Director

There are times in American history — “perfect storms,” if you will — when forces are in alignment for the passage of a momentous reform that makes our country qualitatively better. In the 1930s, we won union rights and Social Security. In the 1960s, civil rights and Medicare.

Is this our moment to finally win Universal Health Coverage — improved and expanded Medicare for All? Or at least wage a campaign so powerful that victory will be just around the corner?

We have a Democratic-majority in Congress. A profound crisis with 50 million uninsured Americans, and a similar number under-insured. A New York Times columnist declaring last week that the health insurance business is “a racket.” A presidential campaign in which candidates are being confronted by voters up close.

And most importantly, we now have the re-introduction of Rep. John Conyers’ HR 676: The United States National Healthcare Insurance Act — enhanced Medicare for All.

Please encourage your Congress member to co-sponsor the bill, now — our goal is to quickly double the current 55 co-sponsors.

Progressive Democrats of America is committed with our friends in Congress, labor unions, the Healthcare-Now coalition and nurses and doctors groups to mounting the biggest fight ever for HR 676, a single-payer system of privately-delivered, publicly-financed healthcare.

This approach has been endorsed by Consumers Union, 20,000 physicians, 232 labor unions, and even corporate CEOs tired of being fleeced by private insurance companies and their bureaucracy and waste.

* Get your state legislature to endorse HR 676. The state of Kentucky just did so!

* Challenge presidential candidates to endorse HR 676. Iowa voters recently told Hillary Clinton they backed Medicare for All.

* Contact Diane@pdamerica.org to join our “Healthcare for All” Organizing Team.

What every policy expert knows, but won’t say

Profit For Some Or Care For All

By Diane Archer
TomPaine.com
February 27, 2007

The health insurance industry is full of surprises, but history and experience show that insurers will never surprise us with a good, affordable health care system for America. No cocktail of regulations, subsidies and tax credits will provide health security to the uninsured, underinsured and anxiously insured–virtually all Americans.

Unlike private insurance, Medicare works for older and disabled Americans because it pools risk and does not punish people financially because they need costly health care services. It works because it has predictable benefits and offers reliable coverage. And it works because coverage is automatic, unlike Medicaid and SCHIP, ensuring all eligible persons coverage and protecting them against the risk of losing coverage for failing to sign up or recertify.

Of course, every health policy expert out there knows that a publicly administered system would guarantee all Americans good, affordable health care at far less cost than we can ever achieve through private insurers, and they’ll say so at the dinner table. It’s time they went public.

http://www.tompaine.com/articles/2007/02/27/profit_for_some_or_care_for_all.php

Comment:

By Don McCanne, MD

Request to the policy community: Please come out of the closet. We need you!