By DR. RICHARD PROPP
Times Union
Sunday, October 22, 2006

Every day across New York, doctors, their employees and hospital workers spend much valuable time anxiously dealing with health insurance company employees. And every day, businesses begin the multimonth process of evaluating old and new insurance plans, investing more and more to provide decent health insurance in an attempt to retain good employees and keep them healthy. Increasingly, businesses give up providing health insurance because they can’t afford it.

The United States is the last country in the industrial world without a universal health care system. We spend more per capita ($6,102) yet cover a smaller proportion of the population than Canada ($3,165), France ($3,159), Germany ($3,005) or the United Kingdom ($2,546). At least 47 million Americans lack health insurance. Our outcomes for infant mortality and life span are worse than in these other countries, the Organization for Economic Cooperation and Development reported this year.

The universal health care movement seeks a practical way to solve the health care needs of all Americans. Because the business of America is business, and with apologies to the Letterman staff, here are the top five reasons the business community should care about expanding the federal Medicare program for seniors and those who are disabled to provide Medicare for All: (5) More capable employees: Fully insured part-time and full-time employees mean improved wellness, less absenteeism and better retention. (4) Reduced auto, truck and business insurance costs: Businesses will pay less for upfront insurance because most of the medical portion of bodily injury or chronic disability care needs of an injured party will be covered by Medicare For All. (3) Reduced administrative responsibilities. Expansion of Medicare to cover all citizens, financed by the government but run privately, would eliminate costly employer time and energy to explain benefits each time a new plan is purchased or an old plan is changed. All bills would be paid from a single pool, eliminating time spent dealing with multiple bills from multiple vendors of multiple services using multiple forms. Improved employee morale would follow and labor management expenses would decrease as negotiations on health care benefits would be off the table. Providers and consumers on a payment council would negotiate fair and affordable reimbursements. (2) New money for investments and payroll. The money that responsible large and small businesses pay for health care costs represents a substantial portion of their annual overhead. The modest tax increases that would be required to cover Medicare For All will leave substantial savings in annual overhead costs. Where will businesses spend that windfall? On better wages? Investment in new equipment to be more competitive in the global economy? To create better working conditions?

And the No. 1 reason small and large businesses will benefit from universal health care: (1) Reduced workers’ compensation costs. Workers’ compensation is a huge cost for businesses because of high rates that cover long-term health care costs. Medicare For All would include high quality standard coverage for illnesses or injuries, work related or not, thus eliminating the portion of premiums that pays for special health care under Workers’ Compensation.

The Medicare system is in place. It has a low and reasonable 3 percent overhead for administration. It is essentially nonprofit. Remuneration decisions are politically negotiable; witness the rollback of planned fee cuts for 2006 that would have decreased physician participation. Medicare quality initiatives are active and Medicare quality data are available on the New York state Health Department Web site.

It is time to end the procrastination and to expand Medicare to all citizens. Citizens are in favor of this. A recent Zogby International poll of 1,200 New York residents found 62 percent would prefer a universal health care system like Medicare. An October 2003 Washington Post/ABC poll found by a 2-to-1 ratio Americans preferred a universal system that would provide coverage to everyone under a government program as opposed to the current employer-based system. We challenge the politicians and business community to act now.

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Dr. Richard Propp is chairman of the Capital District Alliance for Universal Healthcare Inc.

By California State Sen. Sheila Kuehl
Tikkun Magazine
November 2006

As the State Senator for the 23rd Senate District in California, I represent almost a million people on the west end of Los Angeles County and the southern part of Ventura County. It’s a diverse district, culturally, economically, religiously–containing some of the wealthiest neighborhoods in the state, as well as working class neighborhoods where one of the most urgent issues is gang violence. There are high-rise urban neighborhoods, suburbs, agricultural areas, some of the most beautiful wild land in the state, and miles of gorgeous coastline.

My constituents are bus drivers, movie stars, shop owners, social workers and teachers. My job brings me into frequent meetings with Chambers of Commerce, union members and leaders, entertainment industry leaders and representatives of their crews, law enforcement officers, gangland peace brokers, doctors, lawyers and Native American tribes. I find it interesting that, no matter how diverse the group or the subject matter of a meeting, talk inevitably comes around to health care and how our health care “system” is broken.

The facts are chilling. In California, nearly one of every five persons lives without any health care coverage at all. Over 80 percent of these uninsured are employed. Even though various solutions to the crisis have been brought to the Legislature or proposed by initiative over the last few years, we (like the rest of the country) find it easier to agree about the extent of the problem than about a solution.

Some aspects of what the people want are clear enough. Over and over, we are told that individuals want the right to choose their own doctors. Doctors want to regain control over their patients’ care–they don’t want insurance company bean counters telling them what to do. Patients and doctors want evidence-based standards for appropriate medical care–not formularies dictated by pharmaceutical companies.

People don’t want insurance companies passing judgment on their healthcare–and they don’t want the government to own the doctors and hospitals, either. They want quality and choice, and they don’t want to have to choose between medical care and their life savings–or between medical care and food.

The Costs of Our Current System

The health care crisis doesn’t just affect the poor and the working poor. A study in Health Affairs this past February reported that about half of personal bankruptcies result from medical expenses. People who declare bankruptcy are people with assets to protect. The lack of national health care means that one traffic accident or one serious illness can wipe out a lifetime of careful financial decisions.

The effects of today’s health coverage crisis on our common lives are broad and deep. The economic effects are the easiest to measure. For most people with on-the-job insurance coverage, premium costs are rising (at about 9 percent a year, at the very least, and, increasingly, by double digits) faster than real wages. Co-pays and out-of-pocket expenses are also going up, as coverage decreases. The share of these costs borne by employees is rising, but so are employer costs. Major financial scandals, such as the looming wave of retirement pension defaults and the degradation of stocks in large American-based companies are aggravated by the rising costs of providing health care coverage benefits. Labor unions are spending increasing amounts of time, money, energy, and good will on struggles, not for improved wage packages, but simply to hold onto the already inadequate coverage for their members that employers now provide. Many large employers provide no healthcare coverage at all, leaving their minimum-wage workers to rely on MediCal.

For those who are uninsured, and for the growing number who are under-insured (nearly 16 million in 2003, according to an article in Health Affairs), this lack infiltrates every aspect of life. Nagging conditions go untreated until they explode into medical catastrophes. Simple high blood pressure, which could have been controlled with medication, leads to a stroke. Undiagnosed diabetes results in a coma, and hospitalization.

Of course, these disasters cause immeasurable anguish to those most directly involved. What may be less obvious is how much the rest of us also pay for these avoidable catastrophes. People without adequate insurance wind up in emergency rooms–where they will receive much more expensive care than they would have had with regular doctor visits. Hospitals bear the brunt of this over-reliance on ERs, not only because facilities are overused and patients have to wait to be seen, but also because many of the patients treated in ERs are not insured and cannot afford to pay for the care they get. Hospitals also face shrinking reimbursements and daunting red tape when dealing with insurance providers. As a result, hospitals close each year, but new ones don’t open. All of California’s people, insured or not, have to make do with fewer care providers.

The personal costs of this crisis are harder to measure, but pretty easy to see. It isn’t always easy to be a patient, even when we can afford it. Health care is one of the most intimate services that a professional can perform for us. As health care consumers, we have to make decisions that are sometimes very difficult, because they will have life-changing consequences for ourselves and for those we love. It’s hard enough to make those decisions under the best possible circumstances. But now, when critical decisions about what’s best for our children and parents, or for ourselves, become infected with the question of what we can afford, the situation is a source of immense anxiety and shame, as well as fear. This is a private anguish that many people never share and can never be measured. But it affects us as communities and as a state.

Furthermore, in order to feel comfortable as patients, we need to form relationships with care providers whom we trust and who know our history based on their own direct experience. The current patchwork of private and public insurance plans with which we now live, along with the practice of insuring most people at the point of employment, means that changing or losing jobs brings the risk of losing the doctors on whom they depend. Many people remain tethered to jobs from which they could otherwise advance only because they don’t want to lose their particular health benefits. A change in provider networks by an employer can tear us away from our primary care physician. And there’s not much we think we can do about it.

California State Senate Bill 840

But we can change the current system. Based on careful studies of the health care problem and analyses of proposed solutions, I introduced a bill that, I believe, would solve California’s health care crisis and could be a template for the rest of the country. State Senate Bill 840 passed the California’s State Senate and the Assembly and was sent to Governor Schwarzenegger for signature. On September 5, the Governor released a statement signaling his intent to veto the bill.

State Senate Bill 840 is a single-payer plan that would have insured every Californian with comprehensive benefits while controlling medical care costs and preserving the right of each of us to choose our own doctors and hospitals. SB 840 would have accomplished these goals without putting additional burdens on California’s general fund.

How could we get more for the same amount we are paying now? SB 840 is based on a model carefully analyzed in a report by the Lewin Group, an independent health care cost/benefit analysis firm with eighteen years of experience. The Lewin Group discovered that almost one-third of every dollar spent on healthcare in California goes to administrative costs–that is, paperwork, not patient care. The Lewin model, on which SB 840 is based, shows that we can reduce administrative costs to about 5 percent of every dollar spent (about a 20% drop) and that the savings will pay for a health care plan that can work for everyone.

Specifically, SB 840 would reduce costs by replacing the current chaos of private and governmental insurance plans with a single, reliable claim and reimbursement system. This is estimated to save about $20 billion in administrative costs. Second, SB 840 would mandate California to use its purchasing power to buy in bulk prescription drugs and durable medical equipment, such as wheelchairs, from pharmaceutical companies. This would save about $5.2 billion dollars. Twenty-five billion dollars buys a lot of health care.

A Human Impulse

A couple of months before vetoing SB840, in remarks before the Commonwealth Club, Governor Schwarzenegger actually stated, “I don’t believe in universal healthcare.” It’s hard to believe that the Governor truly meant what he said, but his veto speaks volumes.

Quality healthcare is not some status symbol or commodity that can be the province of the richest class. It is a necessity of life, like water or breathable air. Surely people who live in such a technologically advanced and wealthy society as ours ought to be able to expect a higher level of health care than we live with now.

Each of us will need health care at some point in our lives. Each of us is vulnerable–each of us will, someday, die. People may be uncomfortable with the subject of health care, because it is a reminder of an aspect of life that we’d rather not look at. But being mortal and vulnerable simply makes us more human.

Popular culture, in our country, places such an emphasis on strength that it has become almost shameful to admit to any need that one can’t fulfill as an individual. Action movie heroes (and governors) make normal people look unnaturally weak. “Tough-guy” strutting is back on the big screen and in politics.

However, it makes no sense to tell a SARS virus to “bring it on.” Nor can we fight illness or injury with “self-reliance.” Like it or not, we are weak animals who rely, not only on our brains, but also on our cooperation with one another.

If we embrace our inevitable interdependence, if we embrace that human impulse we call kindness, we can see that universal healthcare is not only the compassionate solution–it is the fiscally “tough” solution as well.

This is especially true when we expand our idea of cost/benefit analysis. We might point to all the benefits of increased wellness–not only is preventive care cheaper in terms of preventing expensive problems down the road; it also prevents human misery and promotes every level of well-being. We all have an interest in the health of our neighbors.

I seem to remember an excellent self-help book–the title will come to me any minute–that suggested it’s possible and necessary to love one’s neighbor as oneself. When it comes to health care, that’s a sound prescription.

12-year struggle a bad omen for the nation

By Ron French
The San Jose Mercury News
Published Sunday, Oct. 01, 2006

Bruce Bradley grew up in the 1950s. He remembers when every week in darkened movie houses another giant spider or fire-breathing lizard would threaten the world. Despite the best efforts of the military and bright minds, every kid in the audience knew there was no stopping the monster.

Today, the 61-year-old wages his own war on a monster in a Pontiac, Mich., office building. There, some of General Motors’ best minds fight a losing battle against the bills for Nexium prescriptions, heart bypass surgeries and CT scans that flood in at a rate of $10,000 a minute.

Bradley gets a cup of coffee, and GM has spent $50,000 on health care. He goes to lunch, and $600,000 is gone. He takes a three-day weekend on his sailboat and returns to $43 million in medical bills.

For 12 years, Bradley, GM’s director of health care policy, and the corporate soldiers in the automaker’s health care war room have waged an unprecedented battle against health care costs, throwing more money, time and energy into the issue than any company in history.

GM has used its size to strong-arm doctors and bully drug companies. It built the largest wellness-education program in the country, persuaded workers to pay more for medical care and cajoled hospitals to incorporate assembly-line efficiencies into emergency rooms.

“We’ve thrown everything at the monster,” Bradley said.

But those efforts have barely slowed the staggering surge in medical bills that many analysts believe is a bigger threat to GM than any rival automaker.

The world’s largest automaker is being driven deep into financial trouble not only by the cars of its competitors, but also by the medical bills of its own workers and retirees.

Last year, GM spent $5.3 billion on health care — enough to buy a GMC Yukon for each of its U.S. employees. By 2008, General Motors will probably spend more on health care in the United States than on its hourly-worker payroll.

The economics have become so upside-down that Warren Buffett calls GM “a health and benefits company with an auto company attached.” Bradley has heard that joke before, and it always makes him squirm. He knows health care bills are crippling the company. He also is painfully aware of what that means for the rest of the country.

The profits of U.S. businesses are being eaten away by rising health care costs — a financial burden not borne by their competitors based in other countries. An estimated 46 million Americans have no health insurance at all, and those with insurance are paying more for less coverage.

Because of its aging workforce and army of retirees, GM has reached a health care crisis before the rest of the country. But GM’s battle with the beast may well be a preview of what the United States as a whole will be facing in coming years.

GM has staked its future on an unlikely crusade against the most expensive and sloppy medical system in the industrialized world.

The fact that in 12 years those efforts have scarcely helped prompts a frightening question: If health costs are driving one of the most powerful companies in the world deep into financial difficulty, how bad will the health care crisis be for the rest of us?

At his desk, Bradley can look at the data and see prescription trends and demographic projections. When he looks long enough, he can see the monster emerging.

Every second of every day, GM pays for a medical procedure; every two seconds, it pays for a prescription. Last year, it wrote checks to 500,000 doctors, 35,000 pharmacies, 5,000 hospitals, 120 HMOs and 80 insurance companies.

One of every 87 Americans over the age of 65 have their medical bills paid by GM, as do one of every 279 Americans of all ages.

So large is the program that someone has a GM health card in nearly every ZIP code in the United States. So costly is the program that the automaker’s health care spending alone is more than the total revenue of 121 companies on the Fortune 500 list.

GM is the largest private buyer of health care in the world. Most companies pay an insurance company to assume the financial risk for health care claims. GM, on the other hand, is self-insured, meaning the cost of every mammogram and Viagra prescription comes straight out of the auto giant’s pocket.

The 2005 health care tab — the most any company has paid in history — may be just the tip of the iceberg.

In a recent congressional hearing, GM Chief Executive Rick Wagoner projected his company’s spending would surpass $7 billion by 2009 and keep rising after that.
In a later interview with the Detroit News, Wagoner offered a grim elaboration. “Get a calculator and punch in double-digit health care inflation for five, 10, 15 years, and you have a problem,” he said.

“If you keep paying more and more for health care . . . it robs our ability to invest in future products and future technology, which impacts our ability to employ people.”
In 1962, half the cars sold in the United States were made by General Motors.
GM offered generous health coverage and deferred benefits (retiree health benefits and pensions) instead of higher wages. That choice made sense because health care was inexpensive, and the future medical bills of retirees didn’t have to be charged against revenue until they occurred.

By deferring the cost for decades, the company assumed that its market share and profitability would remain at 1960s levels or higher.

By the early 1990s, that assumption was in tatters. GM’s share of the U.S. auto market had dropped from 50 percent to 33 percent. Health costs were rising at three times the rate of inflation. Facing fierce competition from Japanese automakers, GM couldn’t raise its car prices to cover the increased cost of health care as it had in the past. Instead, the company turned to its suppliers, squeezing price cuts out of parts manufacturers struggling to pay their own health expenses.

By 1994, the company nicknamed “Generous Motors” was suffocating under its own liberal employee benefits. That year, Harry J. Pearce, GM’s executive vice president and general counsel at the time, asked James Cubbin, a longtime lawyer with the automaker, to assemble a team to put a lid on health costs before they permanently scarred the company.
Cubbin’s creation, Health Care Initiatives, set out to do nothing less than diagnose and cure the problems of the U.S. medical industry. It was an audacious plan, akin to Blue Cross/Blue Shield trying to reinvent the way cars are designed, manufactured and sold.

From GM’s perspective, it was a matter of survival.

“There was a tremendous amount of anxiousness among the senior leadership” about growing health care costs, Bradley recalled. “And that anxiousness has been steadily increasing.”

The storm clouds hanging over GM in 1994 have become an economic hurricane. GM’s market share dropped to 27 percent in 2005. Shrinking market share and the bankruptcy of parts maker Delphi played major roles in an overall loss of $10.6 billion, but Wagoner need only look at two figures to see the disastrous impact of health care costs on the company: GM lost $8.2 billion in North America in 2005. And its health care tab amounted to nearly two-thirds of that amount.

Health costs are crippling not just GM, but also businesses across the United States, the only country where health care is primarily paid by employers. In other industrialized nations, it is paid for by the government. Companies may pay a health care tax in other nations, but that cost is far lower than the insurance premiums most U.S. companies pay.

Since 2000, premiums for employer-sponsored family health coverage have jumped 87 percent, according to a Kaiser Family Foundation survey. The average cost of annual premiums for family coverage is now $11,480 — more than the $10,712 in gross earnings a full-time minimum wage worker would make in a year.

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© 2006 MercuryNews.com and wire service sources. All Rights Reserved.
http://www.mercurynews.com

By LEONARD RODBERG
Queens College

“Rising health care costs are undermining the institution of employer-based coverage. We…may well be seeing the whole institution unraveling…. [This] is the byproduct of what should be a good thing: advances in medical technology.”
— Paul Krugman and Robin Wells,”The Health Care Crisis and What to Do About It,” New York Review of Books, March 23, 2006

Americans spend more on health care than anyone else on earth. We are first in spending, but, according to recent surveys, 14th in public satisfaction with our health system. Per person, our government spending alone is more than government plus private spending on health care in any other country. And yet our health statistics are comparatively poor, with life expectancy 24th in the world, infant mortality 27th, and more than 45 million people without any health insurance at all.

So why does the US spend so much and get so little in return? Because of one simple fact: we are alone in the world in relying on private insurance to fund health care.

ONLY IN AMERICA

Many countries have a “single-payer” system, like Canada, in which the government directly funds a system of universal coverage. Some countries (e.g., France or Germany) use employer-supported, nonprofit sickness funds — industry-wide insurance plans created with the support of their union movements. But every economically developed nation funds its health care system through some kind of government- run regulatory or funding mechanism that makes sure everyone has coverage and that costs are controlled.

In the US, employer-based health insurance was a significant advance when it was created by the labor movement in the mid-1930s. It was greatly expanded during World War II and reached its peak of coverage in the 1950s. But now this system, and the collection of private insurance companies it spawned, is a barrier to access to health care for millions of Americans, including union members.

America’s current health insurance system is:

• Wasteful. More than 20% of our spending on health care in this country is simply for administering our multipayer, for-profit insurance system.
• Inflationary. The insurance system is good at denying or delaying care, but incapable of controlling costs and encouraging the efficient use of medical technology.
• Obsolete. It is focused on treating illness when the major modern diseases — heart disease, cancer and stroke — are most effectively dealt with through prevention.

As costs rise, the number of employers who offer health insurance to their employees has steadily declined. Over just the last six years, costs rose by 87% — and the percentage of employers providing health insurance to their employees fell from 69% to below 60%.

SHIFTING COSTS

Those employers that continue to offer coverage pass more and more of the cost on to their employees. Employees now pay an average of 20% of the premiums in plans offered by their employers, on top of the rising co-pays and deductibles.

As employers drop coverage, government has to pick up many of those who are left without insurance — particularly through Medicaid, which covers some low-income people, especially children. In turn, the explosive growth of Medicaid creates financial problems for many states and localities, which share Medicaid costs with the federal government.

UNAFFORDABLE

With the employer-based system leaving increasing numbers of Americans without health coverage, some people propose requiring that individuals purchase insurance to solve the problem. The State of Massachusetts recently passed legislation to create an “affordable” insurance plan and require everyone without other insurance to purchase such a policy. The American Medical Association supports such an individual mandate, and other states are considering the idea.

What’s wrong with it? After all, anyone owning a car is required to have car insurance. The simple answer is that most people who don’t have health insurance today could not afford to buy a policy that would really give them adequate coverage. Today, the average policy for an individual costs more than $4,000 per year and, for a family, over $10,000 each year. Clearly someone earning the minimum wage ($10,000 per year for fulltime work) could not afford to purchase health insurance for her or his family.

While the Massachusetts plan envisions state subsidies that might lower the price for some people, these will be too limited to assure access to quality care. In the end, residents of Massachusetts will be required to spend a lot of money in exchange for very poor coverage.

FOR-PROFIT PROBLEMS

Nor is an individual mandate the solution from the point of view of the nation’s health system. As one wag put it, “If GM can’t keep down the cost of health care, how can we expect Mom and Dad to do it?” Employers have a lot more bargaining power than individual consumers, and they can’t keep a lid on costs.

Ultimately, it is not employer-based insurance that is failing, but the inefficient and increasingly unaffordable private, for-profit health insurance system.

The PSC, along with more than 150 other unions and union locals, is supporting the approach embodied in legislation introduced in Congress by Rep. John Conyers (D-MI). This bill, H.R. 676, the Expanded and Improved Medicare For All Act, builds on the success of the Medicare program in providing efficient, comprehensive coverage for more than 40 million elderly Americans on Social Security. This publicly funded “single-payer” plan gives patients a free choice of doctor and hospital, has much lower administrative costs than private insurance (3% vs. nearly 30%), and can provide the basis for a unified funding mechanism that would cover everyone while spending no more than we do now.

Instead of limited reforms that keep the private insurance companies in place (and which will ultimately fail), a Medicare For All system would be simpler, less costly and more equitable, and would cover everyone. And it would be better for our health.

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Len Rodberg is a member of the PSC Health Care Reform Committee, sponsor of a Dec. 2 symposium on health care reform. See p. 8 for details.