PNHP

Private equity investment in health care

Private equity investment in health care

Private equity infusion: A question of balance of growth vs. control for doctors

By Katherine VogtAmerican Medical News
Oct. 23/30, 2006

For the last few years, a growing pool of private equity investment money has been pouring into health care firms, swelling these enterprises until they are big enough to crest in rewards for investors.

The dollars have streamed into biotech, pharmaceutical, device and equipment companies as well as into hospitals, ambulatory surgery centers and even physician networks, providing relief for businesses that were thirsty for capital to grow and expand.

But implications for physicians are murky. Certainly some physician-led enterprises have benefited from the financial infusions. Yet those physicians may also be losing some control of their businesses as the private equity investors gain a stake. And, the increased leveraging of those enterprises may spell more risk for the physicians who have to make the businesses financially successful.

The money also is flowing into health care services such as integrated health care delivery systems, said Craig Frances, MD, a principal with the Palo Alto, Calif.-based private equity firm Summit Partners. “You’re seeing the resurrection of people believing after all there is a lot of value to some of these physician networks that are built differently, … as long as you are able to appropriately align incentives with doctors,” said Dr.
Frances, who was trained as an internist but no longer practices medicine.

“The difference with private equity is that although it’s a good source of capital, it also comes with owners and investors. And they will want results,” said (Richard Gundling, vice president of the Healthcare Financial Management Assn., a Westchester, Ill.-based association of health care financial executives). “Those private equity investors may want a seat at the table to govern changes. And you may have to give up some control.”

http://www.ama-assn.org/amednews/2006/10/23/bisa1023.htm

Comment:

By Don McCanne, MD

Res ipsa loquitur

Vic Kamber's Blog on HR 676 and Healthcare Reform

Vic Kamber, a prominent figure in many Democratic and labor-led campaigns, has posted a commentary on Congressman John Conyers’ single payer legislation, HR 676, and the outlook for real healthcare reform on his blog: www.vickamber.com.

The Kamber Group is well known to labor activists. Kamber served as assistant to the president of the Building and Construction Trades Department, AFL-CIO, and director of the AFL-CIO Task Force on Labor Law Reform. A veteran Democratic political consultant, Kamber has worked in over 100 political races, from City Council to Presidential.

Excerpts from Vic Kamber’s Oct. 18, 2006, Blog “Congress: Conyers is alive and well”:

“Every day more and more evidence piles up that Democrats are going to regain control of the Congress. It’s so compelling that even Democrats in Congress are beginning to believe it.”

“Here’s how I know: Rep. John Conyers’ universal health care bill that has been lying dormant all these years has suddenly come alive. If the American people could have voted on the bill, Conyers’ legislation would have passed overwhelmingly when it was first introduced… .”

“For years, labor unions have wanted health care taken off the collective bargaining table and have been active participants in statewide universal health care campaigns. Now as they perceive Democrats regaining control of the Congress, they’re giving new attention to the Conyers’ bill. Hundreds of local unions and central labor councils have endorsed HR 676, including state AFL-CIOs in Pennsylvania, Ohio, Connecticut and Kentucky. Just the other day the nation’s largest labor union, the National Education Association, signed on.”

“There is a huge and anxious audience impatient for government to do something about our country’s biggest domestic crisis… .”
________________________________________________________________________

For a complete list of union endorsers of HR 676 and a sample union resolution
contact:
Kay Tillow,
All Unions Committee for Single Payer-HR 676,
c/o Nurses Professional Organization,
1169 Eastern Parkway, #2218,
Louisville, KY 40217, (502) 636-1551.
email: nursenpo@aol.com

Proposal of the Physicians’ Working Group for Single-Payer National Health Insurance

PNHP note: to view the most recent version of the Physicians’ Proposal, published May 5, 2016, please click here.

Executive Summary

The United States spends more than twice as much on health care as the average of other developed nations, all of which boast universal coverage. Yet over 39 million Americans have no health insurance whatsoever, and most others are underinsured, in the sense that they lack adequate coverage for all contingencies (e.g., long-term care and prescription drug costs).

Why is the U. S. so different? The short answer is that we alone treat health care as a commodity distributed according to the ability to pay, rather than as a social service to be distributed according to medical need. In our market-driven system, investor-owned firms compete not so much by increasing quality or lowering costs, but by avoiding unprofitable patients and shifting costs back to patients or to other payers. This creates the paradox of a health care system based on avoiding the sick. It generates huge administrative costs, which, along with profits, divert resources from clinical care to the demands of business. In addition, burgeoning satellite businesses, such as consulting firms and marketing companies, consume an increasing fraction of the health care dollar.

We endorse a fundamental change in America’s health care – the creation of a comprehensive National Health Insurance (NHI) Program. Such a program – which in essence would be an expanded and improved version of Medicare – would cover every American for all necessary medical care. Most hospitals and clinics would remain privately owned and operated, receiving a budget from the NHI to cover all operating costs. Investor-owned facilities would be converted to not-for-profit status, and their former owners compensated for past investments. Physicians could continue to practice on a fee-for-service basis, or receive salaries from group practices, hospitals or clinics.

A National Health Insurance Program would save at least $150 billion annually by eliminating the high overhead and profits of the private, investor-owned insurance industry and reducing spending for marketing and other satellite services. Doctors and hospitals would be freed from the concomitant burdens and expenses of paperwork created by having to deal with multiple insurers with different rules – often rules designed to avoid payment. During the transition to an NHI, the savings on administration and profits would fully offset the costs of expanded and improved coverage. NHI would make it possible to set and enforce overall spending limits for the health care system, slowing cost growth over the long run.

A National Health Insurance Program is the only affordable option for universal, comprehensive coverage. Under the current system, expanding access to health care inevitably means increasing costs, and reducing costs inevitably means limiting access. But an NHI could both expand access and reduce costs. It would squeeze out bureaucratic waste and eliminate the perverse incentives that threaten the quality of care and the ethical foundations of medicine.

Click here to return to the Physicians’ Proposal page

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The current U.S. health care system is fraught with profiteering, mismanagement, corruption and crippling bureaucracy. In addition to putting patients at risk, this broken system dishonors the dedication and service of physicians and other health professionals.

The time for collective action has come. As the presidential election approaches, physicians nationwide can compel our elected officials to stop serving the powerful health insurance and pharmaceutical industries, and start shaping a coherent vision for national health care. It is possible to end uninsurance, lower costs, guarantee coverage, and provide better health for all Americans.

In the words of Margaret Meade, ‘Never doubt that a small group of thoughtful citizens can change the world: Indeed it is the only thing that ever has.’ In the coming months, we hope to add thousands of more physicians to our list of supporters. With our combined efforts, we can achieve true health care reform.

Thank you for partnering with us in this noble cause.

Yours truly,

Quentin Young, M.D.
PNHP National Coordinator”

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CHCF's three options for reform

Covering California’s Uninsured: Three Practical Options

By Rick Curtis and Ed Neuschler
California HealthCare Foundation
October 2006

The alternative mandatory coverage models analyzed in this report include:

* An individual mandate with no required contribution by employers.

* An individual mandate with a “pay-or-pay-plus” requirement on employers, including a modest employer-contribution floor for full-time permanent workers and a required employer fee for other workers and their dependents.

* An All-Consumer Choice Exchange (ACE) funded by payroll fees on all employers and workers (an insurance exchange of competing health plans).

All of the alternative mandatory-coverage approaches estimated in this project would, to the extent that they were sustainable, both preclude people from becoming uninsured and ensure that modest- and low-income people could afford coverage. We have no research basis for estimating different growth rates for health care spending under the different alternatives we analyzed. But unless the disproportionate increases in health care costs are curtailed, a growing number of people with higher incomes will not be able to afford coverage without subsidies, and government’s ability to finance adequate subsidies for even the initial low-income population will falter.

http://www.chcf.org/topics/healthinsurance/index.cfm?itemID=125690

Executive Summary:
http://www.chcf.org/documents/insurance/CoveringCaliforniasUninsuredExecSummary.pdf

Full Report:
http://www.chcf.org/documents/insurance/CoveringCaliforniasUninsuredFull%20Report.pdf

Comment:

By Don McCanne, MD

California HealthCare Foundation (CHCF) was established to serve the citizens of California by helping to improve California’s health care financing and delivery systems. It was funded with a largely-coerced contribution from Blue Cross of California which represented accrual of tax benefits rightly reverting to the citizens once Blue Cross was converted to a for-profit, investor owned company. Mark Smith, MD, MBA (Wharton) has been its president and CEO since its founding in 1996. He has been a strong supporter of managed care and private insurance, while also having expressed his opposition to single payer reform.

California is ripe for comprehensive reform. There is strong support for the single payer model with a bill having recently been passed by the state legislature, only to be vetoed by Gov. Schwarzenegger. The governor has promised to introduce his plan for reform in January.

This background makes it easier to understand why CHCF is presenting three models of reform, each of which dramatically expands the private insurance market in California, as if these were the only feasible options available.
These options, as described in the report, fail to achieve the efficiencies, comprehensiveness, cost containment, and equity of the single payer model.

The gold standard of single payer needs to be included in every dialogue on reform, not only in California, but throughout the nation. Please continue to do your part to be sure that it is.

Are Americans concerned about health care costs?

Understanding The American Public’s Health Priorities: A 2006 Perspective

By Robert J. Blendon, Kelly Hunt, John M. Benson, Channtal Fleischfresser, Tami Buhr
Health Affairs
October 17, 2006

Views on national health spending and health care costs.

Multiple survey results show that the public favors increased health spending in the years ahead but is concerned about the impact of rising health care costs on the financial situation of American families. In 2004,
78 percent of the public thought that national spending to improve health was too low; only 4 percent said that it was too high. Similarly, in 2006 a survey asked specifically about overall national spending on health care and national health care spending by government. The majority of respondents (57
percent) thought that the United States as a country was spending too little on health care in the aggregate, and 70 percent said that government health care spending was too low. Only 26 percent thought that the country as a whole was spending too much, and 11 percent thought that the government was spending too much. Around one-tenth of Americans thought that these spending levels were “about right” (9 percent, nation as a whole; 11 percent, government).

What concerns Americans is not aggregate spending, but the perceived negative impact on American families of their direct health care outlays (insurance premiums, copayments, deductibles, and direct payments for services and products). When asked about spending for health care by average Americans in 2006, 65 percent of respondents said that the average American spends too much, while only 17 percent said too little. (Twelve percent felt that the level of spending was “about right.”) This is what Americans mean when they list health care costs as the top health care priority for government action.

Discussion And Conclusions (excerpt)

Most U.S. news coverage about medical care issues during the past year has concentrated on Medicare’s new prescription drug benefit, while many in the research and professional community have focused on the nation’s quality-of-care problems. What is important to recognize is that these are not the American public’s top health care priorities today. Americans want their government to do something about their rising health care costs and the problems of the uninsured. When Americans talk about health care costs, however, their concern is not for the share of the nation’s gross domestic product (GDP) going toward health care, but rather the financial impact on their own families.

http://content.healthaffairs.org/cgi/content/abstract/hlthaff.25.w508

Comment:

By Don McCanne, MD

This is an important distinction. Americans believe that aggregate health care spending should be increased, especially the contribution by the government. This is in sharp contrast to the concerns that Americans have about their own individual out-of-pocket spending for health care, including the cost of health insurance.

In evaluating reform options, the individual’s first concern is, “Does it work for me?” If individuals understand that it does, and then they see that it also works for everyone else with a negligible additional burden to the individual, then they can be supportive of that reform.

The single payer option is the reform model that would work the best for individuals. But another finding indicates that the public probably does not understand this. When asked which are the two most important problems with the nation’s health care system that the government should address, the top two responses were health care costs (43 percent spontaneous response), and uninsured/access to care (34 percent). Only one percent volunteered that organization of the system was one of the two most important problems, behind many other less pressing health care issues.

It is reassuring that our citizens understand that health care costs, and lack of insurance and access are the most important issues. But they still need to understand that reorganization of the financing of health care will be required to successfully address these issues. It’s our job to see that they do.

Moral high ground elusive to UnitedHealth and WellPoint/BlueCross

Chief Executive at Health Insurer Is Forced Out in Options Inquiry

By Eric Dash and Milt Freudenheim
The New York Times
October 16, 2006

Dr. William W. McGuire, a medical entrepreneur who built the UnitedHealth Group into a colossus in its field, was forced to resign from the company yesterday and to give up a portion of the $1.1 billion he holds in harshly criticized stock options.

At UnitedHealth, even the man named to replace Dr. McGuire as chief executive has been a beneficiary of backdated options: Stephen J. Hemsley, who has been Dr. McGuire’s top lieutenant, will lose a sizable portion of his options, the company said.

http://www.nytimes.com/2006/10/16/business/16united.html?_r=2&adxnnl=1&oref=slogin&adxnnlx=1161018912-8+gxj7+G8oF5ouY7SlJAGQ&pagewanted=all

And…

Hospital Sues Blue Cross for Payments

By Lisa Girion
Los Angeles Times
October 14, 2006

A class-action lawsuit filed Friday on behalf of all California hospitals accused Blue Cross of California of routinely violating state law by refusing to pay hundreds of hospitals statewide for patient care it authorized.

“Hospitals provided care to those Blue Cross patients in good faith,” said (Jan Emerson, a spokeswoman for the California Hospital Assn.). “In many cases that care is pre-authorized by Blue Cross. When they cancel coverage after that care has been provided, that causes a problem for the hospital.”

The suit alleges that, in many cases, such revocations are themselves illegal, triggered by a purported corporate policy to avoid expensive claims.

http://www.latimes.com/business/la-fi-hospitals14oct14,1,3867891.story?coll=la-headlines-business

Comment:

By Don McCanne, M.D.

Three questions:

(1) How many stock options would be granted to the trustees of a publicly funded and publicly administered program of national health insurance?
(Hint: No stock shares exist in a program owned by the citizens of the nation rather than by passive investors on Wall street.)

(2) Under what circumstances would a publicly funded and publicly administered program of national health insurance retroactively deny payment for legitimate health services already provided?
(Hint: The mission of a publicly owned national health insurance program is to prevent financial hardship for individuals requiring health care, whereas the mission of a for-profit health insurance corporation requires the adoption of policies that would maximize investor return.)

(3) Must the moral high ground remain elusive?
(Hint: As long as we leave the private insurance industry in charge… )

Alan Maynard on Porter and Teisberg's reinvention of the wheel

HEALTH REFORM: Reinventing The Wheel

by Alan Maynard
Health Affairs Blog
October 12th, 2006

The American health care systems perform impressively, producing what they are designed to deliver: cost inflation, inefficiency, and inequity. At regular intervals, local pundits declare that the outcomes of the incentive structures in the constituent parts of the systems are unacceptable, usually emphasising that “the nation cannot afford to spend 16 percent of GDP on health care.” Such “insights” ignore the fact that inflation is a consequence of the systems’ perverse incentives and that improved control of expenditure inflation would oblige physicians, nurses, hospitals, and the pharmaceutical industry to moderate their lifestyles.

Michael Porter, a management guru at Harvard, along with colleague Elizabeth Olmstead Teisberg, has now decided to switch his attention to the health care industry, no doubt in part because he has recognised that it is big and remunerative. The extent to which the lessons of Enron and the “successes” of other capitalist enterprises can inform health care policy can and should be debated carefully.

Any cure for the malaise of U.S. health care, or the British NHS to which Porter has also offered his vision of a New Jerusalem, is dependent on diagnostic skills and the evidence base for the treatments offered. Like many gurus before him, Porter makes an adequate job of the diagnostics, offering insights very reminiscent of the Jackson Hole proposals over a decade ago.

However when he gets to cures, there is nothing new to break the logjam of inertia and self-interest that stabilizes the inefficiency of the health care system, be it public or private. He rightly indicates that the industry needs a measure of value added and that instead of focusing on cost and activity, it is necessary to measure patient-reported outcomes – i.e., measures of whether patients feel better. Such a conclusion is welcome but ignores the forces that have prevented the use of outcome measures in health care for centuries. Another Bostonian, Ernest Codman, suggested systematic management for Massachusetts General Hospital – in particular, plans for evaluating the competence of surgeons in the early twentieth century – and, as a consequence of the unpopularity of his proposals, he lost his staff privileges in 1914.

Insurers and Governments Fixated on Failure

The RAND Insurance Experiment produced a generic health profile, Short Form 36. Work in Europe has produced a generic health index, EQ5D. These have been translated into dozens of languages and used in thousands of clinical trials. But with physicians and policy makers fixated with the measurement and management of failure (e.g. mortality), these measures of success have been ignored by insurers and governments alike as a means of measuring success and of bringing to account those providers failing to make their customers “better,” in terms of physical and mental functioning.

Porter’s lack of specificity about the outcome measures needed to improve the performance of the U.S. health care systems, and his glib reliance on “competition” to institute change, flies in the face of international evidence: Nowhere has any public or private institution managed to curb the excesses of powerful providers more interested in their wallets than demonstrably improving patients’ health. Porter adds little new to the debate, but he is a welcome and potentially powerful addition to the chorus advocating change.

A. Maynard, HEALTH REFORM: Reinventing The Wheel, Health Affairs Blog, October 12th, 2006, http://healthaffairs.org/blog/2006/10/12/health-reform-reinventing-the-wheel/,
Copyright ©2006 Health Affairs by Project HOPE – The People-to-People Health Foundation, Inc.

Comment:

By Don McCanne, MD

Health Affairs has initiated a blog and has begun with comments on Michael Porter and Elizabeth Teisberg’s “Redefining Health Care.” Comments by James Robinson, Uwe Reinhardt, Alain Enthoven, and Alan Maynard have been posted, along with responses from readers.

Besides Alan Maynard’s comments above, I would also recommend reading Uwe Reinhardt’s take. An excerpt: “Unfortunately, (Porter and Teisberg’s) book offers few practical hints on how the U.S. health system would transit from its current, allegedly negative-sum game to the allegedly positive-sum utopia (Porter and Teisberg) envision. That transition would vastly rearrange the distribution of economic power and clinical autonomy in our health system. It is naive to assume that the potential losers in that transition would simply roll over and accept their fate.”
http://healthaffairs.org/blog/2006/10/10/health-reform-porter-and-teisbergs-utopian-vision/#more-63

Regular readers of the Quote of the Day will know that I am not a fan of Porter and Teisberg’s concepts. An excerpt from an earlier comment of mine: “Imagine a system in which care is delivered based on teams, without geographical limitations, organized around medical conditions, competing with other teams organized around the same conditions. Imagine your community hospital and its specialists providing care for a very limited list of medical conditions selected on the basis of providing better outcomes and lower prices. Your community hospital may very well lack a team that is dedicated to your particular problem, requiring you to travel to the next county, or maybe the next state, for care. Then allegedly to create transparency in pricing, you receive a single bill that totally obscures any understanding as to where your payment goes. You really have to read the book to understand the extent to which this line of reasoning is carried.” https://pnhp.org/news/2006/june/porter_and_teisberg.php

“The American health care systems perform impressively, producing what they are designed to deliver: cost inflation, inefficiency, and inequity.” This first line in Alan Maynard’s comment leads us to our bottom line. The United States needs a new design that would address cost inflation, inefficiency, and inequity. The first step would be to establish an equitable, efficient national health insurance program that could begin to tackle the rapidly rising costs of health care. That won’t be easy, but it’s impossible under the status quo.

California legitimizes health discount card parasites

State to Set Rules on Health Cards

By Daniel Yi
Los Angeles Times
October 11, 2006

California on Tuesday joined a rising number of states imposing regulations on healthcare discount cards, a fast-growing product that has generated debate amid allegations of fraud or exaggerated claims.

The California Department of Managed Healthcare, which oversees health plans in the state, announced Tuesday that it would license the cards.

Discounts are no substitute for health insurance, Department of Managed Healthcare Director Cindy Ehnes said at a news conference in Sacramento. But “for many uninsured Californians, discount healthcare cards have become a growing alternative to traditional healthcare plans,” she said.

“The fundamental question is, ‘What is the discount?’ ” said Beth Capell, a lobbyist for Health Access California, a consumer group. “There is no sticker price in healthcare, so what is the discount from?”

Discount cards are a “new middleman who’s found a way to make money,” said Jack Lewin, chief executive of the California Medical Assn. “Most doctors would be willing to give uninsured people a break anyway.”

http://www.latimes.com/business/la-fi-discount11oct11,1,1206161.story

Comment:

By Don McCanne, MD

One of the most unique characteristics of health care financing in the United States has been our acceptance of a middleman industry that diverts hundreds of billions of dollars from health care to profoundly wasteful administrative services.

Health care discount cards are marketed as an affordable substitute for those who cannot afford health insurance, but they have a medical loss ratio of zero percent since they do not pay for health care. That means that 100 percent of their costs add to the administrative waste of our system.

Since most health care is paid for by public and private insurers, the “retail price” of health care is set by these third party payers. The “rack price” of health care services is rarely paid, though it is the price presented to uninsured patients. The discount card merely reduces rack fees down to the actual retail level.

These card companies are parasites sucking resources out of our health care system. What is astounding is that California and other states want to legitimize them by giving them a seal of approval through state licensing.
Instead they should be eliminating these thieves, which they could do easily by establishing a universal, publicly-administered health insurance program.

HSAs are not an option for low-income families

Health Savings Accounts and High Deductible Health Plans: Are They An Option for Low-Income Families?

By Catherine Hoffman and Jennifer Tolbert
Kaiser Commission on Medicaid and the Uninsured
October 2006

Key Findings:

* Premiums for HSA-qualified health plans may be lower than for traditional insurance, but these plans shift more of the financial risk to individuals and families through higher deductibles.

* Premiums and out-of-pocket costs for HSA-qualified health plans would consume a substantial portion of a low-income family’s budget.

* Most low-income individuals and families do not face high enough tax liability to benefit in a significant way from tax deductions associated with HSAs.

* People with chronic conditions, disabilities, and others with high-cost medical needs may face even greater out-of-pocket costs under HSA-qualified health plans.

* Cost-sharing reduces the use of health care, especially primary and preventive services, and low-income individuals and those who are sicker are particularly sensitive to cost-sharing increases.

* Health savings accounts and high deductible plans are unlikely to substantially increase health insurance coverage among the uninsured.

For low-income families in particular, HSAs and HDHPs may exacerbate, rather than alleviate, the problems they currently face in affording and accessing needed health care.

http://www.kff.org/uninsured/upload/7568.pdf

Comment:

By Don McCanne, MD

Any student of health policy already fully understands the message in this report: Health savings accounts and high-deductible health plans do not work for lower-income individuals with significant health problems. So why belabor this point? Why shouldn’t we support current legislation that would expand the HSA/HDHP benefits for healthy, higher-income individuals, for whom they work well, and find other solutions for those with lower incomes and greater needs?

The problem is that HSAs remove funds from the risk pools that pay for health care, and convert them into tax-subsidized retirement funds for wealthier individuals. Social insurance programs depend on the healthy to help fund the care of the sick, and the wealthy to help fund the care of the poor. HSAs allow the healthy and wealthy to avoid sharing risk with the sick and poor who are already facing affordability issues. Not very egalitarian, but that seems to be the American way.

Marie Cocco on the Citizens' Working Group report

Jittery about the health system

By Marie Cocco
The Sacramento Bee
October 8, 2006

More than a dozen years after Hillary Rodham Clinton’s grand experiment in reshaping the health insurance system died in a pyre of overheated political argument and hysterical claims, it turns out the public wants pretty much what Clinton tried to deliver: coverage for all Americans in the form of a nationally mandated, guaranteed set of core benefits to replace the current patchwork that leaves even many people who have insurance with inadequate coverage for some illnesses and treatments. In short, it should be a national policy that refuses to let a family be crushed financially if someone becomes very ill.

All this would, naturally, be financed in a way the body politic considers “fair” — without creating an undue burden on sick people and in a way that’s related to a family’s ability to pay. The most popular means of raising additional funds is through “some form of progressive, or ‘sliding scale’ income or payroll tax (like the Medicare payroll tax) specifically dedicated to supporting health care for all.”

No, this isn’t a script for a Democratic candidate’s campaign commercial. And they’re not talking points for an interest group pushing this health care solution or that.

These are the conclusions of an official, nonpartisan government commission set up by Congress as part of the Medicare prescription-drug legislation. What the commission now tells us — after taking soundings in 37 states, collecting tens of thousands of responses to polls and written questionnaires and listening at 98 community meetings — is that Americans see clearly what is wrong with the health care system, and have on their own achieved a remarkable degree of consensus on how to fix it.

More than 90 percent of those who participated in community meetings or responded to the commission’s questions and polls said they believed every American should have affordable coverage. A clear majority wants a mandated, basic benefit for everyone and is “not comfortable with bare-bones benefit packages.” There’s agreement, as well, that if doing things more efficiently and reshuffling current government subsidies don’t generate enough money for expanding coverage then — ahem — people are willing to pay higher taxes.

http://www.sacbee.com/110/story/35162.html

Comment:

By Don McCanne, MD

In a previous Quote-of-the-Day, I condemned the recommendations of the Citizens’ Health Care Working Group as being the product of a partisan hack job. What I did not emphasize in that message (but had stated in previous messages) was the overwhelming consensus of the public participants on what should be done about improving our health care system. Americans want a system that provides reasonably comprehensive coverage for absolutely everyone, that prevents financial hardship and is funded in an equitable manner.

My objection is that there was a disconnect between the findings of the Working Group and the recommendations that were advanced. The recommendations can be summarized as follows: VERY high deductible coverage (reinsurance without coverage of primary benefits); support for integration of systems; contemplating the definition of core benefits; admiring quality; and encouraging humane end-of-life care. These are the recommendations that have been presented to the President and will be forwarded to Congress. No serious person can contend that these recommendations represented the comprehensive reform that Americans seek.

The fact that I condemn the process that resulted in grossly deficient recommendations does not mean that we should discard this report. We should continue to speak up loud and clear on the expressed wishes of the American people. But we should not allow Congress and the President to act on these recommendations and then pretend that they have provided the comprehensive reform we want.

If ever there was a time for citizen activism, it is now.

"Citizens' Health Care Working Group" Ignores Citizens

Congressional Task Force Disregards Public’s Call for National Health Insurance

EMBARGOED UNTIL:
September 27, 2006

Contacts:
David McLanahan, M.D. – (206) 937-7154
Garrett Adams, M.D. – (502) 895-8847
Nick Skala – (312)782-6006

The group created by Congress to listen to Americans’ ideas for improving the health system has ignored their overwhelming advice to create a national health insurance program. Although a national health program was by far the most favored option at 86 percent (25 of 29) of the meetings of the Citizens’ Health Care Working Group (CHCWG), the group’s recommendations avoid the clear public preference for government-guaranteed health coverage.

When given a choice of ten reform options at public hearings held by the CHCWG, participants clearly favored a national health program by a margin of at least 3 to 1. At meetings where participants were asked to rank the 10 options, national health insurance was ranked first 16 of 19 times (Billings, MT; Denver; Des Moines; Detroit; Eugene, OR; Jackson, MS; Kansas City, MO; Memphis; Miami; New York, NY; Philadelphia; Phoenix; Providence, RI; Sacramento; and Seattle). At two meetings participants were neither polled nor options ranked.

Despite the clear public mandate, the CHCWG’s report makes no mention of the vast support for a national health program. Instead, the group’s official recommendations include only generic suggestions such as promoting “efforts to improve quality of care and efficiency.” and finding a way to protect “against very high health costs.”

“The structure of the meeting and the way the questions were presented were obviously geared toward producing recommendations that would fall far short national health insurance.” said Dr. David McLanahan, a surgeon who attended the Seattle hearing. “It was very clear, however, that a national program was what the vast majority of people at the hearing wanted.”

Dr. Garrett Adams, a pediatrician from Louisville, participated in a CHCWG-sponsored teleconference at which he complained about the questions’ bias in writing. “I felt that the questions were written in such a way as to require you to acknowledge premises with which I disagreed,” Dr. Adams said. “Even so, the Working Group’s own data shows that most of the participants at the public hearing in Lexington supported a national health program. I think it was incredibly brave, here in the home state of Humana, for citizens to speak out on behalf of a program that would threaten the profits of huge insurance and drug firms.”

Most supporters of a national health program favor a single-payer system, which retain the private delivery of health care by physicians and hospitals, but organizes payment under a single public agency. A 2003 study in the New England Journal of Medicine found that a single-payer national health insurance program would save enough on administrative costs — more than $300 billion per year — to cover all of the uninsured and provide full benefits for everyone else.

The 15-member CHCWG was created as a part of the 2003 Medicare drug bill to hold public hearings on health care and make recommendations to the President and Congress on “ways to improve and strengthen the health care system based on the information and preferences expressed at the community meetings.”

To see the meeting data from the CHCWG report, follow this link:

https://pnhp.org/PDF_files/Last_Page_from_appendix_b.pdf

Summary and data reports from individual community meetings can be found at: http://govinfo.library.unt.edu/chc/

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PNHP has physicians and citizens who attended the CHCWG community meetings and are available for comment. To request an interview, contact Nicholas Skala at 312-782-6006.

Physicians for a National Health Program is an organization of 14,000 physicians that support single-payer national health insurance. PNHP is headquartered in Chicago and has chapters and spokespeople across the U.S. To contact a physician-spokesperson in your area, contact nick@pnhp.org or call 312-782-6006. www.pnhp.org.