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Toyota's health cost cure: A clinic at the plant site

Toyota's health cost cure: A clinic at the plant site

With tab of $11,000 per U.S. worker, automaker will invest $9M in San Antonia facility

By Christine Tierney
The Detroit News
Wednesday, November 08, 2006

Detroit’s automakers are not the only ones grappling with soaring health-care costs. They are becoming an issue for Toyota Motor Corp., as well, as the Japanese giant expands its U.S. manufacturing operations and work force.

“Our health care costs have doubled over the past five years,” to more than $11,000 a year per U.S. plant worker, said Ford Brewer, assistant general manager for health and wellness at Toyota’s North American manufacturing headquarters.

In designing its newest plant, in San Antonio, Toyota is trying to tackle the problem by building a clinic at the factory to provide a wider array of treatments and services than a typical factory medical office.

The workers at the San Antonio pickup plant can have their eyes checked and their teeth repaired at the $9 million clinic, which also offers pediatric services, laboratory tests and physical therapy.

“This is a major step beyond what we’ve done before,” Brewer said.

The move, however, is consistent with Toyota’s bedrock principle of kaizen, or continuous improvement.

“Typically we reduce costs by improving quality,” Brewer said. “That’s the same thing we’re doing here.”

By offering better primary care and preventive medicine, Toyota expects to rein in its health-care expenses.

Companies that have adopted this approach tend to spend more for primary care and drugs, but that increase is more than offset by a drop in costly hospitalization and specialty care expenses, Toyota said.

The San Antonio clinic is the first of its kind at Toyota, said plant manager Hidehiko “T.J.” Tajima.

“It’s for employees, their families and for suppliers. If it’s successful, we’ll spread the concept to other plants.”

Toyota will employ 2,000 workers at the truck plant by spring, while suppliers on the site will employ 2,100.

Toyota will gauge the success of the clinic by monitoring employees’ health-care indicators, such as smoking-cessation rates and blood-pressure levels, and by tracking expenses.

“From a cost control standpoint, it certainly makes sense,” said Ronald Harbour, president of Troy-based Harbour Consulting Inc., which specializes in manufacturing.

U.S. automakers are deeply frustrated by the rapid increases in health-care costs. In addition, “they feel they have very little control over the cost and over how effectively the money is spent. This is one answer,” Harbour said.

An on-site clinic also is likely to reduce the absenteeism rate.

While a clinic a few minutes from the assembly line may seem convenient to many workers, others may worry about their privacy, some auto industry experts say.

Ford Motor Co. operated a clinic at the Rouge plant in the 1950s that offered basic health-care and dental services. “There used to be a bed ward where employees were kept overnight,” said William Heckman, executive physician at Ford Motor Co.

“The trend has been to move away from doing personal care, to focusing on occupational injuries, as employees got better health-care coverage,” he said.

Ford believes most employees prefer to go to their own doctor.

Honda Motor Co. also encourages employees to choose their doctors, although it has two wellness centers at plants in Ohio offering physical therapy, massages, and exercise and nutrition classes to encourage workers to stay healthy and fit.

Toyota would not require San Antonio workers to go to the on-site clinic, but it encourages them to do so by charging higher co-pays and deductibles for workers who choose to go elsewhere.

“Is that like Big Brother providing my health-care? We had to deal with similar concerns with our pharmacies a couple of years ago,” Brewer said.

When Toyota installed pharmacies at U.S. plants to lower its drug costs, some employees expressed concerns about their privacy.

But now more than 80 percent of the drugs purchased by employees are bought from the plant pharmacies or the mail-order service, Brewer said.

A spokesman for the United Auto Workers union declined to comment specifically on Toyota’s program.

“The primary concern of our members is that the interest of the patient always comes first in any health care delivery system,” said UAW spokesman Roger Kerson. The UAW believes that a comprehensive national health insurance program, as Japan and other industrialized countries have, is the answer to the U.S. health care crisis.

While Toyota is intent on holding down health-care costs, company officials say the system also will benefit employees.

“We want to provide high-quality care,” said John Runge, manager of human resources for the Texas plant.

The clinic’s physicians will not be remunerated on the basis of how many patients they see — a payment method that encourages doctors to see as many patients as possible.

Whereas studies show doctors spend around seven minutes on average with patients in the United States, the San Antonio clinic will allot 20 minutes for a visit with a doctor.

“If a doctor spends 20 minutes with a patient, he’s likely to know more. There’s a major focus on prevention,” Brewer said.

The clinic, which will be operated by CHD Meridian Health Care, will initially employ two full-time doctors and one part-time, but expects to increase that to as many as seven doctors when the plant is fully staffed.

You can reach Christine Tierney at (313) 222-1463 or ctierney@detnews.com.

Action and Reaction

By Matthew Holt
Spot On Blog | San Francisco
Nov 6, 2006

Back in the day when there was some vague interest from Democrats in fixing our health care system, a kindly millionaire gave a pile of money to a lobbying pressure group that had quite some influence behind the ill-fated Clinton Health Plan. Not too much has been heard since from Families USA and its leader Ron Pollack. Sadly, those of us of a certain age felt that its day in the sun had come and gone.

But what was interesting about Families USA was that, unlike other Capitol Hill groups with “friendly” names, it actually lobbied for things that might make pretty good sense to families, especially poor ones. Namely national health insurance coverage that couldn’t be taken away if the breadwinner got sick. Those of us in the now majority who live in households that are no longer inhabited by traditional families, might wonder why health care needs to be specially designed just for them, given that it’s not just people in traditional families who get sick (and in fact many of the most sick are not in traditional families). But families are important because families tend to be richer and more likely to vote than other households, and what’s good for them is generally what’s good for America.

However, you might think that 13 years after its heyday that Families USA may not be very important any more. But it is. How do I know this? Well the health care industry and a few of its zealot fellow traveler ideologues have set up a knock-off “astroturf” movement to counter its work. I’d missed the formal launch but, no worries, into my inbox popped a very nice looking email from someone called Sandra Berk who claims to be the head of Health Care America. And Health Care America’s web site address is, get this, fightingforfamilies.org. No confusion there. Nope. Not a speck.

You know this has got to be special – presumably fighting forfamiliesmotherhoodandapplepie.org was taken. But then I read down in the email and it was full of all the nutty health care theories that proliferates from certain right wing think tanks. I know these people well enough and have had long interviews with two of their leaders Grace Marie Turner and David Grazter over on my site, THCB. Their basic premise is that no one should be forced by mandate or taxation to buy health insurance. They know and cheerfully admit that this will continue the current scenario in which millions of Americans will remain uninsured, and consequently in which many of them have extreme problems with medical costs – often leading to bankruptcy.

Turner, Gratzer et al basically think that this is the price we pay for getting slightly better survival rates for cancer than Canadians, and we should thank our lucky stars that we’re not like them – as in forced to pay into a social insurance pool that puts some limits on care for the virtually dead, but makes sure that no one goes to the poorhouse purely because they’re sick. Whether or not you agree with them, that’s what they think and I suppose it’s a point of view.

But I don’t see how it’s a point of view that “families” are particularly keen on. Which raise a basic question. Which families are supporting fightingforfamilies.org? Well it becomes pretty obvious when you look at their web site:

Health Care America is supported by a broad spectrum of consumer choice advocates, including employers, individuals, hospitals, pharmaceutical manufacturers, pharmacy benefit managers, health care professionals and others.
So the families we’re discussing are the McGuires, the Frists, the Crawfords, et al. Families that look just like the other 50 odd million in America, apart from their bank accounts.

But you won’t find out from the site who’s running the show. There is no page for “management” or “sponsors”. The Washington Post reported that the head was “Sarah Berk, a former lobbyist for the American Hospital Association and earlier an aide in the leadership office of Sen. Rick Santorum (R-Pa.).” She wants to “produce research papers and be a free-market ‘counter-voice’ to Families USA, a group that she said promotes a ‘liberal health-care agenda.'”

Well you didn’t know that 13 years after its glory days promoting the Clinton plan – which today is even repudiated by the person who lead it – Families USA needed to be combatted. So how will HCA help finish it off?

Health Care America is a tireless advocate for American families and is a vocal critic of policies that restrict consumer choice in the health care system. We participate actively in the media, produce groundbreaking research and provide Americans with the information they need to help improve our nation’s health care system.
And even if they don’t tell you on their web site who their management or funders are, a quick search shows the site’s address is registered to geofffreeman@cox.net who sounds suspiciously like this Geoff Freeman:

Geoff Freeman, executive director of the Discover America Partnership, is an expert in managing complex issue campaigns and developing innovative outreach strategies to increase support among unlikely allies.
And who is he really? A Republican PR operative returned from a tour in Iraq at the Coalition Provisional Authority with ties to the big drug companies.

As a Vice President with APCO Worldwide, a global public affairs firm, Mr. Freeman managed a wide array of issue campaigns, including the Partnership for Prescription Assistance (PPA). The PPA, supported by America’s pharmaceutical companies, is the largest effort ever created to connect uninsured Americans with free prescription medicines. The campaign succeed in helping more than two million Americans in its first year of operation, driving over 5,000 news stories and repositioning the pharmaceutical industry.

Prior to leading the PPA, Mr. Freeman managed a multi-million dollar campaign to inform millions of Americans on some of the many “untold stories” from America’s liberation of Iraq. The campaign featured dozens of Iraqis touring the United States to express their gratitude for the sacrifices made by American soldiers as well as the release of a groundbreaking film titled “Voices of Iraq.” The film empowered Iraqis to share their personal stories and won rave reviews from critics across the country. The campaign included over 200 speaking engagements in targeted markets and earned more than 325 television and radio appearances and over 250 newspaper placements.
What Iraqis have in common with bedraggled American families and their health care needs escapes me. But they’re not the only ones who’s labels are in question. There’s also Consumers for Health Care Choices, run by Greg Scandlen – a man who cut his teeth working for the Blue Cross plans – and Stormy Johnson – a former President of the American Medical Association. You might think that a health plan executive and a proponent of organized medicine aren’t exactly most likely to be the standard bearers for the down-trodden consumer. And you’d be right.

But that’s all OK. This is America – you can call yourselves what you like and there’s no penalty for misleading the public. But the skeptics might ask cui bono. And while they’re lacking a bunch of PR flacks on the payroll, there are some organizations who are what they claim, The poor saps at Physicians for a National Health Program are actually what they say they are – a bunch of physicians in favor of a national single payer plan.

Sadly, no one told them that you need to be a “family” to run the world.

What's good about a 5 percent cut in physician payments?

Medicare Announces Final Rule Setting Physician Payment Rates and Policies for 2007

Centers for Medicare and Medicaid Services
November 1, 2006

Starting next year, the Medicare program will pay physicians more for the time they spend talking with Medicare beneficiaries about their health care and will pay for a broader range of preventive services. The changes, which will become effective January 1, 2007, are included in the Medicare Physician Fee Schedule (MPFS) final rule released today by the Centers for Medicare & Medicaid Services (CMS).

CMS projects that it will pay approximately $61.5 billion to over 900,000 physicians and other health care professionals in 2007 as a result of the payment rates and policies adopted in this rule. This new spending figure reflects current law requirements to reduce payment by 5 percent to account for the combined growth in volume and intensity of physician services.

The hallmark of this rule is a stronger emphasis on the physician-patient relationship. The final rule increases significantly the work component for the RVUs (relative value units) for the face-to-face visits (evaluation and management or “E&M services”) during which the physician and patient discuss the patient’s health status and the steps that can be taken to maintain or improve the patient’s health. For example, the work component for RVUs associated with an intermediate office visit, the most frequently billed physician’s service, is increasing by 37 percent. The work component for RVUs for an office visit requiring moderately complex decision-making and for a hospital visit also requiring moderately complex decision-making are increasing by 29 percent and 31 percent respectively. Both of these services rank in the top 10 most frequently billed physicians’ services out of more than 7,000 types of services paid under the physician fee schedule.

The increases in the work component for E&M services are the result of a comprehensive review of the values CMS has placed on the physician work involved in providing a service. Medicare law requires that this review be conducted at least every five years. Consistent with longstanding practice, CMS worked with the Relative Value Update Committee (RUC), which operates under the auspices of the American Medical Association, to review work relative value units for over 400 services. The RUC recommended the proposed E&M increases, and many of the specialty societies commented favorably on them in their comments on the proposed MPFS rule.

The Medicare law includes a statutory formula that will require CMS to implement a minus 5.0 percent update in payment rates for physician-related services. This is slightly less than the 5.1 percent reduction in the proposed rule. This formula compares the actual rate of growth in spending to a target rate, which is based on such factors as the growth in number of Medicare fee-for-service beneficiaries and statutory or regulatory changes in benefits. If the actual rate of spending growth exceeds the target rate, the update is decreased; if it is less, the update is increased. Every year beginning with 2002, in response to rising spending, the statutory update formula would have operated to impose payment cuts. The negative update went into effect in 2002, but for 2003 to 2006, Congress intervened and temporarily suspended the requirements of the formula in favor of specific, statutory updates.

Consistent with requirements of the DRA (Deficit Reduction Act of 2005), the final rule caps payment rates for imaging services under the physician fee schedule at the amount paid for the same services when performed in hospital outpatient departments. The final rule includes a list of codes to which the outpatient prospective payment system (OPPS) cap would apply. The rule also finalizes a policy of reducing by 25 percent the payment for the technical component of multiple imaging procedures on contiguous body parts. CMS will apply the multiple imaging reductions first, followed by the OPPS imaging cap, if applicable.

http://www.cms.hhs.gov/apps/media/press/release.asp?Counter=2044

Final rule (1418 pages):
http://www.cms.hhs.gov/center/physician.asp and click on “CMS-1321-FC and CMS-1317-F”

Comment:

By Don McCanne, MD

As is typical for this administration, this release places a very positive spin on the message that announces a 5 percent reduction in the payment for physician services. For those who believe that they read that payment for an intermediate office visit is increasing by 37 percent, read it again. The 37 percent increase applies only to the work component (physician labor) and not to the practice expenses (office overhead). None the less, there is very positive news in the 1418 pages in the final rule (most of which I confess I have not read).

Although Medicare has been fairly effective in controlling fees, it has not been able to control the increases in frequency and intensity of services. The Sustainable Growth Rate (SGR) makes appropriate adjustments to physician fees based on factors such as demographics, inflation, and newly-authorized benefits. To attempt to control over-utilization, it makes downward adjustments when the frequency and intensity of services increase. This is appropriate when it appears that practice patterns change merely for the purpose of increasing the units for reimbursement. It is especially appropriate when it appears that there is a dramatic increase in high-tech services of no benefit, as has been demonstrated by John Wennberg and Elliott Fisher. The largest single component driving down the SGR-determined rates has been the explosion in the use of expensive imaging services. Another very important factor has been the shift from primary care services to more specialized services, even though primary care services have been proven to provide high-quality care at significantly lower costs.

The good news is that payments are being adjusted upwards to reinforce the primary care infrastructure, and downwards to discourage excessive use of non-beneficial high-tech services. The bad news is that expensive high-tech services that are beneficial may actually end up being under-compensated with these changes. They will certainly take the brunt of the 5 percent reduction. Continual oversight and refinement has to be a perpetual process.

The important point is that, as a social insurance program, Medicare is making every effort to try to achieve the greatest value for our health care dollars as we are ever closer to the spending threshold that we can tolerate. In contrast, the private insurance sector makes every effort to squeeze whatever it can get out of the system short of sacrificing too many patients and their providers. Public administrators who care about the health of patients serve us far better than private administrators who care more about being judged by the success of their business models.

Deterioration of employer-sponsored coverage

Insurance plans target employers

By Andi Atwater
The Wichita Eagle
November 2, 2006

Three of Wichita’s largest insurance carriers are introducing new products this year and next that will help employers offer affordable benefits to just about every employee — even those ineligible for traditional medical coverage or who opted out for financial reasons.

These plans — often called “mini-medical” plans because they typically have limited or capped benefits and high deductibles — can save employers or their employees up to 40 percent from their traditional group coverage.

Industry experts say demand among employers is prompting this new emphasis on trimmed-down health benefits.

Blue Cross Blue Shield of Kansas, which covers about 100,000 people in Sedgwick County, rolled out a new, limited-benefit product Wednesday that gives employers a more affordable way to offer health benefits.

Called EssentialBlue, the plan caps benefits at $30,000, but covers routine and preventive care after a co-payment.

CIGNA HealthCare, which insures 17,500 employees in the Wichita area, will introduce Fundamental Care in Kansas early next year. It’s a limited-benefit plan that can save employers between 25 percent and 40 percent from traditional coverage.

http://www.kansas.com/mld/kansas/business/industries/healthcare/15906000.htm

And…

Many Employers Promote High-Deductible Health Plans During Open Enrollment Period

kaisernetwork.org
November 7, 2006

The Wall Street Journal on Tuesday examined how “employers are trying to get workers to confront ever-rising” out-of-pocket heath care costs as the open enrollment period for health plans “goes into high gear at many companies.”

According to the Journal, the efforts to “get workers to do the math” on health care costs “are coming chiefly from employers that are offering workers new ‘consumer-driven health plans,'” which often have deductibles of at least $1,000 and cost less for employers than plans with lower deductibles.

http://www.kaisernetwork.org/daily_reports/print_report.cfm?DR_ID=40920&dr_cat=3

Comment:

By Don McCanne, MD

The insurers in the individual market have survived by introducing products with affordable premiums, but they have been able to do so only by sharply curtailing the financial security offered by these plans (by reducing benefits and increasing cost sharing). These plans have provided a (false) sense of security for those who remain healthy, but they have defeated the purpose of insurance by creating financial hardships for those with significant health care needs.

Until recent years, employer-sponsored plans have provided more comprehensive benefit packages and have exposed employees to only modest out-of-pocket expenses. That is now changing. The dramatic increase in the use of high-deductible plans has resulted in truly unaffordable out-of-pocket spending for the majority of individuals who develop major health problems. Worse, the newer products that are also stripped of benefits offer no financial security for those with needs. As employer-sponsored plans copy the deficient products in the individual insurance market, private insurance plans are headed toward obsolescence.

Can you imagine Blue Cross Blue Shield capping benefits at $30,000? That’s not insurance; that’s a crime!

Seeking Coverage For All

By JOHN R. BATTISTA AND JUSTINE MCCABE
Op-Ed | Hartford Courant
October 31 2006

Last April, a government-sponsored task force came to Hartford to hear citizens’ views on how to improve our distressed health care system. As in nearly all states visited, Connecticut citizens overwhelmingly said they wanted high-quality, cost-effective health care funded through a national health program – single payer health insurance. Yet, such a recommendation would threaten the profits of powerful interests – insurance and drug companies known more for their political contributions than for their consideration of public interest. So in its final report of Sept. 27, the Citizens’ Health Care Working Group simply ignored the citizens.

The working group, a panel of health care experts appointed by the U.S. Comptroller General, was created by Congress in 2003. The group was mandated to travel the country, seek citizens’ advice for reform, and translate their wishes into recommendations for Congress. Wherever they went, ordinary citizens consistently asked for national health insurance. In fact, the group’s own data show attendees favored a national health program over any other option by an average of 3 to 1.

Connecticut ranked national health insurance first over the nine possible reforms by and average of 26 to 1. From Los Angeles to Memphis to New York, the message was the same: replace our broken system with the same public coverage for everyone.

Yet the final recommendations to Congress make no mention of the national health program citizens chose. Instead, they offer half-measures while leaving the flawed private insurance structure untouched. Unfortunately for those families facing a choice between utility payments and medical bills, the working group’s best suggestion is to ask taxpayers to help them buy deficient insurance products that offer little or no protection when serious illness strikes.

As Connecticut health caregivers, we can see why national health insurance enjoyed such overwhelming public support. One in nine Connecticut citizens – 394,000 people – lacked health insurance in 2005. Even for those wealthy or healthy enough to afford coverage, the private policies offered are so riddled with exclusions, co-payments, and high deductibles that any major illness can threaten a family with financial ruin.

By contrast, numerous studies demonstrate the benefits of creating a national health insurance system like that proposed by Physicians for a National Health Program: private insurance companies would be replaced with a single public payer – “Medicare for All,” saving more than $300 billion annually by eliminating insurers’ administrative costs and profits, and negotiating prescription drug costs. These savings would be enough to cover every American for all medically necessary services. Patients would regain full choice of health caregiver freed from corporate constraints on patient care.

In fact, we proposed this single payer option to the Connecticut General Assembly in our Health Care Security Act of 1999. We argued that just as Social Security had successfully begun as an experiment in one state, a publicly-funded insurance plan could also begin in one state. And what better state than small and wealthy Connecticut? Unfortunately, that bill and its most recent version in the last legislative session died in committee.

Indeed, the Citizens’ Health Care Working Group report reaffirms that Connecticut’s citizens will have to look beyond our current elected officials to make our voices heard.

But what hope do we have for change in the upcoming elections? Not much.

Despite ongoing lip service by Democratic and Republican candidates for “universal coverage,” only Green Party candidates like gubernatorial contender Cliff Thornton explicitly support the wishes of Connecticut citizens for publicly-funded health insurance.

Yet, most Connecticut voters won’t know that Thornton and other Greens represent their views on November’s ballot. Just as Connecticut citizens’ support for single-payer insurance was “omitted” from the Citizens Health Care Working Group Report, candidates who most represent their views have also been “omitted” from expressing them – at least in televised gubernatorial debates.

Sadly, the proposals of the working group and Connecticut’s Democratic and Republican candidates offer nothing but business as usual: insurance and drug firms reaping kingly profits while so many go without needed care.

Still, Connecticut’s citizens know only public health insurance can provide the health security we all need.

John Battista is a psychiatrist in private practice in New Milford with Justine McCabe, who is a clinical psychologist. They are members of the Green Party.

Copyright 2006, Hartford Courant

North Carolina AFL-CIO Supports HR 676

The North Carolina AFL-CIO became the fifteenth state labor federation to support HR 676, single payer healthcare legislation introduced by Congressman John Conyers (D-MI). The state federation represents 200 local unions from 39 different international unions and 8 central labor councils.

On September 22, at its recent convention, the North Carolina State AFL-CIO adopted Resolution # 14, “Healthcare Reform: Support For HR 676.” James Andrews, President of the North Carolina AFL-CIO said later: “Given the difficulties Americans are having securing affordable health care, this kind of legislation will go a long way to help the millions of uninsured. It will provide help for millions of workers and their families struggling to meet their healthcare needs”.

#30#

HR 676 now has 77 congressional co-sponsors in addition to John Conyers. It would institute a single payer health care system in the U.S. by expanding a greatly improved Medicare system to every resident.

HR 676 would cover every person in the U. S. for all necessary medical care including prescription drugs, hospital, surgical, outpatient services, primary and preventive care, emergency services, dental, mental health, home health, physical therapy, rehabilitation (including for substance abuse), vision care, chiropractic and long term care. HR 676 ends deductibles and co-payments. HR 676 would save billions annually by eliminating the high overhead and profits of the private health insurance industry and HMOs.

HR 676 has been endorsed by 205 union organizations including 48 Central Labor Councils and Area Labor Federations and 15 state AFL-CIO’s (KY, PA, CT, OH, DE, ND, WA, SC, WY, VT, FL, WI, WV, SD, & NC).

For further information, a complete list of union endorsers, or a sample endorsement resolution, contact:
Kay Tillow
All Unions Committee For Single Payer Health Care-HR 676 c/o Nurses Professional Organization (NPO)
1169 Eastern Parkway, Suite 2218
Louisville, KY 40217
(502) 636 1551, (502) 459-3393

Healthcare crisis countdown

By David R. Francis
The Christian Science Monitor
November 6, 2006

The healthcare system in the United States is eroding. Costs are rising too fast. More and more people lack health insurance. Companies are dumping or shrinking employee health plans. Deductibles and copayments on medical services are rising.

That’s the widely agreed-upon scene.

Yet chances are slim that Americans will go for a far less expensive “single payer” health system, as in Canada, Britain, or Australia, anytime soon.

“The issue is not likely to be given a fair examination,” says Robert Blendon, professor of health policy and political analysis at the Harvard School of Public Health, Boston. “There is a cultural resistance to even considering this very serious option.”

Since the healthcare system is “sort of collapsing,” Stephanie Woolhandler, co-founder of Physicians for a National Health Program (PNHP), expects “a lot more discussion” of a single-payer system after the congressional elections Tuesday, especially if the Democrats win at least one house in Congress. In such a system, the government pays the bills from hospitals and physicians.

Doctors Woolhandler and Blendon basically agree on why change is resisted.

Many Americans are cynical about government, distrusting its ability to provide a competent healthcare system. They prefer a market-based system with a high degree of individual choice.

Moreover, self-interested groups have political clout. Health insurance companies, pharmaceutical firms, private hospitals, and Wall Street investors in the healthcare industry “aren’t going to go quietly into the night,” says Blendon.

The drug industry usually ranks as the most profitable. In 2002, it made a 14 percent return on assets; the Fortune 500 made a median of 2.3 percent.

When voters in California and Washington considered single-payer systems for their states in the 1990s, opponents outspent proponents 12 to 1, and the proposals died by a huge majority.

Students from other industrial nations tell him that the US is unique in the degree of power that moneyed interests wield in politics, says Blendon.

“A single-payer system is inevitable,” holds Dr. John Geyman, president of the 14,000-member PNHP. “It is just a matter of time.”

Polls find at least 60 percent of Americans want public financing of the $2 trillion healthcare system, something that would work the way Medicare does for older citizens. Government would foot much of the bill from private hospitals and physicians.

But in opposition are many of the 1,500 private insurance firms. They seek to make more money for shareholders by cherry-picking healthy customers and avoiding those with costly chronic illness, Dr. Geyman charges. He cites a former editor of the New England Journal of Medicine, Dr. Arnold Relman, who warned in 1980 of the “medical-industrial complex” and its hold on Washington, echoing President Eisenhower’s reference to a “military-industrial complex.”

Those in the healthcare industry fear more government regulation, more interference. They don’t want the government to restrain prices for drugs or other medical services, as systems in other industrial countries do.

The US spends 15 percent of its gross national product on healthcare, of which 31 percent goes for administrative costs. Canada spends about 10 percent of GDP on a universal healthcare system, 1.3 percent of it for overhead..

Woolhandler is hopeful about a single-payer system because of what she calls a “slow-motion collapse” of employee-sponsored health coverage as health costs rise and competition in a globalized economy increases.

Blendon, though, figures it will take a major healthcare crisis, perhaps including hospital closings and doctors becoming unavailable to many patients, before the political powers will launch an effort at real reform.

“Will the situation get so bad we have to do something about it?” asks Daniel Callahan, international programs director at the Hastings Center, a bioethics research body in Garrison, N.Y. “We have not yet reached that point.”

There is no strong leadership in Congress or the White House for radical change in the healthcare system. Further, some 80 to 85 percent of Americans today get decent medical healthcare, Mr. Callahan estimates. Those who are satisfied with the system are unlikely to urge reforms to help the less fortunate.

Despite polls indicating sympathy for the plight of 46.6 million without health insurance, the majority “is not willing to put their wallet where their mouth is,” says Callahan.

But the system continues to weaken.

Over the past six years, family health insurance premiums have risen on average about 69 percent, more than six times the increase in the median earnings of workers (about 11 percent), finds Families USA, a Washington group championing healthcare consumers.

“This is not sustainable,” says the group’s executive director Ron Pollack. “More and more people are being driven out of healthcare insurance…. More and more people find it unaffordable.”

What may move the issue onto the front burner again is that in 2020 there will be about twice as many elderly in the nation, forcing up healthcare costs.

Healthcare will be a top issue in the 2008 election, Mr. Pollack predicts.

Amerigroup's marketing reps commended for excluding pregnant women

Jury finds HMO bias in signing patients

Amerigroup shunned pregnant women, high-risk patients

By Rudolph Bush
Chicago Tribune
October 31, 2006

A health maintenance organization hired by the government to provide coverage for the poor in Illinois will have to pay damages of $144 million for discriminating against pregnant women and other potentially high-risk patients, a federal jury in Chicago decided Monday.

After two days of deliberations, the jury found that Amerigroup Corp. and subsidiary Amerigroup Illinois sought to fatten their profits off Medicaid dollars paid into their plans by signing up healthy clients and intentionally avoiding those who had health issues.

Amerigroup, which no longer operates in Illinois, runs managed-care plans that, because of restrictions on doctor and hospital choices to their networks, are a cheaper alternative to fee-for-service Medicaid.

Prosecutors said they also will seek almost $200 million more in penalties from the Virginia Beach, Va.-based company because it filed more than 18,000 false claims with the state.

Amerigroup trained its marketing representatives to avoid people who faced high medical bills and had a policy of “cherry-picking” healthy clients, according to testimony and documents presented during the month-long trial.

Under the Medicaid compensation system, the company pocketed more money if it paid out less in medical bills.

A series of e-mails and statements from Amerigroup executives were key elements of the plaintiffs’ case.

In a 2001 e-mail shown to the jury, Amerigroup Illinois’ director of medical management told managers, “Please keep up the good work with the marketing reps of not trying to sign up pregnant women.”

In another e-mail, the executive said the company had continued to build experience in not signing up pregnant women or people from areas where drug abuse was prevalent.

Another Amerigroup executive said in a sworn statement that it was always his policy “to go after the healthies,” prosecutors said.

Dwight Jones, Amerigroup’s corporate representative at the trial, acknowledged on the stand that a large drop in the number of pregnant women the company had as clients was due to an active effort to avoid signing them up in the first place, Cohen said.

http://www.chicagotribune.com/features/health/chi-0610310171oct31,1,5680823.story

Comment:

By Don McCanne, M.D.

Amerigroup has provided us with a prime example of why the single payer reform model is not only publicly funded but also publicly administered. Contracting to private intermediaries, such as Medicaid HMOs or Medicare Advantage plans, is an open invitation for the plans to manipulate the system to achieve their primary goal of enhancing profits.

The boards and management of these entities are absolutely obligated to place the interests of their investors above all else. Non-profits are obligated to use similar devious methods in order to compete successfully with the for-profits in the insurance marketplace.

Think of why we need to establish a single, equitably funded, universal risk pool. That’s easy. Now think of any reason to place a business model intermediary between that pool and the health care that patients receive.
Talk about drawing a blank.

Pace Poll: New Yorkers favor a government-run health insurance plan

This via the Brian Lehrer show on WNYC.

A new poll by Pace University/New York Magazine/WCBS 2 News/WNYC asked New Yorkers to compare single-payer health insurance with an individual mandate to purchase private insurance, along the lines of the Massachusetts plan. Evidently, Mr. Lehrer himself put forward the idea for the question.

This morning during his “Pacing Politics” segment Brian Lehrer struck a note of astonishment that 48% of New Yorkers support the abolition of private health insurance in favor of a solitary publicly financed government-run plan, while 35% supported a statewide mandate that individuals purchase private health insurance.

The overall poll sought to gauge public opinion on a variety of candidates and issues on the eve of the elections; there was only one question on health care.

The results do not add up to 100% – at this point we only have the data via the link above.

The actual question — as it appeared for the pollsters to ask:

Question 43:

Now I’m going to read you some statements about health insurance, which helps people pay doctors’ bills and other medical expenses. When I am done, please tell me which one you agree with more. [ROTATE]

Statement A:
Some/Other people say that New York State should require people without health insurance to buy it and that the government should help people pay for health insurance if they can’t affort it. They say that many unisured people are young, healthy, and financially well-off, so their failure to buy health insurance forces the rest of us to pay more than our fait share of the high cost of caring for the sick.

Statement B:
Some/Other people say that New York State should create a government-run health insurance program to replace private health insurance companies and provide health insurance to everyone. They say that the private insurance companies drive up the cost of health care by acting as useless middlemen between doctors and patients, and they say that people in other countries spend less money on health care while enjoying better health because they don’t waste money on insurance companies.

Which statement do you agree with more?

Results:

22% strongly agree with A
13% somewhat agree with A
29% strongly agree with B
19% somewhat agree with B

Overall (by 48% to 35%) New Yorkers favor a “government-run health insurance program” to a plan that would “require people without health insurance to buy it.”

From the PNHP Capital District Blog, 10/31/06

J. Gruber on lessons from the RAND HIE

The Role of Consumer Copayments for Health Care: Lessons from the RAND Health Insurance Experiment and Beyond

By Jonathan Gruber, Ph.DKaiser
Family Foundation
October 2006

Conclusion

The RAND HIE was one of the most important and influential social experiments in our nation’s history. By tackling a contentious yet central policy issue, the HIE provided a valuable set of evidence that delivers clear lessons for health insurance design. The right way to design health insurance has three features: co-insurance for the typical patient; an income-related out-of-pocket limit; and evidence-based design of co-insurance that targets co-insurance to places where care is least effective. In practice, each of these raises administrative issues that get more daunting as one moves through the list. But in principle, at least, a clear reading of this literature gives us a natural starting point for designing appropriate health insurance benefits.

http://www.kff.org/insurance/upload/7566.pdf

Comment:

By Don McCanne, MD

Jonathan Gruber provides an excellent analysis of the RAND HIE and of more recent studies on the impact of co-insurance. His conclusions are warranted based on a sterile, broad overview of the current knowledge on the topic, but only if you accept the principle that cost sharing should be an essential component of health care cost containment simply because it has been proven to reduce spending. Dr. Gruber’s recommendations demonstrate that he is not insensitive to the potential negative impact, especially on lower-income individuals with significant health care needs, but we should question what he recommends to make cost sharing work.

1. “co-insurance for the typical patient:” The “typical patient” is the average, healthy individual. It is not the patient with significant health care needs, nor the patient who will develop major medical problems in the future. Establishing policies that reduce health care spending amongst those who are not spending very much is of little help in controlling the four-fifths of our spending on those with greater health care needs.

2. “an income-related out-of-pocket limit:” Linking means testing to access of medical services creates an administrative nightmare. This concept acknowledges that low-income individuals cannot be expected to pay large amounts out of pocket, but higher-income individuals can. But rather than creating this complex system of means testing, progressive funding can be much more easily and equitably established on the financing side through the tax system. The relatively small increase in utilization by higher income individuals can be easily off-set by appropriate minor adjustments in tax policies, though the amount would be almost negligible.

3. “evidence-based design of co-insurance that targets co-insurance to places where care is least effective:” This one is a double administrative nightmare. Imagine trying to identify services that are of lower value and then assigning a higher co-insurance rate based on the effectiveness of the service. Overuse of non-beneficial services must be addressed, but it is not realistic to place the patient in charge of that decision based on a complex system of sliding-scale co-insurance. Reducing such wasteful spending would be much more easily accomplished by establishing a national health insurance monopsony which would be more capable and effective in removing worthless services from coverage.

In his analysis, Dr. Gruber fails to acknowledge the fundamental flaw in the way that the RAND HIE has been applied to health policy. It only has intrinsic validity for a healthy sector of our population for a healthy period in their lives. It does not have extrinsic validity for our entire population from birth to death, with their full basket of medical problems.

The RAND HIE should no longer be used as a reason for keeping the private insurance industry in charge. What we need is national health insurance. Other nations spending far less than us have not had to use co-insurance to control costs.

Louisville Metro Council Supports HR676

RESOLUTION NO. 155, SERIES 2006

A RESOLUTION IN SUPPORT OF THE UNITED STATES NATIONAL HEALTH INSURANCE ACT.

SPONSORED BY: Councilwoman Mary Woolridge

Whereas, every person in Metro Louisville and in the United States deserves access to affordable, quality healthcare; and


On the left is District 3 Councilwoman
Mary Woolridge, sponsor of the
Louisville Metro Council Resolution in
support of HR 676, Congressman
John Conyers’ national single payer
health act that would assure health
care for all. On the right is Joan
Dubay, Coordinator of the Metro
Council Committee of Kentuckians for
Single Payer Health Care. The photo
was taken on Oct. 12, 2006, shortly
after the council voted in favor of the
resolution, 14 to 9 with 1 abstention
and 1 voting present.

Whereas, over 45.8 million Americans, including 85,000 residents of Metro Louisville, live daily without healthcare coverage; and

Whereas, those insured now often experience burdensome medical debt and sometimes life-threatening delays in obtaining healthcare; and

Whereas, one-half of all personal bankruptcies are due to illnesses or medical bills; and

Whereas, administrative costs for our current healthcare system consume approximately thirty percent (30%) of United States healthcare spending, with rising costs contributing to decreased international business competitiveness and massive layoffs; and

Whereas, United States Representative John Conyers has introduced House Resolution 676, (hereinafter referred to as HR 676), The United States National Health Insurance Act, which would provide healthcare to all; and

Whereas, the goal of HR 676 is to ensure that all Americans have access, guaranteed by law, to the highest quality and most cost-effective healthcare services regardless of their employment, income, or healthcare status; and

Whereas, HR 676 will cover all medically necessary services, including primary care, inpatient care, outpatient care, emergency care, prescription drugs, durable medical equipment, long term care, mental health services, dentistry, eye care, chiropractic, and substance abuse treatment; and

Whereas, HR 676 will give patients their choice of physicians, providers, hospitals, and clinics with no co-pays or deductibles in a publicly financed, privately delivered system;

NOW THEREFORE, BE IT RESOLVED BY THE LEGISLATIVE COUNCIL OF THE LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT (THE COUNCIL) AS FOLLOWS:

SECTION I: The Metro Council of Louisville, Kentucky hereby supports and endorses HR 676, “United States Health Insurance Act;” and respectfully requests our elected federal officials to endorse and adopt HR 676; and the Council Clerk is authorized and directed to forward copies of this Resolution to our federal legislators and to our area state legislators to enlist their support of this vital piece of legislation.

SECTION II: This Resolution shall take effect upon its passage and approval.


Louisville Metro Council members and members of
Kentuckians for Single Payer Healthcare (KSPH)
were all smiles on October 12 after the council
voted, 14 to 9 with 1 abstention and 1 voting
present, to urge Congress to pass HR 676,
Congressman John Conyers’ national single
payer health plan. L to R: Councilman Dan
Johnson, Harriette Seiler, Mark McKinley, Kristin
Munro Leighton, Councilwoman Vicki Welch, Kay
Tillow, Councilwoman Mary Woolridge (sponsor
of the resolution), and Joan Dubay (coordinator
of the KSPH Committee that organized for the
resolution).

Kathleen J. Herron
Metro Council Clerk

Kevin J. Kramer
President of the Council

Approval Date: October 17, 2006

Jerry E. Abramson
Mayor

APPROVED AS TO FORM AND LEGALITY:

Irv Maze
Jefferson County Attorney

View the PDF of the resolution.