PNHP

Everyone wins when all pay in

Everyone wins when all pay in

Editorial

Rutland Herald, VT
September 3, 2006

A single-payer health care system would save the state $51 million a year, according to a new study carried out for the Legislature and released last week. It would achieve these savings by reducing the wasteful administrative costs that burden the present system.

The Legislature’s study provides welcome information, but it ran into immediate criticism from the business community and from the office of Gov. James Douglas. The hostile response by officials ready to denounce the idea of a single-payer system is an indication of the difficulties facing any proposal to put such a plan into effect.

Democratic proponents of health care reform are not ready to embrace a single-payer system. They understand the political difficulties and the economic uncertainties that remain. But at least, they are not closed-minded. The principles underlying a single-payer system are important to understand because they help set a direction toward the goal of universal access and cost-containment.

One of the important principles is shared risk. That is the principle behind all insurance, and it applies to health coverage that might be provided by the state. Shared risk means that the cost of health care is shared because we recognize that for most individuals the high costs incurred by most medical procedures are not affordable.

It is the same principle behind auto insurance. The high cost of an auto accident is likely to be unaffordable to an individual driver, so through a system of insurance we share the risk, knowing the driver having the accident may some day be any one of us.

At present the risk pool is limited to those with insurance, who pay high costs because their insurance premiums must incorporate the costs of care provided, often in haphazard fashion, to those without insurance. In a single-payer system, everyone would pitch in, and everyone would be covered.

Another advantage of a single-payer system would be its efficiency. As much as a third of medical costs at present go to the complex, wasteful process of tracking down insurance payments and fighting insurance companies who make their money by finding reasons not to pay.

Sharing the risk broadly would mean that those now enjoying a free ride would have to begin paying for health care. Many small businesses in Vermont do not offer health insurance, and paying the payroll tax needed to fund a single-payer system would be a significant new cost for them and their employees. On the other hand, employers who now offer insurance and their employees would see their costs fall when their present health insurance plans were replaced by a new payroll tax.

The study conducted by the Legislature by consultant Kenneth Thorpe describes this system, but legislative leaders know the state is far from adopting it. It would have its complications. It could not supplant Medicare and Medicaid, the federal programs for the elderly and the needy, and it would have to recognize the private plans of people from out of state receiving care in Vermont.

And there is the political resistance. As soon as the Thorpe plan was released, the Vermont Chamber of Commerce jumped on it, saying that it would “drown” the state in new taxes. Not mentioned was the elimination of the cost of health care premiums, which would actually save money for many businesses and individuals. A spokesman for Douglas also took a potshot at the Legislature, accusing it of looking for ways to raise the payroll tax.

It is apparent to Democratic legislators that paranoia about raising taxes, even if costs to businesses and individuals are lowered, is a political fact of life. Resistance to a single-payer system from the insurance industry and from businesses seeking to prolong their free ride will continue to be tenacious.

But it is useful to remind ourselves of the principles underlying a single-payer system as we move ahead with the reforms associated with the new Catamount Health plan. One question that emerged last week was whether people who leave jobs voluntarily would be eligible for the state-backed Catamount plan without a year’s wait. The state is arguing that barring them for a year was necessary to protect the solvency of the system. Legislators countered that covering them was essential to provide the seamless coverage that is the goal of Catamount Health.

Broad, seamless coverage is what a single-payer system is all about, and it ought to be a goal of less sweeping reforms as well. Locking people in unproductive jobs because they fear to go without health insurance is damaging to individual enterprise and to the state’s economy. Let’s cover everyone. Let’s eliminate unnecessary barriers to the health care that everyone deserves.

Speakout: Single-payer health care is way to go

By Drs. David Iverson and Elinor Christiansen
Rocky Mountain News
September 4, 2006f

The new uninsured statistics released Tuesday by the U.S. Census Bureau provide a sobering reminder of the failures of the U.S. health-care system. Here in Colorado the number of uninsured has risen to 788,000: nearly 1 of every 5 residents lacks coverage. Even for those lucky enough to be insured, ever-skimpier private policies helped push an estimated 14,000 Colorado families into medical bankruptcy in 2001. As physicians who face our state’s health-care crisis day in and day out, we support a single-payer “Medicare for All” system for Colorado and for the nation.

Misinformation abounds about countries with government-financed systems, which is why we were troubled to see Deroy Murdock’s column of Aug. 26, “Health-care horror,” featuring misleading, unsourced data pushed by an extremist think-tank. Despite the best efforts of such groups, real science – reviewed by scientists and published in academic journals – does exist. Its conclusion is clear: Even though they spend far less, countries with public health systems provide better quality health care, offer vastly better access, and ration care less than the United States.

Some of the most authoritative studies are worth reciting here:

* Americans are less healthy than the British. We have higher rates of cancer, lung disease and stroke. Americans have a 50 percent higher rate of heart disease and double the prevalence of diabetes. (The New England Journal of Medicine, May 3, 2006)

* Americans are less healthy than Canadians, with higher rates of nearly every chronic disease. This is in large part because Canadians have far superior access to health care: They were 33 percent more likely to have a regular doctor and 27 percent less likely to have an unmet health need. Americans were seven times more likely to report going without care due to cost. (American Journal of Public Health, July 2006)

* American care quality compares poorly against other countries. Of 21 international quality indicators studied by a team of distinguished researchers, the U.S. was superior on only two. Despite spending twice as much on health care, the U.S. performed at or below average on the rest. (Health Affairs, May/June 2004)

How can the U.S. spend so much more and get so much less? Anyone who has ever had to deal with the nightmarish paperwork of giant insurance companies already knows the answer: it’s our reliance on private insurers.

Insurance companies’ natural market behavior is to compete to cover healthy, profitable patients and shun those who are really sick. To do this, they erect a giant, expensive bureaucracy whose only purpose is to fight claims, issue denials and screen out the sick. They consume care dollars, but their main output is unnecessary paperwork headaches. It affects everybody: doctors and hospitals must maintain costly staffs just to deal with insurance hassles, and businesses are saddled with the burden of administering their own health benefits. In total, this administrative waste consumes nearly one-third of our health spending.

Research has shown that streamlining payment though a single public payer could save the U.S. more than $350 billion per year. Such a system could have saved Colorado $3.8 billion in 2003. That’s more than $5,500 per uninsured resident, enough to provide high-quality coverage to everyone. Everybody would be covered for all medically necessary services, including doctor, hospital, long-term, mental health, dental and vision care. All prescription drugs would also be covered. Costs are effectively controlled (as they are in other countries) by bulk purchasing of services.

Single-payer systems are often called “socialized medicine,” but don’t be fooled. In a “socialized” system (like the U.S. Veterans Affairs or Defense Department systems) the government employs the doctors and owns the hospitals.

In a single-payer system they stay private.

Much hysteria has been printed about alleged “rationing” of care in other nations. The truth is that the U.S. rations care more harshly than any other country. According to the Institute of Medicine’s most conservative data, 18,000 Americans die every year due to a lack of insurance. Millions more go without needed care because of cost. Now that’s rationing!

Single-payer offers the only solution for our state and for our nation. Let’s get there – it’s time.

Drs. David Iverson and Elinor Christiansen are members of Physicians for a National Health Program. Dr. Iverson lives in Denver and Dr. Christiansen is a resident of Englewood. The authors thank Nicholas Skala for his assistance in citation and editing.

Health Policy Malpractice

By PAUL KRUGMAN
Op-Ed Columnist
New York Times
Published: September 4, 2006

Let me tell you about two government-financed health care programs. One, the Veterans Health Administration, is a stunning success — but the administration and Republicans in Congress refuse to build on that success, because it doesn’t fit their conservative agenda. The other, Medicare Advantage, is a clear failure, but it’s expanding rapidly thanks to large subsidies the administration rammed through Congress in 2003.

I’ve written about the V.A. before; it was the subject of a recent informative article in Time. Some still think of the V.A. as a decrepit institution, which it was in the Reagan and Bush I years. But thanks to reforms begun under Bill Clinton, it’s now providing remarkably high-quality health care at remarkably low cost.

The key to the V.A.’s success is its long-term relationship with its clients: veterans, once in the V.A. system, normally stay in it for life.

This means that the V.A. can easily keep track of a patient’s medical history, allowing it to make much better use of information technology than other health care providers. Unlike all but a few doctors in the private sector, V.A. doctors have instant access to patients’ medical records via a systemwide network, which reduces both costs and medical errors.

The long-term relationship with patients also lets the V.A. save money by investing heavily in preventive medicine, an area in which the private sector — which makes money by treating the sick, not by keeping people healthy — has shown little interest.

The result is a system that achieves higher customer satisfaction than the private sector, higher quality of care by a number of measures and lower mortality rates — at much lower cost per patient. Not surprisingly, hundreds of thousands of veterans have switched from private physicians to the V.A. The commander of the American Legion has proposed letting elderly vets spend their Medicare benefits at V.A. facilities, which would lead to better medical care and large government savings.

Instead, the Bush administration has restricted access to the V.A. system, limiting it to poor vets or those with service-related injuries. And as for allowing elderly vets to get better, cheaper health care: “Conservatives,” writes Time, “fear such an arrangement would be a Trojan horse, setting up an even larger national health-care program and taking more business from the private sector.”

Think about that: they won’t let vets on Medicare buy into the V.A. system, not because they believe this policy initiative would fail, but because they’re afraid it would succeed.

Meanwhile, the Bush administration is pursuing a failed idea from the 1990’s: channeling Medicare recipients into private H.M.O.’s. The theory was that H.M.O.’s, by bringing private-sector efficiency and the magic of the marketplace to health care, would be able to do what the V.A. has achieved in practice: provide better care at lower cost.

But the theory was wrong. Years of experience show that H.M.O.’s actually have substantially higher costs per patient than conventional Medicare, because they add an expensive extra layer of bureaucracy and also spend heavily on marketing. H.M.O.’s for Medicare recipients prospered for a while by selectively covering relatively healthy older Americans, but when the government began paying less for those likely to have low medical costs, many H.M.O.’s dropped out of the Medicare market.

In 2003, however, the Bush administration pushed through the Medicare Advantage program, which offers heavy subsidies to H.M.O.’s. According to the independent Medicare Payment Advisory Commission, Medicare Advantage plans cost the government 11 percent more per person than traditional Medicare. Oh, and mortality rates in these plans are 40 percent higher than those of elderly veterans covered by the V.A. But thanks to the subsidy, membership in Medicare Advantage plans is surging.

On one side, then, the administration and its allies in Congress oppose expanding the best health care system in America, even though that expansion would save taxpayer dollars, because they’re afraid that allowing a successful government program to expand would undermine their antigovernment crusade and displease powerful business lobbies.

On the other side, ideology and fealty to interest groups make them willing to waste billions subsidizing private H.M.O.’s.

Remember that contrast the next time you hear some conservative going on about excessive spending on entitlements, and declaring that we need to cut back on Medicare and Medicaid benefits.

Three More AFL-CIO State Conventions Endorse HR 676

At state conventions in August, the North Dakota, Delaware, and Washington State AFL-CIOs have all endorsed HR 676, single payer national healthcare legislation introduced by Congressman John Conyers (D-MI). This brings to seven the number of state labor federations that have endorsed the Conyers legislation.

Dave Kemnitz, President of the North Dakota AFL-CIO, said of his state’s convention action: “We think the effort for HR 676 is timely and of utmost importance to all Americans for healthcare access and affordability. In addition, national healthcare is one of the big pieces of the puzzle to keep American workers competitive in the global economy.” In 1993, Kemnitz led a successful effort to pass a single payer bill in the North Dakota state senate. The legislation died when the lower house failed to act.

Gerald Brady, Executive Director, and Samuel Lathem, President of the Delaware AFL-CIO wrote, in a letter informing the All Unions Committee for Single Payer Health Care-HR 676 of their state’s endorsement: “We applaud your efforts to advance this cause on behalf of the millions of Americans that are in need.”

The Washington State Labor Council (WSLC) is the statewide AFL-CIO federation in this northwest state and represents 400,000 members in 500 local unions. The WSLC endorsed HR 676 at its convention August 21-23 in Wenatchee, WA. In “wholeheartedly” endorsing HR 676, convention resolution 12 stated: “A single payer program, as provided by HR 676, is the only affordable option for universal, comprehensive coverage.”

###

HR 676 now has 75 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 174 union organizations, including 39 Central Labor Councils and Area Labor Federations and seven state AFL-CIO’s (KY, PA, CT, OH, DE, ND & WA).

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
Email: nursenpo@aol.com

Single-payer health plan outlined

Vermont News – WCAX.com
August 30, 2006

MONTPELIER, Vt. — Vermont could offer health coverage to all its residents and spend $51 million less a year on health care under a single-payer system, according to a legislative consultant’s report released Tuesday.

But while businesses that currently offer health insurance to their employees would save money, those that don’t _ and their workers _ would see a combined new 13.4 percent payroll tax that even some single-payer advocates see as fatal to the plan.

Sen. James Leddy, D-Chittenden, and Rep. John Tracy, D-Burlington, co-chairs of the Legislature’s Vermont Commission on Health Care Reform, joined the consultant, Dr. Kenneth Thorpe of Atlanta’s Emory University, in describing the report’s findings at a news conference.

“I assume employers would pay about 75 percent of the total (10.1 percent payroll tax) and workers the remaining 3.4 percent,” Thorpe said. Those taxes would be a new expense for businesses and their workers that don’t have health coverage now, he said.

“On the other hand, some employers and families currently pay more than 10.1 percent and 3.4 percent of payroll respectively for insurance and would pay less,” he wrote.

For their money, they would get a “a benefit package modeled after the typical plan in the state,” he added, saying that half of those who currently have insurance have more generous coverage.

Thorpe said copays and deductibles would be set very low under his plan. “These low cost sharing obligations will result in substantial reductions in consumer out-of-pocket spending.”

The lawmakers said Thorpe’s report was not a formal proposal, but was merely informational and one option as they pursue the key goal of health care reform legislation passed in each of the last two years: moving Vermont from a state that has an estimated 61,000 uninsured and 180,000 underinsured to one that offers universal coverage.

Leddy called the report “one more step in our ongoing process that will continue.”

Thorpe, Leddy and Tracy acknowledged that the coverage would not be truly universal. It would exclude Medicare beneficiaries, who already get comprehensive health coverage for seniors from the federal government.

Also excluded would be Vermonters who work for out-of-state employers, whether private companies, national nonprofits or the federal government.

Jason Gibbs, a spokesman for Gov. James Douglas, said the single-payer plan envisioned in the Thorpe report would result in less comprehensive health coverage for many teachers, state employees and others whose employers currently offer more generous plans.

Gibbs said the state should concentrate on implementing health care reform already passed, including the Catamount Health plan designed to get coverage to the uninsured. He noted the legislation’s emphasis on managing chronic diseases, which he said account for 80 percent of health care costs.

“From the governor’s point of view our focus should be laserlike as we implement Catamount Health and these new reforms and our focus should not be on ways to increase taxes,” Gibbs said.

Dr. Deborah Richter, a Cambridge-based family physician and president of the single-payer advocacy group Vermont Health Care for All, called the payroll tax a “nonstarter” because of the opposition it would generate among Vermont’s small business owners.

But she called the report “a great way to open the discussion” about moving the state toward a single-payer system.

Medical miasma

By George H. Lesser
The Washington Times
Published August 16, 2006

I have problems with our health insurance “provider,” as I suppose some of you reading this do as well.

I had a minor test done in my doctor’s office. He injected a little pain killer, did the test, and I was gone in about half an hour. The insurance company refuses to pay half the costs, because the doctor anesthetized me, rather than having an anesthesiologist come. Of course, that would have dramatically increased the cost, but that’s what the insurance company demands.

Not too long ago, another doctor sent me to a hospital to have two routine tests performed, which required a general anesthetic in an operating room. My wife went through the same thing a few months before, and the insurance company paid only half because the two tests were performed simultaneously. So I scheduled two visits, on separate days, in the full operating room with the doctor, anesthesiologists, nurses, and who knows what else. I missed two days of work. The insurance company paid twice as much, plus twice the administrative costs for processing two claims. And, of course, I had to run twice the risks of two procedures under general anesthetic. The insurance tail wags the medical dog.

The last time I sought medical help in Italy, I suffered from gastrointestinal distress to such an extent I wasn’t eating. If I can’t eat in Italy, that is serious. The night before I was due to fly to Washington, I was in a hotel near the Milan airport. I wanted to see my doctor in Washington as soon as possible, so I telephoned him to make an appointment. He questioned me about my symptoms and told me I was too sick to fly. We argued, and then he said I could fly, but only if I got a doctor to prescribe ciprofloxacin (“Cipro”) and metronidazole (“Flagyl”) for me to start taking that evening.

I asked the hotel for a doctor. They said it would be faster to go to the clinic at the airport. I followed their advice and found a doctor. He wrote out two prescriptions for me, but said the airport pharmacy had just closed. He directed me to the nearest town with an open pharmacy.

I couldn’t find the drug store. I did find a hospital. I parked in the parking lot, walked in, and asked if I could get the prescriptions filled. The lady got testy and informed me this was a hospital not a pharmacy. I asked for her advice. She told me: “This is a hospital. We practice medicine. If you would like us to treat you, take a seat in the waiting room.” Unable to think of a better course, I went out to my car, grabbed my book, went back into the hospital and settled in for a nice, long read.

After at most five minutes, a male nurse interrupted me. I assumed it was to wrestle with insurance forms in Italian. Instead, the fellow escorted me into a hospital room, where we were joined immediately by a doctor. He spoke English about as well as I speak Italian, so we spoke my language until he ran into problems, then switched to his language until I couldn’t find a word. He questioned me closely about my symptoms. He had me lie down on the bed and started poking and asking me how it felt. He had the male nurse draw some blood, and he ran some other tests. He took a medical history and inspected parts of my anatomy that seemed to have nothing to do with the problem.

I was there six hours. The nurse was in the room with me for all but a few minutes. The doctor was there almost all the time. After a while, he got the test results, which showed I did not have food poisoning, but he wanted to observe me a while longer. Eventually, he concluded I had contracted some kind of intestinal bug, and he gave me a couple of days supply of Cipro and Flagyl.

I checked in with the waspish lady at the front desk to ask how much I owed. She asked me if I had parked in the hospital parking lot. I said yes. She said I owed one euro and 50 pence ($2). I asked how much for the medical care and the medicine. She said that was free. When I got back to Washington, I saw my doctor. He had a few tests run in the office, gave me full prescriptions for Cipro and Flagyl, and billed me $1,000.

Most Americans I talk to have a lot of screwy ideas about medical care. They think Americans have “The Best Health-Care System in the World.” They think “socialized medicine” doesn’t work, because people have to wait too long to get care, and the care isn’t very good and they don’t have any choices.

We have many wonderful doctors, hospitals and pieces of equipment in the U.S. However, statistically, we don’t do so well. Life expectancy, infant mortality, how long people live with a disease after it is diagnosed: You name the criterion, and we don’t compare well with any of the countries that have national health care. And we spend a whole lot more for a lot less health care.

Here are a few comparisons between the U.S. and France. According to the Organization for Economic Cooperation and Development: French women live 3-1/2 years longer than American women; French men live just over three years longer than American men. Our infant mortality rate is 72-1/2 percent higher than theirs. And 30 percent more Frenchmen smoke than we do, and they consume almost twice as much alcohol. Who knows how much more butter, cheese and fois gras?

Worried about waiting for a doctor? Or a hospital bed? The French have 37-1/2 percent more doctors than we, and way over twice as many hospital beds, per capita. Worried about choice? French hospitals are 65 percent government run and 35 percent privately run. Take your pick. The health-care system pays. You also get to choose your doctor.

The difference in the quality of service is difficult for Americans to comprehend. In France, doctors routinely make house-calls. Patients aren’t thrown out of hospitals because the insurance companies decide when it is time to go. They stay until doctors decide it is time to go. The French government pays 75 percent of all health care costs. Most of the rest is paid by private insurance. If somebody can’t afford private insurance, the government makes up the difference.

The bottom line: We pay 43 percent more for health care than the French do, and we get a whole lot less for our money.

George H. Lesser has reported for more than 30 years on international political and economic developments for both U.S. and European publications. He has been based in Washington, New York, London and Brussels, and lives in Washington D.C. and Florence, Italy.

Study: Single-payer health care would save state money

By Louis Porter
Vermont Press Bureau
August 30, 2006

MONTPELIER — A Legislative study released Tuesday concludes that Vermont could save money by adopting a single-payer health care system.

But key lawmakers who authorized the study said they want more information before endorsing or rejecting such a system.

Implementing single-payer health care would pose political and financial challenges by forcing a “substantial redistribution of who pays for health care,” said Kenneth Thorpe, a national consultant hired by lawmakers to conduct the study.

Vermonters who lack insurance now and companies that do not offer coverage to their employees would pay more under a single-payer system, the study found. People who already have health insurance, and employers that offer it to their workers, would pay less.

When state lawmakers passed a reform bill last year to change the way health care is delivered and financed in Vermont, they promised to continue examining one alternative — a single-payer system, run by the state, that would pay hospital and doctor bills for all Vermonters.

Such a system would be more complex than it might seem, lawmakers and experts said.

For example, even the single-payer system studied by Thorpe would be funded by at least three sources. In addition to money provided by the state, the federal Medicare program would continue to cover eligible Vermonters. And private insurance companies would keep paying bills on behalf of out-of-staters who receive medical care while visiting the state.

Even with multiple funding sources, such a system could save $51 million in administrative costs, Thorpe said.

A single-payer system in Vermont would be financed by a payroll tax on companies and workers of about 13.5 percent, Thorpe said. Companies would pay about 75 percent of those costs, while employees would pick up the rest.

Companies that offer their employees health insurance, and workers who have coverage, would see a net savings under that system. But the roughly 40 percent of companies that offer no coverage to their workers would pay more, Thorpe said.

Rep. John Tracy, D-Burlington and Sen. James Leddy, D-Chittenden, who run the Legislature’s Health Care Commission, said they aren’t prepared to endorse the single-payer system outlined in Thorpe’s report. They said they need to see additional studies, including an analysis of all the economic effects such a system would have on the state.

Tracy and Leddy said a single-payer system could be a complement, rather than an alternative, to the “Catamount Health” measure lawmakers passed last year to increase the number of Vermonters covered by health insurance and improve care of chronic illnesses.

“We are not at the end of the road,” said Tracy, who is a Democratic candidate for lieutenant governor. His primary opponent is state Sen. Matthew Dunne. “As we continue to go forward we need to look at all the options to finance it.”

The report quickly drew fire from two sides: from those who don’t believe last year’s measure went far enough, and from those who believe it went too far.

“Imposing a payroll tax will drown Vermont’s job providers, who are a backbone of Vermont’s economy,” Vermont Chamber of Commerce President Duane Marsh said in a prepared statement.

Jason Gibbs, a spokesman for Gov. James Douglas, said the governor “negotiated and signed the most comprehensive health care legislation in the country.”

“The governor’s focus is on implementing those reforms, assuring universal access to affordable health insurance and lowering the cost of care for those who currently have health insurance,” Gibbs said. “We find it very troubling that, just a few months after landmark legislation has been passed, the Legislature is contemplating how to raise the payroll tax.”

But Marvin Malek, a Progressive Party candidate running for lieutenant governor, said Vermont’s new law does little to address the problems of information management and administrative waste. Lt. Gov. Brian Dubie, a Republican, also is running for lieutenant governor.

“That bill is hardly the answer,” Malek said. “I don’t even think it is funded.”

Taxpayers fund the health insurance plans provided to federal, state and local government workers, Malek said. “We are already paying so much for these government plans, why not just say all right, everybody is in,” Malek said.

Increasing the number of Vermonters eligible for government-subsidized health insurance fails to go far enough, he said.

Contact Louis Porter at louis.porter@timesargus.com

Will primary care survive?

Primary Care – Will It Survive?

By Thomas Bodenheimer, M.D.
The New England Journal of Medicine
August 31, 2006

The American College of Physicians recently warned that “primary care, the backbone of the nation’s health care system, is at grave risk of collapse.”

And indeed, primary care is facing a confluence of factors that could spell disaster. Patients are increasingly dissatisfied with their care and with the difficulty of gaining timely access to a primary care physician; many primary care physicians, in turn, are unhappy with their jobs, as they face a seemingly insurmountable task; the quality of care is uneven; reimbursement is inadequate; and fewer and fewer U.S. medical students are choosing to enter the field.

Even as primary care spirals further into crisis, studies have demonstrated that a primary care-based health care system has the potential to reduce costs while maintaining quality. The hospitalization rates for diagnoses that could be addressed in ambulatory care settings are higher in geographic areas where access to primary care physicians is more limited. States with a higher ratio of generalist to population have lower per-beneficiary Medicare expenditures and higher scores on 24 common performance measures than states with fewer generalist physicians and more specialists per capita.

Serious effort is required to develop a national primary care payment policy. Public policy on primary care does not exist; the fortunes of primary care are dictated not by the health care needs of the country but by a specialty-rich, quantity-based reimbursement system. Few legislators, particularly among those responsible for the trend-setting Medicare program, are aware that primary care is struggling. An educational campaign is needed – to explain the nature and causes of the threats to primary care’s survival; to provide well-documented information on the benefits of primary care, focusing on the potential for a strong primary care-based system to control health expenditures; and to offer concrete proposals for reforming both primary care at the microsystem level and the payment scheme at the macrosystem level.

Whoever takes up the cause of primary care, one thing is clear: action is needed to calm the brewing storm before the levees break.

Primary Care – Will It Survive? By Thomas Bodenheimer, M.D.
http://content.nejm.org/cgi/content/full/355/9/861

Also, Primary Care – The Best Job in Medicine? By Beverly Woo, M.D.
http://content.nejm.org/cgi/content/full/355/9/864

Comment:

Don McCanne, MD

“Crisis” is a word that has been thrown around lately to describe many of the trends that are resulting in higher health care costs, but without an improvement in coverage and access. When it comes to the deterioration that is taking place within our primary care infrastructure, “crisis” is not an adequate term. It’s much worse.

Both of the articles above provide an excellent, brief description of the status of primary care. The issue is of such great importance that the editors of the NEJM have provided free access to both of these articles.
They should be downloaded to be used in your health reform advocacy activities. Particularly valuable are the four graphs (two in each article) that can be downloaded as PowerPoint slides.

We need immediate macrosystem reform. We need single payer now!

How VA Hospitals Became The Best

No longer a nation’s shame, veteran care is acing competitors

By DOUGLAS WALLER
Time Magazine
Sunday, Aug. 27, 2006

Most private hospitals can only dream of the futuristic medicine Dr. Divya Shroff practices today. Outside an elderly patient’s room, the attending physician gathers her residents around a wireless laptop propped on a mobile cart. Shroff accesses the patient’s entire medical history–a stack of paper in most private hospitals. And instead of trekking to the radiology lab to view the latest X-ray, she brings it up on her computer screen. While Shroff is visiting the patient, a resident types in a request for pain medication, then punches the SEND button. Seconds later, the printer in the hospital pharmacy spits out the order. The druggist stuffs a plastic bag of pills into what looks like a tiny space capsule, then shoots it up to the ward in a vacuum tube. By the time Shroff wheels away her computer, a nurse walks up with the drugs.

Life in a big-name institution like the Mayo Clinic? Not hardly. Shroff, 31, a specialist in internal medicine, works at the Veterans Affairs hospital in Washington, where the vets who come for the cutting-edge treatment are mostly poor.

If you’re surprised, that’s understandable. Until the early 1990s, care at VA hospitals was so substandard that Congress considered shutting down the entire system and giving ex-G.I.s vouchers for treatment at private facilities. Today it’s a very different story. The VA runs the largest integrated health-care system in the country, with more than 1,400 hospitals, clinics and nursing homes employing 14,800 doctors and 61,000 nurses. And by a number of measures, this government-managed health-care program–socialized medicine on a small scale–is beating the marketplace. For the sixth year in a row, VA hospitals last year scored higher than private facilities on the University of Michigan’s American Customer Satisfaction Index, based on patient surveys on the quality of care received. The VA scored 83 out of 100; private institutions, 71. Males 65 years and older receiving VA care had about a 40% lower risk of death than those enrolled in Medicare Advantage, whose care is provided through private health plans or HMOs, according to a study published in the April edition of Medical Care. Harvard University just gave the VA its Innovations in American Government Award for the agency’s work in computerizing patient records.

And all that was achieved at a relatively low cost. In the past 10 years, the number of veterans receiving treatment from the VA has more than doubled, from 2.5 million to 5.3 million, but the agency has cared for them with 10,000 fewer employees. The VA’s cost per patient has remained steady during the past 10 years. The cost of private care has jumped about 40% in that same period.

Vets still gripe about wading through red tape for treatment. Some 11,000 have been waiting 30 days or more for their first appointment. The Iraq and Afghanistan wars could stress the system, although for the moment VA officials say the agency can accommodate the new patients. That’s because older vets, especially those from the World War II and Korean War eras, are dying of natural causes at the rate of about 600,000 a year, whereas the Iraq and Afghanistan wars have so far created a little more than 550,000 new vets.

On the other hand, because advances in body armor and field medicine have enabled soldiers to survive battlefield injuries that in earlier conflicts meant death, many of the new patients are arriving at VA hospitals with severe wounds. In response, the VA has set up four polytrauma centers around the country. Dawn Halfaker, a former Army captain who lost her right arm in Iraq, says negotiating the bureaucracy to get treatment for all her medical needs has been frustrating at times. She had to wait eight months for an appointment at the Washington hospital to get her teeth cleaned. Even so, she says, the care “is not as bad as I thought it would be.”
PAGEBREAK
The roots of the VA’s reformation go back to 1994, when Bill Clinton appointed Kenneth Kizer, a hard-charging doctor and former Navy diver, as the VA’s under secretary for health. Kizer decentralized the VA’s cumbersome health bureaucracy and held regional managers more accountable. Patient records were transferred to a system-wide computer network, which has made its way into only 3% of private hospitals. When a veteran is treated, the doctor has the vet’s complete medical history on a laptop. In the private sector, 20% of all lab tests are needlessly repeated because the doctor doesn’t have handy the results of the same test performed earlier, according to a 2004 report by the President’s information technology advisory committee.

Another innovation at the VA was a bar-code system, as in the supermarket, for prescriptions–a system used in fewer than 5% of private hospitals. With a hand-held laser reader, a nurse scans the bar code on a patient’s wristband, then the one on the bottle of pills. If the pills don’t match the prescription the doctor typed into the computer, the laptop alerts the nurse. The Institute of Medicine estimates that 1.5 million patients are harmed each year by medication errors, but computer records and bar-code scanners have virtually eliminated those problems in VA hospitals.

Private hospitals, which make their money treating people who come to them sick, don’t profit from heavy investments in preventive care, which keeps patients healthy. But the VA, which is funded by tax dollars, “has its patients for life,” notes Kizer, who served in his post until 1999. So to keep government spending down, “it makes economic sense to keep them healthy and out of the hospital.” Kizer eliminated more than half the system’s 52,000 hospital beds and plowed the money saved into opening 300 new community clinics so vets could have easier access to family-practice-style doctors. He set strict performance standards that graded physicians on health promotion.

As the reforms produced results, veterans began “voting with their feet,” says Dr. Jonathan Perlin, who just resigned as the VA’s health under secretary. Hundreds of thousands abandoned private physicians and enrolled in the lower-cost and higher-quality VA care. But that created a new problem. The VA’s budget from Congress (currently about $30 billion annually) couldn’t cover the influx. By January 2003, with hundreds of thousands waiting six months or more for their first appointment, the VA began limiting access to only vets with service-related injuries or illness or those with low income.

Veterans’ groups understandably want the health-care system expanded to accommodate vets with higher incomes and no service-related ailments. Tom Bock, commander of the American Legion, has another idea: allow elderly vets not in the system who are drawing Medicare payments to spend those benefits at a VA facility instead of going to a private doctor, as is now required by Medicare. “It’s a win-win-win situation,” he argues. Medicare, which pays more than $6,500 per patient annually for care by private doctors, could save with the VA’s less expensive care, which costs about $5,000 per patient. The vets would receive better service at the VA’s facilities, which could treat millions more patients with Medicare’s cash infusion.

But conservatives fear such an arrangement would be a Trojan horse, setting up an even larger national health-care program and taking more business from the private sector. Congress has no plans to enlarge the scope of veterans’ health care–much less consider it a model for, say, a government-run system serving nonvets. But it’s becoming more and more “ideologically inconvenient for some to have such a stellar health-delivery system being run by the government,” says Margaret O’Kane, president of the National Committee for Quality Assurance, which rates health plans for businesses and individuals. If VA health care continues to be the industry leader, it may become more difficult to argue that the market can do better.

$145,000 for an additional year of life

The Value of Medical Spending in the United States, 1960 -2000
By David M. Cutler, Ph.D., Allison B. Rosen, M.D., M.P.H., Sc.D., and Sandeep Vijan, M.D.
The New England Journal of Medicine
August 31, 2006

According to virtually any commonly cited value of a year of life, we found that if medical care accounts for about half the gains in life expectancy, then the increased spending has, on average, been worth it. However, the current trends are a cause for concern. There has been a sharp increase in the cost per additional year of life gained during the past two decades, primarily among the elderly. Analyses focused on spending and on the increase in life expectancy beginning at 65 years of age showed that the incremental cost of an additional year of life rose from $46,800 in the 1970s to $145,000 in the 1990s. The former amount certainly reflects a good value, but the latter fails to meet many cost-benefit criteria. Furthermore, it appears that although the rate of increase in spending had stabilized, if not declined, by 2000 for the newborn and 15-year-old groups, this rate is substantially outpacing the rate of increase in life expectancy in older age groups. If this trend continues in the elderly, the cost effectiveness of medical care will continue to decrease at older ages.

In conclusion, although medical spending has increased substantially during the past 40 years, the money spent has provided good value. However, temporal trends suggest that the value of health care spending is decreasing over time, particularly for older age groups. We need to continue tracking trends in health care spending and its benefits to ensure that resources are allocated wisely. Such efforts should focus on specific diseases in order to provide a more detailed picture of the value of health care both within disease categories and across a spectrum of common diseases over time. Also, the United States should modify its system of tracking the health sector to include a measure of population health in addition to spending, so that policymakers and the public have an informed picture of the benefits obtained for the money spent.

http://content.nejm.org/cgi/reprint/355/9/920.pdf

Comment:

Don McCanne, MD

Identifying the acceleration in cost trends is the first step. The second is to identify which spending is providing value. The final step is to direct spending away from expensive services with no benefit and toward health care services that do provide value. This process would be much simpler under a single payer health insurance system, whereas it is almost impossible with our current fragmented method of funding care.

Price transparency solves what problem?

Reveal health care costs
USA TODAY
Editorial
August 30, 2006

Traditional insurance, whether government- or employer-based, shields patients from the true costs of care. If someone else is paying most of the bill, patients have little incentive or ability to demand lower prices. Hospitals and doctors face little pressure to publicize their fees or to lower them.

Faced with rising costs, however, employers are pushing workers to shoulder a larger share with higher premiums, deductibles and co-pays. Plans combining low premiums, high deductibles and employee-funded health savings accounts are gaining popularity. Because those plans force people to spend more of their own money, they have more incentive to shop around. But they can’t do that without better data.

The medical industry has paid lip service to transparency but has been slow to act. Allen Hubbard, director of President Bush’s National Economic Council, warned hospital executives in March that the administration would urge Congress to require better disclosure unless voluntary efforts start soon.

Opposing view

Transparency or fig leaf?
By Steffie Woolhandler and David Himmelstein

Nearly 47 million Americans are uninsured, and millions more have coverage so skimpy that a major illness would bankrupt them. Yet President Bush apparently thinks Americans are too well-insured.

He’s pushing health savings accounts – a plan to make the sick pay thousands from their own pockets before insurance kicks in. And the fig leaf for his soak-the-sick scheme is “transparency.” Just make hospitals and doctors post their prices, he says, and the market will magically cut health costs.

The president’s scheme will drive millions more into medical poverty, but it won’t hold down costs.

Insured Americans already pay bigger co-payments and deductibles than do people in any other nation. Yet our health costs are far higher than anywhere else.

Steep out-of-pocket costs have little impact on overall spending. They discourage preventive care such as immunizations but don’t affect the real cost driver – expensive illnesses that afflict only 20% of Americans each year but account for 80% of spending.

Huge corporations like General Motors have tried for years to hold down health benefit costs by using their market muscle (and the kind of price and quality information Bush touts). They’ve failed. If GM can’t bargain down costs, will Mrs. Smith succeed?

Transparency won’t cut costs, but national health insurance would. A single-payer system could save $300 billion annually on health bureaucracy…

USA TODAY view:
http://www.usatoday.com/news/opinion/2006-08-29-medical-costs_x.htm

Opposing view:
http://www.usatoday.com/news/opinion/2006-08-29-medical-costs-oppose_x.htm

Comment:

By Don McCanne, MD

All too often in the debate on reform we see advocates lead with policy solutions and extrapolate backwards to the problem that is being addressed. The debate over price transparency certainly exemplifies this.

The solution is to have patients bear more of the costs of health care. The obvious problem solved is that we can reduce health care spending by making access to care truly unaffordable. But no, the backward argument is that we can make patients more thrifty shoppers by making them reach into their own pockets.

Insurance innovations have already evolved to the point that patients are exposed to costs, yet spending remains out of control. That leads to the next backwards extrapolation: patients who are responsible for most of the spending are accepting too much care because they are not presented in advance with a full itemization of the prices and fees that they will face in the care of their complex acute and chronic medical problems. The problem is so straightforward that Allen Hubbard is going to sic Congress on the providers if they don’t start to provide in advance the reams of itemized charges that the patient will face. It doesn’t matter that such lists are impossible to provide since health care is a dynamic process, and it is impossible to know which diagnostic and treatment decisions will be made along the way.

The problem is not the lack of price transparency. Americans are already very concerned about the affordability of health care. Patients are not jockeying for the right to be the price negotiator for their own care; they understand that they are impotent purchasers in the health care marketplace.

They want something done about the true drivers of health care costs. What they still don’t realize is that they want to be part of a public monopsony that can negotiate health care value for them: a single payer program of national health insurance.