PNHP

RAND – Eliminating copays can reduce health care spending

RAND – Eliminating copays can reduce health care spending

Varying Pharmacy Benefits With Clinical Status: The Case of Cholesterol-lowering Therapy
By Dana P. Goldman, PhD; Geoffrey F. Joyce, PhD; and Pinar Karaca-Mandic, PhD (From the RAND Corporation, Santa Monica, Calif.)
The American Journal of Managed Care
January 2006

Methods: Using claims data from 88 health plans, we studied 62 274 patients aged 20 years and older who initiated CL (cholesterol-lowering) therapy between 1997 and 2001. We examined the association between copayments and compliance in the year after initiation of therapy, and the association between compliance and subsequent hospital and emergency department (ED) use for up to 4 years after initiation.

Benefit Scenarios: We used estimates from both the compliance and service-use models to estimate the impact of 2 alternative BBC (benefit-based-copayment) designs relative to a base case of a $10 copayment for all patients (the modal copayment). We derived the predictions by first estimating compliance using our copayment and compliance model, and then predicting hospitalizations and ED visits with the compliance and service-use models. The first scenario was chosen to keep total pharmacy payments unchanged. Patients at high and medium risk had no copayments while copayments for low-risk individuals were increased from $10 to $22. In the second scenario, medium-and high-risk patients received the medication for free, while low-risk patients still paid $10. The estimates were computed assuming 6.3 million privately insured or Medicare-insured adults on CL therapy in the United States, as calculated using the 1999-2000 National Health and Nutrition Examination Survey.

Results: Table 3 (available at link below, though this text explains the findings in the table) shows the effects on the sample of 6.3 million CL users of 2 designs for BBCs. The base case is a $10 copayment for all patients. Under scenario 1, high- and medium-risk patients faced no copayment and low-risk patients had copayments of $22. Compared with the base case, full compliance increased 9 percentage points among the high-risk group (62% to 71%) and 10 percentage points among the medium-risk group (59% to 69%), and decreased from 52% to 44% among the low-risk group. There was no change in aggregate health plan payments for drugs because reduced use by the low-risk group was offset by increased use by the high-risk group. The high-and medium-risk groups had no out-of-pocket payments, but out-of-pocket payments by the low-risk group increased $280 million (from $272 million to $552 million). This scenario averted 79 837 hospitalizations overall, even after accounting for an additional 10 406 hospitalizations among the low-risk group. Similarly, ED use was reduced in aggregate by 31 411.

Scenario 2 eliminated copayments for high- and medium-risk patients with no change in copayments for low-risk patients. This benefit increased prescription drug spending by health plans ($486 million) and lowered spending by patients ($311 million). Scenario 2 resulted in 90 243 fewer hospitalizations and 36 493 fewer ED admissions compared with the base case.

Our scenarios with BBCs (Table 3) reduced the number of hospitalizations by approximately 80 000 to 90 000 annually and the number of ED visits by 30 000 to 35 000, resulting in net aggregate savings of more than $1 billion.

Conclusion: The challenge for the healthcare system is to make patients more sensitive to the cost of treatment without encouraging them to forego cost-effective care. Health plans increasingly recognize the need to differentiate coverage based on demonstrated value. For example, some health plans have eliminated copayments for some generic drugs, while others now assign drugs to tiers based on their cost effectiveness. The problem with these approaches is that clinical efficacy of any drug varies across patients.

We showed that strategically reducing copayments for patients who are most at risk can improve overall compliance and reduce use of other expensive services. In an era of consumer-directed healthcare and improved information technology, tailoring copayments to a patient’s expected therapeutic benefit can increase the clinical and economic efficacy of prescription medications.

http://www.ajmc.com/Article.cfm?Menu=1&ID=3072

Comment: By Don McCanne, M.D.

The RAND Health Insurance Experiment (RAND HIE), completed over twenty years ago, demonstrated that patient cost sharing (coinsurance) reduces the utilization of health services and thereby reduces total health care spending. It is the study most commonly cited by supporters of consumer-directed health care (CDHC), because it makes their case that health care spending will decline if patients are required to use some of their own funds whenever health care services are accessed.

Further analysis of the RAND data confirmed that patient cost sharing does decrease use of beneficial services. In conceding this point, the CDHC advocates have called for greater transparency so that patients can select beneficial services that provide value and reject services that are of little or no benefit. Although this trend may lead to posting of price lists and primitive measures of quality, the complexities of medical decisions over which are truly beneficial services are difficult enough for the physician and will never be within the purview of the patient. Deductibles, copayments, and coinsurance will always result in decreased use of beneficial services.

This new RAND study is interesting because it almost seems to be a flip of the prior RAND conclusions. In this study, eliminating copayments reduced total health care spending. However, this principle would apply only in instances wherein the intervention encouraged (e.g., cholesterol-lowering therapy) is less expensive than the consequences of not intervening (e.g., hospitalizations and ED visits).

The concept of adjusting cost sharing based on potential health care cost reductions does have some serious flaws. Just reading this study demonstrates that the administrative complexities are great even with the simple intervention of cholesterol-lowering drugs. It is unlikely that the data required for more complex clinical situations would be readily forthcoming, not to mention the complexity of pre-assigning patients in variable cost-sharing categories. This bird likely will never fly.

Another serious concern is that this study, by design, looked at the financial impact of benefit-based-copayments while seemingly dismissing, as a trade-off, the negative clinical impact that a drug-spending-neutral shift in copayments would produce. That is, in eliminating copayments for high- and medium-risk groups, the copayments for the low-risk group were increased from $10 to $22 in order to keep the total spending for this drug benefit budget-neutral. That $12 increase in copayments saves the health plan $280 million, but for this low-risk group, it results in 10,406 additional hospitalizations and 5,082 additional ED visits. That doesn’t even include additional morbidity and mortality.

As to the focus of the study, the authors state, “…more importantly, these benefits can be achieved without increasing a health plan’s pharmacy costs.”

They didn’t even look at a scenario that would have eliminated copayments for the low risk group. That would have increased plan costs even more, but how many hospitalizations would it have prevented?

The most fundamental flaw of consumer-directed health care is that it depends on demand-side spending control that reduces utilization of truly beneficial services. A single-payer national health insurance program would depend on more carefully targeted and patient-friendly supply-side mechanisms of containing health care costs.

For their next study, instead of defining demand-side mechanisms that would reduce health plan spending at a cost of reduced patient access, RAND should study supply-side mechanisms that would improve resource allocation for all of us, perhaps starting with the reduction of detrimental high-tech excesses that impair both quality and outcomes. Reducing costs while improving outcomes would certainly provide us with greater health care value.

Health Care for All/New Jersey responds to Kristof op-ed

New York Times
February 5, 2006

To the Editor:

Nicholas D. Kristof suggests that we mandate health-promoting measures like taxing junk foods. He says he’s personally “convinced that we need universal health care based on a single payer system,” but “that is not politically feasible now.”

“Not politically feasible” is code for “the politicians have been bought and paid for by the special interests.”

Aren’t our pols on the take also from purveyors of corn syrup, French fries and other noxious nostrums?

What makes Mr. Kristof think that lobbyists for agribusiness and Big Tobacco will smile on his ideas for a “systematic assault on the causes of American ill health”?

How many employers must go under; how many Americans must declare health-related bankruptcy; and how expensive must the profiteers make American health care before a rational, national health system becomes “politically feasible”?

In several states and cities that have reduced the amount of private money in politics with “clean election” laws, universal health care has suddenly become more “politically feasible.” The rash of political scandals makes this an idea whose time has come.

John Glasel
Hoboken, N.J., Jan. 31, 2006
The writer is secretary of Health Care for All/New Jersey.

FEHBP's initial experience with HDHPs & HSAs

Federal Employees Health Benefits Program First-Year Experience with High-Deductible Health Plans and Health Savings Accounts
GAO
January 2006

Like many large employers, the FEHBP has expanded enrollee health plan choices by offering HDHPs combined with HSAs.

Forty-three percent of actively employed HDHP enrollees earned federal salaries of $75,000 or more compared to 14 percent of the other new plan enrollees and 23 percent of all FEHBP plan enrollees.

http://www.gao.gov/new.items/d06271.pdf

Comment: By Don McCanne, M.D.

Proponents of HDHPs (high deductible health plans) and HSAs (health savings accounts) have contended that these products are not only for the healthy and wealthy, but work well for everyone. As proof, they cite statistics showing that many enrollees were previously uninsured. They fail to mention that these plans with very high deductibles were the only ones with premiums that the uninsured could afford. Many enrollees have not been able to put any funds in their HSAs, and there is a much lower level of satisfaction with this coverage. Although the previously uninsured recognize that this coverage is better than nothing at all, they do understand their financial vulnerability if they were to develop significant health care needs.

Federal employees have a large number of health care coverage options available through FEHBP (Federal Employees Health Benefits Program). It is instructive to see who chooses HDHPs with HSAs when a range of options is available. This study by the GAO (Government Accountability Office) confirms that higher income individuals are much more likely to select these plans.

That should come as no surprise since these plans, by design, are particularly well suited for higher income individuals to benefit from the tax and pension benefits of these plans.

The policy lesson: It is not who is buying these plans, but rather it is who is benefiting from theses plans that is important. High income individuals who can easily afford the out-of-pocket costs benefit from the regressive tax policies that these plans represent. Modest and low income individuals are on the losing end of these regressive policies, and they lose even more when they can’t afford the out-of-pocket expenses to which the HDHPs leave them exposed.

So why don’t we simply let the wealthy have these plans, and the rest of us can look for other solutions? Lower income individuals will never be able to fund their share of health care. That means that funding of a health care system that covers everyone must be progressive. Perpetuating a regressive system exclusively for the benefit of the wealthy only magnifies the affordability issues for the rest of us.

KPBS debate on HSAs

These Days:
What is consumer-directed health care?
Tom Fudge
KPBS
Feb. 1, 2006

In his State of the Union address, President Bush pushed for the expansion of tax-free health savings accounts. Host Tom Fudge talks with two doctors on opposing sides of the issue to debate the pros and cons of consumer-directed health care.

Guests:

Dr. James Knight. A local urologist and CEO of Consumer Directed Health Care Incorporated.

Dr. Don McCanne. Senior health policy fellow of Physicians for a National Health Program.

For the KPBS archived audio of this 14 minute debate on HSAs:
http://www.publicbroadcasting.net/kpbs/news.newsmain?action=article&ARTICLE_ID=873506

Comment: Activists in the health care reform movement may want to save this link since it can be used to educate the public on health savings accounts (HSAs). The debate centers around what HSAs pretend to be and what they really are.

State of the Union on health care

State of the Union Address
President George W. Bush
The White House
January 31, 2006

Keeping America competitive requires affordable health care. (Applause.) Our government has a responsibility to provide health care for the poor and the elderly, and we are meeting that responsibility. (Applause.) For all Americans — for all Americans, we must confront the rising cost of care, strengthen the doctor-patient relationship, and help people afford the insurance coverage they need. (Applause.)

We will make wider use of electronic records and other health information technology, to help control costs and reduce dangerous medical errors. We will strengthen health savings accounts — making sure individuals and small business employees can buy insurance with the same advantages that people working for big businesses now get. (Applause.) We will do more to make this coverage portable, so workers can switch jobs without having to worry about losing their health insurance. (Applause.) And because lawsuits are driving many good doctors out of practice — leaving women in nearly 1,500 American counties without a single OB/GYN — I ask the Congress to pass medical liability reform this year. (Applause.)

http://www.whitehouse.gov/stateoftheunion/2006/

Comment: By Don McCanne, M.D.

Unfortunately, President Bush once again has failed to address one of the more pressing issues in health care today. How can we continue to pay for the 80% of health care costs consumed by the 20% of individuals with greater health care needs?

Everyone understands that pooling risk is the answer; the large number of healthy individuals pay into the insurance pool so that those with needs can afford health care. The simplest, most equitable and most efficient method of doing this would be to establish a national health insurance program.

It is understandable that the President, as a conservative, is opposed to national health insurance since he believes that funding sources should be private rather than through the tax system. So it seems that the President would support private solutions to pooling risk, but does he?

Health savings accounts break up portions of the pools into individual accounts. High deductible plans remove large amounts of up-front costs from the pools. Association health plans strip out state mandated benefits thereby pulling more funds out of the risk pools. Cost sharing reduces demands on pools by making health care access unaffordable for many.

While ignoring the dramatic increases in actual health care costs, attention has been directed toward making health insurance premiums more affordable. Premiums are lower when the pool has to pay out less. The pool pays out less when the responsibilities are shifted from the pools to the individual participants. The healthy pay less, and the sick pay more. It’s as simple as that.

President Bush’s policies are not designed to encourage risk pooling in the private sector. Just the opposite. His policies are designed to break up risk pools and shift the responsibility to individuals, even if that makes care unaffordable. His policies insulate the healthy from the costs of the sick.

Though the President’s ideology prevents him from supporting national health insurance, why is he supporting policies that inhibit us from joining together, in the private sector, to share health care risks in common pools, so that everyone would always have affordable access to health care?

Private solutions don’t work anyway. The private insurers are doing everything in their power to avoid the market segment that requires more health care. Government programs such as Medicare and Medicaid cover the elderly and poor in that high-cost sector. It’s time for us to enact a single government program that would cover the entire high-cost sector, and the rest of us as well.

PNHP Decries "State of the Union" Health Care Proposals

National Doctors’ Group Decries “State of the Union” Health Care Proposals

Bush Reforms Would Worsen Care, Bankrupt Sick Families

President Bush’s proposals for health reform would simultaneously: (1) worsen access to care for people who are already covered; (2) offer billions for new tax subsidies that will not expand coverage; (3) drive up bureaucratic costs and do nothing to control overall health spending; and (4) offer tax breaks targeted to the wealthiest Americans.

CONSUMER-DIRECTED HEALTH CARE

* “Consumer Directed Health Care” (CDHC) is simply another term for skimpy insurance. These plans shift costs from employers to workers by forcing them to pay huge deductibles — from $2000 to $20,000 — before insurance kicks in.

* Many plans exclude important services (e.g. maternity care) altogether, so spending for these doesn’t even count towards the deductible.

* High deductibles discourage needed as well as unneeded care, and particularly discourage preventive care. For instance, diabetic patients forego routine eye and foot care, and end up with amputations and blindness. Similarly, patients with high blood pressure skimp on treatment and end up with strokes and heart attacks.

* These plans effectively penalize the sick for being sick, and will drive an increasing number of middle class families into bankruptcy. While healthy people may pay a little less, the sick will pay far more. Of course, virtually everyone gets sick and has high health costs at some point in their life — costs that will drain whatever money middle class people will be able to put into an HSA.

TAX CREDITS FOR THE UNINSURED

* The tax credits the President would offer are so meager that they would not even cover the skimpiest of plans that are actually available. The average cost of family coverage is now about $10,000, while the President suggests offering the poor only a $3000 tax subsidy. Past experience with a similar subsidy program (under The Trade Adjustment Assistance Act) showed that only a tiny fraction of low income families were able to get coverage, even with a substantially more generous subsidy than Bush now proposes.

ADDED WASTE AND BUREAUCRACY

* CDHC plans will not control costs. More than 30 percent of health spending is already consumed by administrative waste. HSAs and high deductible plans save nothing on existing insurance bureaucracy because patients and insurers must still keep track of each health expenditure to know when the deductible is reached.

* CDHC will add a new layer of bureaucratic costs to the system. A consultant has estimated that additional account management fees, transaction fees etc. required because of HSAs will cost $1 billion annually by 2011 (Modern Healthcare January 16, 2006:16). Moreover, doctors and hospitals will have to spend even more than at present on their billing, since collecting cash from individual patients (many of whom will not be able to pay) is costlier than computerized billing of insurance plans. One consultant has estimates these increased collection costs at 0.5% of total practice revenues, which would amount to billions of dollars annually.

* Savings Account Plans encourage predatory lending to sick families. Already, insurance firms are chartering their own banks and investment firms are gearing up to manage HSA assets — for a fee. Moreover, insurers are planning to issue HSA debit and credit cards (with high interest rates).

* Nor will the incentives in CDHC contain overall health spending. First, about 70% of health costs are incurred by a relatively few very sick people who will quickly exceed their deductible limits and have no incentives to “comparison shop” or otherwise save on care. Second, by discouraging routine preventive care in the short term CDHC threatens to actually increase costs in the long run. Finally, research in other nations demonstrates that an increase in deductibles does not decrease system-wide costs. Doctors generally tell their sick patients how soon they need to return for a visit, how frequently lab tests should be monitored etc. In Saskatchewan, Quebec and Switzerland, co-payments merely shifted care from the poor toward the wealthy as doctors apparently kept themselves fully booked, and yielded no overall savings.

HEALTH CARE TAX CREDIT FOR THE WEALTHY

* The vast majority of CDHC tax breaks are sure to accrue to those who need them the least. The tax advantages of HSAs are far more valuable to people in high tax brackets than to the poor or middle class. In fact, early data shows that only one half of people choosing HSA plans have deposited any money in the account — presumably because they couldn’t afford to. Rich people choose these plans because they offer a big tax break, and poor people choose them because the premiums are lower — they look like a good deal until you get sick.

By contrast, single-payer national health insurance could provide high-quality, comprehensive coverage to every American by recovering more than $300 billion annually squandered on needless administration with a single, simplified payment system.

###

Physicians for a National Health Program is an organization of 14,000 physicians advocating for non-profit national health insurance. PNHP has chapters and spokespersons across the country. For contacts, call (312) 782-6006

Steffie Woolhandler, M.D. is an Associate Professor of Medicine at Harvard Medical School. She is the author of “Costs of Health Care Administration in the United States and Canada,” New England Journal of Medicine, August 21, 2003.

FOR MORE INFORMATION: “Impacts of Health Reform,” By Ken Thorpe, Ph.D., National Coalition on Health Care (available at: http://www.nchc.org/materials/studies/Thorpe%20booklet.pdf).

COMMENTS ON STATE OF THE UNION HEALTH PROPOSALS FROM PNHP MEMBER PROF. JAMES G KAHN

First Appeared Monday, 30 January ’06, UCSF Today

President’s State of the Union Likely to Address Health Care

James G. Kahn, MD, MPH, a professor at UCSF’s Institute for Health Policy Studies and in the Department of Epidemiology and Biostatistics, will be among those tuning in to hear the President’s State of the Union address on January 31.

Kahn, who researches health care costs and policies, recently published a study in Health Affairs that found that billing and insurance paperwork consume at least one out of every five dollars of private insurance health spending in California.

Kahn answered some questions regarding the President’s policies and what he expects to hear in the address on Tuesday night. The President will deliver his fifth State of the Union address before a joint session of Congress at 6 p.m.

Q: Do you expect any positive news regarding health care spending in the President’s address? A: Unfortunately, I expect more bad news than good. We’ve had a law in the US for a few years for people to set up Health Savings Accounts (HAS). Originally, if an individual did not use all of the money that he or she put aside, it would be contributed to a shared insurance pool for those who needed it. The rules were changed in the bill that implemented the Medicare drug benefit. Now, any remaining money goes into an Individual Retirement Account, rather than remaining in the pool. I expect that the President is going to recommend that the amount of money people can put into Health Savings Accounts be increased.

Q: You consider this a negative? A: For most people, yes. It’s great for the individual healthy person who does not use the money set aside, but it means there is less money for people who get sick; therefore the integrity of the shared insurance pool is compromised. It gives healthy, wealthy people a tax break and added retirement income. However, by shifting money away from health care, it compromises the ability to maintain in the insurance pool for people who are sick and have no reason or ability to get an HSA plan. With higher limits on these accounts, it is an exacerbation of what is already a bad policy.

Q: What about the expected proposal for tax breaks for medical spending? A: We have the same problem here. Who benefits most from tax deductions? – wealthier people. It’s once again helping individuals that least need the help. At least as important, when economists have looked at tax incentives for health insurance, they conclude that it is one of the least effective ways to use federal money: the fewest people insured per federal dollar spent. It costs the government lots of money and reduces pressure on employers to pay for health insurance for employees. So, overall you are shifting expenses from employers to the federal government, which is ironic in an era when the government says it wants to stay out of people’s business.

Q: What would you like to see the President propose? A: Within the current system, there are a few things that could happen. It would be great to propose that employers be mandated to offer reasonable health insurance – insurance that is comprehensive and affordable for employees. Another valuable proposal would be to increase public health insurance. The Children’s Health Insurance Program was very successful in getting children health coverage, stemming growth in the numbers of uninsured children, but unfortunately, this program has been cut back.

Further, Medicaid (Medi-Cal) reimbursements are being cut, and the federal government is giving the states more leeway to make it harder to use Medicaid. This administration is also pushing the privatization of programs, which will cost more in administrative costs and profits for insurers. The new Medicare drug program is a great example of that. It must be administered – by law – through pharmacy benefit plans. In addition, this scattered approach has resulted in a lot of confusion, with many seniors unable to get their medications.

What I’d really like to see is Presidential support for national health insurance – public funding of privately delivered care. There is ample evidence from here and Canada that this would increase system efficiency enough to allow comprehensive coverage for everyone, both healthy and sick. However, the current administration is philosophically committed to a total private sector solution – for health insurers as well as providers. Then again, remember that it was Nixon who went to China.

Kahn will offer his comments and reaction after the State of the Union address for UCSF Today.

Plan OK for rich, healthy

By David Lazarus
San Francisco Chronicle
Wednesday, February 1, 2006

When he leaves office in a couple of years, President Bush will continue to be covered by the Federal Employees Health Benefit plan, for which taxpayers pay up to 75 percent of costs.

He’ll also receive a pension of more than $180,000 a year and will be eligible for treatment at any military hospital.

No one at the White House could tell me precisely what Bush’s out-of-pocket medical obligations will be. But it’s a fairly safe bet that his visits to the doctor won’t put much of a dent in his annual stipend.

That’s worth considering in light of the president’s advocacy of so-called health savings accounts, which he said in Tuesday night’s State of the Union speech should play a greater role in covering the medical costs of ordinary Americans.

“Keeping America competitive requires affordable health care,” Bush declared.

However, is that what health savings accounts will do?

I’ve spoken to a number of experts, and the consensus is that health savings accounts can be a nifty financial tool as long as you’re rich or don’t get sick.

For working-class people who develop serious or chronic health problems, the accounts can be economically devastating — and could perhaps worsen the nation’s already dysfunctional health care system.

And here’s the real kicker: Experts say an ever-increasing number of employers will be shifting workers to health savings accounts in coming years as a way to keep spiraling insurance costs in check.

If this isn’t something you’re dealing with at the moment, just wait. It very likely will be soon.

“Employers are desperate to do something about health care costs, and most will move in this direction,” said Paul Fronstin, a health economist at the nonpartisan Employee Benefit Research Institute.

“But are workers sophisticated enough to deal with their own health care?” he asked. “That’s a real issue.”

Health savings accounts were authorized by the same 2003 law that created the Medicare prescription drug benefit (and look how well that’s turned out).

Funds placed in such accounts are tax deductible and, as long as they’re used for medical expenses, remain tax-free. Balances can be rolled over from one year to the next.

Health savings accounts are intended to be coupled with high-deductible insurance plans. Deductibles must be at least $1,000 for individuals and $2,000 for families.

An account holder is thus responsible for up to the first $2,000 of medical costs in a single year. After that, his or her insurance kicks in.

The idea here is that consumers of health care will make more prudent and responsible decisions because their own money is on the line. This, in turn, will help keep down medical costs.

The reality, experts say, is that health savings accounts benefit the wealthy far more than lower-income people (the higher your tax bracket, after all, the more valuable a tax shelter becomes).

Similarly, the financial benefit of a health savings account lies in making the maximum contribution each year and allowing that money to compound, so that a sizable nest egg takes shape to cover medical expenses.

This is relatively easy for richer Americans, who may be seeking additional savings vehicles after maxing out their annual 401(k) contributions.

For everyone else, it’s a real question whether they’ll have any money left over each year for health savings.

On Monday, the Commerce Department reported that the savings rate fell to minus 0.5 percent last year, meaning that average Americans not only spent all their after-tax cash but also dipped into previous savings or borrowed more money.

This is the first time this has happened on an annual basis since the Great Depression.

“One of the biggest problems with health savings accounts is that people with low or moderate incomes won’t be able to make a lot of contributions,” said Edwin Park, senior health policy analyst at the Center on Budget and Policy Priorities.

“That’s a real concern,” he said. “A lot of people won’t be able to make all their payments before reaching the deductible.”

Another concern is that as more employers push workers into health savings accounts — with or without matching funds — an increasing number of people may be left to their own devices in the largely unregulated individual insurance market.

“If you’re young and healthy, you might be able to get a pretty good policy,” Park observed. “If you’re not young and healthy, you’re going to have some pretty serious problems getting affordable coverage.”

John Holahan, director of health policy research at the nonpartisan Urban Institute, said the challenge in reforming the United States’ health care system is that there’s no one-size-fits-all policy out there.

“Most people don’t spend a lot on health care,” he said. “A minority of people spends an awful lot.”

The catch is that the millions of people comprising that minority will become increasingly more expensive to insure as healthier Americans pursue separate policies, thus spreading an insurer’s risk less broadly among the population.

“Health savings accounts may be good for people with no health problems,” Holahan said. “They’re not much good for society unless we address some of the issues surrounding people with health problems.”

In other words, health savings accounts are a stopgap at best. They may relieve financial pressure on major employers, and they may even teach people to be better health care consumers.

But they’ll do little if anything to improve overall coverage (let alone to insure the 46 million Americans now lacking health insurance).

“This isn’t a silver bullet,” said Fronstin at the Employee Benefit Research Institute. “This will help some people but not all people. It’s not a solution for all our health care problems.”

Bush won’t face these problems when he becomes a full-time ex-president — he’s got a retirement package awaiting him that the rest of us can only dream of.

This makes it easy for Bush to champion the idea of an “ownership society.” He has his.

You’re on your own.

Page C – 1
URL: http://sfgate.com/cgi-bin/article.cgi?file=/c/a/2006/02/01/BUGKSH0FQ01.DTL

The collapse of primary care, and the SGR

The Impending Collapse of Primary Care Medicine and Its Implications for the State of the Nation’s Health Care
American College of Physicians
January 30, 2006

Conclusion

Unless immediate and comprehensive reforms are implemented by Congress and CMS, primary care-the backbone of the U.S. health care system-will collapse.

The consequences will be higher costs and lower quality as patients find themselves in a confusing, fragmented and over-specialized system in which no one physician accepts responsibility for their care, and no one physician is accountable to them for the quality of care provided. The state of the nation’s health care in 2006 already is deficient, as evidenced by increasing costs, more uninsured persons, persistent gaps in quality, and the decline in the numbers of physicians going into primary care. But the state of the nation’s health care in the near future will be far worse if the collapse of primary care is allowed to happen.

The recommendations being advanced today by the American College of Physicians offer a comprehensive strategy to redesign how primary care is financed and delivered to allow physicians to provide care that is centered on the needs of patients. ACP believes that our recommendations, coupled with reforms in medical education and relief from student debt, can reverse the decline in the number of physicians going into primary care. The federal government must accept its responsibility to redesign Medicare payment policies to recognize the value of physician-guided care coordination through an advanced medical home, to increase reimbursement for undervalued evaluation and management services, to expand coverage and provide reimbursement for health information technology, and to link payments to quality in a way that is non-punitive and provides substantial increases–commensurate with effort-to those physicians who participate in quality improvement, measurement and reporting focused on the top 20 conditions described in the IOM’s Crossing the Quality Chasm report.

Such reform will help strengthen the state of the nation’s health care, now and in the future, by acknowledging and supporting the value and role of primary care physicians in delivering better care at lower cost.

http://www.acponline.org/hpp/statehc06_1.pdf

ACP Policy Monograph on The Advanced Medical Home:
http://www.acponline.org/hpp/statehc06_5.pdf

Comment: By Don McCanne, M.D.

One of the greatest crises in health care today is the accelerating deterioration of our primary care infrastructure. Shifting to a fragmented primary system of multiple specialized services, the current trend in the United States, has been well documented to increase costs and result in lower quality outcomes.

The concept of the advanced medical home will not be addressed here other than to say that it is important that we improve the way that health care services are delivered, especially with current demographic shifts and evolving needs. The policy monograph accessible through the link above can provide more information on this important concept.

Although there are many reasons for the decline in primary care, two of the most important are comparatively low pay, and very long, labor-intensive hours. Concern about the latter can be reduced by improving the practice environment through application of innovative thinking of the type that led to the advanced medical home model. A gratifying practice environment would certainly make primary care a more attractive practice choice.

What about compensation? Most would agree that, by U.S. standards, primary physicians are under-compensated. Most would also agree that the amount of our GDP delegated to physicians is about right. The obvious conclusion is that some of the compensation directed to specialists should be shifted to generalists. Specialist compensation would still be adequate to provide for a very comfortable lifestyle, and would meet needs such as college expenses for the children and very comfortable pensions. If a physician really needs a fleet of luxury automobiles and a condo in every climate, then medicine might not be a good career choice.

Under a single payer system, physician compensation would be negotiated. The playing field would be leveled wherein primary care representatives would advocate for a more appropriate generalist/specialist compensation ratio. It would be beneficial to remove money as a major factor in the decision of a physician-in-training on whether to enter primary care or a specialty.

The process of negotiating compensation with the single payer administrators should be contrasted with our current system of paying physicians. The ACP report, as an example, is appropriately critical of the SGR (sustainable growth rate) method used by Medicare. With rigid fee schedules, physicians increase the frequency and intensity of services. The SGR is designed to keep the growth of spending in line with inflation and demographic changes.

As some physicians siphon off more funds by increases in frequency and intensity, downward adjustments must be made in the per unit payments. This penalizes physicians who make greater efforts to ensure that services are appropriate and efficient.

Although total Medicare spending for physicians is adjusted upwards, the per unit payments were reduced 4.4% this year. In the budget reconciliation process taking place now, these cuts will be restored. But look at what is happening.

S. 1932 – Deficit Reduction Act of 2005
Cost Estimate
Congressional Budget Office
January 27, 2006

“The act would increase payment rates for physicians’ services to the 2005 level (those payment rates were reduced by 4.4 percent on January 1, 2006).

That provision would increase outlays during the 2006-2009 period, and would reduce Medicare’s payments to physicians below current-law levels in subsequent years.”

http://www.cbo.gov/ftpdocs/70xx/doc7028/s1932conf.pdf

Further comment: You probably read that too fast, so let’s stop and see what it says. It was anticipated that the same dynamics would continue and that additional cuts beyond this year’s 4.4% would eventually add up to about a 25% reduction. Those reductions are being eliminated through 2009, but in 2010, the full level of reductions will be reinstituted with one dramatic drop in rates. But wait, there’s more! The funds that will be used to reestablish 2005 rates through 2009 are only a loan. As of 2010, the repayment of the loan will be added to the scheduled reductions resulting in a drop in Medicare compensation rates that virtually no physician will tolerate. By coincidence, that is the same year that Congress has called for the beginning of the process to entice physicians to exit the traditional Medicare program and provide their services through the private Medicare Advantage plans. What a nefarious plot! (In fairness, the reconciliation act does call for a report from the Medicare Payment Advisory Commission for suggestions on replacement of the SGR system, though primarily through methods of controlling volume growth – another problematic approach.)

The $2 trillion that we are spending is enough to provide high quality care for everyone, but it will never happen under our current flawed system. We won’t get it right until we establish a single national health insurance program. Once we have that in place then we will have the ability to allocate sufficient resources to our primary care infrastructure to ensure higher quality, more cost-effective care for everyone.

"We Will Educate Our Colleagues, the Policy Community, the Media, and Our Patients": Physicians for a National Health Program Meet in Philadelphia

by Andy Coates
Published in MRZine

Physicians for a National Health Program held its annual meeting on December 10, 2005. Originally planned for New Orleans, it was relocated to Philadelphia after Hurricane Katrina. Founded in 1987, the organization has over 14,000 members nationally. PNHP advocates and educates for a single national health insurance plan: in the words of PNHP National Coordinator Quentin Young, MD, “everybody in, nobody out.” With about 250 in attendance, the meeting consisted of a series of panel discussions.

The PNHP “Proposal of the Physicians’ Working Group for Single-Payer National Health Insurance” has been published in the New England Journal of Medicine (in 1989) and the Journal of the American Medical Association (in 2003). Over 12,000 physicians endorsed the plan in 2003-2004. The proposed plan would cover all necessary medical care, including mental health and dental care, long-term care, hospitalization, and all prescription medications.

The Physicians’ Proposal articulates four principles:

1. Access to comprehensive health care is a human right. It is the responsibility of society, through its governement, to assure this right. Private insurance firms’ past record disqualifies them from a central role in managing health care.

2. The right to choose and change one’s physician is fundamental to patient autonomy. Patients should be free to seek care from any licensed health care professional.

3. Pursuit of corporate profit and personal fortune have no place in caregiving and they create enormous waste. The U.S. already spends enough to provide comprehensive health care to all Americans with no increase in total costs. However, the vast health care resources now squandered on bureaucracy (mostly due to efforts to divert costs to other payers or onto patients themselves), profits, marketing, and useless or even harmful medical interventions must be shifted to needed care.

4. In a democracy, the public should set overall heatlh policies. Personal medical decisions must be made by patients with their caregivers, not by corporate or government bureaucrats.

PNHP President John Geyman, MD, welcomed participants to the meeting with brief remarks. Former editor of The Journal of Family Practice and author of many works including the Textbook of Rural Medicine, Dr. Geyman has written several books on the crisis in American health care.

Dr. Geyman’s soon-to-be-released book Shredding the Social Contract: The Privatization of Medicare (Common Courage Press, 2006) was available at the meeting. He writes in its first chapter that “the great debate of the 21st century will be about how the new rules for a global market can be rewritten in the public interest. The current model of ‘corporate managed trade’ serves corporate self-interest at the expense of entire populations.”

Steffie Woolhandler, MD, PNHP co-founder and associate professor of medicine at Harvard Medical School, started the day at 78 rpm with a brisk update of the PHNP slideshow, an activists’ speaking tool that digests evidence from the medical literature of the injustice, inequality, and inefficiency of health care in the United States.

Dr. Woolhandler explained, for example, that it is a myth that those who have trouble paying for care are uninsured but young and healthy. In a study Dr. Woolhandler published this year with PNHP co-founder David Himmelstein, MD, Elizabeth Warren, and Deborah Thorne, “Illness and Injury as Contributors to Bankruptcy,” over half of those declaring bankruptcy were driven into debt by medical costs. Of these, three quarters of debtors had insurance at the onset of illness and three fifths had private insurance at the onset of illness!

As part of a panel discussion on market-driven health care, Adewale Troutman, MD, spoke. An author, with former U.S. surgeon general David Satcher, MD, of “What If We Were Equal? A Comparison of the Black-White Mortality Gap in 1960 and 2000,” Dr. Troutman illustrated, with the case of a 56-year-old African American woman, how the failures of the American health care system lead to avoidable death and suffering. He advocated using the terms “injustice” and “inequality” instead of “disparities.” He suggested Episode III of Race: The Power of an Illusion, which looks at the question of housing, as a useful video analogy to portray the systemic racism in U.S. health care.

A panel devoted to Canada proved so popular that an extra session had to be organized for continued discussion. Steven Barrett, an attorney who was counsel for the Canadian Labor Congress before the Supreme Court of Canada in the Chaoulli v. Quebec case, gave an overview of medical malpractice in Canada, which is scarcely comparable to the United States. (Among many differences, with a single-payer system like the Canada’s Medicare, future health care costs need not be considered in lawsuits.) Joel Lexchin, MD, emergency physician at the University Health Network in Toronto and author of over 60 peer-reviewed articles, spoke on the questions of pharmaceutical regulation and drug costs, comparing the U.S. and Canada. Public health official and family physician Rosana Pellizzari, MD, discussed the Chaoulli decision and the struggle to resist privatization of health care in Canada. Along the way, Dr. Pellizzari addressed the problem of waitlists in Canada’s health system. She included a slide of the lawn sign of the Canadian Health Coalition: “Protect Medicare: Don’t privatize it!” Dr. Himmelstein suggested that it was a yard sign that might do just as well south of the Canadian border.

Rocky White, MD, an internist from Alamosa, Colorado, a self-described “hard-core, dyed-in-the-wool, capitalistic, fee-for-service Republican” gave an animated speech. Dr. White became convinced of the need for a single-payer solution after his Nebraska multi-specialty group was forced into a buy-out by the local hospital in 2004 due to the increasing number of uninsured and underinsured. He called upon health care reform activists to work to unite diverse communities around the demand for single-payer health reform, no matter how deep disagreements on other issues might be. He quoted from the Bible to show how he has called upon his own conservative Christian community to stand up for the uninsured. Dr. White also spoke about Martin Luther King, Jr., the 1965 Selma march across the Edmund Pettis Bridge, and passage of the Voting Rights Act as a hopeful example of the tempo that large movements for social change may develop.

Founder of Vermont Health Care for All, Deb Richter, MD, a Vermont family physician and past PNHP president, spoke on the panel together with Dr. White. She showed slides from a talk she has given hundreds of times to make the case that health care reform is in the interest of business. She reported that business people respond favorably to the argument that much of health care costs are fixed infrastructure costs (perhaps more than 70%) that should be borne by the whole society. To illustrate, she tells business people that, when someone goes to the emergency room, we are not paying for the sick person but for the nurse who will be there at the ready.

Ana Malinow, MD, pediatrician at the Harris County Hospital District Ben Taub General Hospital Pediatric Emergency Center and co-founder of Health Care for All Texas, spoke on lessons from Hurricane Katrina. An organizer of the Houston Astrodome medical clinic — where over 15,000 patient visits took place over a span of two weeks, including 2,000 visits in one day, and at one point, 100 visits per hour — Dr. Malinow said that practicing medicine had never been so rewarding for the physicians involved: the emergency conditions forced bureaucracy and billing paperwork to vanish, leaving the doctor-patient relationship unfettered. She underscored the strain that Hurricane Katrina placed upon the already stressed Texas health system — following Hurricane Katrina, some 373,000 people re-located to Texas. (Of these, 59,680 had been covered by Medicaid.) The annual increased cost to the state of Texas could be about $1.6 billion — provided the health system can absorb the increased demand for services.

From Louisville, Kentucky, Garrett Adams, MD reported on the vigorous work the PNHP chapter there, particularly with successful interventions at a broad range of meetings, “including those to which we were invited as well as those at which we were not invited to speak.” Also in attendance from Louisville was Kay Tillow, Director of the Nurses Professional Organization, who has spearheaded an effort to gain union support for HR 676, “The United States Health Insurance Act.” At dinner, the Executive Director of the California Nurses Association, Rose Ann DeMoro spoke to the PNHP members. The California Nurses Association recently merged with the AFL-CIO with the specific goal of leading a union campaign for a single-payer health care system.

Dr. Himmelstein, as a panel respondant, offered remarks on the importance of unconventional thought and a diversity of approaches to building a movement for a single-payer health system — just as the diversity of patients demands a diversity of doctors. He told a story of a patient, a smoker, who had suffered a heart attack. After the episode subsided, the patient went to see a cardiologist. The cardiologist asked if the patient had quit smoking. The patient replied that he had smoked for decades and had no intention of quitting just because he had had a heart attack. The cardiologist, an intense and excitable man, began jumping up and down, swearing at the patient and yelling words to the effect that he would “not take care of a goddamned smoker.” This so frightened the man that he quit smoking — “which is either brilliant medicine or utter malpractice,” Dr. Himmelstein concluded.

Don McCanne, MD was welcomed by warm applause as he participated in afternoon panel discussions from the stage. He is the author of the listserv Quote of the Day, which PNHP activists rely upon. He concluded his remarks on the strategy for health reform by saying: “We have a mission to educate. We will educate our colleagues, the policy community, the media, and our patients.”

http://mrzine.monthlyreview.org/coates050106.html

Half of U.S. Health Care Workers Get Flu Shots

FOR IMMEDIATE RELEASE
JANUARY 24, 2006

Cambridge Health Alliance: Alison Harris, aharris@cha.harvard.edu (617) 499-8323 UCLA: Elaine Schmidt, eschmidt@mednet.ucla.edu (310) 794-2272

Click Here For Study Text
RESEARCH ALERT

LESS THAN HALF OF U.S. HEALTHCARE WORKERS GET FLU SHOTS FINDS UCLA/HARVARD STUDY; HEALTHCARE WORKER’S LACK OF ACCESS TO HEALTHCARE PUTS PATIENTS AT RISK

FINDINGS: UCLA and Harvard researchers analyzed data from the 2000 National Health Interview Survey to measure flu vaccination rates among U.S. healthcare workers. From a nationally representative sample of 1,651 workers, the overall vaccination rate was only 38 percent. Rates were particularly low in workers who were health aides (e.g. nurses aides, medical assistants or orderlies), African American, or under 50.

IMPACT: The low flu vaccination rate among healthcare workers increases their likelihood of contracting the flu and passing it to patients. Healthcare workers, especially those who are minority, poor, or young, need both better education and improved access to primary care in order to reduce the spread of flu. Inequalities in healthcare currently undermine our ability to stop flu transmission. Should an epidemic of bird flu emerge, such inequalities will hamstring efforts to contain it.

BACKGROUND: More than 36,000 people died between 1990 and 1999 from influenza, the sixth leading cause of death in the nation. A severe pandemic of bird flu might kill many times that number. The Centers for Disease Control and Prevention recommend vaccinating healthcare workers with direct patient contact as a priority in preventing spread of the disease. Yet many healthcare workers lack access to healthcare for their own medical needs. Earlier studies have found that 12.2% of healthcare workers have no health insurance coverage. Workplace vaccination programs are also failing to reach such workers.

AUTHORS: Dr. William King, visiting assistant physician, Department of Infectious Diseases, David Geffen School of Medicine at UCLA; and Dr. Steffie Woolhandler, physician at Cambridge Health Alliance and associate professor of medicine at Harvard Medical School, are available for interviews. Two of the other authors work at Cambridge Health Alliance: David H. Bor (Infectious Disease Specialist and Chairman of the Department of Medicine) and David U. Himmelstein (Associate Professor of Medicine, Harvard Medical School).

JOURNAL: The research will appear in the February edition of the peer-reviewed Journal of General Internal Medicine, Vol. 21, No. 2.

FUNDING: Funding from the National Institutes of Health supported the research.

Take a Hike

By Nicholas D. Kristof
New York Times, op-ed
January 31, 2006

First, a quiz: What “vegetable” do American infants and toddlers eat most?

Weep, for it’s the French fry. A major study conducted by Gerber found that up to one-third of young children don’t eat any vegetable daily, but that the French fry is the single most common one they do consume. And among children age 19 months to 24 months, 20 percent eat French fries at least once a day.

President Bush is slated to discuss health care in his State of the Union address tonight. It’s about time: it’s scandalous that babies born in the United States are less likely to survive their first year than babies born in Slovenia. But the solutions to the health crisis lie less in reorganizing medical treatment than in improving public health ā€” such as steering kids away from French fries.

Think of two of the biggest breakthroughs in improving Americans’ health over the last generation or two. They had nothing to do with doctors, but arose from higher cigarette taxes and other efforts to discourage smoking, and from compulsory seatbelts and improvements in auto safety.

So what can we do? In my last column, I praised Gov. Mike Huckabee of Arkansas for leading a series of initiatives to confront obesity and lack of exercise. Health experts suggest a variety of others (a book by Tom Farley and Deborah Cohen published last year, “Prescription for a Healthy Nation,” offers excellent ideas). Building on them, here are my suggestions:

Ban soda, potato chips and other unhealthy snacks from American schools, and discourage them in the workplace. It’s unforgivable that our schools help to send children on the road to diabetes. Obesity kills far more Americans than heroin does.

Sell cigarettes only in pharmacies and raise cigarette taxes. Smoking still kills 440,000 Americans a year, including 50,000 nonsmokers. One study found that raising the federal excise tax on cigarettes by 75 cents a pack would generate $13.1 billion in additional revenue per year and cut youth smoking by 13 percent and adult smoking by 3 percent, saving 1.2 million lives. Let’s do it.

Tax junk foods. Some 19 states already impose taxes on particular junk foods, like soda, and a nickel-a-can tax on soft drinks would generate $7 billion in revenues. In particular, we should tax high-fructose corn syrup, which is used as a sweetener in a vast array of products and is a major culprit in the fattening of America.

Promote jogging and biking. Since we pay for all the consequences of inactivity (like those heart bypasses), we should encourage exercise. We should build more bicycle paths and turn more streets over to bikers, skaters and pedestrians ā€” starting with Sixth Avenue in Manhattan.

Encourage exercise breaks. Governor Huckabee gives state employees a 30-minute daily “exercise break” that is modeled on the smoking breaks that smokers take. It’s a good idea.

Distribute fruits and veggies to certain low-income people, as Maine does in FarmShare, a potent antipoverty program.

Expand P.E. It’s ridiculous that schools have been cutting back on P.E. when students need more of it. Likewise, kids should be encouraged to walk to school. When my eldest son attended a Japanese elementary school in Tokyo, the school required him to walk or bike to school beginning in the first grade.

Design better stairways. The default system for getting from one floor to the next in America (but not the rest of the world) is the elevator. Let’s encourage stair use instead, by having new buildings constructed with open and appealing stairs that are actually meant to be used ā€” while perhaps making elevators dark, dingy and out of the way.

I’m sure there are other creative approaches. I’ve thought of subsidies for running shoes, which make more sense than subsidies for corn. And since the average American child spends 24 hours a week sitting in front of a television, how about developing televisions for kids that are powered by Exercycles?

Look, personally I’m convinced that we need universal health care based on a single-payer system. But that is not politically feasible now, while a systematic assault on the causes of American ill health could make a big difference.

Granted, a War on Sloth isn’t as dramatic for the Bush administration as a War on Terrorism. And for Democrats, attacking junk food isn’t as attention-grabbing as denouncing corruption in Congress. But there is perhaps no area of public policy where it would be easier to save the lives of countless Americans than in promoting public health.

Henry Aaron on rationing

A healthcare prescription that’s hard to swallow Rationing may be the only way to ensure that access for all remains affordable
By Henry Aaron
Los Angeles Times
January 30, 2006

Something needs to be done, but no one seems quite ready to come forward with a solution. The only thing American politicians all agree on is this: The United States must at all costs avoid healthcare “rationing.” One after another, they step forward to deplore this much-hated approach, insisting they will fight off efforts to deny the insured any beneficial service that their insurance covers.

But it’s too late for that. The truth is that sensible rationing may be the only way to make sure that fair access to healthcare for all remains affordable. The U.S. can no longer afford to offer every available service no matter how high the cost or how small the benefit to the patient.

Intelligent healthcare rationing – limiting the availability of care that costs society more to produce than it is worth to patients – is not a horror to be avoided. It’s a regretfully necessary limit to sustain fair access to healthcare that is worth what it costs.

Some people argue that simply boosting deductibles will encourage consumers to squeeze out low-benefit care because they won’t want to spend their own money without a high chance of a good outcome. Unfortunately, this approach is being greatly oversold. First, patients whose healthcare costs more than $4,000 a year consume roughly 80% of all health services. They are, of course, the sickest – and their doctors, acting in good faith, prescribe tests, procedures and drugs, most of which are demonstrably beneficial but some of which have only a small chance of helping the patients much, if at all. These very sick patients are in no position to decide which treatments are cost effective, which are likely to work and which are probably wasteful. So “consumer-directed healthcare” – a clever marketing label for high-deductible insurance that makes the patient pay the first $4,000 – won’t do much to curb high-cost, low-benefit treatments for those patients.

Other analysts believe that computerizing healthcare records and billing would reduce paperwork and costly medical errors. But careful estimates put the savings at no more than about 3%.

The kind of rationing that is necessary will require steps that may now seem unimaginable to most Americans and to elected officials, including restrictions on the purchase of costly equipment, caps on hospital budgets and well-enforced protocols for using treatments that have been proved effective for various conditions. Failure to ration, however, will mean that the cost of caring for the aged, disabled and poor will require astronomical tax increases – and that working Americans will have less money to spend on anything other than healthcare. Employers will find it increasingly unattractive to sponsor coverage for workers, and workers will refuse increasingly costly coverage. What Winston Churchill said of democracy may also apply to healthcare rationing: the worst system – except for all the others.

http://www.latimes.com/news/opinion/commentary/la-oe-aaron30jan30,0,885710,print.story?coll=la-news-comment-opinions

Comment: By Don McCanne, M.D.

“Ration refers to equitable division in limited portions of scarce, often necessary, items.” (The American Heritage Dictionary of the English Language, Fourth Edition)

Henry Aaron’s leading message of the past decade is an important one. Health care spending has reached a level that we must now consider “limiting the availability of care that costs society more to produce than it is worth to patients.” “Rationing” may not be quite the appropriate term since health care in the United States is not a scarce resource, though our distribution is limited based on our flawed system of funding care. Limiting access based on ability to pay does make it a somewhat scarce resource for those who cannot afford to pay for their care.

Although Aaron’s message on controlling spending on wasteful high-tech excesses is an important one, his message on how we do that seems muddled, if not obstructionist. Single payer activists are certainly offended with his pompous assertion that “no one seems quite ready to come forward with a solution.” Also, he does not move reform forward when he attacks a seminal article on administrative waste as “questionable answers to a questionable question.”

The single-payer model of national health insurance would accomplish much of Aaron’s goal, including measures that he explicitly endorses: budgeting of capital improvements, global budgeting for hospitals, and increased use of evidence-based medicine. In spite of his attack on the numbers, he does concede that much is wasted in excess administrative costs, another potential source for controlling spending. Policy experts are already aware of the other effective single-payer methods of controlling costs while improving quality and value, so they won’t be repeated here.

One caveat: We cannot allow Aaron’s use of the term “rationing” to be used by the opponents of single payer to attack our model. It has been demonstrated repeatedly that improving use of health care resources prevents excessive queues. Also, a single-payer purchaser is in a position to demand value for new innovations. That means only that worthless technology would be rejected. The pharmaceutical and high-tech industries will never walk away from the $2 trillion that we are spending on health care, but they are going to have to show us that their advances provide value.

Yes, all systems ration care, but some systems use their resources better than others. With our inhumane method of rationing by ability to pay, we do the worst. By switching to a single payer system of allocating our $2 trillion, we would change the dialogue on reform from that of “rationing” to that of “rational.”