PNHP

Medicare bill calls for vote of Congress on health care coverage for all Americans

Medicare bill calls for vote of Congress on health care coverage for all Americans

H.R.1
Medicare Prescription Drug, Improvement, and Modernization Act of 2003

Title X – Medicaid and Miscellaneous Provisions

Subtitle B – Miscellaneous Provisions

Sec. 1014 – Health Care that Works for All Americans: Citizens Health Care Working Group.

(b) Purposes – The purposes of this section are –

(1) to provide for a nationwide public debate about improving the health care system to provide every American with the ability to obtain quality, affordable health care coverage; and

(2) to provide for a vote by Congress on the recommendations that result from the debate.

(c) Establishment – The Secretary, acting through the Agency for Healthcare Research and Quality, shall establish an entity to be known as the Citizens’ Health Care Working Group (referred to in this section as the `Working Group’).

(d) Membership –

(1) Number and appointment – The Working Group shall be composed of 15 members. One member shall be the Secretary. The Comptroller General of the United States shall appoint 14 members.

f) Designation of the Chairperson – Not later than 15 days after the date on which all members of the Working Group have been appointed under subsection

(d)(1), the Comptroller General shall designate the chairperson of the Working Group.

http://thomas.loc.gov/ (In the “Bill Number” box insert “H.R.1″ and click Search”)

General Accounting Office
GAO Health Care Forum
January 13, 2004
Slide presentation
David M. Walker, Comptroller General of the United States

Slide 49:

The presence of insurance blunts sensitivity to the price of services and results in the tendency to overconsume.

Slide 51:

Tax incentives can serve to mask the cost of health care and impair achievement of desired cost-containment outcomes.

Administrative burdens reduce market efficiency and value to consumers.

Slide 52:

Reforms, although comprehensive, may need to be incremental in order to minimize disruptions and facilitate political consensus.

http://www.gao.gov/index.html (Under “From the Comptroller General” click “Slide presentation” for January 13, 2004. Then click “Health Care System Crisis: Significant Challenges Point to Need for Fundamental Reform.”)

Comment: An important provision in the Medicare Prescription Drug Bill is the requirement of “… a nationwide public debate about improving the health care system to provide every American with the ability to obtain quality, affordable health care coverage.” Further, the process provides for “… a vote by Congress on the recommendations that result from the debate.”

It is crucial that we closely observe this process that will result in a vote in Congress on systemic health care changes theoretically designed to bring quality care to every American.

The current Comptroller General, David Walker, will appoint 14 of the 15 members and the Chairperson of the Working Group. Since David Walker will be able to control the ideological complexion of the Working Group, we should try to understand his views.

Based on his health care forum presentation this month, it appears that he supports incremental reforms in the marketplace that place a greater emphasis on increasing price sensitivity for patients while decreasing the financial insulation provided by insurance.

Bill Thomas, as Co-Chair of the Bipartisan Medicare Commission helped to prove that it is nearly impossible to reach political consensus on important social issues through a bipartisan process. In drafting the Medicare Prescription Drug bill, Thomas and his colleagues made certain that the recommendations for comprehensive reform on which Congress will eventually vote will not be bipartisan, but will be produced by the independent Comptroller General (who just happens to share some of Thomas’ ideology on health care reform).

As structured, we have reason to anticipate that the Working Group will provide us with a unanimous recommendation for expanding health savings accounts, eliminating deductibility of employer-sponsored plans, Limiting tax deductibility to individually-owned catastrophic plans, shifting Medicare and Medicaid to private, marketplace plans with a commensurate reduction in the level of public funding, etc., etc.

It is unfortunate that this bill authorizes spending $6 million for this potentially phony partisan study when we really do need a consensus on comprehensive health care reform. Maybe we should approach David Walker in advance to see if he might consider allowing a true cross section of Americans to nominate the members of the committee. He is a man of integrity, even if biased, and he might consider a more democratic process.

(If you download the side show, be sure also to look at the other slides, especially slide 8. It demonstrates dramatically why some say that Social Security and Medicare spending will have to be dramatically reduced if we are to protect current tax cuts.)

Sure cure for health care

Sure cure for health care
By MARTIN DYCKMAN, Times Columnist
Published January 25, 2004

TALLAHASSEE – President Bush didn’t say a word about the moon or Mars during his State of the Union address. He did talk about health insurance. It must have been the polls that brought him back to earth. Listen closely, and you’ll hear every candidate addressing the issue. Trouble is, the ones who are speaking most sensibly are either out of the race or were never really in it.

Nothing short of universal coverage will work. For confirmation, read the recent report of the Institute of Medicine, a branch of the National Academy of Sciences, which observed that the lack of health insurance for 43-million Americans is also bad for those who do have it, and concluded that everyone should have it by 2010.

“We all bear the costs of the current nonsystem… ,” the report said. “Doing nothing and maintaining the status quo… is expensive. The nation suffers losses due to ill health, impaired development, early deaths and lost productivity. The lack of health insurance is a destabilizing factor in families and for health care institutions that serve uninsured patients. In fact, the presence of uninsurance creates insecurity for everyone, even those with health insurance today, because losing that coverage tomorrow is so easy. Universal insurance coverage will benefit all Americans, enhance the great promise of our health care system, and reinforce our values as a democratic society. It is time for our nation to extend coverage to everyone.”

The only candidates to propose universal coverage were Dick Gephardt and Carol Mosely Braun, who are out of the race, and Dennis Kucinich and Al Sharpton, whose chances are beyond remote.

Gephardt wanted to require employers to provide coverage, but the issue did not play well for him in Iowa. One likely reason is that Iowans are already better insured than other Americans. Only 8.5 percent of them lack coverage.

Sharpton’s plank on the issue calls for a constitutional amendment declaring health care to be a human right. That has no more chance than he does. Kucinich, on the other hand, has a specifically detailed proposal that would essentially extend Medicare to everyone. Our single-payer system for the elderly, which already runs more efficiently and with lower overhead than anything else about health care, would become single-payer for everybody.

This isn’t original with Kucinich. Floridians will recognize it as what Sam Gibbons, the former congressman from Tampa, wanted to do.

“Everybody’s in Medicare,” he once pointed out. “Some of us get it. Others pay.”

For not heeding Gibbons, President Clinton blew what looked like the last chance to achieve universal health care. He also lost Democratic control of Congress, for perhaps decades to come. This year marks the 10th anniversary of Clinton’s debacle. Rep. Dan Rostenkowski, the departing chairman of the Ways and Means Committee was accurate in pointing out that Clinton, for trying to do business with the health insurance industry, came out with a plan “too complex to understand and so riddled with centrist compromise that it was a recipe for political roadkill.”

It bears remembering that the American Medical Association once opposed Medicare as intensely as the health insurance racket is opposed to universal coverage. Today, nobody would dare propose to repeal Medicare. Congress has just broadened it, but only for seniors. The sad part of that, as the Institute of Medicine report implies, is that Medicare would cost even less per capita if new enrollees were as healthy as they should be – and as they would be if everyone were insured regardless of age.

The president’s proposals call for refundable tax credits to help low-income people buy their own insurance and for full tax deductibility for wealthier people who buy catastrophic health care coverage. Bush notably didn’t say what this would cost, which would be a lot.

However much that turns out to be, it wouldn’t be efficiently spent. The insurance will cost too much. In Florida, the average cost of a small-group family policy is more than $1,000 a month, which is why so few employers are willing to subsidize more than a small part of it.

To make a long story short, the reason insurance costs so much is that not everybody has it. Some don’t think they need it; others simply can’t afford it. So the dwindling proportion of those who remain in the market are likely to be less healthy and more costly.

Two things are fundamental about health insurance. The more you need it, the less you can afford it. The more who have it, the less it costs. Imagine Medicare as an optional program. Or Social Security. The only way to make it affordable for everybody is to see that everyone has it – as a requirement for employers, or as an obligation of individuals (like the Florida law that requires motorists to insure themselves) or as a single-payer system financed by government taxes. Every objective analysis has concluded this would cost less than we’re spending now. That is, of course, hardly the only reason why it would be the right thing to do.

Sen. Kennedy's universal coverage program

From the office of Senator Edward Kennedy
For Immediate Release
January 22, 2004
Senator Edward M. Kennedy Introduces the Health Security and
Affordability Act

A new effort is… needed to end the crisis of the uninsured and provide comprehensive health insurance for all Americans. We can make health insurance affordable for individuals, businesses, and government.

I intend to introduce new legislation to do that-the Health Security and affordability Act. It will rely on the employer-based system to do that, because the most realistic way to reach this goal is through a combination of job-based coverage for workers and dependents where possible, and insurance through public and private programs where needed.

The cornerstone of universal health care should be a requirement that employers share in the responsibility to provide quality health insurance for employees and their dependents. Eighty percent of the uninsured are workers or family members of workers. Employer-based health insurance provides coverage for 170 million Americans today. We should improve it, not scrap it.

For decades, we have required employers to contribute to Social Security and
to Medicare. We require them to pay a minimum wage, and contribute to unemployment insurance. Now it is time to say that they also have an obligation to contribute to the cost of health insurance for their employees.

A solid majority of businesses already provide health insurance to their workers, and the rest should fulfill that obligation, too. The Health Security and Affordability Act will require all large businesses to provide coverage as good as the coverage now provided to every member of Congress and other federal employees. Small businesses will be asked to contribute to coverage based on their ability to pay.

In asking businesses to fulfill this obligation, government has an obligation too-to assist them in making health care affordable. Use of information technology, paying for results, improving quality, and a new emphasis on prevention will reduce health care costs for society as a whole. The bill I propose will include an additional guarantee. No employers will have to spend more than 12% of their payroll for health care for their employees. If health costs rise faster than a fair average of other costs, the government will cover the difference. We will protect America’s ability to compete in the world, and we will keep wages and profits from being consumed by health care costs.

For individuals without access to employment-based coverage, we will establish new options based on the Federal Employees Health Benefit Program-the program that provides good health insurance for members of Congress and Federal workers. The same options now available to members of Congress should be available to those not qualifying for coverage from other sources. Businesses can participate as well, so that they can make these choices available to their employees if they feel they offer better value.

Premiums for the plan will be based on ability to pay, including cost-sharing for low income families. It will also help low-income workers covered by their employer’s plan.

http://kennedy.senate.gov/

Comment: This is an historical moment. We are truly at a major fork in the road to comprehensive health care reform. The nation now agrees that reform is essential. We agree that health care must be affordable and accessible for everyone. Virtually all fully-informed observers of the health care scene recognize that the problems require a national solution. They agree that coverage must be universal. And most agree that now is the time to seriously address this problem.

The most important unresolved issue is whether universal coverage alone is an acceptable goal, or we need to include other goals such as equity and efficiency. It is a crucial decision. Reform has become an imperative. The model selected will not be a temporary measure to make do until we can enact something better. Although continuing refinements would be inevitable, the fundamental structure will be with of for decades, if not longer.

Sen. Kennedy’s proposal is a dramatic improvement over our existing system.
But, whether employer-sponsored plans or individual plans similar to the
federal employee options (FEHBP-type coverage), Sen. Kennedy’s proposal
will leave in place the current private health plans.

Private plan choices no longer include the option of comprehensive indemnity
coverage, but they are limited to variations of HMO or PPO managed care
plans plus self-insured programs. All plans today manipulate premiums, benefits (including restricted provider lists) and cost sharing to match the particular targeted patient populations. To ensure an equitable system of coverage for all, the federal government would have to mandate a comprehensive, accessible benefit package, set reasonable, modest limits on cost sharing, and ensure that premiums remain affordable. The Medicare + Choice options demonstrate that private plans cannot comply with such mandates without being granted extra taxpayer funds (as the Bush administration just did with the 10.6% increase for Medicare Advantage plans). Why should we lock into the system forever administratively-wasteful, superfluous, private plan bureaucracies? All studies confirm that a single, publicly-owned insurer would provide the administrative services much more efficiently. And we wouldn’t have private plans manipulating premiums, benefits and cost sharing to their own benefit.

Now that we have come to that fork in the road, let’s not merely follow Yogi
Berra’s advice and “take it,” but let’s intensify our efforts to be certain that policymakers and the public choose a path only as a fully-reasoned decision. One path offers universal coverage, and the other path adds equity, comprehensiveness, efficiency, affordability, a better framework for an integrated information technology system for error reduction and improved
resource allocation, and innumerable other important goals that we can achieve.

The administrative challenges of establishing our own public insurance program would not be much greater than those we faced when we established the Medicare and Medicaid programs. In contrast, we would face greater administrative issues for a complex program of large employer-mandated plans, separate small employer programs, multiple FEHBP-type individual plans, and an administrative nightmare of trying to match various employer and individual funding sources with the fragmented system of intermediary plans. It’s not the task of establishing a system of public funding, but it’s the special interests that continue to block reform.

As Sen. Kennedy says, “… let’s get it done-if not this year, then next year with a new Congress and a new Administration elected with a mandate to get it done.” He’s right. But let’s be sure that everyone understands what we are doing. We will have to live with it for a very long time.

Sen. Kennedy’s universal coverage program

From the office of Senator Edward Kennedy
For Immediate Release
January 22, 2004
Senator Edward M. Kennedy Introduces the Health Security and
Affordability Act

A new effort is… needed to end the crisis of the uninsured and provide comprehensive health insurance for all Americans. We can make health insurance affordable for individuals, businesses, and government.

I intend to introduce new legislation to do that-the Health Security and affordability Act. It will rely on the employer-based system to do that, because the most realistic way to reach this goal is through a combination of job-based coverage for workers and dependents where possible, and insurance through public and private programs where needed.

The cornerstone of universal health care should be a requirement that employers share in the responsibility to provide quality health insurance for employees and their dependents. Eighty percent of the uninsured are workers or family members of workers. Employer-based health insurance provides coverage for 170 million Americans today. We should improve it, not scrap it.

For decades, we have required employers to contribute to Social Security and
to Medicare. We require them to pay a minimum wage, and contribute to unemployment insurance. Now it is time to say that they also have an obligation to contribute to the cost of health insurance for their employees.

A solid majority of businesses already provide health insurance to their workers, and the rest should fulfill that obligation, too. The Health Security and Affordability Act will require all large businesses to provide coverage as good as the coverage now provided to every member of Congress and other federal employees. Small businesses will be asked to contribute to coverage based on their ability to pay.

In asking businesses to fulfill this obligation, government has an obligation too-to assist them in making health care affordable. Use of information technology, paying for results, improving quality, and a new emphasis on prevention will reduce health care costs for society as a whole. The bill I propose will include an additional guarantee. No employers will have to spend more than 12% of their payroll for health care for their employees. If health costs rise faster than a fair average of other costs, the government will cover the difference. We will protect America’s ability to compete in the world, and we will keep wages and profits from being consumed by health care costs.

For individuals without access to employment-based coverage, we will establish new options based on the Federal Employees Health Benefit Program-the program that provides good health insurance for members of Congress and Federal workers. The same options now available to members of Congress should be available to those not qualifying for coverage from other sources. Businesses can participate as well, so that they can make these choices available to their employees if they feel they offer better value.

Premiums for the plan will be based on ability to pay, including cost-sharing for low income families. It will also help low-income workers covered by their employer’s plan.

http://kennedy.senate.gov/

Comment: This is an historical moment. We are truly at a major fork in the road to comprehensive health care reform. The nation now agrees that reform is essential. We agree that health care must be affordable and accessible for everyone. Virtually all fully-informed observers of the health care scene recognize that the problems require a national solution. They agree that coverage must be universal. And most agree that now is the time to seriously address this problem.

The most important unresolved issue is whether universal coverage alone is an acceptable goal, or we need to include other goals such as equity and efficiency. It is a crucial decision. Reform has become an imperative. The model selected will not be a temporary measure to make do until we can enact something better. Although continuing refinements would be inevitable, the fundamental structure will be with of for decades, if not longer.

Sen. Kennedy’s proposal is a dramatic improvement over our existing system.
But, whether employer-sponsored plans or individual plans similar to the
federal employee options (FEHBP-type coverage), Sen. Kennedy’s proposal
will leave in place the current private health plans.

Private plan choices no longer include the option of comprehensive indemnity
coverage, but they are limited to variations of HMO or PPO managed care
plans plus self-insured programs. All plans today manipulate premiums, benefits (including restricted provider lists) and cost sharing to match the particular targeted patient populations. To ensure an equitable system of coverage for all, the federal government would have to mandate a comprehensive, accessible benefit package, set reasonable, modest limits on cost sharing, and ensure that premiums remain affordable. The Medicare + Choice options demonstrate that private plans cannot comply with such mandates without being granted extra taxpayer funds (as the Bush administration just did with the 10.6% increase for Medicare Advantage plans). Why should we lock into the system forever administratively-wasteful, superfluous, private plan bureaucracies? All studies confirm that a single, publicly-owned insurer would provide the administrative services much more efficiently. And we wouldn’t have private plans manipulating premiums, benefits and cost sharing to their own benefit.

Now that we have come to that fork in the road, let’s not merely follow Yogi
Berra’s advice and “take it,” but let’s intensify our efforts to be certain that policymakers and the public choose a path only as a fully-reasoned decision. One path offers universal coverage, and the other path adds equity, comprehensiveness, efficiency, affordability, a better framework for an integrated information technology system for error reduction and improved
resource allocation, and innumerable other important goals that we can achieve.

The administrative challenges of establishing our own public insurance program would not be much greater than those we faced when we established the Medicare and Medicaid programs. In contrast, we would face greater administrative issues for a complex program of large employer-mandated plans, separate small employer programs, multiple FEHBP-type individual plans, and an administrative nightmare of trying to match various employer and individual funding sources with the fragmented system of intermediary plans. It’s not the task of establishing a system of public funding, but it’s the special interests that continue to block reform.

As Sen. Kennedy says, “… let’s get it done-if not this year, then next year with a new Congress and a new Administration elected with a mandate to get it done.” He’s right. But let’s be sure that everyone understands what we are doing. We will have to live with it for a very long time.

President Bush's State of the Union response on health care

The White House
January 20, 2004
State of the Union Address
President George W. Bush

On the critical issue of health care, our goal is to ensure that Americans can choose and afford private health care coverage that best fits their individual needs. To make insurance more affordable, Congress must act to address rapidly rising health care costs. Small businesses should be able to band together and negotiate for lower insurance rates, so they can cover more workers with health insurance. I urge you to pass association health plans. (Applause.) I ask you to give lower-income Americans a refundable tax credit that would allow millions to buy their own basic health insurance. (Applause.)

By computerizing health records, we can avoid dangerous medical mistakes, reduce costs, and improve care. To protect the doctor-patient relationship, and keep good doctors doing good work, we must eliminate wasteful and frivolous medical lawsuits. (Applause.) And tonight I propose that individuals who buy catastrophic health care coverage, as part of our new health savings accounts, be allowed to deduct 100 percent of the premiums from their taxes. (Applause.)

A government-run health care system is the wrong prescription.(Applause.) By keeping costs under control, expanding access, and helping more Americans afford coverage, we will preserve the system of private medicine that makes America’s health care the best in the world. (Applause.)

http://www.whitehouse.gov/news/releases/2004/01/20040120-7.html

Comment: Other than his comments on the recently enacted Medicare bill, the above is the entire section of his speech that covered his health care proposals.

President Bush’s proposals:
* “…ensure that Americans can choose and afford private health care coverage that best fits their individual needs…”

(Affordable coverage means plans stripped of benefits with excessive cost sharing)

* “…Congress must act to address rapidly rising health care costs.”

(Rhetoric without a substantive proposal)

* “Small businesses should be able to band together… (in) association health plans.”

(Association health plans enable the marketing of inadequate plans that escape adequate state insurance regulatory oversight)

* “… give lower-income Americans a refundable tax credit that would allow millions to buy their own basic health insurance.”

(Privatizing Medicaid while increasing the cost sharing of lower-income individuals!)

* “… computerizing health records…”

(An essential inevitability, made less possible by the perpetuation of our current fragmented method of funding health care)

* “… eliminate wasteful and frivolous medical lawsuits.”

(Malpractice reform is important, but “frivolous” lawsuits are hardly even a negligible portion of the health care cost problem)

* “… individuals who buy catastrophic health care coverage, as part of our new health savings accounts, be allowed to deduct 100 percent of the premiums from their taxes.”

(Regressive tax policy that disproportionately benefits higher-income individuals)

A government-run health care system is the wrong prescription. (Applause.)

By keeping costs under control, expanding access, and helping more Americans afford coverage, we will preserve the system of private medicine that makes America’s health care the best in the world. (Applause.)”

(Innumerable studies have confirmed that we rank first only in the cost of our health care system but that our system fails miserably in health care outcomes, especially considering our resources. America’s health care is clearly not the best in the world. Health policy experts across the political spectrum agree that we need a federal solution to our problems in funding health care. Our president, in condemning government involvement, is not demonstrating the political leadership that we desperately need.

Nor are the politicians who applauded these comments. Shouldn’t we be considering a regime change

President Bush’s State of the Union response on health care

The White House
January 20, 2004
State of the Union Address
President George W. Bush

On the critical issue of health care, our goal is to ensure that Americans can choose and afford private health care coverage that best fits their individual needs. To make insurance more affordable, Congress must act to address rapidly rising health care costs. Small businesses should be able to band together and negotiate for lower insurance rates, so they can cover more workers with health insurance. I urge you to pass association health plans. (Applause.) I ask you to give lower-income Americans a refundable tax credit that would allow millions to buy their own basic health insurance. (Applause.)

By computerizing health records, we can avoid dangerous medical mistakes, reduce costs, and improve care. To protect the doctor-patient relationship, and keep good doctors doing good work, we must eliminate wasteful and frivolous medical lawsuits. (Applause.) And tonight I propose that individuals who buy catastrophic health care coverage, as part of our new health savings accounts, be allowed to deduct 100 percent of the premiums from their taxes. (Applause.)

A government-run health care system is the wrong prescription.(Applause.) By keeping costs under control, expanding access, and helping more Americans afford coverage, we will preserve the system of private medicine that makes America’s health care the best in the world. (Applause.)

http://www.whitehouse.gov/news/releases/2004/01/20040120-7.html

Comment: Other than his comments on the recently enacted Medicare bill, the above is the entire section of his speech that covered his health care proposals.

President Bush’s proposals:
* “…ensure that Americans can choose and afford private health care coverage that best fits their individual needs…”

(Affordable coverage means plans stripped of benefits with excessive cost sharing)

* “…Congress must act to address rapidly rising health care costs.”

(Rhetoric without a substantive proposal)

* “Small businesses should be able to band together… (in) association health plans.”

(Association health plans enable the marketing of inadequate plans that escape adequate state insurance regulatory oversight)

* “… give lower-income Americans a refundable tax credit that would allow millions to buy their own basic health insurance.”

(Privatizing Medicaid while increasing the cost sharing of lower-income individuals!)

* “… computerizing health records…”

(An essential inevitability, made less possible by the perpetuation of our current fragmented method of funding health care)

* “… eliminate wasteful and frivolous medical lawsuits.”

(Malpractice reform is important, but “frivolous” lawsuits are hardly even a negligible portion of the health care cost problem)

* “… individuals who buy catastrophic health care coverage, as part of our new health savings accounts, be allowed to deduct 100 percent of the premiums from their taxes.”

(Regressive tax policy that disproportionately benefits higher-income individuals)

A government-run health care system is the wrong prescription. (Applause.)

By keeping costs under control, expanding access, and helping more Americans afford coverage, we will preserve the system of private medicine that makes America’s health care the best in the world. (Applause.)”

(Innumerable studies have confirmed that we rank first only in the cost of our health care system but that our system fails miserably in health care outcomes, especially considering our resources. America’s health care is clearly not the best in the world. Health policy experts across the political spectrum agree that we need a federal solution to our problems in funding health care. Our president, in condemning government involvement, is not demonstrating the political leadership that we desperately need.

Nor are the politicians who applauded these comments. Shouldn’t we be considering a regime change

Broader Health Coverage May Depend on Less

The New York Times
January 20, 2004
Broader Health Coverage May Depend on Less
By Milt Freudenheim

With the number of uninsured Americans rising to new heights, some policy makers and influential health care experts are saying that the best way to give health coverage to more people is to give some people less.

Experiments in several states are establishing stripped-down packages of basic benefits intended to be affordable for employers and uninsured workers, including young, middle-class people who have dropped out of the health insurance pool. Some officials say that government health benefits could be extended to more people, too, if the benefit package were narrower.

Some experts warn that cutting back mandated benefits will neither yield enormous savings nor slow the increase in costs associated with medical advances.

“There is very little in health care that you can trim off,” said John Sheils, a health policy expert at the Lewin Group, a consulting firm based in Falls Church, Va., that has advised health care advocacy groups in several states. “If you develop a new procedure that does some good,” he added, “ultimately all the insurers are going to have to recognize it and pay for it.”

http://www.nytimes.com/2004/01/20/business/20care.html

Comment: John Sheils is one of the nation’s most noted authorities in the analyses of health care reform proposals. His microsimulation models have demonstrated that little savings can be achieved by reducing the level of services covered, if the resulting product continues to protect individuals from the excessive financial burdens of health care.

Many proposals today call for ensuring “basic” coverage for everyone, as if that were a lower-cost, isolated segment of health care that people “really need.” But when attempts are made to define what should or should not be covered, the process falls apart. Theoretically, beneficial services should be covered and ineffective services should not. But, in fact, much of health care cannot be readily assigned to one of these two categories.

Thus, the concept of “basic” services really should mean that patients must have unimpeded access to physicians and other providers and to the institutions and services that they control. The ultimate decision for appropriate services should be made jointly by the patient and his or her health care professional. This process is not amenable to meat cleaver economics.

If eliminating non-basic services is not an effective option, then how can we control costs? Placing the entire health care system under a global budget will determine the capacity of the system. The budget allocation process will determine capacities for segments of the health care system.

That process may well limit the number of total knee replacements in nonagenarians. But isn’t that process better than depriving many of us of beneficial services merely because they fail to meet an arbitrary threshold of just what a basic service is?

The fallacy of "basic" health care

The New York Times
January 20, 2004
Broader Health Coverage May Depend on Less
By Milt Freudenheim

With the number of uninsured Americans rising to new heights, some policy makers and influential health care experts are saying that the best way to give health coverage to more people is to give some people less.

Experiments in several states are establishing stripped-down packages of basic benefits intended to be affordable for employers and uninsured workers, including young, middle-class people who have dropped out of the health insurance pool. Some officials say that government health Benefits could be extended to more people, too, if the benefit package were narrower.

Some experts warn that cutting back mandated benefits will neither yield enormous savings nor slow the increase in costs associated with medical advances.

“There is very little in health care that you can trim off,” said John Sheils, a health policy expert at the Lewin Group, a consulting firm based in Falls Church, Va., that has advised health care advocacy groups in several states. “If you develop a new procedure that does some good,” he added, “ultimately all the insurers are going to have to recognize it and pay for it.”

http://www.nytimes.com/2004/01/20/business/20care.html

Comment: John Sheils is one of the nation’s most noted authorities in the analyses of health care reform proposals. His microsimulation models have demonstrated that little savings can be achieved by reducing the level Of services covered, if the resulting product continues to protect individuals from the excessive financial burdens of health care.

Many proposals today call for ensuring “basic” coverage for everyone, as if that were a lower-cost, isolated segment of health care that people “really need.” But when attempts are made to define what should or should not be covered, the process falls apart. Theoretically, beneficial services Should be covered and ineffective services should not. But, in fact, much of health care cannot be readily assigned to one of these two categories.

Thus, the concept of “basic” services really should mean that patients must have unimpeded access to physicians and other providers and to the institutions and services that they control. The ultimate decision for appropriate services should be made jointly by the patient and his or Her health care professional. This process is not amenable to meat cleaver economics.

If eliminating non-basic services is not an effective option, then how can we control costs? Placing the entire health care system under a global budget will determine the capacity of the system. The budget allocation process will determine capacities for segments of the health care system. That process may well limit the number of total knee replacements in nonagenarians. But isn’t that process better than depriving many of us of beneficial services merely because they fail to meet an arbitrary threshold of just what a basic service is?

The fallacy of “basic” health care

The New York Times
January 20, 2004
Broader Health Coverage May Depend on Less
By Milt Freudenheim

With the number of uninsured Americans rising to new heights, some policy makers and influential health care experts are saying that the best way to give health coverage to more people is to give some people less.

Experiments in several states are establishing stripped-down packages of basic benefits intended to be affordable for employers and uninsured workers, including young, middle-class people who have dropped out of the health insurance pool. Some officials say that government health Benefits could be extended to more people, too, if the benefit package were narrower.

Some experts warn that cutting back mandated benefits will neither yield enormous savings nor slow the increase in costs associated with medical advances.

“There is very little in health care that you can trim off,” said John Sheils, a health policy expert at the Lewin Group, a consulting firm based in Falls Church, Va., that has advised health care advocacy groups in several states. “If you develop a new procedure that does some good,” he added, “ultimately all the insurers are going to have to recognize it and pay for it.”

http://www.nytimes.com/2004/01/20/business/20care.html

Comment: John Sheils is one of the nation’s most noted authorities in the analyses of health care reform proposals. His microsimulation models have demonstrated that little savings can be achieved by reducing the level Of services covered, if the resulting product continues to protect individuals from the excessive financial burdens of health care.

Many proposals today call for ensuring “basic” coverage for everyone, as if that were a lower-cost, isolated segment of health care that people “really need.” But when attempts are made to define what should or should not be covered, the process falls apart. Theoretically, beneficial services Should be covered and ineffective services should not. But, in fact, much of health care cannot be readily assigned to one of these two categories.

Thus, the concept of “basic” services really should mean that patients must have unimpeded access to physicians and other providers and to the institutions and services that they control. The ultimate decision for appropriate services should be made jointly by the patient and his or Her health care professional. This process is not amenable to meat cleaver economics.

If eliminating non-basic services is not an effective option, then how can we control costs? Placing the entire health care system under a global budget will determine the capacity of the system. The budget allocation process will determine capacities for segments of the health care system. That process may well limit the number of total knee replacements in nonagenarians. But isn’t that process better than depriving many of us of beneficial services merely because they fail to meet an arbitrary threshold of just what a basic service is?

Institute of Medicine's call for universal coverage

Institute of Medicine
January 14, 2004
Committee on the Consequences of Uninsurance

Insuring America’s Health: Principles and Recommendations

Principles to guide the extension of coverage

1. Health care coverage should be universal.
2. Health care coverage should be continuous.
3. Health care coverage should be affordable to individuals and families.
4. The health insurance strategy should be affordable and sustainable for society.
5. Health insurance should enhance health and well-being by promoting access to high-quality care that is effective, efficient, safe, timely, patient-centered, and equitable.

Using the principles

The Committee concludes that health insurance coverage for everyone in the United States requires major reform initiated as federal policy.

The Committee recommends that these principles be used to assess the merits of current proposals and to design future strategies for extending coverage to everyone.

To illustrate how the principles should be used to evaluate reform proposals, the Committee sketches four prototypes for major reform in a simplified format so that the main incentives are clear. It then assesses ach prototype against each of the principles, highlighting the model’s strengths and weaknesses.

The prototypes

1. Major public program extension and new tax credit
2. Employer mandate, premium subsidy, and individual mandate
3. Individual mandate and tax credit
4. Single payer

Each of the four prototypes satisfies the principles better than does the status quo. Each model does so through different mechanisms and realizes each principle to a different degree. The Committee does not recommend one approach over another.

The Committee recommends that the President and Congress develop a strategy to achieve universal coverage and to establish a firm and explicit schedule to reach this goal by 2010.

It is time for our nation to extend coverage to everyone.

http://books.nap.edu/books/0309091055/html/index.html

Comment: The Committee has provided a great service by demonstrating, in previous reports, the severe deficiencies in our system related to uninsurance, and now by providing an unqualified recommendation for universal coverage.

In the interest of objectivity, the Committee has not recommended a specific model of universal coverage, but the crucial importance of examining the specific impacts of each model is appropriately stressed. Table 5.2 in the report (page 150) does demonstrate that the single payer model is the most effective in ensuring continuous, universal coverage, and that the coverage would remain affordable for individuals and for society.

Single payer advocates will find much in this report to continue to fuel our passion for reform.

Institute of Medicine’s call for universal coverage

Institute of Medicine
January 14, 2004
Committee on the Consequences of Uninsurance

Insuring America’s Health: Principles and Recommendations

Principles to guide the extension of coverage

1. Health care coverage should be universal.
2. Health care coverage should be continuous.
3. Health care coverage should be affordable to individuals and families.
4. The health insurance strategy should be affordable and sustainable for society.
5. Health insurance should enhance health and well-being by promoting access to high-quality care that is effective, efficient, safe, timely, patient-centered, and equitable.

Using the principles

The Committee concludes that health insurance coverage for everyone in the United States requires major reform initiated as federal policy.

The Committee recommends that these principles be used to assess the merits of current proposals and to design future strategies for extending coverage to everyone.

To illustrate how the principles should be used to evaluate reform proposals, the Committee sketches four prototypes for major reform in a simplified format so that the main incentives are clear. It then assesses ach prototype against each of the principles, highlighting the model’s strengths and weaknesses.

The prototypes

1. Major public program extension and new tax credit
2. Employer mandate, premium subsidy, and individual mandate
3. Individual mandate and tax credit
4. Single payer

Each of the four prototypes satisfies the principles better than does the status quo. Each model does so through different mechanisms and realizes each principle to a different degree. The Committee does not recommend one approach over another.

The Committee recommends that the President and Congress develop a strategy to achieve universal coverage and to establish a firm and explicit schedule to reach this goal by 2010.

It is time for our nation to extend coverage to everyone.

http://books.nap.edu/books/0309091055/html/index.html

Comment: The Committee has provided a great service by demonstrating, in previous reports, the severe deficiencies in our system related to uninsurance, and now by providing an unqualified recommendation for universal coverage.

In the interest of objectivity, the Committee has not recommended a specific model of universal coverage, but the crucial importance of examining the specific impacts of each model is appropriately stressed. Table 5.2 in the report (page 150) does demonstrate that the single payer model is the most effective in ensuring continuous, universal coverage, and that the coverage would remain affordable for individuals and for society.

Single payer advocates will find much in this report to continue to fuel our passion for reform.

State must lead the way

State must lead the way
David Lazarus
Sunday, January 18, 2004
©2004 San Francisco Chronicle

More than 43 million Americans may now be uninsured, but no one expects a
national health care system similar to Canada’s to be adopted any time soon.
The obstacles, not least the fierce opposition of the $300 billion insurance industry, make such an enormous change politically untenable.

If universal coverage is to come to the United States, most experts agree, it will be introduced gradually, state by state. And California is positioning itself to be among the first out of the gate with a workable plan.

A statewide universal health care bill, introduced by Sen. Sheila Kuehl, D-Santa Monica, was approved by the Senate last summer. It will be taken up by the Assembly this year.

No one, not even Kuehl herself, expects such groundbreaking legislation to become law in the near future. But a few years down the road, as California
businesses increasingly plead for help in coping with runaway health care
costs, the bill’s chances could improve significantly.

“The more employers are burdened with providing health care for society, the
more they’ll be looking at this kind of system,” Kuehl predicted.

“Chances are slim the bill will get passed this year. But maybe four years from now, with a five-year transition period — that’s very possible.”

Businesses, pension funds and other insurance providers have grappled with
annual double-digit increases in insurance premiums for the past four years.

About 70,000 supermarket workers are on strike in Southern California because their employers want to raise health care costs. Nearly 100,000 workers at the telecom giant SBC, to cite just one other example, say they’ll walk off the job if medical costs are increased when their contract expires in April.

Meanwhile, the influential Institute of Medicine in Washington estimates that 18,000 adults die each year because they don’t have insurance.

The institute, which advises the federal government on health matters, issued an unprecedented call last week for universal health care but offered no guidance about how it could be achieved.

In Canada, a so-called single-payer system has been in place nationally since 1971. Taxpayer funds are allocated in lump-sum payments to hospitals, which have wide discretion as to how resources are used. Any citizen can receive treatment from any doctor at any hospital.

“It took one Canadian province, Saskatchewan, to show it could be done in the 1940s,” noted Kevin Grumbach, chairman of UCSF Medical School’s Department of Family and Community Medicine and a long-time backer of universal health care. “Then it caught on province by province.”

Kuehl’s bill, SB921, would create a single-payer system in California. It probably would be funded by a payroll tax that would replace current employer medical contributions and an income tax that would replace employee premiums, co-pays and other out-of-pocket expenses.

Kuehl said she’s also exploring having a statewide single-payer insurance system embrace a portion of workers’ compensation as well — an issue of particular interest to California businesses long accustomed to some of the highest workers’ comp costs in the nation.

“I read about all the strikes and labor problems, and I grind my teeth,” said Dan Hodges, chairman of Health Care for All-California, an advocacy group. “All this could be solved by SB921.”

One key issue for the legislation is how a California single-payer system would accommodate the various federal programs, including Medicare and Medicaid, which are a part of the health care landscape. Federal funding comprised about half of nearly $163 billion spent on health care in the state last year.

“There are a number of steps along the way that would have to be solved,” Kuehl acknowledged, adding that it remains unknown whether federal authorities would allow California to serve as a conduit for Medicare funds.

In any case, a Canadian-style single-payer system is not the only approach on the table to bring health coverage to the estimated 7 million Californians now lacking insurance.

Bruce Bodaken, chairman and chief executive of Blue Shield of California, advocates rejiggering the current insurance system so that everyone in the
state is covered. Among other things, he proposes requiring anyone who can
afford health insurance to buy it, and subsidizing those who can’t.

“The most practical way to achieve universal coverage is to build on the existing system but make sure everyone’s paying their fair share,” Bodaken said.

He added that his plan would have a better shot at passage than the single-payer system advocated by Kuehl, which would all but decimate private health insurers. “The political future of single-payer is no slam dunk,” Bodaken said.

The problem with the Blue Shield approach is that, while it guarantees insurers more customers, it doesn’t address inefficiencies now pushing health care costs higher.

A pair of Harvard Medical School researchers determined last week that $45
billion of the $163 billion spent on health care in California last year was eaten up by administrative expenses.

With a single-payer system in place, the researchers found, California health care spending would be reduced by almost $34 billion — enough to cover every uninsured person in the state and improve treatment for others.

In 2002, the California Health and Human Services Agency asked the Lewin Group, a prominent health care consulting firm, to evaluate nine different
proposals for expanding coverage in the state. The proposals included reforms similar to Bodaken’s plan along with establishment of a single-payer system.

The Lewin Group concluded that only a single-payer system would guarantee
universal coverage and control future costs, while also reducing health care
spending by as much as $7.6 billion per year through economies of scale.

Other states, including Massachusetts and Maine, are exploring single- payer
systems, but California is furthest along in terms of legislative activity and financial analysis. An in-depth analysis of Kuehl’s SB921 was begun by health care specialists last week as part of preparations for an Assembly vote.

The question at this point is not whether such a system would work in the state (or nationwide, for that matter). The question now is whether the political will can be found to push ahead with fundamental change that would benefit millions of California residents and thousands of businesses.

UCSF’s Grumbach says the time will come when taxpayer-backed universal coverage is seen as the only true solution to the state’s health care woes. It won’t be tomorrow, though, or the day after.

“It could take 10 years,” Grumbach said. “But the current system is so bloody awful and so many people are suffering, something eventually has to happen.”