PNHP

Editorial opinions support challenge of Physicians' Proposal

Editorial opinions support challenge of Physicians' Proposal

Date: Wed, 20 Aug 2003 10:23:15 -0700
Last week, the publication of the physicians’ proposal for single-payer national health insurance in The Journal of the American Medical Association(JAMA) was extensively covered by the media. A JAMA editorial called for a resumption of the debate on reform, specifically to either support this proposal or come up with something better. This week, the anticipated editorial and op-ed responses are appearing. Today’s Kaiser Daily Health Policy Report provides a selection of these. The message that the nation must support this model or find something better has clearly resonated with editorial boards and op-ed writers.

Kaiser Daily Health Policy Report
August 20, 2003
Editorials, Opinion Pieces Examine Debate Over Single-Payer Health System
Several recent editorials and opinion pieces have examined a proposal introduced last week by the Physicians for a National Health Program under
which the federal government would become the single payer for health insurance in the United States to provide universal coverage for U.S. residents. Under the proposal, the government would cover the cost of health insurance for U.S. residents, but delivery of health care in large part would remain under private control (Kaiser Daily Health Policy Report,8/15). Summaries of the editorials and opinion pieces appear below.

Editorials
Asbury Park Press: Although the single-payer system proposed by the physicians “may not be the solution,” a “new approach is needed,” a Press editorial states. The managed care system, which was promoted in the early 1990s as a solution to rising health care costs and diminishing patient choices, “failed to deliver,” the Press writes. The editorial concludes, “The system is sick. … It’s time for Congress to look for another cure”(Asbury Park Press, 8/17).

Daytona Beach News-Journal: The attempt of the Clinton administration to
enact a universal coverage plan in the early 1990s will provide “valuable
guidance for the next attempt” at covering all U.S. residents, a News-Journal editorial states. At that time, doctors, the insurance industry and lawmakers “spent most of their energy picking at details,” and the proposal’s failure was a “death of a thousand cuts, most of them inflicted by … friends of universal coverage,” the editorial states. According to the News-Journal, before “delving into the details” of the structure of universal coverage, supporters of such a system should “build a strong coalition” and then develop a “national consensus supporting every American’s right to health care.” The editorial concludes, “Without that foundation, the next attempt is likely to dissolve into another circular firing squad” (Daytona Beach News-Journal, 8/18).

Des Moines Register: The nation’s current health care system “doesn’t work
optimally for anyone,” a Register editorial states. According to the Register, U.S. residents are paying higher insurance premiums, employers are paying more to provide coverage to employees and 41 million people do not have health insurance, with “millions more underinsured.” The editorial concludes, “Leaving one-sixth of the country’s residents without access to health care is wrong. Now, a group of doctors thinks so, too” (Des Moines Register, 8/20).

Newark Star-Ledger: It is “time to renew the debate about creating a national health insurance plan,” a Star-Ledger editorial states, adding that the Clinton administration’s effort to establish a national health care program “failed to deliver” and “seemed to sap our national will” to create a universal care system. Still, “chronic failings and frustrations” with the nation’s current health care system affect patients, doctors, employers and lawmakers, the Star-Ledger writes. The editorial concludes, “That is why this nation … must regain faith in its ability to design a national health care program that works” (Newark Star-Ledger, 8/18).

Raleigh News & Observer: The physicians’ proposal is a “good start,” a News & Observer editorial states. Although “[s]uch a sweeping step would deserve vigorous debate,” the proposal’s “basic principles are sound,” according to the News & Observer. The editorial contends, “Comprehensive health care is something to which Americans should be entitled,” adding, “The 8,000 doctors and medical students who endorse universal health coverage for Americans uphold the best traditions of their care-giving profession” (Raleigh News & Observer, 8/18).

Tennessean: The physicians “may not have the ideal proposal for health care,
but it certainly has issued a challenge to the Bush administration, presidential contenders and members of Congress,” according to a Tennessean editorial. Opponents of the proposal “must acknowledge” that over the”decade of silence on health care,” health care costs have increased,the number of uninsured individuals has increased and racial disparities in health care have “become more pronounced,” the editorial states(Tennessean,8/18).

Opinion Pieces
Dr. Murray Katz, Arizona Daily Star: Medicaid, which since 1965 has”expanded to cover needs no other program could,” is the only federal program that has the “capacity to morph into national health insurance,” Katz, a professor internal medicine and physiology at the University of Arizona College of Medicine, writes in a Daily Star opinion piece. He concludes that “we’ll be richer once all our fellow citizens have equal access to health care, and we can join the world as the last nation to do what is sensible and right” (Katz, Arizona Daily Star, 8/16). (Don’s comment:Although, because of chronic underfunding of the Medicaid program,some would cringe at the suggestion that Medicaid be used as a model for reform, Dr. Katz’s point is that Medicaid provides truly comprehensive benefits and is administered on the state level, both goals of a single payer system.)

Myriam Marquez, Orlando Sentinel: Public health care systems “aren’t perfect,” but the United States under a private health care system “spends more than twice as much on health care services than … all other developed nations” and has “tens of millions of uninsured” residents, Marquez, a Sentinel columnist, writes in an opinion piece. “The GOP philosophy that government can do little right and that business can do little wrong” will not lead to a “substantive” proposal to reduce health care costs or expand health insurance, Marquez writes (Marquez, Orlando Sentinel, 8/17).
http://www.kaisernetwork.org/daily_reports/rep_hpolicy.cfm#19461

Editorial opinions support challenge of Physicians’ Proposal

Date: Wed, 20 Aug 2003 10:23:15 -0700
Last week, the publication of the physicians’ proposal for single-payer national health insurance in The Journal of the American Medical Association(JAMA) was extensively covered by the media. A JAMA editorial called for a resumption of the debate on reform, specifically to either support this proposal or come up with something better. This week, the anticipated editorial and op-ed responses are appearing. Today’s Kaiser Daily Health Policy Report provides a selection of these. The message that the nation must support this model or find something better has clearly resonated with editorial boards and op-ed writers.

Kaiser Daily Health Policy Report
August 20, 2003
Editorials, Opinion Pieces Examine Debate Over Single-Payer Health System
Several recent editorials and opinion pieces have examined a proposal introduced last week by the Physicians for a National Health Program under
which the federal government would become the single payer for health insurance in the United States to provide universal coverage for U.S. residents. Under the proposal, the government would cover the cost of health insurance for U.S. residents, but delivery of health care in large part would remain under private control (Kaiser Daily Health Policy Report,8/15). Summaries of the editorials and opinion pieces appear below.

Editorials
Asbury Park Press: Although the single-payer system proposed by the physicians “may not be the solution,” a “new approach is needed,” a Press editorial states. The managed care system, which was promoted in the early 1990s as a solution to rising health care costs and diminishing patient choices, “failed to deliver,” the Press writes. The editorial concludes, “The system is sick. … It’s time for Congress to look for another cure”(Asbury Park Press, 8/17).

Daytona Beach News-Journal: The attempt of the Clinton administration to
enact a universal coverage plan in the early 1990s will provide “valuable
guidance for the next attempt” at covering all U.S. residents, a News-Journal editorial states. At that time, doctors, the insurance industry and lawmakers “spent most of their energy picking at details,” and the proposal’s failure was a “death of a thousand cuts, most of them inflicted by … friends of universal coverage,” the editorial states. According to the News-Journal, before “delving into the details” of the structure of universal coverage, supporters of such a system should “build a strong coalition” and then develop a “national consensus supporting every American’s right to health care.” The editorial concludes, “Without that foundation, the next attempt is likely to dissolve into another circular firing squad” (Daytona Beach News-Journal, 8/18).

Des Moines Register: The nation’s current health care system “doesn’t work
optimally for anyone,” a Register editorial states. According to the Register, U.S. residents are paying higher insurance premiums, employers are paying more to provide coverage to employees and 41 million people do not have health insurance, with “millions more underinsured.” The editorial concludes, “Leaving one-sixth of the country’s residents without access to health care is wrong. Now, a group of doctors thinks so, too” (Des Moines Register, 8/20).

Newark Star-Ledger: It is “time to renew the debate about creating a national health insurance plan,” a Star-Ledger editorial states, adding that the Clinton administration’s effort to establish a national health care program “failed to deliver” and “seemed to sap our national will” to create a universal care system. Still, “chronic failings and frustrations” with the nation’s current health care system affect patients, doctors, employers and lawmakers, the Star-Ledger writes. The editorial concludes, “That is why this nation … must regain faith in its ability to design a national health care program that works” (Newark Star-Ledger, 8/18).

Raleigh News & Observer: The physicians’ proposal is a “good start,” a News & Observer editorial states. Although “[s]uch a sweeping step would deserve vigorous debate,” the proposal’s “basic principles are sound,” according to the News & Observer. The editorial contends, “Comprehensive health care is something to which Americans should be entitled,” adding, “The 8,000 doctors and medical students who endorse universal health coverage for Americans uphold the best traditions of their care-giving profession” (Raleigh News & Observer, 8/18).

Tennessean: The physicians “may not have the ideal proposal for health care,
but it certainly has issued a challenge to the Bush administration, presidential contenders and members of Congress,” according to a Tennessean editorial. Opponents of the proposal “must acknowledge” that over the”decade of silence on health care,” health care costs have increased,the number of uninsured individuals has increased and racial disparities in health care have “become more pronounced,” the editorial states(Tennessean,8/18).

Opinion Pieces
Dr. Murray Katz, Arizona Daily Star: Medicaid, which since 1965 has”expanded to cover needs no other program could,” is the only federal program that has the “capacity to morph into national health insurance,” Katz, a professor internal medicine and physiology at the University of Arizona College of Medicine, writes in a Daily Star opinion piece. He concludes that “we’ll be richer once all our fellow citizens have equal access to health care, and we can join the world as the last nation to do what is sensible and right” (Katz, Arizona Daily Star, 8/16). (Don’s comment:Although, because of chronic underfunding of the Medicaid program,some would cringe at the suggestion that Medicaid be used as a model for reform, Dr. Katz’s point is that Medicaid provides truly comprehensive benefits and is administered on the state level, both goals of a single payer system.)

Myriam Marquez, Orlando Sentinel: Public health care systems “aren’t perfect,” but the United States under a private health care system “spends more than twice as much on health care services than … all other developed nations” and has “tens of millions of uninsured” residents, Marquez, a Sentinel columnist, writes in an opinion piece. “The GOP philosophy that government can do little right and that business can do little wrong” will not lead to a “substantive” proposal to reduce health care costs or expand health insurance, Marquez writes (Marquez, Orlando Sentinel, 8/17).
http://www.kaisernetwork.org/daily_reports/rep_hpolicy.cfm#19461

Administrative Costs in Market-Driven U.S. Health Care System Far Higher Than in Canada's Single-Payer System

EMBARGOED UNTIL: 5 PM EDT, AUGUST 20, 2003

Contact: Steffie Woolhandler, M.D., M.P.H � (518) 794-8109
David U. Himmelstein, M.D. � (cell) (617) 312-0970; (hospital office) (617) 665-1032
Sidney M. Wolfe, M.D. � (202) 588-1000

To read the full report please click here

Administrative Costs in Market-Driven U.S. Health Care System Far Higher Than in Canada�s Single-Payer System, New Research Shows With National Health Insurance, United States Could Cover the Uninsured

WASHINGTON, D.C. � Bureaucracy in the health care system accounts for about a third of total U.S. health care spending � a sum so great that if the United states were to have a national health insurance program, the administrative savings alone would be enough to provide health care coverage for all the uninsured in this country, according to two new studies.

The studies illustrate the failure of the private, fragmented and business-oriented U.S. health care system to control administrative costs, as compared to Canada�s single-payer system. One of the studies, in seeking to answer whether the ascendancy of computerization, managed care and more businesslike approaches to health care have decreased administrative costs, answers the question with a resounding �no.�

The second study provides a state-by-state breakdown of savings each state could achieve if the United States adopted a national health insurance program.

�Hundreds of billions are squandered each year on health care bureaucracy, more than enough to cover all of the uninsured, pay for full drug coverage for seniors, and upgrade coverage for the tens of millions who are under-insured,� said Dr. Steffie Woolhandler, co-founder of Physicians for a National Health Program and lead author of the studies. �Americans spend almost twice as much per capita on health care as Canadians, who have universal coverage and live two years longer. The administrative savings of national health insurance make universal coverage affordable.�

New England Journal of Medicine Study Shows U.S. Health Care Paperwork
Cost $294.3 Billion in 1999, Far More Than in Canada

The first study, which is to be published Thursday in The New England Journal of Medicine, finds that health care bureaucracy cost U.S. residents $294.3 billion in 1999. The $1,059 per capita spent on health care administration was more than three times the $307 per capita in paperwork costs under Canada�s national health insurance system. Cutting U.S. health bureaucracy costs to the Canadian level would have saved $209 billion in 1999, researchers found. [The study was conducted with grant support from the Robert Wood Johnson Foundation. The Foundation does not endorse the analyses or findings of this report or those of any other independent research projects for which it provides financial support.] The study, the most comprehensive analysis to date of health administration spending, was conducted by researchers at Harvard Medical School and the Canadian Institute for Health Information, Canada�s quasi-official health statistics agency. The authors analyzed the administrative costs of health insurers, employers� health benefit programs, hospitals, nursing homes, home care agencies, physicians and other practitioners in the United States and Canada. They used data from regulatory agencies and surveys of doctors, and analyzed Census data and detailed cost reports filed by tens of thousands of health institutions in both nations.

The authors found that bureaucracy accounted for at least 31 percent of total U.S. health spending in 1999 compared to 16.7 percent in Canada. They also found that administration has grown far faster in the United States than in Canada. Between 1969 and 1999, administrative and clerical personnel in the United States grew from 18.2 percent to 27.3 percent of the health work force. In Canada, those personnel grew from 16 percent in 1971 to 19.1 percent in 1996.

Harvard/Public Citizen Report Finds National Health Insurance Would Save $286 Billion on Administration in 2003 – Enough to Cover All Uninsured and Seniors� Drug Costs

The researchers also released a second report co-authored with Dr. Sidney Wolfe, director of Public Citizen�s Health Research Group. This report, based on data adjusted to reflect estimates of 2003 spending, found that health bureaucracy now consumes at least $399.4 billion annually and that national health insurance could save about $286 billion in administrative costs. This is equivalent to $6,940 for each of the 41.2 million people uninsured in 2001 (the most recent figure available for the uninsured). In addition to providing health coverage for the uninsured, these savings could provide drug coverage for the nation�s seniors.

The researchers found wide variation among states in the potential administrative savings available per uninsured resident. Texas, with 4.96 million uninsured (nearly one in four Texans), could make available $3,925 per uninsured resident if a national health plan were implemented. Massachusetts, which has very high per capita health administrative spending and a relatively low rate of uninsured, could make available $16,453 per uninsured person.

The high U.S. administrative costs can be attributed to three factors. First, private insurers have high overhead in both nations but play a much bigger role in the United States than in Canada. Second, doctors and hospitals in the United States must deal with hundreds of different insurance plans (at least 755 in Seattle alone), each with different coverage and payment rules and referral networks that must be tracked. In Canada, doctors bill a single insurance plan, using a single simple form, and hospitals receive a lump sum budget.

�Only national health insurance can squeeze the bureaucratic waste out of health care and use the money to give patients the care they need,� said Dr. David Himmelstein, co-founder of Physicians for a National Health Program and lead author of the studies. �Republicans are pushing to move seniors into HMOs, whose overhead is three times higher than Medicare�s. National health insurance could cover everyone without any increase in costs.�

Added Wolfe, �These data should awaken governors and legislators to a fiscally sound and humane way to deal with ballooning budget deficits. Instead of cutting Medicaid and other vital services, officials could expand services by freeing up the $286 billion a year wasted on administrative expenses. In the current economic climate, with unemployment rising, we can ill afford massive waste in health care. Radical surgery to cure our failing health insurance system is sorely needed.�

Drs. Woolhandler and Himmelstein are co-founders of Physicians for a National Health Program, a 10,000-member organization that advocates for Canadian-style national health insurance in the United States. Public Citizen is a non-profit, member-supported, consumer advocacy organization.

Insurers provide a "price point" for everyone

American Medical News
Aug. 25, 2003
Insurers post robust profits for the second quarter
By Robert Kazel
Springtime brought a bumper crop of profits for most of the nation’s large,investor-owned HMOs, and several even reported record-breaking financial
results for the second quarter.
Just about all of the leading health care payers met or surpassed their stated profit goals by raising premiums, redesigning products to shift costs to patients and cutting overhead. All insurers also benefited from an apparent decrease in medical cost acceleration.
Insurers are increasing profits as they learn how to succeed in tailor-making health plans to employers, which today typically means selling companies budget-minded products that require patients to pay more,said Ken Abramowitz, an analyst with the Carlyle Group, a New York investment firm.
“In the old days these companies used to sell one HMO at one price point, and the client would buy or didn’t buy,” he said. “Now there is a broad [range] of products and prices. There is a price point for everyone.”
http://www.ama-assn.org/sci-pubs/amnews/pick_03/bisc0825.htm
Comment: Now there is “a price point for everyone.”
Private health plans have ratcheted down rates for providers, wringing that sponge dry. They have pushed up premiums for employers and otherpurchasers
to the maximum tolerated. That leaves only the patient as the source of increased health plan net revenues. By reducing benefits and increasing cost
sharing, the insurers are able to create a “price point” that may appear to be affordable for moderate and low income individuals, but it purchases a Swiss cheese product that is marketed in yet smaller and smaller packages.
And it can only get worse. The tragedy is that most proposals for reform continue to use these evolving plans in the health care marketplace as the basis for reform. What good does it do to have “universal” coverage if the plans fail to make health care affordable for the individual with significant health care needs?
Our policymakers urgently need to shift from policies that protect and
nurture the private health plans to policies that would ensure affordable, comprehensive coverage for everyone. The Physicians’ Proposal (JAMA, Aug.13) would do just that.

Time for strong medicine

Time for strong medicine
8/19/2003

AMERICANS SPEND more than anyone else in the world on health care, but with 41 million people uninsured, they are paying for a system that is both unjust and inefficient. It is refreshing that at a time of retrenchment, the prestigious Journal of the American Medical Association has published an article urging that the United States adopt a single-payer system that would cover every American.

This approach represents a major contrast with the incrementalism that has resulted in a few improvements in coverage since the Clinton health plan died in Congress nine years ago. Now states are cutting back their Medicaid programs, employers are shifting more health costs directly to workers, and the Bush administration is showing little interest in expanding coverage.

The article by the Physicians’ Working Group for Single-Payer National Health Insurance asks, in effect, “Why keep paying for a dysfunctional system that costs $1.4 trillion a year?” The physicians propose replacing it with an expanded Medicare program for every American but adding a drug benefit, which Medicare lacks, and other improvements.

A single-payer plan would affect the interests of powerful economic lobbies. Private health insurers would not be needed if the government paid for all care directly to providers. Drug companies would be less able to charge exorbitant prices if they had to deal with one powerful customer, the US government. Income for some physicians might go down as more money was devoted to primary care and less to some procedures that are not as demonstrably beneficial.

The American Medical Association — which treats JAMA as an autonomous publication — promptly disassociated itself from the article. The AMA said it feared the prospect of rationing, as occurs in some countries with single-payer coverage. But other nations spend far less per capita on health care than the United States. Enough money sloshes around the US system to provide excellent care for everybody if it is spent wisely.

Costs are hidden and fragmented in the US system to such an extent that individuals rarely know what their health insurance costs. The physicians’ plan would replace this with a single revenue stream generated by taxes. That would cause the antitax lobby to howl, but it is better to confront the costs directly and debate them in a democratic process rather than having decisions diffused among government, employers, drug companies, and private insurers.

The physicians’ plan will have to contend with distrust of big government expressed by many Americans. Yet a majority believe that health care should not be a market commodity. The popularity of Medicare suggests that at least here, government is doing a creditable job.

“Access to comprehensive health care is a human right,” says the physicians’ group. A hodgepodge health care system is failing too many Americans. It’s time for a new approach with a goal of universal coverage. Single payer is a prominent option.
© Copyright 2003 Globe Newspaper Company.

Universal Health Plan is Endorsed

Published on Wednesday, August 13, 2003 by the Boston Globe
Universal Health Plan is Endorsed
Thousands of doctors back proposal in JAMA
by Liz Kowalczyk and Amber Mobley
Thousands of US physicians have endorsed a broad proposal that would abolish for-profit hospitals and insurers and transfer all Americans into an expanded and improved Medicare program for all ages, reigniting the debate over universal health care a decade after President Clinton’s failed plan.

While the four physicians who wrote the plan — three of whom are affiliated with Harvard Medical School — are members of a nonprofit organization that has long pushed for universal health coverage, the new proposal is important for two reasons: It was published today in one of the country’s most prestigious and its most widely circulated medical journal, the Journal of the American Medical Association, and because of the large number of doctors — nearly 8,000, including two former surgeons general — who endorsed it.

The doctors said they hope to spark a debate over national health insurance that essentially ended with the death of the Clinton health plan.
Of the Democratic presidential candidates, only Rep. Dennis Kucinich is advocating a single-payer system.

Americans spend $1.6 trillion on health care, which the doctors say is more than enough money to cover every American. The doctors contend that there will be at least $200 billion in administrative savings in a single-payer, national insurance plan.
.
The Associated Press
JAMA officials said it is unusual for the journal, which has a circulation of about 700,000 worldwide, to publish an article endorsed by such a large number of physicians. JAMA’s editor, Dr. Catherine DeAngelis, said that an editorial accompanying the article represents the journal’s viewpoint that it is time for the country to grapple more seriously with major problems in the health-care system.

“Look, if you don’t agree with this plan, it’s not a foolproof plan, there are plenty of problems with it, come up with something better,” she said in an interview. “Let the debate resume. It’s sort of been on the back burner and it’s time we get on the stick with this. We are the only developed country in the world that doesn’t have a specific health plan for our people. It’s a disgrace. We have too many people not insured, and this is wrong.”

In the editorial accompanying the proposal, Rashi Fein of Harvard Medical School said one drawback of such a comprehensive plan is that it may be too radical to pass the US political system, but that the doctors’ proposal “should re-energize the debate.”
The plan, developed by the Physicians for a National Health Program, based in Chicago, differs from Clinton’s 1993 initiative in fundamental ways. Clinton sought to avoid large new taxes, instead seeking to require all companies to offer health insurance with federal subsidies helping small employers, Fein said. The country’s basic system — employers buying health insurance from nonprofit and for-profit insurance companies — would have remained intact.
The physicians’ plan is more radical and more encompassing, including coverage for the 41 million uninsured Americans as well as incorporating ways to control costs by setting a national budget, providing a set amount of money to hospitals for day-to-day operations and major expansions, paying for nursing home and home care for the elderly, and developing a national list of drugs the program would pay for.

The government would pay for health care through an expanded version of traditional Medicare, the federal health insurance program for the elderly. Most hospitals and clinics would remain privately owned and operated, and the national health insurance program would pay them a monthly budget for operating costs. Investor-owned facilities would be converted to nonprofit status. Private insurance companies would be virtually eliminated. The plan is endorsed by former surgeons general Dr. David Satcher, who served under Clinton, and
Dr. Julius Richmond, appointed by Jimmy Carter.

One of the doctors’ arguments is that for-profit companies and multiple insurers are diverting money from clinical care for the demands of business. The physicians estimate that the country would save $200 billion annually by eliminating profits of investor-owned hospitals and insurance companies and by reducing administrative costs for hospitals and doctors who must bill dozens of different insurance companies. Private health insurers now consume 12 percent of premiums for overhead, while Medicare and the Canadian national health insurance system have overhead costs below 3.2 percent, the doctors reported.
Taxes, the doctors said, would increase. But except for the very wealthy, higher taxes would be offset by the elimination of insurance premiums and out-of-pocket copayments and deductibles, they argued.

Lead coauthor Dr. Marcia Angell, a senior lecturer at Harvard Medical School and former editor of the New England Journal of Medicine, said during a news conference in Washington, D.C., that the doctors want to curtail the entrepreneurial aspects of medicine, where insurers and providers avoid unprofitable patients and try to shift costs back to patients. But she said they also sought ways to control costs amid skyrocketing insurance premiums.

Dr. Steffie Woolhandler and Dr. David Himmelstein, both physicians at Cambridge Hospital and associate professors at Harvard Medical School, were coauthors.
Critics and even advocates of universal health insurance said the doctors’ proposal has major shortcomings. Susan Pisano of the American Association of Health Plans said private industry, not the government, has led the way in adopting disease management programs and prescription drug coverage. “Political pressures on Congress make change and innovation very difficult,” she said.
Giving hospitals a set monthly budget is similar to a form of managed care called “capitation,” in which insurers paid doctors and hospitals a set amount of money to treat patients. If they kept under the budget, providers made a profit; if they exceeded the budget, they lost money.

But capitation is now being called a failure by many providers, because it creates a financial incentive to limit care, and many insurers are moving away from it.
Further, many health-care economists questioned whether the proposal is realistic in the United States, given that even Clinton’s more modest plan failed.

© Copyright 2003 Globe Newspaper Company

Insurers provide a “price point” for everyone

American Medical News
Aug. 25, 2003
Insurers post robust profits for the second quarter
By Robert Kazel
Springtime brought a bumper crop of profits for most of the nation’s large,investor-owned HMOs, and several even reported record-breaking financial
results for the second quarter.
Just about all of the leading health care payers met or surpassed their stated profit goals by raising premiums, redesigning products to shift costs to patients and cutting overhead. All insurers also benefited from an apparent decrease in medical cost acceleration.
Insurers are increasing profits as they learn how to succeed in tailor-making health plans to employers, which today typically means selling companies budget-minded products that require patients to pay more,said Ken Abramowitz, an analyst with the Carlyle Group, a New York investment firm.
“In the old days these companies used to sell one HMO at one price point, and the client would buy or didn’t buy,” he said. “Now there is a broad [range] of products and prices. There is a price point for everyone.”
http://www.ama-assn.org/sci-pubs/amnews/pick_03/bisc0825.htm
Comment: Now there is “a price point for everyone.”
Private health plans have ratcheted down rates for providers, wringing that sponge dry. They have pushed up premiums for employers and otherpurchasers
to the maximum tolerated. That leaves only the patient as the source of increased health plan net revenues. By reducing benefits and increasing cost
sharing, the insurers are able to create a “price point” that may appear to be affordable for moderate and low income individuals, but it purchases a Swiss cheese product that is marketed in yet smaller and smaller packages.
And it can only get worse. The tragedy is that most proposals for reform continue to use these evolving plans in the health care marketplace as the basis for reform. What good does it do to have “universal” coverage if the plans fail to make health care affordable for the individual with significant health care needs?
Our policymakers urgently need to shift from policies that protect and
nurture the private health plans to policies that would ensure affordable, comprehensive coverage for everyone. The Physicians’ Proposal (JAMA, Aug.13) would do just that.

NABE Panel: Federal deficit a risk, monetary policy about right,health care needs major reform

National Association for Business Economics
NABE Economic Policy Survey
NABE Panel: Federal deficit a risk, monetary policy about right,health care
needs major reform
August 2003

From the Survey Details:Health Care
NABE introduced a special topic into this economic policy survey and questioned our panelists about healthcare in the United States. Given the choice of high cost or the large number of uninsured Americans, 57% felt high cost was the most important issue to address and 42% were more concerned with the increasing number of uninsured. That a survey of economists did not escalate the issue of high cost to a greater degree may indicate that most people in America, even economists, are conditioned tothink of healthcare differently from other choices we make each day,i.e.,noneconomically.
Regarding high costs, the most blame was assigned to insurance and third-party payer systems that left consumers with little or no incentive to hold costs down. Reasons of medium importance for high and rising healthcare costs were that healthcare providers lacked incentives to economize,improved technology allowing better outcomes, and excessive liability costs.
Costs were indeed seen as harmful to companies’ profitability. More than 90%
of respondents said escalating healthcare costs would be at least somewhat significant to companies’ profit margins over the next two years.
What’s the answer?
Two-thirds of respondents felt the answer to the problems in our healthcare
system needed to involve fundamental changes in both healthcare delivery and
its financing.
We asked panelists to identify specific changes to the U.S. healthcare system that would provide for improvements in cost, access, or quality.There was an overwhelming response against government involvement; neither nationalizing the healthcare system nor government regulation of insurance premiums and drug prices received much support. Most panelists advocated the spread of consumer-directed health insurance, which would give more incentives, choices, and responsibility for their healthcare to consumers.
http://www.nabe.com/publib/pol/03/pol0308.pdf
Comment: It is fully expected that economists employed by the business community would conduct surveys and make recommendations that would enhance corporate performance. It is their responsibility to assess costs,including the costs of employee health benefit programs, and make recommendations to control those costs. Making recommendations to improve the social welfare of employees is not in their job description. So it is not surprising that business economists support shifting costs of health benefit programs to employees.
The reason that this report is important is that it is being used by advocates of “consumer-directed” health care to support their cause, as if the findings and resulting recommendations of this survey represented the moral imperative. It does only if you believe that greater corporate profit is a higher moral goal than ensuring the welfare of workers. On the contrary, many of us advocating for improved access and coverage believe that worker welfare must first be ensured, and only then corporate financial adjustments be made to ensure adequate profit. (Of course, the best way of ensuring affordable worker access to health care would be to eliminate employer-sponsored health programs, and to establish a universal system of publicly-funded and publicly-administered social insurance.)
But the NABE economists must bear responsibility for supporting policies
that are clearly insensitive to the health care needs of the workers.When asked for recommendations to improve cost, access and quality, they respond by opposing government involvement and by recommending dumping the problem onto the employees (using the highly deceptive “consumer-directed”rhetoric). Their solution is not responsive to the problems. It shifts cost to individuals, thereby impairing access with an inevitable decline in quality.
When you hear reports that the “nation’s economists support consumer-directed health care,” be prepared to expose the potential impact of these cruel and inhumane policies being supported by the -anti-government sector of economists from the right.
_____________________________________________
Quote-of-the-day mailing list
Quote-of-the-day@mccanne.org
http://two.pairlist.net/mailman/listinfo/quote-of-the-day

America's 100 Most and Least Expensive Hospitals

June 11, 2003
Contact: Charles Idelson, 510-273-2246, 415-559-8991 (pg/cell) or the IHSP at 510-267-0634.

h2. New Study Links High Hospital Charges to Higher Profits

The full 48-page report and summary graphs and charts are available on the CNA website at http://cna.igc.org/top200

The nation’s most expensive hospitals are also the hospitals which are racking up the highest average profits, according to a comprehensive new research report by the Institute for Health and Socio-Economic Policy (IHSP) commissioned by the California Nurses Association.

Included in the report is a listing of the 100 most expensive and 100 least expensive hospitals, based on just released federal cost reports with aggregated data for millions of patient discharges in fiscal years 2000-2001 filed for nearly 4,300 U.S. hospitals.

Surveying all hospital charges for all in-patient and out-patient services and other financial categories, the nation’s 100 most expensive hospitals mark up their gross charges an average of 525% over their costs, a significant contributor to skyrocketing health care costs that are pricing increasing numbers of families out of health care coverage, according to CNA and the IHSP.

For the first time ever, the report also documents a direct correlation between high hospital markups over costs and higher hospital profits or net income. The 100 hospitals with the highest average gross charges also had the greatest average profits, while the bottom 100 on average reported financial losses.
Additionally, the report found links between high charges and the growing corporatization in the health care industry. Only five hospitals in the Top 100 were not part of hospital chains, while 69 of the nation’s least expensive 100 hospitals were not system affiliated.

Size also matters. The larger a hospital as measured by average number of beds, the higher the markup on gross charges over cost, the report found.

Troubled Tenet Healthcare dominates the expensive list, owning the top 14 slots, and 64 of the top 100. Doctors Medical Center in Modesto, Ca., placed first with a sticker price of 1,092% above its costs on hospital services. That means Tenet Doctors would bill $10,920 for a patient’s case where the costs were $1,000. Nearby Doctors Hospital of Manteca was the next highest with average markups of 920%.

HCA – The Healthcare Company ranked second among the top 100 with eight hospitals, followed by Saint Barnabas Health Care System, a New Jersey-based chain with four hospitals in the top 100. Overall Tenet’s hospitals averaged gross markups of 477% over costs. Of some 280 U.S. hospital chains, only Crozer-Keystone, a small system in the Philadelphia area, had a higher average markup than Tenet for its hospitals, with a charge to cost ratio of 585%.

“These numbers, and the wide chasm in billing practices, suggest that some hospitals, particularly those that command large market share, may be inflating gross charges to make windfall profits or net income, while many other smaller facilities are struggling simply to keep the doors open,” said IHSP director Don DeMoro.

Following previous reports by the IHSP/CNA and others, some hospital executives have said that high gross charges were unrelated to net income, DeMoro noted. “This data, reported by the hospitals themselves, identifies a direct association between what the hospitals charge and their bottom line.”

Some hospitals have also contended that their charges are fixed by Medicare or other payers, but a report by the California Public Employees Retirement System earlier this year found that Blue Cross, which administers claims for CalPERS, paid Tenet almost three times more for bypass surgery than it paid to non-Tenet hospitals in California.

CNA President Kay McVay, RN, said the huge markups in hospital bills “drive up overall health care costs for everyone. Patients and consumers are being priced out of our health care system. When we see growing numbers of uninsured and underinsured families, and double digit health care premium increases that encourage employers to drop or reduce health benefits, these outrageous markups are a major contributor to our national health care crisis.”

“While Tenet is not the only offender, these numbers clearly demonstrate that Tenet’s pricing practices encourage other hospitals in the same markets to jack up their prices as well,” said McVay. For example, the highest ranking non-Tenet hospital on the list, Sutter Health’s Memorial Hospital in Modesto, Ca., with an average 597% markup, competes with two nearby Tenet hospitals, Doctors Modesto and Doctors Manteca – the top two among the top 100.

Three states, California, Florida and Pennsylvania accounted for about 64% of the top 100. All three states are dominated by corporate hospital chains. By contrast, New York State, with 194 hospitals in the data set, 188 of which were non-profits, had a statewide average charge-to-cost ratio of 181%, significantly below the national average of 206%.

Tenet’s dominance on the current list is notable for other reasons. Previous reports on Tenet’s billing practices have been on earlier years of public data. Tenet has said in investor conferences that it’s most aggressive pricing strategy did not go into effect until after 2000. “This is the first year of federal data that reflects the effect of the increase with Tenet facilities so far above other hospitals in gross charges,” DeMoro said.

The full 48-page report and summary graphs and charts are available on the CNA website at http://cna.igc.org/top200

America’s 100 Most and Least Expensive Hospitals

June 11, 2003
Contact: Charles Idelson, 510-273-2246, 415-559-8991 (pg/cell) or the IHSP at 510-267-0634.

h2. New Study Links High Hospital Charges to Higher Profits

The full 48-page report and summary graphs and charts are available on the CNA website at http://cna.igc.org/top200

The nation’s most expensive hospitals are also the hospitals which are racking up the highest average profits, according to a comprehensive new research report by the Institute for Health and Socio-Economic Policy (IHSP) commissioned by the California Nurses Association.

Included in the report is a listing of the 100 most expensive and 100 least expensive hospitals, based on just released federal cost reports with aggregated data for millions of patient discharges in fiscal years 2000-2001 filed for nearly 4,300 U.S. hospitals.

Surveying all hospital charges for all in-patient and out-patient services and other financial categories, the nation’s 100 most expensive hospitals mark up their gross charges an average of 525% over their costs, a significant contributor to skyrocketing health care costs that are pricing increasing numbers of families out of health care coverage, according to CNA and the IHSP.

For the first time ever, the report also documents a direct correlation between high hospital markups over costs and higher hospital profits or net income. The 100 hospitals with the highest average gross charges also had the greatest average profits, while the bottom 100 on average reported financial losses.
Additionally, the report found links between high charges and the growing corporatization in the health care industry. Only five hospitals in the Top 100 were not part of hospital chains, while 69 of the nation’s least expensive 100 hospitals were not system affiliated.

Size also matters. The larger a hospital as measured by average number of beds, the higher the markup on gross charges over cost, the report found.

Troubled Tenet Healthcare dominates the expensive list, owning the top 14 slots, and 64 of the top 100. Doctors Medical Center in Modesto, Ca., placed first with a sticker price of 1,092% above its costs on hospital services. That means Tenet Doctors would bill $10,920 for a patient’s case where the costs were $1,000. Nearby Doctors Hospital of Manteca was the next highest with average markups of 920%.

HCA – The Healthcare Company ranked second among the top 100 with eight hospitals, followed by Saint Barnabas Health Care System, a New Jersey-based chain with four hospitals in the top 100. Overall Tenet’s hospitals averaged gross markups of 477% over costs. Of some 280 U.S. hospital chains, only Crozer-Keystone, a small system in the Philadelphia area, had a higher average markup than Tenet for its hospitals, with a charge to cost ratio of 585%.

“These numbers, and the wide chasm in billing practices, suggest that some hospitals, particularly those that command large market share, may be inflating gross charges to make windfall profits or net income, while many other smaller facilities are struggling simply to keep the doors open,” said IHSP director Don DeMoro.

Following previous reports by the IHSP/CNA and others, some hospital executives have said that high gross charges were unrelated to net income, DeMoro noted. “This data, reported by the hospitals themselves, identifies a direct association between what the hospitals charge and their bottom line.”

Some hospitals have also contended that their charges are fixed by Medicare or other payers, but a report by the California Public Employees Retirement System earlier this year found that Blue Cross, which administers claims for CalPERS, paid Tenet almost three times more for bypass surgery than it paid to non-Tenet hospitals in California.

CNA President Kay McVay, RN, said the huge markups in hospital bills “drive up overall health care costs for everyone. Patients and consumers are being priced out of our health care system. When we see growing numbers of uninsured and underinsured families, and double digit health care premium increases that encourage employers to drop or reduce health benefits, these outrageous markups are a major contributor to our national health care crisis.”

“While Tenet is not the only offender, these numbers clearly demonstrate that Tenet’s pricing practices encourage other hospitals in the same markets to jack up their prices as well,” said McVay. For example, the highest ranking non-Tenet hospital on the list, Sutter Health’s Memorial Hospital in Modesto, Ca., with an average 597% markup, competes with two nearby Tenet hospitals, Doctors Modesto and Doctors Manteca – the top two among the top 100.

Three states, California, Florida and Pennsylvania accounted for about 64% of the top 100. All three states are dominated by corporate hospital chains. By contrast, New York State, with 194 hospitals in the data set, 188 of which were non-profits, had a statewide average charge-to-cost ratio of 181%, significantly below the national average of 206%.

Tenet’s dominance on the current list is notable for other reasons. Previous reports on Tenet’s billing practices have been on earlier years of public data. Tenet has said in investor conferences that it’s most aggressive pricing strategy did not go into effect until after 2000. “This is the first year of federal data that reflects the effect of the increase with Tenet facilities so far above other hospitals in gross charges,” DeMoro said.

The full 48-page report and summary graphs and charts are available on the CNA website at http://cna.igc.org/top200