PNHP

K. Sullivan on Blendon’s polls

K. Sullivan on Blendon’s polls

Response of Kip Sullivan to Robert Blendon’s polls:

From Don’s comment:

Dr. Blendon could improve his credibility by conducting polls that ask about views on universality, comprehensiveness and affordability of social insurance. Rather than asking exclusively about government and taxes, the poll should begin with a statement such as “Medicare and Social Security are programs of social insurance that are designed to include everyone and to be funded equitably.”

Kip Sullivan’s response:

Don,

I have what I think is an even more important suggestion for Dr. Blendon. He should stop asking respondents whether they would pay $50 or $200 or $500 more “to insure the uninsured,” and instead start asking, “If a universal insurance program would reduce your premium and out-of-pocket costs by $500, and increase your taxes by $500, would you support such a program?” Blendon’s question and my proposed question make different assumptions about costs. Blendon’s question assumes there is no way costs can be lowered while coverage is expanded; my question does not.

The other problem with Blendon’s question is that it assumes financing of universal coverage must be regressive. (A per head tax of $50 or $200 is regressive; it takes a rising portion of income as income declines.) My suggested question also suffers from that defect. Blendon should explore how support for universal coverage is affected by progressivity of financing by asking some follow-up questions, such as, “If a universal insurance program would reduce your premium and out-of-pocket costs by $500, and increase your taxes by $200, would you support such a program?”

Blendon keeps asking Americans his loaded question, and, not surprisingly, their responses show they are reluctant to pour even more money into our dreadfully expensive system. From this Blendon concludes, “Americans say they want universal coverage but they don’t want to pay for it.” If Blendon wants to continue posing his loaded question, fine, but the least he can do is draw the appropriately narrow conclusion, which is, “Americans want universal coverage, but they don’t want to buy it at the current price at which coverage sells these days, and they don’t want to pay for it with a regressive tax.”

Kip

Blendon – “…we don’t have enough money…”

The New York Times
April 30, 2003
Health Care Limps Up Political Ladder
By Robin Toner

The health care crisis is returning to American politics – gradually, but inexorably, with a force that will most likely grow as rising costs and deepening cuts squeeze more and more voters.

Pollsters say the issue ranks high with Democratic primary voters, which means that every presidential candidate must address it.

Meanwhile, rising health costs, coupled with declining revenues, are forcing states to consider major cutbacks in Medicaid – the program that already covers millions of people who would otherwise be uninsured. State officials have not, so far, received the help they are pleading for from Washington.

There is an incongruity here, as Bob Blendon, a Harvard University expert on public opinion and health, put it: Candidates are proposing bold visions to expand coverage in the future, “and we don’t have enough money to pay for the present.”

Comment: Dr. Blendon’s comment is unfortunate. His polls (with KFF, NPR, WP and others) have been used to inform our political leaders that Americans do not want a government-run, taxpayer-funded system. His insistence on continuing with the pejorative phrasing of his question on social insurance has contributed to the belief that reform must be incremental and not comprehensive.

Now Dr. Blendon has adopted the rhetoric of those who are opposed to reform in stating that “we don’t have enough money to pay for the present.” Numerous studies have demonstrated that we are already spending more than enough to fund comprehensive health care for everyone, but we need to reform the system to make that a reality. 98% of Americans believe that the issue of affordability of health care must be addressed.

Dr. Blendon could improve his credibility by conducting polls that ask about views on universality, comprehensiveness and affordability of social insurance. Rather than asking exclusively about government and taxes, the poll should begin with a statement such as “Medicare and Social Security are programs of social insurance that are designed to include everyone and to be funded equitably.” Then asking questions about support for adopting social insurance for health care for everyone should provide more objective responses.

It is helpful to understand the impact of the prevailing political rhetoric, but it would be even more helpful if we understood precisely what Americans really do want in the way of affordable access to health care.

California health care reform legislation moving foreward

Great news!

The insurance committee of the California State Senate this afternoon approved both SB 2 (Burton/Speier), an employer mandate proposal, and SB 921 (Kuehl), a single payer proposal.

Based on the hearings today, it seems clear that almost everyone agrees that major reform is essential. The debate now centers on just what that reform should be. Most agreed that we should move forward with the legislative process on both proposals, single payer and the employer mandate. The public legislative process should serve to clarify the issues, enabling an informed decision.

If anyone needs help understanding the differences in these models of reform, you can start by reading the article that was the subject of yesterday’s message, “Private Health Plans Versus Social Insurance: Implications for Health Care Reform.”

For the article:
https://pnhp.org/publications/archives/001892.php

Private health plans: the price is too great

Physicians for a National Health Program
April 28, 2003
Private Health Plans Versus Social Insurance: Implications for Health Care
Reform
by Don McCanne

Private health plans are responsible for much of the administrative waste that uniquely characterizes the health care system of the United States. And for this outrageous cost and inefficiency, these plans are providing highly flawed and inequitable methods of pooling funds and allocating health care resources. We are receiving remarkably little value from this very costly industry.

Yet the leading incremental proposals for health care reform call for an expansion of the role of private plans as a method of expanding health care coverage to more individuals. Because of the unacceptable inadequacies and high costs of our current system we will have major reform soon. But before we invest more resources into the health plan industry, we should review the policy implications to decide whether this would be a worthwhile investment.

An evaluation of funding through private health plans would not be complete without comparing this model with a model of public funding through social insurance.

Publicly funded systems of social insurance have a mission to allocate the health care resources as equitably and as efficiently as possible.

For the full article:
https://pnhp.org/publications/private_health_plans_versus_social_insurance.php

Special Request: Since this article is several pages long, you may not have time to read it now. If so, please save the link or download it now to be read later. You can use the printer icon on the PNHP page for a printer-friendly format.

Many of the leading proposals for reforming health care would use individual or employer mandates along with tax policy to expand enrollment in private health plans. Many supporters of such incremental reforms understand the benefits of the single payer model, but they believe that it lacks political feasibility. They correctly believe that achievable modest steps are better than no reform at all. But they have to live with the fact that modest reforms have only slowed the rate of deterioration in our system, as the net result of incremental improvements has been a negative. Costs are up, more people are uninsured, under-insurance is epidemic, and portions of our health care infrastructure are threatened with insolvency. And since the newer models of health care coverage leave patients exposed to greater risk, coverage alone is no longer an adequate goal for reform. Our goal must be universal coverage that ensures both financial and health security.

It is no longer acceptable to debate merely whether or not single payer reform is feasible. The debate now must center on whether it is ethical to support reform that increases costs as it perpetuates inequities, or should the ethics of the health policy professions mandate support for an affordable, equitable, universal system of health care coverage? The onus of proving that it is ethical to support inequities and waste because of political feasibility must now be placed on those with lesser goals for reform.

Please use this article to help change the terms of the debate. Share it not only with our colleagues for their use in the debate, but also share it with those who would accept a lesser ethical standard for reform. Let’s end the debate over political feasibility, and begin the debate over the ethics of supporting reform that perpetuates and expands waste and inequities.

For health care justice for all,

Don McCanne, MD
President, Physicians for a National Health Program
www.pnhp.org
don@mccanne.org
Home telephone: 949-493-3714

California Dreamin'

SFGate.com
April 26, 2003
Despite budget woes, lawmakers trying to deal with uninsured
By Steve Lawrence, Associated Press Writer

…California legislators have introduced at least five bills designed to reduce the number of uninsured.

They range from a measure to increase the number of people covered by the state’s Healthy Families program to a bill that would set up a state-run universal health care system with an elected commissioner.

In between are bills that would require all or most employers to offer their workers health coverage.

The bill that seems to have the best chance of passing is a measure by Senate President Pro Tem John Burton, D-San Francisco, and Sen. Jackie Speier, D-Daly City, who chairs the Senate Insurance Committee.

Not only is it co-authored by Burton, who is generally considered to be the Legislature’s most influential member, it has the support of labor leaders and the California Medical Association, a powerful physicians’ group. Art Pulaski, executive secretary-treasurer of the California Labor Federation, predicts it will also win some business support.

Commonly known as a “pay or play,” it would require employers to pay at least 80 percent of the cost of a health insurance policy for their employees, either by buying the policies themselves or contributing to a state fund that would provide coverage.

Sen. Sheila Kuehl, D-Santa Monica, says the ultimate solution is the so-called “single payer” approach in her bill, which would create one state fund to provide health insurance for all Californians.

It’s the only plan that would cover all Californians and actually cut health care spending by reducing administrative costs and eliminating health care profits, Kuehl says.

The Lewin Group, a consulting firm based in Falls Church, Va., looked at nine health insurance options for the state Health and Human Services Agency in 2002, including three single-payer proposals, and concluded the single-payer approach could save the average family up to $813 a year.

But single-payer proposals have been tough to enact. California voters rejected one in 1994.

Voters tend to oppose single payer plans because they take them from their current insurance to something unknown, says John Sheils, a vice president with the Lewin Group.

But Kuehl says she’ll keep bringing it back as many times as it takes. “It’s truly the only plan that makes sense for California.”

On the Net: Read the bills, SB2, AB30, SB921, AB1527, AB1528, at www.senate.ca.gov and www.assembly.ca.gov

http://www.sfgate.com/cgi-bin/article.cgi?f=/news/archive/2003/04/26/state14 13EDT0073.DTL

The reform movement gains more credibility

San Francisco Chronicle
April 27, 2003
The long road to a national health plan
By Kevin Grumbach and Philip R. Lee **

Most experts concede that the simplest way to guarantee coverage for all Americans is to make every resident automatically eligible for coverage under a single public plan, avoiding the chaos and transience of eligibility linked to specific employers or degrading and cumbersome “means testing” of family income. Single-payer systems also have appealing economic virtues, operating with far lower administrative overhead costs than private insurance and exercising greater care to rein in health care inflation.

California recently contracted with the Lewin Group, a private independent consulting firm, to analyze 10 alternative proposals to increase coverage. The firm concluded that pay-or-play models, which require employers to finance coverage, would increase state health care costs by $2 billion, while a single- payer plan could reduce overall costs by $7 billion — and provide comprehensive coverage to all Californians.

The single-payer plan would also trim $18 billion in unnecessary administrative costs and excessive prices for prescription drugs and medical supplies — more than enough to afford universal coverage.

But policy logic has never been sufficient to ensure political victory for single-payer proposals. Big Government and Big Taxes are not attractive brand labels in the current emporium of electable ideas.

The need for a universal health care program and health security for all Americans is rightfully returning to the forefront of policy debate.

A recent issue of the American Journal of Public Health proposed several benchmarks for judging reform proposals: universal and equitable coverage, comprehensive benefits and quality health care, affordable and equitable financing, simplified administration and sensibly organized work, accountability and a strong public health system.

The hard work ahead is to create the political change that can implement a universal health care plan that would achieve these goals.

**Dr. Kevin Grumbach is a professor of family and community medicine at UCSF and a founding member of the California Physicians Alliance. He practices family medicine at San Francisco General Hospital. Dr. Philip R. Lee, who served as assistant secretary of health in the Johnson and Clinton administrations, is the former chancellor of UCSF and was founding director of UCSF’s Institute for Health Policy Studies, where he is a senior scholar.

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2003/04/27 /IN105921.DTL

Comment: There is no more credible source on health policy than Dr. Grumbach and Dr. Lee. It is time for us to end the political stalemate that has allowed the perpetuation of profound health care injustices. Let’s now turn to leaders like Dr. Grumbach and Dr. Lee and get on with the very serious business of truly reforming our health care system.

Health Care Rally Protests Lack Of Support

By THOMAS D. WILLIAMS, Courant Staff Writer

At a rally of medical students, doctors and social activists near the steps of the state Capitol in Hartford on Sunday, the frustrated refrain was: political leaders have abandoned the poorest working-class families by failing to support universal health care.

In the past two decades, said Jean Rexford, a human rights activist, the conservative political right has successfully lobbied Democratic and Republican politicians to essentially gut health care funding for the poor.

And, she added, the state’s political climate has shifted so far to the conservative right, even today with a Democrat-controlled General Assembly, that health becomes a victim – especially for underprivileged children and pregnant women.

Dr. John R. Battista, president of the Connecticut Coalition for Universal Health Care, said the state’s health care system is discouraging its poorest residents from seeking care and few political leaders are doing anything to help them.

Battista ticked off figures about the state:

Those lacking basic health insurance include 29 percent of non-elderly residents making substantially less than the federal poverty guidelines – $12,120 for a household of two people – as well as 24 percent of non-elderly Hispanics and 17 percent of non-elderly blacks.

Health care costs are the No. 1 cause of personal bankruptcies.

And, 25 percent of state residents are locked into jobs they want to escape, simply because they would lose health care benefits if they changed employment.

Sunday’s rally attracted 50 to 60 people and was organized by the American Medical Student Association, which has 40,000 members nationwide and about 300 in Connecticut, mostly from Yale and the University of Connecticut’s medical schools.

Lauren Oshman, the association’s national president and a senior medical student at Baylor University, said medical students are more active in supporting universal health care than doctors and nurses. Doctors are generally more concerned with their rising medical malpractice insurance costs, she said.

In Hartford, said Dr. Bruce Gould, director of the Burgdorf Fleet Health Center, if conditions get worse, “people will be dying in the streets.” Communicable diseases like AIDS will intensify in the general population, he said.

The center handles 30,000 to 40,000 office visits a year at its clinic on Coventry Street in the city’s North End. Gould said staff members have to scrounge to get the money and the medicine to treat these patients’ critical illnesses.

Gould said he is troubled by politicians who insist the working poor exploit government funding for health care by overusing services or medications; or that cutting funding for preventive medicine is a sound way to control state or federal budgets.

In fact, he explained, many working poor are reluctant to use the health care system because they need what money they would spend on it for essentials like food and rent.

And, Gould added, if state and federal politicians ensure more funding is available for preventive medicine for the poor, millions of dollars can be saved in public subsidies for hospital emergency room visits and in worker productivity.

“Any way you look at it, either the saving the dollar way, or on the humanistic side of it,” Gould said, “a healthy population is a productive population.”


http://www.ctnow.com/news/local/hc-rally0428.artapr28,0,6504197.story?coll=hc-headlines-local

Universal care is nowhere to be found

Jeff Stryker
Sunday, April 27, 2003
Ā©2003 San Francisco Chronicle

One in seven citizens in the world’s richest country is without health insurance.

The uninsured are not some wretched underclass, some marginalized group with whom policymakers and opinion leaders somehow find it impossible to identify.

They are, for the most part, middle class. More than 80 percent of the uninsured live in households with either a full-time or part-time worker. A third live in families with household incomes of $50,000 or more.

After a couple of years of improvement in the late 1990s, the number of the uninsured has begun to rise again, with a vengeance. Spurred by the sour economy, the ranks of the uninsured swelled to more than 41 million last year. They are neither old or disabled enough for Medicare nor poor enough to qualify for Medicaid.

The lack of universal insurance coverage is only the most evident flaw in a vastly complex, wildly inefficient health care system that would make Rube Goldberg proud.

“If we had set out to design the worst system we could imagine, we couldn’t have imagined one as bad as we have,” says Marcia Angell, former editor of the New England Journal of Medicine.

Perhaps the system’s most fundamental flaw involves the uneven structure of health insurance. Since World War II, when health insurance costs, designed to be routed through large employers, were exempted from wage controls, most private health insurance comes through a job.

Those who receive health insurance through the workplace enjoy a tax break to the tune of $141 billion a year. The unemployed and those who work for smaller employers who don’t provide coverage must pay for coverage out of their own after-tax income.

Even those with health coverage through the workplace are increasingly burdened by high copayments and coverage restrictions. Princeton health economist Uwe Reinhardt calls the coverage many workers now have “unsurance” because they are unsure what it covers today and unsure what it will cover next month.

With so many lacking insurance, and those lucky enough to have coverage worried they may be a mere pink slip away from losing it, why so little public agitation for universal access?

According to a survey conducted by National Public Radio, the Kaiser Family Foundation and the Kennedy School of Government at Harvard, when asked to name the two most important problems facing the nation, only 10 percent mentioned health care, ranking it behind problems such as the economy, terrorism, war and crime. Yet only 1 in 5 of those surveyed thinks the health care system works pretty well.

“However, it does not appear that people’s worries and experiences are causing them to push for sweeping change in the health care system,” the survey’s authors concluded.

The researchers asked respondents about a variety of measures to expand access. The survey results showed, “A majority of the public favors no single option. This fact, combined with the cost and winners and losers involved in any proposal, helps explain why consensus is often hard to reach dealing with issues of expanding health coverage.”

The reluctance to embrace proposals for wholesale change comes in part because the picture is so complicated. Lacking health insurance does not necessarily mean going without care entirely. Federal law prohibits hospital emergency rooms from turning away sick people, until they are stabilized. A variety of free and subsidized clinics helps fill in the gaps, along with heaps of uncompensated care. (A recent study by the Urban Institute, a Washington, D.C., think tank, put the price tag for uncompensated care in 2001 at $35 billion, 85 percent of which came from public sources.)

Well, if people are getting care anyway, why make a big fuss about who is insured or not and who pays? As it turns out, health insurance makes a huge difference in who gets care and the type of care they get.

The title of a report issued last year by the Institute of Medicine summed up the situation — “Care Without Coverage: Too Little, Too Late.” The summary of 130 research studies found that the uninsured are likely to be sicker and die sooner than their insured counterparts.

Even when admitted to the hospital, say after an auto accident or a heart attack, the uninsured receive fewer diagnostic and treatment services. The uninsured receive less frequent cancer screenings, resulting in delayed diagnoses and premature mortality. Professionally recommended standards for managing chronic diseases are often forgone with tragic consequences, such as the timely eye and foot exams that can help avert blindness and amputations in persons with diabetes.

The inefficiencies of the system reverberate in ways that have consequences,

not just for uninsured folks, but for the community at large. As Diane Rowland, executive director of the Kaiser Commission on Medicaid and the Uninsured, said in releasing the study on uncompensated care, “Uncompensated care is not a substitute for insurance. We are paying for a substantial amount of care for a large uninsured population without a guarantee of coverage. The implication is that we pay for care in the least efficient way possible — after people get sick and need emergency or hospital care.”

Emergency departments in many American cities are becoming so crowded that diversion — rerouting patients because an ER is full — is a perennial problem. As an article in the Annals of Emergency Medicine put it, “Unless the problem is solved in the near future, the general public may no longer be able to rely on emergency departments for quality and timely emergency care, placing the people of the country at risk.”

The Bush administration proposes implementing tax credits to help more people pay for health insurance, tinkering with Medicaid and offering seniors prescription drug benefits in exchange for enrolling in private Medicare plans.

Ron Pollack, executive director of Families USA, said the president’s health care proposal is “like throwing a 10-foot rope to a person in a 40-foot hole.”

Well, then, who has a 40-foot rope?

Quixotic advocates of single-payer, universal coverage schemes are still proposing wholesale reforms. More calls have been heard recently for employer coverage mandates.

Perhaps, for the first time since then-first lady Hillary Rodham Clinton took on the health care system (and met her match), universal coverage and access may truly be up for debate.

Jeff Stryker is a San Francisco writer specializing in medical ethics. He is working on a book about sperm banking.

http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2003/04/27/IN96867.DTL

California Dreamin’

SFGate.com
April 26, 2003
Despite budget woes, lawmakers trying to deal with uninsured
By Steve Lawrence, Associated Press Writer

…California legislators have introduced at least five bills designed to reduce the number of uninsured.

They range from a measure to increase the number of people covered by the state’s Healthy Families program to a bill that would set up a state-run universal health care system with an elected commissioner.

In between are bills that would require all or most employers to offer their workers health coverage.

The bill that seems to have the best chance of passing is a measure by Senate President Pro Tem John Burton, D-San Francisco, and Sen. Jackie Speier, D-Daly City, who chairs the Senate Insurance Committee.

Not only is it co-authored by Burton, who is generally considered to be the Legislature’s most influential member, it has the support of labor leaders and the California Medical Association, a powerful physicians’ group. Art Pulaski, executive secretary-treasurer of the California Labor Federation, predicts it will also win some business support.

Commonly known as a “pay or play,” it would require employers to pay at least 80 percent of the cost of a health insurance policy for their employees, either by buying the policies themselves or contributing to a state fund that would provide coverage.

Sen. Sheila Kuehl, D-Santa Monica, says the ultimate solution is the so-called “single payer” approach in her bill, which would create one state fund to provide health insurance for all Californians.

It’s the only plan that would cover all Californians and actually cut health care spending by reducing administrative costs and eliminating health care profits, Kuehl says.

The Lewin Group, a consulting firm based in Falls Church, Va., looked at nine health insurance options for the state Health and Human Services Agency in 2002, including three single-payer proposals, and concluded the single-payer approach could save the average family up to $813 a year.

But single-payer proposals have been tough to enact. California voters rejected one in 1994.

Voters tend to oppose single payer plans because they take them from their current insurance to something unknown, says John Sheils, a vice president with the Lewin Group.

But Kuehl says she’ll keep bringing it back as many times as it takes. “It’s truly the only plan that makes sense for California.”

On the Net: Read the bills, SB2, AB30, SB921, AB1527, AB1528, at www.senate.ca.gov and www.assembly.ca.gov

http://www.sfgate.com/cgi-bin/article.cgi?f=/news/archive/2003/04/26/state14 13EDT0073.DTL

Lack of a single payer system kills patients

Los Angeles Times
April 23, 2003
County-USC Doctors Say Delays Fatal
By Tracy Weber and Charles Ornstein

Emergency room patients regularly wait as long as four days for a bed at Los Angeles County-USC Medical Center, and some die before receiving critical medical treatment, according to sworn declarations by the hospital’s own doctors.

…the case of a 40-year-old woman with an arterial blockage in her lungs who was kept in the emergency room for more than 30 hours because an intensive care unit bed was not available. She suffered cardiac arrest and died.

…another case, doctors couldn’t treat a patient with shortness of breath quickly enough. “This patient died before we were able to help him…”

…an ER in which as many as 156 patients were crowded into 43 treatment areas, exams were conducted in the hallways, and there was “no such thing” as patient privacy.

“Imagine trying to maintain your dignity while using a bedpan in a hallway lined with stretchers.”

“We often have to squeeze three patients, both men and women together, into one booth designed to hold two. The lights are never turned off, the noise level is high, there are no facilities to wash and there is no privacy.”

…noncritical patients are waiting 16 hours or more just to be treated by a doctor in County-USC’s emergency room. If they need a bed upstairs, some are forced to wait a day or longer.

According to the county Emergency Medical Services Agency, County-USC asked ambulances to stay away nearly 75% of the time last year because it had nowhere to place patients. Paramedics who nonetheless deliver patients often must sit and wait for hours to transfer the patient from their gurney to one at the hospital.

Those who need immediate treatment for a fractured pelvic bone can wait up to two weeks for care. And patients who need surgery for such injuries as repeated shoulder dislocations could wait years.

…a 75-year-old woman admitted with a broken hip had to wait a week for surgery because no bed was available. She developed a blood clot from lying prone for so long and died despite the surgery.

…a 30-year-old pregnant woman with gallstones was forced to wait 10 days for surgery. She developed an infection of the gall bladder, which spread to her blood. She lived; her baby died.

In January, the Los Angeles County Board of Supervisors voted to authorize the closure of the first 50 beds at County-USC, along with the closure of Rancho Los Amigos National Rehabilitation Center in Downey. The remaining 50 beds are scheduled to be cut next year.

http://www.latimes.com/news/printedition/front/la-me-usc23apr23002425,1,1172 782.story?coll=la%2Dheadlines%2Dfrontpage

Comment: We’ve all heard many times the following generic quote. “The United States has the greatest health care system in the world, and we don’t want any part of rationing like they have in Canada and England.”

Well we do have the greatest resources, far more than enough to prevent inhumane rationing of urgent care. But we have the worst system of funding care, which results in health care conditions far worse than those in nations with less health care spending but with greater equity in resource allocation.

If we had a single payer system in the United States the horror story above would never have been written.

Mandating private plans increases costs

The New York Times
April 24, 2003
Proposals Attach a Price to Universal Health Care
By Milt Freudenheim

…a foundation (Commonwealth Fund) proposed spending $90 billion a year to cover almost every uninsured American.

http://www.nytimes.com/2003/04/24/national/24CARE.html

Washington Post
April 24, 2003
Gephardt Health Plan to Cover All
By Dan Balz

Rep. Richard A. Gephardt (Mo.), in a bid to set the Democratic agenda for the 2004 presidential campaign, proposed today an ambitious plan to provide access to health insurance to all Americans, at an initial cost of about $210 billion a year…

http://www.washingtonpost.com/wp-dyn/articles/A27256-2003Apr23.html

Tri-Valley Herald
April 24, 2003
High cost burdens insurance proposal
By Rebecca Vesely

A plan hatched by Blue Shield of California requiring health benefits for all residents would cost taxpayers and employers an additional $7.8 billion (for California), according to a new study.

Bruce Bodaken, chairman and CEO of Blue Shield of California, announced the findings…

http://www.trivalleyherald.com/Stories/0,1413,86~10669~1347104,00.html

Comment: These proposals have helped to revive discussion of solutions for the problem of the uninsured. These proposals build on the current system which is highly dependent on private health plans. These proposals significantly increase costs, as do all proposals that perpetuate the role of private health plans.

There is virtually universal agreement that cost containment must be a goal of reform. The only proposals that promise cost containment while providing universal coverage are those which eliminate the wasteful private plans, replacing them with a single, publicly-administered program under a global budget.

We can understand the political reasons for Richard Gephardt’s proposal, the economic reasons for Bruce Bodaken’s proposal, and the reasons for Commonwealth Fund’s attempt to achieve consensus amongst all players with their diverse interests. But isn’t it time to concentrate instead on a model that would provide truly affordable health care coverage for everyone?

Health insurance underwriting cycle

MILLIMAN, USA
April 10, 2003
Health Insurance Underwriting Cycle Effect on Health Plan Premiums and
Profitability
By Richard Kipp, M.A.A.A., John P. Cookson, F.S.A., & Lisa L. Mattie, R.N.

Health care cost trends are not the only factor influencing the change in health insurance premiums. Competition, legislation, regulation and difficulty predicting future costs are all contributors to the phenomenon called the underwriting cycle-a repeating pattern of gains and losses within the insurance industry. As the cycle plays out, expected trends and the associated premium increases tend to go above or below the actual rate of change in underlying health care costs. Today, as the cycle approaches another highpoint, we see improved profitability of Plans as premium growth exceeds the growth in the costs of health care claims for Health Plan enrollees.

Today as premium growth again climbs into the double-digits, it is important to understand the role this cycle plays as we formulate a policy response to current trends.

This report first discusses the underwriting cycle in general terms, and then describes some of the actions and reactions that Health Plans’ typically exhibit at various points during a cycle. Lastly, the report discusses specific events of the 1990s that may have contributed to the pattern of insurance company profits and acted to exaggerate upward and downward swings in premium growth-swings that went well above or below the actual changes in underlying health care costs.

http://www.hospitalconnect.com/aha/press_room-info/content/MillimanReport030410.pdf

Comment: This report, prepared by a leading consulting firm for the health care industry, provides a clear description of the underwriting cycle. It is important to understand why we have intermittent periods of excessive premium increases interspersed with solvency issues that continue to threaten the stability of the health care system.

This is yet one more reason why we should abandon the use of “market forces” to control health care funding in the United States, and, instead, adopt a rational, single payer system of funding care.