Speaker – Page 1179

Impact Of Health Plan Design And Management On Retirees’ Prescription Drug Use And Spending, 2001

Authors of a new study published today on the Health Affairs Web site say that higher drug cost-sharing saves money for retiree health plans, but enrollees pay more; drug utilization isn’t necessarily reduced. The authors conclude that policymakers should consider how copayments change use when designing a Medicare drug benefit. To view the article, go to www.healthaffairs.org/WebExclusives/Thomas_Web_Excl_120402.htm.

BETHESDA, Md.—Employer health plans that charge retirees higher copayments for retail pharmaceuticals saved themselves 18.7 percent per member on average in 2001, but their enrollees on average had 59.4 percent higher out-of-pocket costs ($389 versus $244), according to a new study published as a Health Affairs Web exclusive.

The study demonstrates the effects that plan design might have on costs and drug use under any Medicare prescription benefit, write authors Cindy Parks Thomas, Stanley S. Wallack and colleagues from Brandeis University’s Schneider Institute for Health Policy. The authors write that the study shows that higher copayments lead to the use of less-expensive drugs and fewer retail purchases, although they argue that Medicare should consider using copayment strategies in combination with other cost-containment mechanisms such as encouraging generics, mail-order delivery of prescriptions, prior authorization, and provider education.

The authors studied prescription drug claims made by more than 29,000 retirees age 65 and older enrolled in 96 employer plans managed by one pharmacy benefit management firm. They compared prescription drug use and costs in a number of plan designs, including those with multiple “tiers” of benefits and cost-sharing requirements.

They compared plans with cost sharing categorized as “more-aggressive” and “less-aggressive,” defined by whether they required an above- or below-average copayment for brand-name drugs, or whether they required coinsurance of more or less than 30 percent for brand-name drugs. The “more-aggressive” cost-sharing plans had average per-enrollee costs to the plan of $1,155 and average enrollee out-of-pocket costs of $389 in 2001. The “less-aggressive” plans had average per-enrollee plan costs of $1,421 and average enrollee out-of-pocket costs of $244 in 2001.

Enrollees in the more-aggressive plans had on average overall costs of $1,544 in 2001, compared to less-aggressive plans, which had fewer 30-day equivalent prescriptions and overall costs of $1,665 per enrollee. The study attributes half of the difference in costs to the higher cost-sharing in the more-aggressive plans, but says the greater use of generics, less expensive brands, and more mail-order delivery lowers the costs of drugs in those plans.

Across all the plan designs studied, average annual spending per enrollee was $1,571 in 2001, with average member out-of-pocket cost-sharing of 18 percent. The plans that had the highest member cost-sharing were the single-tiered plans with at least 50% member coinsurance for retail purchases, combined with mail order incentives, and the three-tier plans that charged between 10 percent and 40 percent member coinsurance, depending on the type of drug. Those plans had total member out-of-pocket cost sharing of 28 percent and 22 percent, respectively.

The study also found that enrollees are more likely to use generics when they fill their prescriptions at retail pharmacies under plans that have the greatest spread in copayments between brand-name and generic drugs. This is particularly true in plans that make use of coinsurance, which as a percentage of the total cost is variable based on the total price of the drug and not a flat copayment. For example, the authors found that in three-tier plans with a maximum 30 percent coinsurance for retail purchases and an actual copayment difference of $15 between generic and brand-name drugs, 44.5 percent of prescriptions were generic. In a three-tier plan with a $5 to $10 difference between tiers, only 36.1 percent were generic.

In addition, the study found that use of generic medications and use of mail order can save money both for enrollees, through lower copayments, and plans, through lower overall costs. The average mail-order price for all prescriptions was 16.4 percent less than retail. However, use of generics saved the most, with the average price of a generic prescription over 70 percent less than the average brand, at the pharmacy or through mail order.

The study can be read at www.healthaffairs.org/WebExclusives/Thomas_Web_Excl_120402.htm.

The research was funded by the U.S. Department of Health and Human Services Office of the Assistant Secretary for Planning and Evaluation.

Health Affairs, published by Project HOPE, is a bimonthly multidisciplinary journal devoted to publishing the leading edge in health policy thought and research.

The employer-mandate tsunami

The Mounting Crisis in Health Care
Universal medical coverage needs universal commitment

Bruce G. Bodaken, CEO, Blue Shield of California

Hardly a day goes by that we don’t hear a story about turmoil in California’s health-care system: the collapsing trauma network in Los Angeles; hospital overcharges in Redding; bankrupt medical groups in San Jose or nurses on strike in the East Bay. Health-care costs are rising at astronomical rates, thousands are losing their insurance and the state government is too broke to adequately fund health-care programs for the poor.

According to the U.S. Census Bureau, one in five Californians — more than 6 million in all — are uninsured. They include workers in small businesses who aren’t offered insurance and can’t afford to buy it on their own; and people who are eligible for public programs such as Medi-Cal and Healthy Families but don’t know how to navigate the bureaucracy. A surprising number are wealthy and healthy enough to afford insurance but choose not to buy it.

With a weak economy, rapidly escalating costs and an aging population needing more services, a deepening crisis is inevitable. Something must be done.

What are the consequences of not having insurance? You’re more likely to live sicker and die poorer. Each year, 18,000 people die unnecessarily because they lacked health insurance, and uninsured infants are 50 percent less likely to survive than newborns with insurance. If you’re uninsured, you probably ignore the first symptoms of an illness and wait until you’re really sick before seeing a doctor. More often than not, you’ll go straight to the emergency room, a costly and impersonal place to receive basic medical care.

Meanwhile, well-off people without any symptoms are spending $900 for full- body scans they don’t need. When the scan finds something ambiguous, they spend thousands more getting additional tests that prove they’re healthy after all.

This unequal and inefficient system must be changed. A new model should be based upon individual, corporate and societal responsibility.

Here’s what we should do:

— Build upon the existing employer-based system: Preserve a paradigm that has successfully insured a majority of American workers and their families for six decades. Require employers, except smaller companies, to offer coverage or contribute an equivalent amount toward an essential benefit package for each employee.

— Promote state programs: Enroll every eligible Californian in Medi-Cal or Healthy Families. The state and private sector should work together on creative and effective marketing and outreach strategies.

— Require coverage: Require those who can afford insurance to buy it. Others would be subsidized based upon documented need.

— Define essentials: Provide an essential benefits package, designed by independent medical professionals, that would guarantee preventive care, physician services, hospital care and prescription drugs.

— Encourage savings: Achieve savings through expanded preventive care, earlier treatment of the formerly uninsured, reduced use of emergency rooms and more secure financing.

— Establish tax-based funding: Supplement the additional business and individual contributions to the insurance pool with a modest, broad-based tax or fee as needed.

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2002/12/02/ED52155.DTL

Comment: To say that there is a tide of support for an employer mandate for health care coverage with a public program for low-income and uninsurable individuals would be a gross understatement. That tide is a tsunami that will soon engulf California. The employer mandate is now supported by politicians, business, labor, organized medicine, hospital administrators, consumer organizations, and the insurance industry. In March, the RWJ Covering the Uninsured campaign will unleash efforts to align public opinion in support of this model of reform. It is likely that this year the employer mandate will cross the threshold of political feasibility.

California will serve as a testing ground for political solutions for our health care crisis. Sen. Jackie Speier will be introducing legislation in support of the employer mandate/public insurance model, and Sen. Sheila Kuehl will be introducing legislation supporting a single payer model. Both are vast improvements over our current fragmented, wasteful and inequitable system. But there are major differences.

The single payer model has the advantage of reducing administrative waste, allowing more funds to be directed towards a more equitable system of health care. It would provide economic mechanisms to slow the escalation of health care costs. The employer mandate/public insurance model would perpetuate both administrative excesses and the inequities of a system in which multiple health plans game the system to shift costs. And the public insurance component inevitably would be underfunded as it would be perceived to be a “welfare program.” But the employer mandate/public insurance model has one overwhelming advantage: political feasibility.

Our task is to make every effort to be certain that the public understands all options available. The other vested interests understand the issues and realize that the employer mandate/public insurance model comes closest to meeting their collective needs. The task to educate the public will be monumental. But the Canadian Romanow study confirms that a public that has decades of experience with a single public model emphatically rejects the suggestion that our system of private and public health plans would be preferred.

For the democratic process to function properly, it is essential that we have an informed electorate. Since the vested interests profit by disinformation, it is our task to be sure that the public really understands all options. Immediate initiation of massive grassroots coalition efforts is mandatory. The alternative is a system, by default, that primarily caters to the vested interests of those with money and power, relegating patients to a secondary position.

Roberta Palmer Health-care reform post-Measure 23

Measure 23 (Health Care for All) died an ignominious death on Nov. 5, but the health care crisis is still with us. The Oregon Health Plan’s future is uncertain and nearly half a million Oregonians are uninsured, including many low-wage workers. Many more are underinsured and struggling to pay exorbitant premiums. On a national level, moderate Sen. John Breaux of Louisiana declares that U.S. health care is “collapsing around us”. The horror stories that volunteers for Measure 23 heard during the campaign are remembered. But where do we go from here?

Americans spend far more on health care than other developed countries. Yet, the U.S. ranks only thirty-seventh in quality, according to the World Health Organization. Employer-based health care greatly increases labor costs, holds down wages, and keeps employees tied to particular jobs. U.S. health care costs are distributed through premiums, employer benefits, out-of-pocket expenses, and TAXES, so that the full cost is not appreciated. Our taxes pay for 60 percent of U.S. health care, while the Canadian government pays for 70 percent of Canadian health care. We are paying for a national health care system, but not receiving it.

Congress seems committed to “incrementalism” – just covering children, the needy, prescription drugs for the elderly, etc. From a cost-control viewpoint alone, two things are wrong with our piecemeal approach. First, as long as the uninsured are increasing and not getting preventive care, rising costs will be shifted to the insured. Restricting health care has contributed to the double-digit inflation in health care premiums. In any insurance plan, the larger the risk pool, the smaller the cost for the individual. Therefore, cost-effective health care will start with universal coverage. Second, the huge administrative costs of the insurance companies must be eliminated. Health care as a public service does not fit a profit-driven system. Administrative costs of a single-payer (government-insured) health care system are typically one-fifth that of a U.S. insurance company. Additionally, a national plan (as opposed to state-wide) eases the burden on small states and eliminates the migration argument.

The General Accounting Office has determined that single-payer national health care is the most cost-effective method of health care delivery that maintains providers in the private sector. It is no stranger to the U.S. Medicare was originally conceived as a single-payer system but is presently filtered through many insurance companies, adding to the complexity, expense, and diminishing coverage.

While the benefits of national health insurance are clear, many obstacles stand in the way. Americans must be persuaded that under such a system, provider choice would expand, not diminish, and that quality need not be sacrificed. The feeling that government cannot properly administer any public service is an American conviction, in spite of the popularity of Social Security, Medicare, Medicaid, an excellent military, and the fact that over 90% of Americans are publicly educated.

Where does health care reform go from here? A simplified state-wide initiative might be attempted to keep the issue alive. More Americans must be registered to vote so that they can support reform-minded candidates. Support the Wyden-Hatch Act and other legislation that will be introduced in 2003. In the meantime, let’s keep talking.

(Roberta Palmer, M.D., of Tigard is a member of Physicians for a National Health Program.)

NUPGE Report Card on the Romanow Report

By NUPGE Research

Since the beginning of our campaign to protect and build Canada’s Medicare, the National Union of Public and General Employees has recommended that the different levels of government work together to reach ten objectives. We believe that these ten objectives are not only about the health of Canadians, they are also about the economic health ofCanada. Achieving these ten objectives is the best way to ensure that we have a sustainable health care system that reflects Canadian values and lives up to Canadian standards for efficiency. We also believe that these ten objectives draw on the courage of the original vision put forward by the pioneers ofCanada’s Medicare and fulfill that vision by restoring, rethinking, and reinvesting in public Medicare and the people who provide health services. This report card is intended to evaluate how well the final report of the Romanow Commission stacks up against the National Union’s ten objectives.

Objective 1

Adequate and stable public funding
Romanow Report Grade: A

The report recommends the federal government provide “adequate, predictable, and stable public funding for Medicare.” To do so, the report recommends a multi-billion dollar injection of federal funds until it reaches a 25% minimum cash floor of Canada Health Act insured services – $6.5 billion more per year by 2006 – $3.5 Billion in 03/04, $5 billion in 04/05, and $6.5 Billion in 05/06. NUPGE, the CLC, other unions and many of our health coalition partners have called on the federal government to increase its share of health funding to 25% of publicly insured services. The Romanow report clearly reaches this benchmark.

As equally important as proposing increased federal funds, the report recommends that the new federal cash be used to “buy change” by attaching strings (through earmarked funding initiatives) to the new funds. In addition, the report recommends that the CHST be abandoned and replaced with a separate fund for health care transfers to the provinces (called the Canada Health Transfer) with a built-in escalator provision so that federal funding would keep pace with economic growth. This is the kind of accountability and transparency that’s necessary to ensure that any new health dollars actually go to health care services rather than tax cuts or other areas and it is something the labour movement has called for over the last 8 years.

The Romanow report is much better that the Kirby report when it comes to increased public funding for Medicare. Kirby proposed what amounts to a permanent user fee, payable by all tax payers. Kirby’s proposal would not raise enough funds and it does not meet the test of fairness.

While we could argue that Medicare needs more money than what is being proposed, what is being offered is significant (particularly if the federal government gets to the 25% minimum, using the existing progressive income tax system and its revenues, with a built-in escalator) and this section of the report is positive and comes very close to meeting our Objective.

Objective 2

Never for profit
Romanow Report Grade: B

The report states that: ‘Medicare is a moral enterprise, not a commercial venture. Medicare is a right of citizenship … It is a far greater perversion of Canadian values to accept a system where money, rather than need, determines who gets access to care. ” The report concludes that private, for-profit health care runs the risk of being more expensive, providing worse care and undermining the value of fairness.

The report clearly states that Romanow challenged those advocating private sector solutions to provide the evidence but that evidence was not forthcoming. The answer to Canadian health needs, the report concludes, does not lie in the private sector but in a better funded public system.

The Romanow report also recommends decisive action to curb the growing number of private for-profit MRI and other diagnostic services clinics, concluding that these private clinics lead to queue-jumping and this violates the principles of the Canada Health Act. The report recommends that diagnostic services be explicitly included under the definition of insured services under the Canada Health Act. The report recommends that there be no user fees, facility fees or extra billing for MRIs and CT scans; thus, making it illegal for anyone to be charged an out-of-pocket fee for these services. The report recommends thatOttawapenalize any provinces that allow private delivery of diagnostic services. The report also states that the current status of injured workers (WCB claims) getting preferred access to care and being sent to private clinics violates the principle of equal access. Further, the report proposes a Diagnostic Services Fund of $1.5 billion over 2 years to improve wait times.

The report looks at Public-Private Partnerships and essentially concludes that they’re not a good idea and will end up costing taxpayers more than if the government had simply done the job itself in the first place. The report also notes that these arrangements can have the effect of hospital bed closures and a reduction in staffing levels.

The Romanow report also recommends that user fees, medical savings accounts, deductibles and tax-based co-payments continue to be banned by the CHA.

Clearly, this is much better than the Kirby report which has no problem with further commercialization, private for-profit ownership and delivery.

However, the report does have a major weakness on the issue of privatization. It offers reasons and suggests there is evidence that contracting-out of non-medical services such as food preparation, laundry, maintenance and cleaning is okay. This is not the right thing to recommend or the smart thing to recommend and therefore the report, on this point, is extremely disappointing.

Further, while the report gives strong rationale for opposing private for-profit care, the report is missing a specific recommendation of a specific mechanism for banning private, for-profit delivery of health services.

In addition, while the report is critical of P3s it stops short of recommending they be banned completely and even suggests that they might be useful in non-direct health areas such as “health information systems.”

This section of the report went far, but could have and should have gone even further. In any health care institution, germ-free environments, properly sterilized laundry and food safety are critical to the well-being of patients – we can’t afford to cut corners with for-profit laundry, dietary and maintenance services. The report should have said this but it didn’t. Therefore, this section of the report does not completely meet our Objective.

Objective 3

Debunk private health care myths
Romanow Report Grade: A

The report is an eloquent defence of public Medicare. It offers unqualified support for the principles underlying public Medicare. It dismisses the myth that public Medicare is on the brink of collapse. It debunks the myth that public Medicare is unsustainable or unaffordable. It also challenges the myth that private, for-profit care is more efficient, would shorten waiting lines, and provides better care (except when it comes to support services and this is a problem with the report). It also concludes that ‘innovations’ such as user fees, medical savings accounts, P3s etc. are nothing more than standard right-wing nostrums that will do nothing to improve Medicare.

This part of the report is very positive and meets our Objective.

Objective 4

A comprehensive national health human resources strategy
Romanow Report Grade: B

The report suggests the need to look at changing the scopes and patterns of practice of health providers.

The report argues for a national database to analyze relevant human resource information, and track and forecast trends.

It also suggests that governments stop recruiting health care workers from third world countries.

The report calls for a Rural and Remote Access Fund ($1.5 Billion over 2 years) to attract and retain health care providers, including opportunities for health professionals to train and gain experience.

There are not enough substantial recommendations on this subject – i.e. it does not make specific suggestions for training and upgrading skills of existing health professionals and other workers. Most of the details of a national health human resources strategy are left to be developed by a new Health Council of Canada. We were hoping for more substantive recommendations and a national fund for a human resource strategy. We were also looking for a proposal to promote and market the various health professions.

On this subject, the Romanow report only partially addresses the Objective we set out.

Objective 5

Primary Care Reform – Develop a system of blended care
Romanow Report Grade: A

The report recommends a common national platform for primary care reform.

It recommends a $2.5 billion investment over 2 years through a Primary Health Care Transfer in order to remove barriers to change and kick-start reform. Of course, service delivery is provincial jurisdiction, so Romanow recommends the federal government link the new funding to provincial pursuit of the community clinic model.

The changes it proposes include: full-service community health clinics where patients can access a team of health professionals 24-7and receive everything from a doctor’s prescription to nutritional advice to physiotherapy and psychiatric help.

There is also an emphasis on the need for cultural diversity and removing language barriers to improve access to care.

The report also talks about the need to put more emphasis on wellness and disease prevention programs – tobacco, obesity and physical activity are good choices to start with for health promotion.

In some ways this section of the Romanow report is similar to Kirby’s proposal of creating primary-care groups of different types of health-care providers. However, Romanow’s recommendation is better in that it calls on the federal government to use any new money to ‘buy the changes needed in primary care reform’ and it talks about wellness and prevention programs being critical to good health.

The focus on primary care reform, integrated with health promotion and disease prevention is long over-due. This section of the report and its related recommendations are very positive and come very close to meeting our Objective.

Objective 6
Add home care to the Canada Health Act
Romanow Report Grade: B

The report recommends that Ottawa kick-start a process (and provide the foundation for) a national home care program by covering all priority home care services – i.e. intervention services, home mental health services, palliative care, post-acute home care – through a Home Care Transfer of $2 billion over 2 years.

It is not clear what the report suggests should be done with home support / personal support services. It has no specific recommendation on bringing these services under the CHA so we must assume it is okay with those services, for the most part, being left out of the Act and therefore becoming out-of-pocket expenses for all intents and purposes. This would not be the right thing to do or the smart thing to do. These are services that allow people to live with dignity in their own homes. That both improves care and saves money by keeping people out of hospitals.

The Kirby report called for a national home care program that would cover only those just released from hospital or those near death.

This part of the report does not go all the way and recommend a new national program immediately, and not mentioning home support services is disappointing, but it does propose a good step forward in the direction of including all home care services under the CHA. It doesn’t completely meet our Objective but it brings us a closer to a national home care program.

Objective 7
Add long term care to the Canada Health Act
Romanow Report Grade: D

The Romanow report is a dismal failure on this Objective. The report does not make any recommendations at all for institutional care.

It assumes, for the most part, that through home care reform and increased coverage of acute and palliative home care services under the CHA, you would be able reduce the demand for beds in long-term care institutions.

The report does not recommend national standards for long-term institutions and it does not recommend new immediate public funding for long-term care.

The total lack of recommendations in this area is clearly a major win for the huge private corporations involved in the long-term care industry i.e. Extendicare.

Objective 8
Add a national pharmacare program to the Canada Health Act
Romanow Report Grade: A-

The report concludes that the short term priority should be to provide public funding for “catastrophic drug costs” with the Canada Health Act eventually covering the cost of prescription drugs.

It recommends the establishment of a National Drug Agency and a National Drug Formulary as a national strategy for dealing with soaring drug costs, providing comprehensive coverage and objective and accurate information on drugs.

The Romanow report also calls for a review of current drug patent laws inCanada.

The Romanow recommendation is better than Kirby’s proposal which calls for public coverage after $5,000 and does nothing to address the root causes of soaring drug costs (patent law).

This recommendation falls short of our Objective of a National Pharmacare Program but it offers a huge step in the right direction, especially on the recommendation to review patent laws.

Objective 9
Exclude health services from all international trade deals
Romanow Report Grade: A

The Romanow report offers a strong message on this issue. The report issues a ‘warning flag’ on globalization and trade deals and their impact on the future expansion of public health care.

It recommends that governments must not delete from trade deals any of the current protections and exemptions for health care and it states thatCanadashould work with other nations to protect public health care from trade agreements.

It also states that any future efforts to expand public Medicare must also be protected from trade deals.

It also states that the right to regulate health policy should not be subject to claims from foreign companies.

The Romanow recommendation is better than the Kirby report which ignores altogether the risks posed by NAFTA and other trade agreements that further privatization of health services would open the door to US and other foreign corporations to penetrate our Medicare and take over its services.

The report could have called for a renegotiation of trade deals which would provide even stronger protection for public health services. There should have been a recommendation that the Canadian government take TeleHealth technology off any trade negotiation table.

On the whole, the Romanow report is strong on this subject and comes very close to meeting our Objective.

Objective 10
Women’s equality in health care
Romanow Report Grade: A

The report recommends that governments provide some kind of financial aid to those (overwhelmingly women) who have to stay at home to care for sick, elderly or disabled relatives. On principle this is an excellent recommendation and it takes us into any area governments have not yet ventured. Of course, the devil will be in the details with respect to how the assistance is provided – likely through the EI system

The recommendation of increased public funding and reversing the trend of privatization is also very helpful for health care workers the majority of whom are women. Contradicting this, however, is the section of the report that offers reasons for contracting-out support services. This would unevenly affect women workers and so this aspect of the report could have been better.

The report does not offer enough to address the unique health needs of women and related access issues.

The Romanow recommendation is much better than the Kirby report which ignores the uneven burden faced by women when it comes to unpaid care giving in the home. Further the Kirby endorsement of private for-profit ownership of facilities and services would actually exacerbate the uneven burden and unequal access to health services faced by women.

The report goes further than any other to address the uneven burden faced by unpaid care-givers (mostly women) and comes close to meeting our Objective.

Other Important Recommendations

· A new Canadian Health Covenant is proposed to express Canadians collective vision for health care and updating the Canada Health Act.

· A New Health Council of Canada to foster collaboration amongst governments and stakeholders.

· The report recommends that a 6th principle of “accountability” be added to the Canada Health Act.

FOR MORE INFORMATION:
Contact Mike Luffat
Phone: 613-228-9800
Fax: 613-228-9801
Email: mluff@nupge.ca
Visit: www.nupge.ca
www.savemedicare.com
www.youthformedicare.ca

Strong medicine

Health care reform is back in the news. This time, does it stand a chance?

By Jonathan Cohn, 12/1/2002

WHEN SENATOR EDWARD Kennedy announced on Nov. 21 that he would soon propose a plan for universal health insurance, it barely qualified as news. Kennedy has been a member of Congress for 40 years now, and in that time he’s introduced major health care bills at least a dozen, maybe two dozen times. But for once, Kennedy’s timing seemed exquisite. In the past, the senator has been a lonely champion of health care reform, fighting not only Republicans but even more cautious members of his own party. This time around, Kennedy has company in his crusade. And lots of it.

Just days before Kennedy made his announcement, Al Gore surprised reporters with his announcement that he will call for the creation of a ”single-payer” health insurance system in the United States – that is, a system in which the government provides every citizen with health insurance directly, just as it does in Canada. Almost immediately, two of Gore’s would-be rivals for the 2004 Democratic presidential nomination, Senators John Edwards and John Kerry, indicated they’d soon be unveiling health care plans of their own. Assuming all three men make good on their promises, they’ll be following the lead of a fourth Democratic presidential contender, Vermont Governor Howard Dean, who long ago made universal health insurance the centerpiece of his upstart candidacy.

And Democrats running for president aren’t the only ones talking about big changes in health care. The National Academy of Sciences has placed a starkly worded report on the desk of President Bush. ”The American health care system is confronting a crisis,” it reads. ”The health care delivery system is incapable of meeting the present, let alone the future, needs of the American public.” The academy went on to recommend that the federal government allow a handful of states to experiment with different schemes for achieving universal coverage, a message the Bush administration said it would take to heart. And while Bush doesn’t exactly have the budget space to enact a major health reform right now – frittering away $1.7 trillion on a tax cut for the wealthy will do that – he has been talking up a more modest initiative to help the uninsured buy coverage for themselves.

Feel like you’ve heard this all before? That’s because you have. In the early 1990s, as health care costs skyrocketed and a deep recession drove up unemployment, large numbers of Americans began to fear losing their insurance coverage and having to face serious medical bills, much as they do today. Panels of experts began churning out dire warnings of systemwide collapse and, before long, health care reform was the dominant topic in politics. During the 1992 campaign, the popularity of Bill Clinton’s health care pitch even forced the incumbent president, Republican George H.W. Bush, to craft a modest reform package similar in broad outlines to what his son offers today.

Of course, all the talk about health care reform in the early 1990s didn’t exactly make it happen. On the contrary, in 1994 Clinton’s ambitious health care proposal died an ignominious death: Even though the Democrats controlled both the House and the Senate, the plan never came up for a vote on the floor of either chamber. Ultimately, it unleashed such furious political opposition that the Democrats lost control of the House for the first time in a generation. So while it seems pretty obvious that another national dialogue about health care is beginning, the real question is where that discussion will go. Will it produce meaningful change? Or will it produce exactly what the last great health care debate produced – namely, nothing?

Certainly, there are reasons to doubt that large scale health care reform will take place soon. A major reason that the Clinton plan ran afoul of public opinion was that substantially expanding the reach of health insurance coverage inevitably requires substantially expanding the reach of government. The voters were pretty ambivalent about that prospect then, and they still are now. What’s more, you can bet the special interests who fought reform so vigorously in the 1990s – particularly the small business lobby and portions of the insurance industry – will do so again.

But even if those conditions remain largely the same, one key barrier to reform may be gone: the sense among middle-class Americans that their current insurance policies are sacrosanct. If you remember the fight over the Clinton health care plan, then you probably remember the ”Harry and Louise” ads on television. Those spots featured a middle-class couple sitting around their kitchen table, purportedly reading aloud from the Clinton plan and recoiling at its provisions. As Harry and Louise explained it, under the Clinton plan Americans would lose their choice of doctor, their access to life-saving treatments, and so on. The advertisements echoed what would become the main line of attack against the Clinton plan: that middle-class Americans stood to lose more from government intervention in health care than they stood to gain.

Such an argument is unlikely to be so persuasive today. When government reform failed in 1994, employers took it upon themselves to restrain costs through managed care – a method that, although effective, rankled most consumers. Suddenly, all of the dire predictions of Harry and Louise were coming true anyway, even without the dreaded Clinton plan. Health maintenance organizations and other forms of managed care limited patients to selected groups of physicians, second-guessed treatment decisions, and created longer waits for those treatments that were approved. Whether or not these changes were necessary for the sake of containing costs, the fact is they made the status quo a lot less appealing to the average American. According to the Harris Poll, for example, the number of people who said health insurance companies do a ”bad job” of serving consumers jumped from 47 percent to 57 percent from 1998 to 2001 alone. That’s one reason regulating HMOs, a cause that burst onto the scene in the mid-1990s, became so popular so quickly. It’s also one reason that enthusiasm for a total overhaul of health care has quietly crept back to its pre-1992 levels.

Another traditional obstacle to health care reform has been the cost. Any successful program to extend health coverage to the uninsured is going to require raising taxes, and one might expect voters to resist, even if it’s just a matter of redirecting money they’d be spending on insurance premiums anyway.

But will they resist? Here is where today’s reformers can unleash some scare tactics of their own, thanks to another side-effect of the managed care revolution. During the late 1990s, as insurance companies slashed the money they paid doctors and hospitals, the providers of health care responded by downsizing and making their operations more efficient. They largely succeeded – it’s one reason hospitals like Beth Israel Deaconess and Massachusetts General, which were in so much financial trouble just a few years ago, are climbing back into the black – but only by compromising their ability to deal with surges of patients. The most visible result of this shift has been a nationwide epidemic of overcrowded emergency rooms, a crisis Boston knows only too well. As recently reported in the Globe, Massachusetts ERs are now diverting ambulance traffic twice as often as they did just two years ago. And once patients do make it into the ER, they must frequently wait hours – even days – before getting admitted.

Stories like this scare people, as well they should. And because everybody, not just the poor, might someday need care in an emergency room, concern about ER crowding can motivate otherwise complacent, relatively comfortable voters into supporting expensive health care initiatives. Just consider what happened in Southern California this Election Day, where voters in Los Angeles – cradle of the antitax movement – overwhelmingly approved a property tax increase in order to support local trauma care. A major reason they did so was a series of television ads portraying paramedics desperately seeking emergency rooms that would accept their patients. The ads were dramatizations, but they weren’t fiction: In LA, emergency rooms now divert ambulance traffic 40 percent of the time.

To be sure, it’s a long way from enacting a local ER tax to making health insurance a right of citizenship, as many reformers now propose to do. And as if to demonstrate the extent of that distance, on the same day voters in Los Angeles approved their new property tax the voters in Oregon, about as progressive a state as you’ll find on health care issues, overwhelmingly rejected a ballot initiative that would have required the creation of a universal health care program in the state.

But today’s reformers have learned a key tactical lesson from Clinton: don’t try to reinvent the entire health care system at once. That’s why Howard Dean, who once proposed a Clinton-like scheme for Vermont, has said he’ll work on insuring children up to the age of 22 first and worry about the adults afterward. Ted Kennedy may have a reputation as a radical, but his plan actually calls for leaving our current employer-based system intact. He’d simply require that businesses give their workers benefits and cover three-quarters of the cost themselves; employees would pick up the rest of the bill, with government subsidizing low-income workers who can’t afford their share of the premiums. Then there is the National Academy of Sciences approach to health reform: letting a few states experiment with universal coverage until somebody gets it right.

Al Gore’s proposal would appear to be the odd one out: The adoption of Canadian-style national health insurance would represent a sweeping change of Clintonlike proportions. But Gore may have learned a key lesson from Clinton, too. Clinton’s determination to produce a workable compromise ultimately produced a convoluted scheme that, however elegant on paper, was impossible to defend from Harry and Louise’s kitchen table jabs. Gore, by contrast, can describe his plan with one simple slogan, ”Medicare for All,” thereby linking it to one of the most popular and successful government programs of all time.

Admittedly, it will take more than simplicity to sell large-scale health care reform right now. If Congress can’t even pass HMO reform, a relatively modest measure that would merely regulate the way insurance companies make decisions about treatments, the prospects for more sweeping measures would seem pretty slim. But the plight of the uninsured and the anxieties of the currently insured are getting worse, and this means the political appetite for health care reform is likely to increase. Ted Kennedy obviously thinks it will. And judging by all his newfound political soulmates, he’s not alone.

This story ran on page D1 of the Boston Globe on 12/1/2002.
© Copyright 2002 Globe Newspaper Company.

Final report of the Commission on the Future of Health Care in Canada

Statement by Roy J. Romanow, Q.C, Commissioner
On the release of the final report of the
Commission on the Future of Health Care in Canada
November 28, 2002

Conclusion

In completing this report, I am acutely aware that the support of Canadians
for their health care system is not given freely. It is given in exchange
for a commitment that their governments will ensure that high quality care
is there for them when they need it.

If Canadians come to believe that their governments will not honour their
part of the bargain, they will look elsewhere for answers. And the grave
risk we will face is pressure for access to private, parallel services- one
set of services for the well off, another for those who are not. Canadians
do not want this.

Our reform agenda is an ambitious one, but at a time when one of our most
cherished national programs is at a crossroads, Canadians expect no less
than an ambitious plan.

I am always mindful of the lineage of Canada’s medicare system. It began
with the CCF party in my home province of Saskatchewan. It was a
Conservative Prime Minister who appointed Emmett Hall. And that it was a
Liberal government that introduced legislation to create modern Medicare.
And it was politicians of all stripes, and from all regions, that joined
together to UNANIMOUSLY approve it.

Ideology was not an issue then, nor should it be today. Medicare was simply
the right choice to make, and it remains so. Is it a left-wing or a right
wing agenda to want to provide Canadian businesses with comparative
advantages in the global marketplace? Is it a left wing or a right agenda to
opt for an approach to delivering services that any detached, objective
examination of the evidence shows to be more efficient, more affordable and
more equitable?

Forty years ago, when visionary men and women came together to create
Medicare, we had private medicine in Canada. You paid out of pocket to
receive medical services if you could afford them, or relied on the dole if
you couldn’t. If you needed an operation, you cashed in your savings,
mortgaged your home or sold your farm so you could pay, or you simply did
without. If you had the resources or good fortune, you were able to pay your
way to the front of the line; if you didn’t, you waited and prayed for the
best.

Many of the so-called “new solutions” being proposed for health care-
pay-as-you-go, user and facility fees, fast-track treatment for the lucky
few, and wait-lists for everyone else- are not new at all. We’ve been there.
They are old solutions that didn’t work then, and were discarded for that
reason. And the preponderance of evidence is that they will not work today.

In the coming months, the choices we make, or the consequences of those we
fail to make, will decide medicare’s future. I believe Canadians are
prepared to embark on the journey together and build on the proud legacy
they have inherited.

http://finalreport.healthcarecommission.ca/pdf/HCC_Speech.pdf

The entire report is now available at:
http://finalreport.healthcarecommission.ca/

Healthcare system is due for transformation

BCBSHealthIssues.com
Healthcare System Is Due for Transformation
By Margaret Heldring, PhD
President and CEO, America’s HealthTogether

At the top of the healthcare agenda for the 108th Congress could be the
transformation of our present healthcare system. According to a recent issue
of Health Affairs, nearly 60 percent of the national healthcare dollar is
now financed through taxes-for such programs as Medicare, Medicaid, SCHIP,
the Veterans Administration, tax-subsidies for workers, and public employee
benefit plans. The new Congress will be working hard to reduce that
percentage-by squeezing program revenues, cutting benefits, and forcing
individuals to pay for more of their own healthcare expenses.

At America’s HealthTogether/Coalition Health First, we believe that there’s
a better way. All Americans deserve quality, affordable healthcare.
Healthcare should be an essential service, such as public education and
national security that we all can count on. There is one insurance program
that includes everyone, regardless of income, race, ethnicity, gender, and
health status. One program that is administered efficiently and is simple to
understand and use. One program that guarantees choice of provider, and is
rated highly by a large proportion of its members. That program is called
Medicare for Americans aged 65 and older and millions of the disabled.

As more Americans are forced to drop their health insurance coverage because
of higher premium costs or to pay more out-of-pocket for their current
coverage, we predict that a new and improved Medicare program for all
Americans may start sounding like a winning solution in 2004.

Dr. Margaret Heldring served as the Director of Health Policy for former
Senator Bill Bradley’s 2000 presidential campaign. She is a clinical
psychologist with more than 30 years experience in health care.

America’s HealthTogether is a public policy organization devoted to assuring
affordable health care for all, unencumbered access to essential health care
services, and a belief that mental health is fundamental to good health.

http://bcbshealthissues.com/proactive/newsroom/release.vtml?id=35530

Woolhandler demands nationalized health care in U.S.

By Momoko Hirose: Herald Staff Writer

Dr. Steffie Woolhandler advocated a centralized, government-regulated system of national health insurance, urging members of the academic medical community to lend their support at a lecture Monday night at the BioMed Center.

Woolhandler is a co-founder of Physicians for a National Health Program and is also a member of the advisory board to Mass-CARE, the grassroots initiative for single-payer healthcare in Massachusetts.

Under the current U.S. health care system, numerous for-profit insurance companies operate with few regulations and little regard for patients, Woolhandler said. Regulating and centralizing the system would help cut costs and provide adequate care for most citizens, she added.

“The key conundrum in American health care and American health policy is allegedly the conflict between access and cost,” said Woolhandler. “It’s really elusory and, in fact, a single-payer health care system provides a mechanism through which we can improve access. We can improve quality and simultaneously control costs.”

Woolhandler presented over 20 slides, comparing the United States to other developed nations such as Germany, France and Italy. The United States lagged in life expectancy by two to three years, and its infant mortality rate was comparatively large with 12.2 deaths per 1,000 live births.

Almost every other developed country has 100 percent government-assured insurance, in contrast to the United States, which has only 45 percent, Woolhandler said. All developed nations except for the United States provide universal drug coverage.

“It’s true that we have wonderful hospitals, wonderful nurses, wonderful doctors, wonderful equipment,” Woolhandler said. “But the system as a whole is broken and functions very poorly.”

Across the nation, about 41 million people are uninsured, Woolhandler said. She said that the majority of uninsured citizens are the employed or the children of the employed. One out of every 12 Rhode Islanders is uninsured, according to the lecture pamphlet.

Woolhandler said that the overhead costs of insurance were the issue, pointing out that the CEO of AETNA insurance company makes $12.1 million annually.

“Tax-funded spending in the United States is higher than total spending in any other nation with the exception of Switzerland,” Woolhandler said. “Americans already through our taxes are paying the full cost of a national health insurance program in this country. And then they’re turning around and taking another $1,400 out of their pockets and paying privately.”

Woolhander added that 45.6 percent of all bankruptcies involve a medical reason or a large medical debt.

“It turned out that persons who said that their illness was a major financial problem to their family were much more likely than other patients to want to hasten their death in order to remove the burden from their families,” she said. “Think of what kind of adjective best defines that kind of health care financing system. I think ‘obscene’ is the most polite word that I can come up with.”

Woolhandler also used Canada as an example for the United States, saying that the implementation of a national health program would lower health costs.

“Through a universal system, you get leverage to do cost control that’s simply not available with a pluralistic — what I call ‘fragmented’ — health insurance system,” she said.

Outlining the basic goals of a national health program for the United States, Woolhandler listed the following stipulations: full payment for all needed care; free choice of doctor and hospital; independent, non-profit doctors and hospitals; local planning boards allocating expensive technology; progressive tax for funding; and a public agency to process all bills.

“National health insurance is affordable,” Woolhandler said. “It’s not a technical problem, it’s a political problem.”

This appeared in The Brown Daily Herald on Tuesday, November 5, 2002.

Al Gore on Single-Payer: New Republic

DAILY EXPRESS
The Single Guy
by Jonathan Cohn
Only at TNR Online | Post date 11.22.02

It looks like Al Gore wasn’t kidding two weeks ago when he let slip his intentions to propose a single-payer health care system for the United States. In a piece about Gore published earlier this week, Ron Brownstein of the Los Angeles Times reports that Gore told him the very same thing–and in considerably more detail. Specifically, Gore told Brownstein that he would unveil his plan early next year, and that the plan would observe three principles: The actual practice of medicine would still be done through the private sector; Americans would have “choices”; and the plan would reduce spending by streamlining bureaucracy. “The system as a whole has reached a point of no return,” Gore said. “It is collapsing. It is beyond saving in its current design.”

Is Gore nuts? Not on policy grounds. In a single-payer system, the government becomes the nation’s health insurance company. Instead of paying premiums to an insurer (either directly or through an employer), each American would pay that money to the government; in turn, the government would pay the providers of medical care–i.e., mostly private doctors and hospitals–in the same way insurance companies now do.

Make no mistake: It’s a radical overhaul. But single-payer also has clear virtues: As a general rule, the more people who belong to an insurance pool, the more thinly you spread the financial burden of illness, which can be devastating if you face it alone or within a small group. By definition, single-payer spreads the risk pool across the largest number of people possible–namely, everyone in the country. In addition, while people may associate government with excessive bureaucracy, single-payer systems devote far less money to administrative overhead than private insurance. (Among other things, insurance companies spend a ton of money on advertising.)

Typically, opponents of single-payer insist it’s better to have a private insurance system that promotes more “choice.” But one of the chief advantages of single-payer is that it gives patients the kind of choice that matters–not choice of insurance plan, but choice of doctor. For example, if you switch plans today, you may discover your favorite physician doesn’t take your new insurance. But in a single-payer system, virtually every physician would take government insurance, so that would no longer be an issue.

And, of course, single-payer systems by definition make coverage universal–i.e., they give insurance to every citizen as a birthright, regardless of employment status. This isn’t just fair: It may also be more efficient, since it would allow people more freedom to change jobs and pursue better opportunities.

None of this means single-payer is ultimately the best way to go on health care. In fact, there are some pretty valid objections to it, though not necessarily the ones its critics are making today. But its virtues make it a credible alternative, one that deserves a major role in the debate over our health care system’s future.

But what about the politics? No sooner had Gore introduced the plan than conservative critics pounced on him, calling him an extreme leftist and noting that this endorsement represented another Gore “flip-flop,” given his opposition to Bill Bradley’s health care plan in 2000. “This is … Gore, the radical,” Michael Kelly wrote in his Washington Post column. He then defined single-payer as “the idea [Gore] savaged his 2000 Democratic primary opponent, Bill Bradley, for supporting.”

But the criticism about Gore’s apparent reversal on Bradley actually shows why endorsing single-payer has a certain political logic to it. Bradley didn’t propose a single-payer plan in 2000. On the contrary, the essence of Bradley’s plan (which, by the way, this author lauded at the time) was to help uninsured Americans buy into the same system that now serves federal employees. In that system, federal employees choose from among a menu of private insurance plans, then pay premiums based on what the plans offer. Yes, lots of people attacked that plan for expanding the role of government. But, if anything, it actually reduced government’s role, by getting rid of Medicaid (under which government insures the poor directly) and having those people buy private insurance instead.

The lesson is that even if you don’t actually propose a radical overhaul of the health care system, critics from the right will still have an easy time denouncing it as medical socialism. Indeed, critics from the right have been known to level that charge at even piecemeal health reform measures–from the State Children’s Health Insurance Program (S-CHIP), which merely allows states to subsidize coverage for kids living at or near the poverty line, to HMO reform, which doesn’t expand coverage at all but simply regulates the way insurance companies make treatment decisions.

So if you’re going to propose a large-scale change to the health care system and invite the “socialized medicine” charge anyway, you might be better off endorsing a single-payer system, which at least has the virtue of being easy to explain. Unlike, say, a hybrid public-private system, which involves all sorts of convoluted regulations, which then require all sorts of tortured explanations, the essence of single-payer can be reduced to three simple words: “Medicare for all.”

After all, Medicare is essentially a single-payer system, only one that operates exclusively for senior citizens. While its lack of prescription drug coverage remains a major flaw–albeit one that both parties have now sworn to fix–it is also incredibly popular with the people who have it. And why not? If you’re on Medicare, you never worry about losing your insurance. If you’re on Medicare, you can see most any doctor you want–and get most treatments the doctors recommend. Medicare has a large bureaucracy, but most physicians today will tell you it’s a more reliable payer–and a less onerous overseer–than private managed care companies. Indeed, far from true “socialism,” Medicare allows doctors and hospitals to remain privately employed.

If there’s a big problem with Medicare these days, it’s the program’s lack of long-term financial viability. But that’s a flaw of the entire health care system, and will require resolution with or without major health care reforms. Indeed, single-payer advocates argue that their system makes that resolution easier, by introducing a more efficient system and allowing people to make trade-offs democratically. Enacting single-payer wouldn’t necessarily mean expanding Medicare per se (although plenty of Democrats have proposed such schemes before). But a would-be reformer could certainly explain it that way.

This isn’t to say single-payer is an easy sell. Quite frankly, it may be impossible to sell sweeping health care reform–any sweeping health reform–right now, given the nation’s political mood and power of special interests with a stake in the status quo. But among the proposals out there, single-payer has compelling political advantages. Al Gore may turn out be wrong. But he isn’t nuts.

Jonathan Cohn is a senior editor at TNR and a 2002-2003 Kaiser Family Foundation media fellow.

SINGLE PAYER BILL WILL BE REINTRODUCED ON DECEMBER 4, 2002

From MassCARE:

The Massachusetts Health Care Trust will be resubmitted on December 4, 2002. Activists will be in the State House gathering signatures of legislative cosponsors on:

Tuesday, December 3rd – 10am to 4pm – call the office at 800-383-1973 if you would like to join us. We will meet at the 4th Floor cafeteria

Wednesday, December 4th – 9am to 1pm in Room 222 at the State House. Join us if you can.

Senator Steve Tolman (D-Brighton) and Representative Frank Hynes (D-Marshfield) are the new lead sponsors for the bill. Both legislators agree that the best strategy is to file the bill only in the Senate, this makes it easier to move. Frank Hynes will be listed as the lead House sponsor and will sign right under Steve Tolman. Representatives can sign onto a Senate bill, I am assured that Reps are used to doing this.

CALL YOUR STATE SENATOR AND STATE REPRESENTATIVE AND TELL THEM THAT YOU EXPECT THEM TO SIGN ON AS A COSPONSOR.

THANK YOU.

Problem of Lost Health Benefits Is Reaching Into the Middle Class

This article was reported by John M. Broder, Robert Pear and Milt Freudenheim and was written by Mr. Broder.

By JOHN M. BRODER
November 25, 2002

Diane MacPherson, of Lowell, Mass., lost her job at a relocation management company last November, and with it the health insurance for herself, her husband and their 4-year-old daughter. Her husband works in construction and does not have access to health care coverage at work.

Continuing her family health insurance under the federal Cobra program would have cost $931 a month, so the couple decided to insure only their daughter, at a cost of $270 a month. Two months ago, when Ms. MacPherson’s unemployment compensation payments ran out, they dropped their health insurance altogether. Although her husband earns about $75,000 a year, construction work is seasonal and they could not be assured of enough income every month to pay for health insurance.

Then their daughter came down with strep throat. “That was rather humiliating, being in the doctor’s office without insurance,” Ms. MacPherson said. “You become very obvious to everyone.”

The family represents a changing portrait of the 41 million Americans who do not have health insurance today. Once thought to be a problem chiefly of the poor and the unemployed, the health care crisis is spreading up the income ladder and deep into the ranks of those with full-time jobs.

According to recently released Census Bureau figures, 1.4 million Americans lost their health insurance last year, an increase largely attributed to the economic slowdown and resulting rise in unemployment. The largest group of the newly uninsured — some 800,000 people — had incomes in excess of $75,000. They either lost their jobs, or were priced out of the health care market by rapidly rising insurance premiums, or, like Ms. MacPherson, both.

While it is true that the number of uninsured people rises when unemployment goes up, it is also true that the rolls of the uninsured can expand even when joblessness is going down, as it did through most of the 1990’s.

The numbers of uninsured during the last recession from 1990-92 jumped to 35.4 million from 32.9 million. But the number continued to rise even in the boom years of the mid- to late 1990’s, reaching 40.7 million in 1998 before dipping slightly in 1999 and 2000.

Labor economists say that much of the job growth during the expansion of the 1990’s came in small businesses and in service industries, low-wage, nonunion sectors that are much less likely to offer health insurance as a benefit to new workers. There was also a demographic bulge of young people and recent immigrants entering the work force during the decade, with many of them willing to take jobs that did not offer rich benefit packages.

The problem has long been acute among minorities, immigrants, part-time workers and employees in low-wage service jobs. What is different this time, analysts say, is that the problem is hitting middle-income and upper-income families harder because many of the job losses are in high-wage industries like technology and telecommunications.

Thirty million Americans in working families today — 16 percent of all those in families headed by a worker — lack health care coverage, according to a four-year tracking study by the Center for Studying Health System Change, a nonprofit research group financed by the Robert Wood Johnson Foundation. An additional 16 million Americans — mostly low-income workers — are offered health insurance through their jobs but decline because they get health care from government programs or it is too expensive, the study found.

“The failure of the economic boom to expand employer-based coverage for working families significantly is ominous,” the center said in a recent study. It found that the current slowdown and the rising cost of providing health care to employees produced a double whammy: fewer companies are now willing to offer their workers health care coverage, and those that do will demand that employees shoulder a far higher share of the cost.

Rising Concerns

Policy makers and health care analysts say the United States is again confronting a crisis in its medical delivery system.

“The number of uninsured will continue to grow as long as health insurance premiums rise more rapidly than earnings, as they have for a decade,” said Drew E. Altman, president of the Henry J. Kaiser Family Foundation, which tracks health coverage trends.

“Losing health benefits is becoming a middle-class issue,” Mr. Altman said. “If it had not been for expansions in the child health program and Medicaid, we would have 10 million more uninsured.”

The growing number of uninsured and the rising cost of health insurance have stimulated Congressional interest on a scale not seen since 1993 and 1994, when President Bill Clinton tried to remake the health care system and guarantee coverage for all Americans.

The major proposals being debated now fall into two main categories. One approach, favored by Republicans and some Democrats, would provide tax breaks to help individuals, families and small businesses buy health insurance in the open market. The other, preferred by many Democrats, would expand eligibility for Medicaid or the Children’s Health Insurance Program to include the parents of some children who are already eligible.

Either plan could have eased the situation of Brian and Anna Brooks, who run a small electrical contracting business in Westminster, Colo. They gave up their health insurance for themselves and their 8-year-old daughter this year to keep their business afloat.

They had already let go four of their five workers and wanted to maintain health coverage for their remaining employee.

Ms. Brooks said that they dropped their health coverage in July after the family premium jumped to $989 a month from $489 a month. Business was slow, and their previous income of more than $60,000 a year had fallen by half.

The effect has been immediate. Mr. Brooks, 50, has stopped taking Lipitor to control high cholesterol and has started taking over-the-counter herbal supplements. Ms. Brooks no longer takes Singulair for asthma and has adopted an exercise program intended to regulate her breathing. Ms. Brooks estimates they are saving $150 a month by not using prescription drugs.

“We changed our diets a lot in order to help the effectiveness of the supplements, and maybe that’s a good thing,” she said. They are setting aside $30 a month for their daughter’s medical needs, but one ear infection would quickly empty the pot.

The federal Cobra program, enacted as part of the Consolidated Omnibus Budget Reconciliation Act of 1986, is devised to provide a cushion for those who have recently lost their jobs. It allows workers to maintain their health care coverage for up to 18 months if they assume the full cost of the health coverage provided by their former employer. But many find the cost prohibitive, and only a quarter of workers say they would keep up their coverage under Cobra because of its high cost, according to a new survey from the Commonwealth Fund, a private research group.

Betting on Good Health

The high cost of Cobra coverage presents many people who have recently been laid off with a cruel choice. Audrey Robar of Milwaukee, 63, who lost her job at a private social services agency in September, decided to skip the $300 a month Cobra package in the expectation that she would soon find another job.

It was a gamble, and she lost.

“She was thinking she could get away with it,” her daughter, Eva Robar-Orlich, said in an interview last week.

In the early hours of Oct. 23, Ms. Robar began to suffer chest pain and dizziness. She called her sister to ask whether she could seek medical care immediately and sign up for Cobra later. Her sister, Alden Egan, urged her to call an ambulance right away, but Ms. Robar set down the phone to look for the Cobra documents. Ms. Egan then heard over the open phone line the sound of her sister falling to the floor and quickly called 911. By the time paramedics arrived a few minutes later, Ms. Robar was dead of a heart attack.

“I think the fact that she hadn’t paid for Cobra very well could have cost her her life,” said Ms. Robar-Orlich. “She deliberated over calling an ambulance at a time when every minute was urgent.”

Because the insurance crisis has hit high-income families and millions of middle-class Americans with jobs, advocates for the uninsured have expressed hope that Washington will finally resolve the problem. High-wage workers and small-business owners are a much more effective lobbying force than the unemployed, children and the poor.

Mary R. Grealy, president of the Healthcare Leadership Council, an industry coalition seeking coverage for the uninsured, said: “We are very optimistic. More and more people say that the uninsured will be a big issue in the next Congress.”

“Lawmakers have seen the new face of the uninsured — it’s not a welfare population — and will seek solutions for the employed uninsured,” the many working families who lack insurance, Ms. Grealy said. “This is now an issue for Republicans,” she added. “It’s not just a one-party issue.”

Ronald F. Pollack, executive director of Families USA, a consumer group, said that Republicans and Democrats could agree on proposals combining tax credits with some expansion of Medicaid and the Children’s Health Insurance Program.

On the other hand, proposals to aid the uninsured could easily touch off a partisan brawl, in which lawmakers fight over the merits of government programs versus the private market.

President Bush has already proposed tax credits and is expected to offer more proposals to help the uninsured as part of his budget early next year.

In his first two budgets, Mr. Bush earmarked a large amount of money for health insurance tax credits: $89 billion over 10 years, for people who are not covered by an employer’s plan and not eligible for public programs. The proposal languished in Congress, but Mr. Bush will have a greater incentive to push for action this year.

“The president wants to develop a record on health care to neutralize this issue going into the 2004 elections,” Mr. Pollack said.

The issue is of particular concern to small-business owners, who say they would like to offer their employees health insurance but cannot keep up with the fast-rising premiums. They are a large and influential lobby and an important base for the Republican Party.

Martyn Hopper, the California state director for the National Federation of Independent Business, said that 42 percent of the state organization’s 37,000 member businesses did not offer their employees health care coverage. He blames rising premiums and the high cost of doing business in California, which has imposed a number of expensive mandates on employers. Big companies, Mr. Hopper said, can move operations to cheaper locations or offshore, but mom-and-pop businesses are forced to lay off workers or make their employees pay an ever-increasing share of health care costs.

Tom Lucas, who owns two plant nurseries outside Los Angeles, said that he provided health coverage to his 70 employees until the mid-1990’s, when the cost became crushing. Mr. Lucas said that some of his workers have spouses with jobs that provided insurance, some drove to Mexico to seek cheap treatment and drugs, and some did without.

He said that health coverage was particularly expensive in California because the legislature had imposed a number of mandates on the policies that employers must offer, including coverage for mental illness, comprehensive cancer screening, substance abuse treatment and weight loss programs.

“Health insurance is a luxury I can’t afford for my people,” he said. “It’s a great perk, but in an industry like my own, it’s not reality. There’s not enough dollars to go around.”

Roadblocks to a Solution

While there is continuing public concern about health care and gathering sentiment in Washington to do something about it, a number of constraints are limiting the likelihood that the growth in the numbers of the uninsured will be reversed any time soon.

Growing federal and state budget deficits will make it difficult to find money to subsidize coverage for the uninsured. The president and members of both parties have promised prescription drug benefits to the elderly, who vote in large numbers, and fulfilling that commitment is a higher political priority for most lawmakers than addressing the problem of the uninsured.

In addition, doctors, hospitals, nursing homes and other health care providers are demanding higher Medicare payments, which will eat up money that could be used to cover people with no insurance. Medical providers are much more effective lobbyists than are the uninsured.

A number of proposals on Capitol Hill would at least incrementally address the problem. One, sponsored by Senators Susan Collins, Republican of Maine, and Mary L. Landrieu, Democrat of Louisiana, would provide tax credits for the health insurance expenses of individuals, families and small businesses; allow small businesses to take a tax deduction for the full cost of their premiums; and allow states to cover low-income parents and legal immigrants under Medicaid and the Children’s Health Insurance Program, know as CHIP. The bill would also provide federal money to the states to establish insurance purchasing cooperatives for small businesses and high-risk pools for people who cannot get insurance in the private market because of chronic illnesses.

As Congress debates, however, employers and workers continue to struggle with higher costs and more difficult access to health care.

Mitch Flinchum, the controller at a highway paving company in Burlington, N.C., sees the problems from both ends — as an executive in charge of benefits and as a consumer.

Mr. Flinchum pays more than 10 percent of his $65,000 annual salary for health insurance for his family, but he considers himself better off than most of his company’s 350 workers. Only 119 of the employees accept the coverage, and two-thirds of those pay only for themselves and not their dependents. Mr. Flinchum says most of the workers who decline insurance do so because the premiums are costly and the coverage is so meager.

“When you look at your benefits, you’ve got massive deductibles, massive co-pays, and unless you have a heart attack or cancer, which would be devastating in itself, it’s like you don’t have any insurance,” he said.

“I don’t know where it stops,” Mr. Flinchum added. “With a 20 percent increase each year, over time the only two people in this country who will be able to have health insurance are Bill Gates and Warren Buffett. No one else can afford it.”

Healthcare System Is Due for Transformation

By Margaret Heldring, PhD
President and CEO, America’s HealthTogether

At the top of the healthcare agenda for the 108th Congress could be the transformation of our present healthcare system. According to a recent issue of Health Affairs, nearly 60 percent of the national healthcare dollar is now financed through taxes-for such programs as Medicare, Medicaid, SCHIP, the Veterans Administration, tax-subsidies for workers, and public employee benefit plans. The new Congress will be working hard to reduce that percentage-by squeezing program revenues, cutting benefits, and forcing individuals to pay for more of their own healthcare expenses.

At America’s HealthTogether/Coalition Health First, we believe that there’s a better way. All Americans deserve quality, affordable healthcare. Healthcare should be an essential service, such as public education and national security that we all can count on. There is one insurance program that includes everyone, regardless of income, race, ethnicity, gender, and health status. One program that is administered efficiently and is simple to understand and use. One program that guarantees choice of provider, and is rated highly by a large proportion of its members. That program is called Medicare for Americans aged 65 and older and millions of the disabled.

As more Americans are forced to drop their health insurance coverage because of higher premium costs or to pay more out-of-pocket for their current coverage, we predict that a new and improved Medicare program for all Americans may start sounding like a winning solution in 2004.

Dr. Margaret Heldring served as the Director of Health Policy for former Sentor Bill Bradley’s 2000 presidential campaign. She is a clinical psychologist with more than 30 years experience in health care.

America’s HealthTogether is a public policy organization devoted to assuring affordable health care for all, unencumbered access to essential health care services, and a belief that mental health is fundamental to good health.

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