PNHP

Young immigrants excluded from ACA benefits

Young immigrants excluded from ACA benefits

Young immigrants shut out of health reform

By Drew Joseph
San Francisco Chronicle, February 19, 2013
California’s young immigrants who have been granted reprieves to stay in the country stand to gain little from the federal health reform law that the state Legislature is working to implement.
The Affordable Care Act excludes illegal immigrants from accessing the law’s benefits, but some immigrant and health advocates are angry that the young people known as Dreamers have been left out, saying the policy contradicts the law’s intent of expanding coverage to more people.
“It really defeats what the goals of the ACA were to begin with,” said Sonal Ambegaokar, health policy attorney at the National Immigration Law Center.
The Deferred Action for Childhood Arrivals program (DACA), which was announced in June, allows people who were brought into the United States when they were young to stay for two years if they pursue education or military service. The young people eligible for the program are known as Dreamers, in reference to the proposed Dream Act – legislation that would give them a path to citizenship.
More than a quarter of the 1.76 million people who are or will be eligible to apply for DACA – about 460,000 immigrants – live in California, according to an August 2012 Migration Policy Institute report.
After the DACA program was announced, the Obama administration clarified the policy, specifying that people to whom DACA applies will not qualify for Medicaid now or as the health law is implemented. And while many Americans will receive subsidies to buy insurance through their state’s exchanges – the insurance marketplaces established by the Affordable Care Act – people granted DACA approval will not be able to purchase coverage through those exchanges even with their own money.
Critics say the rule does not make sense. They argue that people approved for the program are lawfully present in the country, but when it comes to health care, they are treated as undocumented immigrants and will face a harder time finding coverage.
http://www.sfgate.com/default/article/Young-immigrants-shut-out-of-healt…
And…

Health Care for DACA Grantees

National Immigration Law Center, January 2013
What health insurance options are available to DACA grantees under ACA?
Until recently, like other individuals granted deferred action, DACA grantees would have had access to all the new health insurance options under ACA as “lawfully present” individuals. Due to a rule change by the Obama administration in August 2012, DACA grantees were specifically excluded from the ACA as well as nonemergency Medicaid and CHIP, and have the same access to health insurance as do undocumented individuals despite being granted deferred action by the U.S. Department of Homeland Security. As a result of the rule change, DACA grantees who have valid work permits and valid Social Security numbers (SSNs) and who are otherwise eligible:
* Cannot enroll today in affordable coverage through Medicaid or CHIP unless their state provides coverage to a broader group of lawfully present individuals.
* Do not have access today to prenatal care through Medicaid or CHIP unless their state provides coverage for pregnant women regardless of the woman’s immigration status.
* Cannot apply today for private health insurance under Pre-Existing Condition Insurance Plan (PCIP) unless their state has a similar health insurance program that is available regardless of status.
* Will not be able to buy affordable private health insurance, even at full cost, in the new insurance marketplaces created by ACA after 2014.
* Will not be eligible for federal tax credits (or subsidies) to help make private health insurance affordable after 2014, even if they are paying federal taxes.
* Will not be eligible for the Basic Health Plan if their state has this program.
* Likely will not be required to have health insurance after 2014.
What health care options do DACA grantees and undocumented individuals have today?
* Emergency-room care.
* Community health centers and free clinics.
* Public and safety-net hospitals.
* Public health services (immunizations, treatment of communicable diseases such as tuberculosis, HIV, or sexually transmitted diseases).
* Emergency treatment under the emergency Medicaid program, including labor and delivery for pregnancy.
* Hospital and community health centers’ financial assistance programs (also known as “charity care”).
* Private health insurance.
http://www.nilc.org/facts-health.html

Young immigrant children who were brought to this country and remained here without proper documentation have been raised here and are as much a part of our culture as are legal citizens. The Dream Act has been proposed to grant these individuals legal status to match the reality that this is their country.
Because of the failure of Congress to pass the Dream Act, President Obama has established the Deferred Action for Childhood Arrivals program (DACA). This is not a replacement of the Dream Act, but it is aimed at the same demographic, and it does provide temporary, potentially renewable legal status.
It seems that these individuals under DACA should have the same access to health care as other documented immigrants. However, it was decided that they would specifically be excluded from the provisions of the Affordable Care Act. They are not totally excluded from all health care since they have the same access as undocumented immigrants – those services and facilities listed above.
Although some might say that these services are adequate for this population, most of us want not want these limitations placed on our health care (with the exception of being able to purchase insurance outside of the exchanges and without subsidies – a problem for this population).
Immigration policy and health policy are two different topics. They should be dealt with separately. Right now, Congress is engaged in a process to reform immigration, and hopefully our lawmakers will demonstrate wisdom and benevolence in their decisions.
Health care is another matter. Everyone should have whatever health care is necessary. Period. Our laws and regulations and their implementation should have a goal of making certain that people get the care that they need. The Obama administration’s interpretation of their own DACA program falls short.
Under an optimally designed single payer program, whomever you are, if you need care, you get care. That’s the way it should be.

The role of the New Democrats in the explosion of managed care

By Meade Klingensmith
Remapping Debate, Feb. 20, 2013

The “New Democrats” of the 1990s — those who thought the Democratic Party should move further to the right and position itself as a “centrist” alternative to the GOP — promoted a model of health care reform called “managed competition.” Fundamental premises behind the strategy — such as the idea that the interests of insurers would be aligned with the interests of those needing a doctor and that Americans, if anything, were getting too much medical care — were much more faith-based than evidence-based. And some of the negative consequences of the greater reliance on “managed care” created a short-term backlash. Nevertheless, the assumptions and rhetoric of the New Democrats live on, embedded in the architecture of the Affordable Care Act (ACA) and in the rhetoric of a wide range of politicians and journalists, as well as many of the experts who study the health care industry.

Will Marshall was a co-founder of the Democratic Leadership Committee (DLC), for more than two decades the heart of the New Democrats (the DLC shut its doors in 2011). He was also the founder and is still the president of the Progressive Policy Institute (PPI), the organization that provided the blueprints for many of the policies advocated by the DLC.

In an interview with Remapping Debate, Marshall described managed competition as “a system of private provision, competing health care providers who are under the supervision of public law and regulation that protects patients.” The idea, he said, was to create marketplaces in which health insurers sold their products, either to companies or directly to enrollees. (In the 1990s, these marketplaces were called “purchasing alliances”; in 2010, they were later incorporated into the ACA as “exchanges.”)

The marketplaces would be the only way to purchase health insurance in the United States, and all products sold within them would be required to meet certain standards of coverage. Under the Clinton plan, every employer in the U.S. would have been required to provide health insurance to its employees. And, crucially, managed competition models in general assumed that for-profit managed care organizations would become the dominant actors in the system, as their lower cost would naturally attract purchasers.

Theoretically, adoption of the model would achieve three things: (1) it would control health care costs by guiding patients into managed care organizations, forcing insurers to directly compete over customers, and enabling mass-scale group purchasing; (2) it would ensure universal coverage; and (3) it would do these things through regulated market mechanisms rather than a national health program, thereby appealing to what Marshall views as “the American economic and cultural outlook.”

Aligning incentives?

A central claim of managed care is that it aligns the incentives of health care providers with those of their patients. In the original formulation by Paul Ellwood (the “father” of managed care), found in his 1971 article for the journal Medical Care, the argument went as follows: “Since the economic incentives of the contracting parties [provider and patient] are identical [to keep the patient healthy], both would have an interest in maintaining health.”

Remapping Debate asked Marshall whether, even if managed competition and managed care could control costs and provide some form of universal coverage, it would do so by denying medical services to patients who need them. Marshall insisted managed care would theoretically not deny useful procedures. Its goal, he said, was to “eliminate unnecessary procedures, root out waste, and, when it’s done right, try to bring together specialists and general practitioners to take a holistic approach to the health care of the patient, rather than parceling them out by body part or disease and never communicating with each other.”

When asked whether PPI ever worried about the potential for managed care to deny necessary services, Marshall said it did. “If you can get away with dropping coverage and denying services,” he said, “some actors will do that, and did.” Then why would a for-profit managed care organization ever prioritize quality of care over making a profit? “The customers leave,” Marshall responded. “We have exit … I remember being in several HMOs that I didn’t like, and I left them and got into something that I thought was better care for me. Choice and exit are powerful forces.”

According to Dr. David Himmelstein, a professor of public health at the City University of New York School of Public Health at Hunter College and a co-founder of Physicians for a National Health Program (PNHP), however, the argument does not stand up. Because managed care is a profit-driven enterprise, he said, “The incentive … is to recruit the healthiest patients you can, to make them look on paper as sick as you can, and to avoid giving them care as much as you can.” Or, more simply, “If you deliver less care, you profit. If you deliver more care, you lose.”

Dr. Jim Scott, president-elect and vice president of internal affairs at the National Physicians Alliance, a physician advocacy organization, agreed.  He told Remapping Debate that from the perspective of a for-profit managed care organization (as opposed to the doctors who work there), “what you want to do is manage the population. You want to have the healthiest population you can, deny the most care you can, and get away with it. That’s about managing cost. That has nothing to do with managing care.” Calling such organizations “managed care,” he said, is “a lie.”

Remapping Debate pointed out to Marshall that most people in the United States receive health insurance through their employers, whose incentive is to control their own costs. How were those employees supposed to “exit”? “That constrains choice,” he said. “We’re not dealing with a perfect marketplace here. It’s got all kinds of peculiarities. And most people can’t afford to forgo the group purchasing functions of their employers.”

Where then, were they supposed to go? At that point in the interview, Marshall acknowledged that choice and exit alone were not powerful enough to prevent managed care from denying necessary services to patients. “That’s why you have to have legal protections. Aligning the incentives of health care providers with the interest[s] of patients cannot be left to the market alone.” For that reason, he said, having regulated “purchasing alliances” that would increase the negotiating leverage of health insurance “consumers” was an important part of the managed competition theory — but one that was not realized in the 1990s.

Cost, cost, cost

Managed competition was at the heart of President Clinton’s health care reform proposal, the Health Security Act (HSA), which was formulated by a group of health insurance insiders known as the Jackson Hole Group. The HSA died in 1994 of what Ida Hellander, the director of policy and programs at PNHP, called “political asphyxiation.” Neoconservative political commentator William Kristol, through his organization called Project for the Republican Future, spearheaded the opposition.

But records of the public debate around the HSA provide a window into how health care was discussed in the New Democrat era. Upon examining a range of speeches and testimony given during this period by politicians, health insurance lobbyists, and think tank representatives, and comparing those with the rhetoric of the last major health care debate in the 1970s, it is clear quality concerns took a back seat to a focus on controlling cost in the 1990s. As Will Marshall acknowledged, “The assumption [in the 1990s] was that quality wasn’t a huge problem…The assumption was that cost
inflation was the problem.”

The text of President Clinton’s 1993 speech on health care encapsulates the general trend of the 1990s. Its underlying assumption was that the quality of American health care was already excellent and needed little improvement: public policy should focus on quality health care only insofar as it does not harm quality; the priority was controlling cost, not improving quality. “We’re blessed with the best health care professionals on earth, the finest health care institutions, the best medical research, the most sophisticated technology,” Clinton said.  However, “medical bills are growing at over twice the rate of inflation, and the United States spends over a third more of its income on health care than any other nation on earth, and the gap is growing, causing many of our companies in global competition severe disadvantage.”

President Clinton’s speech was just the vanguard of what became a stampede of calls for controlling the cost of health care, with quality as an afterthought. For example, on November 8, 1993, Kenneth Thorpe, deputy assistant secretary for health policy at the Department of Health and Human Services, in testimony at a hearing on health care reform held by the Housing Energy and Commerce Committee, said, “Why must we remain committed to a strong cost containment strategy? Because the total costs of health care are high and rising…The rising costs of the current system harm businesses, government, and households.” The only mention of quality was as a factor for health insurance plans to compete over as part of a market-oriented bid at controlling cost.

And on March 10, 1994, Joan Simmons, the vice president of the Healthcare Leadership Council, an association of CEOs from several health insurers, pharmaceutical companies, hospitals, and other corporations in the health care field, testified to the House Education and Labor Committee, “People from across the globe come to the United States to receive the highest quality care. In this respect, our health care system is the envy of the world. It is proof that our system does more for its patients…Our delivery is undoubtedly the best in the world…Yet the financing system does require swift legislative reform…Congress must pass and the President must sign a bill that contains health care costs and makes coverage affordable and accessible to all.”

There were a number of key reasons that might have caused lawmakers and policy advocates to appreciate some cost increases as appropriate. These included the increased availability of demonstrably improved and necessary medical technology, the  population growth, and the beginning of the aging of the population. But, in general, this view was not expressed or explored, with the rising cost of health care seen as exclusively a negative that needed to be thwarted.

And quality?

There were, of course, some voices calling for quality as well, but even those often explicitly acknowledged they were swimming against the tide. For example, in testimony to the House Education and Labor Committee on November 8, 1993, Samuel Havens, board chairman of the Group Health Association of America, said, “We want to emphasize that while much of the impetus for reform comes from the need to reduce the inordinately high rate of increase in the overall health care costs, an even greater emphasis on assuring appropriate care and on maintaining and continuously improving the quality of care will be necessary if reform efforts are to succeed.” A call for “continuously improving the quality of care” was rare indeed, the record shows.

In testimony that pointed directly to the risk posed to quality of care by a strategy that focused entirely on cost control, given before the House Committee on Ways and Means on March 21, 1995, Robert Brook, a professor of medicine and health services at the UCLA Center for the Health Sciences, said, “If we are going to contain the growth of health care costs in the United States, as most people insist we must, mechanisms that rely solely on economic and administrative principles will result in the indiscriminate elimination of care that is both beneficial and not beneficial to the patient…We must work toward ensuring that quality, not just cost and access, is considered when the structure of the health system is altered by forces such as managed care and competition.”

Consequences of cost control fever

Near-relentless focus on cost and access, said Theodore Marmor, a professor emeritus of both political science and public policy and management at the Yale School of Management, will generally “put pressure on quality.” Marmor believes a basic health care policy dictum: “If you push for any two of the following three aspirations, you put pressure on the third. That is, if you put pressure on access and on cost, you’re going to do something to quality. If you put pressure to expand quality and to increase access, you’re going to put pressure on cost. If you put pressure to get cost under control and to maintain quality, you’re going to have real pressure on access.” This rule, he said, generally holds true “for anything other than vaccinations.” According to Marmor’s rule, then, by focusing the debate of the 1990s so strongly on cost and access, the New Democrats guided the way toward pressure on quality.

The health care debate in the 1970s was different. There, Marmor said, “the scope of reform was much broader.” Democrats, led by Senator Ted Kennedy, pushed for a national health program as a means of improving cost and quality, with both factors seen as equally in need of improvement. In a speech on health care at the 1978 Democratic National Convention, Kennedy said, “One of the most shameful things about modern America is that in our unbelievably rich land, the quality of health care available to many of our people is unbelievably poor, and the cost is unbelievably high.”

According to Marmor’s rule, wouldn’t a focus on quality and cost put pressure on access? “Allocating care has got to happen,” Marmor said, “and allocating it by ability to benefit and the seriousness of the medical need is a just, in my view, way of talking about this, as distinct from allocating it by ability and willingness to pay. That’s the central philosophical issue in medical care.”

Marmor insisted that it was not possible to provide “unlimited” highest-quality care for everyone: “You cannot do all the things that are possible and live within a reasonable budget,” he said, adding in a follow-up interview that doing so was also logistically impossible.

But what about trying to identify the highest standard of care currently available, estimating the cost of delivering that care universally, and only then deciding what compromises were necessary (rather than simply starting with the judgment that current expenditure levels are the appropriate place from which to start cutting)?

Marmor acknowledged the possibility that one could “imagine extending to everybody suffering [from an] illness the quality of care that is [provided] at very good places,” and derive, at least in broad terms, the cost of doing so. He was skeptical, however, because of what he described as practical impediments to the delivery of such care on a universal basis (including the difficulty of replicating universally best-practice care now being delivered by a self-selected population of doctors to a self-selected population of patients), and did not weigh in on the question of whether cutting should precede or follow the identification of, and cost associated with, universal best practices.

Fallout and backlash

Despite the failure of the HSA as a piece of legislation, the principles behind it had an enormous impact on American health care. Its ideas — and the bipartisan acceptance of those ideas — sent a signal to the fo
r-profit health insurance industry that no one would stop a scramble for profit, and scramble they did.

Hellander, noting that previous Democratic administrations had consistently aimed at creating a national health program, said, “That’s what capital and business and everyone thought was eventually going to happen, so they weren’t going to invest too much money in the health sector as a for-profit industry. Health insurance at that point was still mostly not-for-profit,” despite the steady growth of the for-profit sector over the previous two decades.

“Once it became clear that they [the New Democrats] were on the side of big business,” she said, “there was an all-out rush of insurance companies to merge…There were a lot of billionaires made during that period. Before that we’d seen people get rich in medicine, they’d have a few million dollars, but we’d never seen the creation of these billionaires.”

During this same period, the percentage of American workers in some form of managed care plan exploded — from 27 percent in 1988 to 90 percent in 1999 — primarily because employers favored them as a means of cost control. Managed care transformed from a niche market that catered largely to self-selecting enrollees into the primary way that Americans received medical care. “We got the market reorganization without the superstructure of public law and regulation,” PPI’s Marshall said, referring to the fallout from the New Democrats’ support of a market-based system, combined with the failure to pass the HSA.

This was most Americans’ first taste of managed care, and many found it bitter. The result was what is often called “the managed care backlash,” a period in which newspapers filled with horror stories about patients being denied care by their HMOs, or made to jump through so many hoops that when care finally came, it was at a grave cost. A 1996 op-ed column by Bob Herbert in The New York Times that excoriated a North Carolina HMO for forcing a three-month-old girl with leukemia to receive treatment in a different state for several months, away from her family, is a typical example.

Of course, not every managed care enrollee had to deal with denials of service. Enough did, however, and enough newspapers reported about such cases that in a 1997-1998 survey of consumer satisfaction, only tobacco companies were seen as providing worse service than managed care companies and health insurance companies. Banks and oil companies both received higher satisfaction ratings.

Though demands for more access remained a resonant political theme, and ultimately resulted in the increases in access promised by the ACA, demands for improving the “gold standard” of care have not been heard in force for 20 years. Indeed, rather than engaging in a process of first determining what the gold standard is, then making that standard of care available to all (in other words, the provision of care that would be “the envy of the world”), the ACA adopted a very different concept: it speaks in the language of “minimum essential benefits,” with each state being able to define that standard by matching it to the level of coverage currently provided by one of the largest health insurers or managed care organizations in the state (as long as certain broad categories of coverage are met).

SIDEBARS

Cost control Über alles

This is the second in a series of articles examining the phenomenon by which health care policy has come to be dominated by a single-minded desire for cost control, while concerns about maximizing the quality of care have been downgraded or ignored entirely.

The first article in the series described the origins of the Health Maintenance Organization (HMO) model, the modern incarnations of that model, and the evolution of HMOs into the vehicles through which a for-profit health insurance industry came to dominate the market by the 1990s.

This article describes the crucial role that the Clinton-era “New Democrats” — played in promoting the view that the principal problem to be addressed was cost control, and that the best and only solution to providing health care was through a for-profit, market-based system of insurance (albeit a regulated one), not a single-payer or not-for-profit HMO model.

— Editor

What motivated the New Democrats on health care?

Will Marshall said the PPI’s approach to health care policy was based on “the failure to achieve universal coverage after eight decades of agitation around that on the progressive end…We were trying to figure out how to get the goal of universal coverage in a new way, since the old ways didn’t seem to be yielding any progress.”

Chris Jennings, one of President Clinton’s primary health care advisors and a congressional liaison for Hillary Clinton, told Remapping Debate, “The motivator was [that] they wanted to have a successful effort to pass and enact legislation, and they felt that single payer was never going to pass.”

And Theodore Marmor, the Yale professor emeritus, said that some New Democrats “were advancing these [ideas] not because they thought this was the best way to go, but because they thought the institutions of American government made it so easy to block things that the only way you could do anything would be to provide a conception of health reform…that could draw Republican votes.”

But Dr. Ida Hellander rejected the idea that New Democrats were just seeking a practical way to achieve greater access to and affordability in health care: “The New Democrats were all about an alliance between Democrats and business…They were looking for a way to regain power, and they figured that moving to the right a whole lot was the way to do it.”

Were the New Democrats “all about” such an alliance? Marshall denied it, but in language remarkably similar to that used by those who are pro-business: the New Democrats, he said, had a “pro-growth agenda,” were “pro-market,” and tried to create policy solutions “that went with the grain of market logic.”

According to Marmor, some New Democrats did indeed have “a faith in market instruments, if not markets, that was practically theological in their fundamental orientation.” Marmor said Alain Enthoven, an economist formerly associated with the RAND Corporation (not himself a New Democrat), was the “quintessential example” of the beliefs of this faction.

When asked where the PPI got its ideas for health care reform, Will Marshall cited the work of Alain Enthoven.

http://www.remappingdebate.org/article/role-new-democrats-explosion-managed-care

Setting the record straight on Medicare’s overhead costs

Traditional Medicare’s administrative costs were only 1% in 2010, but if you roll in the private insurers’ Medicare plans, that figure jumps to 6%, says new study

FOR IMMEDIATE RELEASE, Feb. 20, 2013
Contact: Mark Almberg, communications director PNHP,  (312) 782-6006, mark@pnhp.org

The traditional Medicare program allocates only 1 percent of total spending to overhead compared with 6 percent when the privatized portion of Medicare, known as Medicare Advantage, is included, according to a study in the June 2013 issue of the Journal of Health Politics, Policy and Law.

The 1 percent figure includes all types of non-medical spending by the Centers for Medicare and Medicaid Services plus other federal agencies, such as the IRS, that support the Medicare program, and is based on data contained in the latest report of the Medicare trustees. The 6 percent figure, on the other hand, is based on data contained in the latest National Health Expenditure Accounts (NHEA) report.

The journal article, written by Minneapolis-based researcher Kip Sullivan, finds that the gap between the two measures has been growing over the last two decades as enrollment in private Medicare plans has risen.

“The high administrative costs of the privatized portion of Medicare are no surprise,” says Sullivan. “What’s surprising is that the high administrative costs of the Medicare private insurance companies haven’t provoked a debate about whether spending more money on insurance industry overhead is a good use of scarce tax revenues.”

According to Sullivan, the low attention given to this issue is caused in part by confusion about Medicare’s overhead costs.

“The confusion is due partly to the existence of two government reports,” says Sullivan, “and partly to claims by critics of Medicare that the government fails to report all of Medicare’s overhead costs.” The paper addresses both sources of confusion.

The article explains the difference between the yardstick used by the trustees and the one used by the NHEA and concludes both are accurate. The trustees’ measure counts as overhead only those administrative expenditures that support the traditional fee-for-service Medicare program, in which approximately three-fourths of all Medicare beneficiaries are enrolled. The NHEA measure takes the trustees’ measure and adds to it the overhead of insurance companies that participate in Medicare Advantage and that sell stand-alone Part D drug coverage.

“The issue isn’t whether one yardstick is more accurate than the other,” Sullivan explains. “The issue is when it’s appropriate to use one measure instead of the other.”

The 1 percent figure is the one that should be used to analyze several hotly debated health reform issues, including whether to expand traditional Medicare to all Americans and whether to turn Medicare over to the insurance industry, either by expanding the Medicare Advantage program of by converting Medicare to a voucher program as Rep. Paul Ryan has proposed.

“Total spending for any type of insurer, public or private, consists of medical and administrative expenditures,” explains Sullivan. “If you want to know whether Medicare would cost more or less if it were turned over to insurance companies, you first have to determine what Medicare spends on medical care and administration and you have to do the same for the health insurance industry.”

The proper yardstick to use to measure Medicare’s overhead in analyses of issues such as these would be the trustees’ measure – 1 percent. The average overhead of the health insurance industry is approximately 20 percent, he said.

The large difference between traditional Medicare’s overhead and that of the insurance industry has caused some conservative critics of Medicare to assert that the federal government is ignoring numerous administrative expenditures incurred by various federal agencies that should be attributed to Medicare.

Sullivan’s paper, “How to think clearly about Medicare administrative costs: Data sources and measurement,” describes this criticism as the second major source of confusion about Medicare’s overhead. Sullivan’s study reports that the 1 percent figure includes all appropriate administrative expenses incurred on Medicare’s behalf, including those by the IRS, the Social Security Administration, and the FBI, as well as the cost of numerous pilot projects that Congress orders CMS to conduct.

Sullivan’s notes that many liberals are also confused about what Medicare’s overhead costs are. “With so much confusion on both sides of the political spectrum, it’s fair to say a useful debate about whether to expand or contract the traditional Medicare program has yet to take place in this country,” he said.

Sullivan is a lawyer and member of the Minnesota chapter of Physicians for a National Health Program, which had no role in funding the study.

“How to think clearly about Medicare administrative costs: Data sources and measurement,” Kip Sullivan, J.D., Journal of Health Politics, Policy and Law, Vol. 38, No. 3, June 2013. Advance version published online Feb. 15, 2013. DOI 10.1215/03616878-2079523

Physicians for a National Health Program (www.pnhp.org) is a research and education organization of more than 18,000 doctors who advocate for single-payer national health insurance. PNHP had no role in funding the study mentioned above. To speak with a physician/spokesperson in your area, visit www.pnhp.org/stateactions or call (312) 622-0996.

Important: What are Medicare's true administrative costs?

How to Think Clearly about Medicare Administrative Costs: Data Sources and Measurement

By Kip Sullivan
Journal of Health Politics, Policy and Law, February 15, 2013

Abstract

The Centers for Medicare and Medicaid Services (CMS) annually publishes two measures of Medicare’s administrative expenditures. One of these appears in the reports of the Medicare Boards of Trustees and the other in the National Health Expenditure Accounts (NHEA). The latest trustees’ report indicates Medicare’s administrative expenditures are 1 percent of total Medicare spending, while the latest NHEA indicates the figure is 6 percent. The debate about Medicare’s administrative expenditures, which emerged several years ago, reflects widespread confusion about these data. Critics of Medicare argue that the official reports on Medicare’s overhead ignore or hide numerous types of administrative spending, such as the cost of collecting taxes and Part B premiums. Defenders of Medicare claim the official statistics are accurate. But participants on both sides of this debate fail to cite the official documents and do not analyze CMS’s methodology. This article examines controversy over the methodology CMS uses to calculate the trustees’ and NHEA’s measures and the sources of confusion and ignorance about them. It concludes with a discussion of how the two measures should be used.

Two Official Yardsticks
 
Medicare’s administrative costs were $8 billion in 2011, or 1.4 percent of total Medicare spending of $549 billion that year. Those figures come from the latest annual report of the Medicare trustees, prepared by OACT (Office of the Actuary within the Centers for Medicare and Medicaid Services). As I document below, the $8 billion includes costs incurred directly by CMS (notably, the salaries of CMS staff and payments to insurance companies to process claims) as well as costs incurred by other federal agencies on Medicare’s behalf (e.g., tax collection services provided by the Internal Revenue Service, Part B premium collection services provided by the Social Security Administration and the Railroad Retirement Board, and fraud prevention services provided by the Federal Bureau of Investigation).

The latest NHEA, also prepared by OACT, is for 2010. According to it, Medicare’s overhead totaled $31 billion that year, far more than the $7 billion reported by the trustees for 2010. That $31 billion constituted 6 percent of total Medicare spending in 20102 — much higher than the 1 percent rate reported for that year by the trustees. The difference between the trustees’ measure of overhead and the NHEA measure is due almost entirely to the fact that the NHEA defines Medicare’s overhead to include not only the $7 billion in administrative expenditures reported by the trustees for 2010 but also the $24 billion in administrative expenditures incurred by the insurance companies that participate in Parts C and D.

Selecting the Right Yardstick

The NHEA measure tracked the trustees’ measure quite closely for the first twenty years of Medicare’s existence. But since the mid- 1980s, which is when the percentage of Medicare beneficiaries insured by insurance companies began to rise beyond the negligible levels of the 1970s, the NHEA measure of Medicare’s overhead has risen dramatically while the trustees’ measure has continued to decline. As of 2010, the latest year for which data from both measures are available, the NHEA measure was 4.5 times larger than the trustees’ measure — 5.9 versus 1.3. This enormous disparity between two measures that used to be almost identical should long ago have triggered inquiries within Congress and the US health policy community as to whether the higher administrative costs associated with the growing privatization of Medicare are justified.

http://jhppl.dukejournals.org/content/early/2013/02/11/03616878-2079523.abstract

Comment:

By Don McCanne, M.D.

In his article, Kip Sullivan has finally laid to rest the distortions and obfuscations of those who contend that Medicare’s administrative costs are much higher than commonly cited percentages – 1.4 percent in 2011. Not only has he shown that the other government costs that allegedly were left out are actually included, but he has also shown that the other official measure of Medicare’s administrative costs shows how much more it is costing us to fund the administrative excesses of the private Medicare Advantage and Part D drug programs – an egregiously wasteful use of our Medicare funds.

Quoting Sullivan, “This enormous disparity between two measures that used to be almost identical should long ago have triggered inquiries within Congress and the US health policy community as to whether the higher administrative costs associated with the growing privatization of Medicare are justified.”

It should also have triggered the question: Why haven’t we yet enacted an improved Medicare for everyone?

Important: What are Medicare's true administrative costs?

How to Think Clearly about Medicare Administrative Costs: Data Sources and Measurement

By Kip Sullivan
Journal of Health Politics, Policy and Law, February 15, 2013
Abstract
The Centers for Medicare and Medicaid Services (CMS) annually publishes two measures of Medicare’s administrative expenditures. One of these appears in the reports of the Medicare Boards of Trustees and the other in the National Health Expenditure Accounts (NHEA). The latest trustees’ report indicates Medicare’s administrative expenditures are 1 percent of total Medicare spending, while the latest NHEA indicates the figure is 6 percent. The debate about Medicare’s administrative expenditures, which emerged several years ago, reflects widespread confusion about these data. Critics of Medicare argue that the official reports on Medicare’s overhead ignore or hide numerous types of administrative spending, such as the cost of collecting taxes and Part B premiums. Defenders of Medicare claim the official statistics are accurate. But participants on both sides of this debate fail to cite the official documents and do not analyze CMS’s methodology. This article examines controversy over the methodology CMS uses to calculate the trustees’ and NHEA’s measures and the sources of confusion and ignorance about them. It concludes with a discussion of how the two measures should be used.
Two Official Yardsticks
Medicare’s administrative costs were $8 billion in 2011, or 1.4 percent of total Medicare spending of $549 billion that year. Those figures come from the latest annual report of the Medicare trustees, prepared by OACT (Office of the Actuary within the Centers for Medicare and Medicaid Services). As I document below, the $8 billion includes costs incurred directly by CMS (notably, the salaries of CMS staff and payments to insurance companies to process claims) as well as costs incurred by other federal agencies on Medicare’s behalf (e.g., tax collection services provided by the Internal Revenue Service, Part B premium collection services provided by the Social Security Administration and the Railroad Retirement Board, and fraud prevention services provided by the Federal Bureau of Investigation).
The latest NHEA, also prepared by OACT, is for 2010. According to it, Medicare’s overhead totaled $31 billion that year, far more than the $7 billion reported by the trustees for 2010. That $31 billion constituted 6 percent of total Medicare spending in 20102 — much higher than the 1 percent rate reported for that year by the trustees. The difference between the trustees’ measure of overhead and the NHEA measure is due almost entirely to the fact that the NHEA defines Medicare’s overhead to include not only the $7 billion in administrative expenditures reported by the trustees for 2010 but also the $24 billion in administrative expenditures incurred by the insurance companies that participate in Parts C and D.
Selecting the Right Yardstick
The NHEA measure tracked the trustees’ measure quite closely for the first twenty years of Medicare’s existence. But since the mid- 1980s, which is when the percentage of Medicare beneficiaries insured by insurance companies began to rise beyond the negligible levels of the 1970s, the NHEA measure of Medicare’s overhead has risen dramatically while the trustees’ measure has continued to decline. As of 2010, the latest year for which data from both measures are available, the NHEA measure was 4.5 times larger than the trustees’ measure — 5.9 versus 1.3. This enormous disparity between two measures that used to be almost identical should long ago have triggered inquiries within Congress and the US health policy community as to whether the higher administrative costs associated with the growing privatization of Medicare are justified.
http://jhppl.dukejournals.org/content/early/2013/02/11/03616878-2079523….

In his article, Kip Sullivan has finally laid to rest the distortions and obfuscations of those who contend that Medicare’s administrative costs are much higher than commonly cited percentages – 1.4 percent in 2011. Not only has he shown that the other government costs that allegedly were left out are actually included, but he has also shown that the other official measure of Medicare’s administrative costs shows how much more it is costing us to fund the administrative excesses of the private Medicare Advantage and Part D drug programs – an egregiously wasteful use of our Medicare funds.
Quoting Sullivan, “This enormous disparity between two measures that used to be almost identical should long ago have triggered inquiries within Congress and the US health policy community as to whether the higher administrative costs associated with the growing privatization of Medicare are justified.”
It should also have triggered the question: Why haven’t we yet enacted an improved Medicare for everyone?

Miners arrested in fight to end Peabody’s stealing of health benefits

Coal Execs deserve ‘a cell next to Bernie Madoff’

By Kay Tillow
Firedoglake, Feb. 17, 2013

ST. LOUIS, Feb. 13 – Shirley Inman was arrested for peaceful, civil disobedience as she protested at the Peabody Energy headquarters against the corporate threat to rob miners and their families of the health benefits they have earned. Inman, a member of United Mine Workers of America Local 2286 in Madison, W.Va., spent 18 years driving a coal truck. Head held high, Inman faced arrest with a determination much greater than her petite stature. She is serious about this fight.

“If I can’t get my medication for my heart disease, I won’t be around much longer,” said Inman. “I’m a breast cancer survivor and I have coronary artery disease. Health care isn’t an option for me; it’s what I need to survive. I’ll do whatever it takes to make these corporate executives keep the promises they made – and if that means going to jail, so be it.”

Inman was arrested with nine of her union brothers, including UMWA Secretary Treasurer Dan Kane. This was the second set of arrests at Peabody Energy, and it looks like there will be more to come. On Jan. 29 UMWA President Cecil Roberts was arrested with the first group, but he was not present for this rally because of negotiations.

In 2007, Peabody Energy and Arch Coal spun off a large chunk of their health care and retirement obligations to a new entity called Patriot Coal. In a financial and bankruptcy transaction that UMWA vice president from Alabama, Daryl Dewberry, described as “nickel slick,” Peabody Energy and Arch Coal are trying to wash their hands of responsibility for the health benefits for which they had signed contracts.

There was an air of militancy as more than 1,000 miners and supporters marched to the park and rallied between the St. Louis arch and the Peabody headquarters prior to the arrests. There was emotion also. Health care hits close to the heart. The union has challenged the theft of benefits in court, and the case has been moved to St. Louis. Concerned that bankruptcy law may not be adequate to protect these benefits, the miners say they will win this battle by appealing to a higher moral law.

Dan Kane told the crowd: “They intentionally put Patriot in the position for bankruptcy. They want this in the bankruptcy court – they don’t want it in the court of public opinion. This is about every man and woman who works for a living. Health care and pension are not gifts. You paid for it. But these companies are using bankruptcy more and more. Lawyers will get paid. Million dollar bonuses will go to executives. The heads of Patriot won’t suffer. Those who did the work walk out with nothing. That has to stop. We don’t want their sympathy. What we want is justice.”

“We want what we’ve earned,” said Kane. “They want to go to their palatial homes – but they deserve a cell next to Bernie Madoff. I’m tired of an economy that walks all over the workers. I look for a day when we win the fight so every person who wants to can be in a union without interference. And next, I look for a day when each and every one drops their tools and sits down for a day and tells the executives here’s what it’s like without us.” The protesters roared approval.

Dewberry said the UMWA was founded in 1890 “when it was not popular to have all creeds and colors together, but we did it and we’ve been doing it for over 100 years.” He said that miners are “used to adversity and we are all our brothers’ keepers. Peabody left scars in Alabama. Arch left scars in Alabama. They left black lung. Miners took less benefits to assure health care.”

“Know this, Peabody, we’re seasoned and we ain’t backing down from nothing,” continued Dewberry.  “Our members have been shot at and burned out and turned out since 1890 and nobody is going to turn us around.” He then compared the times with an earlier era when Abraham Lincoln said, “Corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands, and the Republic is destroyed.” Dewberry declared of Peabody, “They don’t know what a fight is, but we’ll take ‘em on.”

James Gibbs, UMWA vice president from West Virginia and a third generation coal miner, spoke. “I think about Peabody and Arch and how they lied to our retirees who today walk with canes and walkers and carry bottles of oxygen after working all these years. They were promised health care for all their lives. We’re not going to let Peabody get by with this. It’s not right.”

Reflecting the common heritage of the union with the civil rights movement, Gibbs related the story of Rosa Parks. Then he told of his father who worked the last 30 years in the mine with an artificial leg, “yet Pittston didn’t mind a bit to try to take their benefits. But Pittston didn’t win that fight. We win when we are right.” He was referring to the 14-month struggle in 1989 when Pittston sought to discontinue medical benefits to miners, retirees and the disabled. Pittston was met with massive resistance when miners and their families by the thousands engaged in nonviolent civil disobedience to bring the company to its knees and to a contract.

The 10 volunteers for civil disobedience led the crowd to the street beside the gleaming Peabody Energy headquarters where they were arrested. The police secured their wrists with white plastic handcuffs and took them away. UMWA Vice President Steve Earle announced, “We’ll be back in a couple of weeks.”

The UMWA is taking on a big fight that will impact all workers and our ability to stop crooked bankruptcies from destroying health coverage. Please sign the petition to support the miners here: http://www.fairnessatpatriot.org/take-action/sign-the-petition/

Then ask your local union to endorse H.R. 676, national single-payer health care, so that we can free our health care from corporate control and assure all medically necessary care for everyone.

Sample resolution is here: http://unionsforsinglepayer.org/tools/sample_resolution

You can watch the video of the Feb. 13 rally and sit-in here:http://www.ustream.tv/channel/mineworkers

(The video begins with Kentucky AFL-CIO President Bill Londrigan introducing Paul Whiteley to sing about Peabody – lyrics by Paul and Bill.)

Background on single payer: Cecil Roberts speaks on single-payer health care here: http://tinyurl.com/aspchla

Distributed by: All Unions Committee for Single Payer Health Care–HR 676

http://my.firedoglake.com/kaytillow/2013/02/17/miners-arrested-in-fight-to-end-peabodys-stealing-of-health-benefits/#comment-263564

OECD report on waiting times

Waiting Times in the Health Sector: What Works?

By Luigi Siciliani, Michael Borowitz and Valerie Moran
Organisation for Economic Development and Co-operation (OECD), OECD Health Policy Studies, February 2013

The book first provides a framework to understand the role of waiting times in health systems in Chapter 1. It then discusses variation and best practice in defining and measuring waiting times across OECD countries in Chapter 2. The book summarises and discusses the effectiveness of the most common policies to address long waiting times in 13 OECD countries in Chapter 3. Chapters 4-16 provide detailed country case studies respectively in Australia, Canada, Denmark, Finland, Ireland, Italy, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, and the United Kingdom. They describe current policy developments and assess the effectiveness of policies in the last ten years.

Table 3.1 – (Policies and their potential effect on waiting times)

Supply-side policies

1. Increased production in the public sector by funding extra activity – WEAK
2. Contracting with private sector – WEAK
3. Sending patients abroad – WEAK
4. Increased productivity by introducing activity-based financing (DRGs) – MEDUIM
5. Increased choice of providers – MEDIUM
6. Improved management of waiting lists – MEDIUM

Demand-side policies

1. Explicit guidelines to prioritise patients – MEDIUM
2. Subsidise private insurance – WEAK

Combined policies

1. Waiting-time guarantees – WEAK
2. With sanctions – STRONG
3. With choice and competition – STRONG

Chapter 5 – Canada

This chapter outlines the main characteristics of the Canadian health care delivery system, traces the development of unacceptably long patient waiting times for care and examines public concern about the viability of Canadian Medicare. While individual jurisdictions addressed the problem of waiting times with limited success, federal provincial and territorial leaders collaborated in the development of a pan-Canadian approach to reduce waiting times in the context of the 2004 10-Year Plan to Strengthen Health Care. Reductions in waiting times are presented as are the results of statutory parliamentary reviews of progress.

In response to their 2004 commitment and given the funding to support it, Canadian jurisdictions have delivered measurable improvement in patient waiting times in the priority clinical areas. There has been improvement in the infrastructure required to collect data and to compare and report on performance. This improvement, across the country, would not have been possible without the federal, provincial and territorial collaboration and commitment set out in the 10-Year Plan to Strengthen Health Care. Nor could it have been documented without similar collaboration on data, definitions and reporting methodologies.

The accomplishments of the past eight years were necessary and have been beneficial but not sufficient according to the most recent Parliamentary Review. It calls for investment in dealing with the root causes of waiting and investment in better management practices along the continuum of care.

The full 328 page report can be read online at this link:
http://www.keepeek.com/oecd/media/social-issues-migration-health/waiting-times-for-elective-surgery-what-works_9789264179080-en

Comment:

By Don McCanne, M.D.

A well designed single payer national health program uses equitable public financing to ensure that health care is universal, administratively efficient, and reasonably comprehensive. The opponents of single payer cannot deny these well documented benefits, so they usually resort to the claim that single payer systems cause rationing. Does this allegation have any basis in fact?

The term “rationing” traditionally has referred to the equitable allocation of a commodity that is in short supply. In health care, the term is more limited. In OECD nations any person experiencing a medical emergency receives essential care. There is no rationing of emergency services.

On the other hand, in many but not all nations a backlog in the scheduling of elective services may develop. Theoretically, everyone would still receive appropriate care, but they might have to wait for it. Rather than labeling this phenomenon “rationing,” we should call it what it is – “waiting times” or “queues.”

This new OECD report is important because it demonstrates that, with good government stewardship, queues can be reduced to acceptable levels. (Totally eliminating queues by providing instant access to all services, no matter how specialized, is not practical nor desirable.)

The United States was not included in this report. Queues are not as much of a problem for individuals who are well insured, though some excessive delays do occur. Rather, some experts claim that we do “ration” care for those without the ability to pay for that care, with the exception of emergency services provided in an Emergency Department. Yet “ration” may not be the appropriate term since these individuals do not receive an equitable allocation of a limited resource; they are denied care in a system to which others are granted access.

Let’s suppose that we enacted a single payer national health program in the United States. It is true that if we later elected leaders who were opposed to government programs, their inattentiveness to needs could result in the development of excessive queues. That is why it is important to understand what does and what does not work.

In the list in Table 3.1 (above), you can see that measures that are not particularly effective are those such as sending patients abroad, contracting public patients with the private sector, or subsidizing private insurance plans (like ACA does).

Moderately effective measures include increasing choice of providers (not locking patients into networks), using activity-based financing (DRGs), and improved queue management, with better systems of prioritizing patients.

The strongest measures, according to this report, include establishing waiting time guarantees with sanctions for failing to comply (sanctions combat sloth), and providing more choice and competition. Here choice refers to choice of health care professionals and institutions, selected based on competition on perceived quality and service. Another important measure that was left off of this list is fine-tuning system capacity.

Since Canada’s single payer system is the closest to the PNHP model of reform, it is important to understand what is happening there. We still hear that “single payer would cause rationing like they have in Canada.” But, with federal and provincial collaboration, they have made considerable progress in reducing their queues, and are continuing with efforts toward further improvement.

All we would need to avoid “rationing” under a single payer system is responsible public stewardship. If the people in charge insist that we can’t have single payer because of rationing, then we, in turn, need to insist that they be discharged as our public stewards. There are plenty of well qualified individuals who do care about the health of our people.

OECD report on waiting times

Waiting Times in the Health Sector: What Works?

By Luigi Siciliani, Michael Borowitz and Valerie Moran
Organisation for Economic Development and Co-operation (OECD), OECD Health Policy Studies, February 2013
The book first provides a framework to understand the role of waiting times in health systems in Chapter 1. It then discusses variation and best practice in defining and measuring waiting times across OECD countries in Chapter 2. The book summarises and discusses the effectiveness of the most common policies to address long waiting times in 13 OECD countries in Chapter 3. Chapters 4-16 provide detailed country case studies respectively in Australia, Canada, Denmark, Finland, Ireland, Italy, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, and the United Kingdom. They describe current policy developments and assess the effectiveness of policies in the last ten years.
Table 3.1 – (Policies and their potential effect on waiting times)
Supply-side policies
1. Increased production in the public sector by funding extra activity – WEAK
2. Contracting with private sector – WEAK
3. Sending patients abroad – WEAK
4. Increased productivity by introducing activity-based financing (DRGs) – MEDUIM
5. Increased choice of providers – MEDIUM
6. Improved management of waiting lists – MEDIUM
Demand-side policies
1. Explicit guidelines to prioritise patients – MEDIUM
2. Subsidise private insurance – WEAK
Combined policies
1. Waiting-time guarantees – WEAK
2. With sanctions – STRONG
3. With choice and competition – STRONG
Chapter 5 – Canada
This chapter outlines the main characteristics of the Canadian health care delivery system, traces the development of unacceptably long patient waiting times for care and examines public concern about the viability of Canadian Medicare. While individual jurisdictions addressed the problem of waiting times with limited success, federal provincial and territorial leaders collaborated in the development of a pan-Canadian approach to reduce waiting times in the context of the 2004 10-Year Plan to Strengthen Health Care. Reductions in waiting times are presented as are the results of statutory parliamentary reviews of progress.
In response to their 2004 commitment and given the funding to support it, Canadian jurisdictions have delivered measurable improvement in patient waiting times in the priority clinical areas. There has been improvement in the infrastructure required to collect data and to compare and report on performance. This improvement, across the country, would not have been possible without the federal, provincial and territorial collaboration and commitment set out in the 10-Year Plan to Strengthen Health Care. Nor could it have been documented without similar collaboration on data, definitions and reporting methodologies.
The accomplishments of the past eight years were necessary and have been beneficial but not sufficient according to the most recent Parliamentary Review. It calls for investment in dealing with the root causes of waiting and investment in better management practices along the continuum of care.
The full 328 page report can be read online at this link:
http://www.keepeek.com/oecd/media/social-issues-migration-health/waiting…

A well designed single payer national health program uses equitable public financing to ensure that health care is universal, administratively efficient, and reasonably comprehensive. The opponents of single payer cannot deny these well documented benefits, so they usually resort to the claim that single payer systems cause rationing. Does this allegation have any basis in fact?
The term “rationing” traditionally has referred to the equitable allocation of a commodity that is in short supply. In health care, the term is more limited. In OECD nations any person experiencing a medical emergency receives essential care. There is no rationing of emergency services.
On the other hand, in many but not all nations a backlog in the scheduling of elective services may develop. Theoretically, everyone would still receive appropriate care, but they might have to wait for it. Rather than labeling this phenomenon “rationing,” we should call it what it is – “waiting times” or “queues.”
This new OECD report is important because it demonstrates that, with good government stewardship, queues can be reduced to acceptable levels. (Totally eliminating queues by providing instant access to all services, no matter how specialized, is not practical nor desirable.)
The United States was not included in this report. Queues are not as much of a problem for individuals who are well insured, though some excessive delays do occur. Rather, some experts claim that we do “ration” care for those without the ability to pay for that care, with the exception of emergency services provided in an Emergency Department. Yet “ration” may not be the appropriate term since these individuals do not receive an equitable allocation of a limited resource; they are denied care in a system to which others are granted access.
Let’s suppose that we enacted a single payer national health program in the United States. It is true that if we later elected leaders who were opposed to government programs, their inattentiveness to needs could result in the development of excessive queues. That is why it is important to understand what does and what does not work.
In the list in Table 3.1 (above), you can see that measures that are not particularly effective are those such as sending patients abroad, contracting public patients with the private sector, or subsidizing private insurance plans (like ACA does).
Moderately effective measures include increasing choice of providers (not locking patients into networks), using activity-based financing (DRGs), and improved queue management, with better systems of prioritizing patients.
The strongest measures, according to this report, include establishing waiting time guarantees with sanctions for failing to comply (sanctions combat sloth), and providing more choice and competition. Here choice refers to choice of health care professionals and institutions, selected based on competition on perceived quality and service. Another important measure that was left off of this list is fine-tuning system capacity.
Since Canada’s single payer system is the closest to the PNHP model of reform, it is important to understand what is happening there. We still hear that “single payer would cause rationing like they have in Canada.” But, with federal and provincial collaboration, they have made considerable progress in reducing their queues, and are continuing with efforts toward further improvement.
All we would need to avoid “rationing” under a single payer system is responsible public stewardship. If the people in charge insist that we can’t have single payer because of rationing, then we, in turn, need to insist that they be discharged as our public stewards. There are plenty of well qualified individuals who do care about the health of our people.

"Expanded & Improved Medicare For All Act" provides renewal for the movement

"Expanded & Improved Medicare For All Act", H.R. 676

Sponsor: Rep. John Conyers, Jr., plus 40 Cosponsors (2/14/13)
113th Congress

To provide for comprehensive health insurance coverage for all United States residents, improved health care delivery, and for other purposes.

The Library of Congress
Thomas (Select “Bill Number” and enter H.R. 676)
http://thomas.loc.gov/home/thomas.php

As of 2/15/13 the text of the legislation has not been received from the Government Printing Office, but a draft is available at this link:
https://pnhp.org/system/assets/drupal/HR_676_2013.pdf

Comment:

By Don McCanne, M.D.

Congressman John Conyers has reintroduced his bill for a single payer national health program: H.R. 676, “Expanded & Improved Medicare For All Act.” Some perspective is warranted.

Our government stewards are intensely involved in implementation of the Affordable Care Act (ACA), and thus tend to dismiss any consideration of single payer reform as being irrelevant in today’s political climate. Such an attitude is decidedly unwise.

We know that a decade from now 30 million people will still be without any health insurance, and tens of millions more may be exposed to excessive medical debt because of the inadequate coverage of the health plans – the standard silver plan having an actuarial value of only 70 percent. We also know that the ACA model of reform will not be capable of adequately controlling costs and will fail to provide much needed reform such as the reduction or elimination of profound administrative waste.

Many understandably do not want to wait the years it will take to see that ACA is a failure. They are turning to their states to try to achieve single payer reform. But state efforts not only face the “political feasibility” hurdle, they also face the federal gridlock of existing programs, laws and regulations that place barriers in the way of state reform.

For example, Vermont’s highly touted single payer legislation has not enabled adequate federal flexibility with Medicare, Medicaid, and employer self-insured (ERISA) funds. Although state activists talk about obtaining federal waivers to free up these funds, without comprehensive federal legislation, the existing waiver programs cannot possibly open the gates for state-level single payer. Considering the complexity of existing federal laws and regulations, the federal legislation required to enable state single payer systems likely would be as complex, if not more so, than enacting a national single payer program. The latter simply would displace our dysfunctional financing system, whereas the former would have to negotiate the the extremely complex maze that has been constructed over many decades, most recently compounded by ACA.

The California legislature has twice passed a bill that they labeled “single payer,” but only with the promise of the Republican governor that it would be vetoed. Now that California has a Democratic governor and a two-thirds super-majority in each house of the state legislature, with only one week left to file bills for the current two year session, no state legislator has been willing to sponsor the single payer bill. They insist that all attention must now be devoted to implementation of ACA.

This is why H.R. 676 is so important. Even if Congressional barriers succeed in blocking the legislation, the Expanded and Improved Medicare for All Act serves as a very important vehicle for education and advocacy. The bill was introduced two days ago with 37 cosponsors, and yesterday, 3 more were added. That is more than they began with in the last session of Congress. We should build on this.

State efforts should be encouraged, but with a dose of reality. We need to be working on a national movement – all of us, including the state activists. We can support each other in our state efforts, but all of us must pull all stops in support of the national efforts.

Perhaps around 2017 the picture will finally emerge that the fragmented and dysfunctional model of a multitude of private plans and public programs cannot be repaired, and that a public program such as single payer or a national health service will be essential. Until then, we must continue to spread the message that there is a model that will work. People need to know that, when ACA fails, there is a place to where we can turn.

Health care spending: A 21st century gold rush

By Philip Caper, M.D.
Bangor Daily News, Feb. 14, 2013

Winston Churchill once remarked, “Americans will always do the right thing, once they’ve exhausted all alternatives.” His observation, at least the second half of it, is proving itself as we continue to struggle with our health care system, especially its out-of-control costs that are crippling the budgets of businesses and government alike.

There is a lot of money in our health care system, and no enforceable budget. That leads to carelessness when it comes to spending that money.

What are some of the reasons health care costs continue to rise? Here are a few examples.

For at least the past 40 years, I’ve heard colleagues say, “We’d better get our fees and charges up now, because next year they’re really going to crack down on us.” It has never happened, yet. The problem is intensifying as outpatient “providers” have morphed from being real people into being corporations.

The Los Angeles Times reported on a case where a teacher’s group health plan was billed $87,500 by an “out of network” provider for a knee procedure that normally costs $3,000. Her health plan was willing to pay it. Outraged, the teacher ratted on the orthopedic surgicenter to California’s attorney general. After the press got involved, the charge was “reduced” to only $15,000. Not a bad pricing strategy, from the surgicenter’s point of view.

The New York Times reported an incident where a student who needed emergency gallbladder surgery ended up with a couple of “out-of-network” surgeons through no fault of his own. He was billed $60,000. His insurance company was willing to pay only $2,000. He was left to deal with the rest of the bill on his own.

There are many more examples. Privately insured patients are not the only ones affected. Governors around the country are continuing to struggle with how to pay for their Medicaid programs. In Oregon, Democratic Gov. John Kitzhaber is trying to find ways to impose a fixed budget on Oregon’s Medicaid program without adversely affecting Medicaid beneficiaries. But, he acknowledges, disciplining Medicaid alone will not do the job. He hopes his approach will be adopted by most other health insurance programs.

In Maine, Republican Gov. Paul LePage is struggling not only with how to keep up with burgeoning current Medicaid costs, but also how to pay the state’s almost $500 million past-due Medicaid debt to hospitals. He has proposed lowering liquor prices to boost sales, and mortgaging Maine’s future liquor revenues to secure bonds to pay the debt. His Republican colleagues in the Legislature have described this idea as “creative.”

One of the central features of Obamacare is the creation of “health insurance exchanges,” or online marketplaces. But the law has recognized that many people will need help making the right choices. So it has created an army of “navigators” to help them. A recent Washington Post story points out that a huge number of such experts will be necessary (California alone plans to certify 21,000 of them). Their cost will be reflected in higher health insurance premiums and has sparked opposition from insurance brokers who view them as competition. That will be an expensive fight, without increasing the amount going to actual health care by a single dollar.

Then there is the purchase of politicians by powerful corporate interests. When the Medicare prescription drug benefit was enacted in 2003, it was prohibited from negotiating lower drug prices, even though the veterans health system and many Medicaid programs are permitted to do so. The lead congressman pushing that provision retired from Congress soon after it was passed to take a lucrative job with the pharmaceutical industry. This has become standard practice in Washington.

And don’t forget the for-profit levels of compensation paid to the executives of nonprofit hospitals.

Meanwhile in Massachusetts, where Obamacare was born, health care costs are expected to rise six to 12 percent next year. Last year, their legislature passed a law capping increases in total private and public spending statewide, limiting them to the rate of growth of the Massachusetts economy. But the job of figuring out how to actually get it done was turfed to an “expert panel” of “stakeholders.” My bet is that such cost control will be difficult or impossible to achieve unless we simplify and centralize the way we finance health care.

Why does this financial abuse of taxpayers and patients continue? Because we let it. Americans often react to structural problems by simply throwing more money at them. We seem to be unable to say “no more.”

Maybe it’s time to revisit the part of Churchill’s comment about Americans always doing the right thing — by emulating the policies of most other wealthy countries. They have health care systems that are more popular than ours, provide better access to care, get better results, and are far less expensive.

Maybe it’s time to put everybody into a single, nonprofit system we can all support, within a budget acceptable to the majority of people. That arrangement would eliminate the political fights among people in different health insurance programs, each questioning change by asking, “How does it benefit me?”

Such a system would be best if done at a national level. But it could work initially at the level of individual states, such as Maine. That’s how the Canadians did it — one province at a time. If Maine could be one of the first states to do that, the people of Maine could truly say “Dirigo, I lead.”

Physician Philip Caper of Brooklin is a founding board member of Maine AllCare, a nonpartisan, nonprofit group committed to making health care in Maine universal, accessible and affordable for all. He can be reached at pcpcaper21@gmail.com.

http://bangordailynews.com/2013/02/14/health/health-care-spending-a-21st-century-gold-rush/print/

"Expanded &; Improved Medicare For All Act" provides renewal for the movement

“Expanded & Improved Medicare For All Act”, H.R. 676

Sponsor: Rep. John Conyers, Jr., plus 40 Cosponsors (2/14/13)
113th Congress
To provide for comprehensive health insurance coverage for all United States residents, improved health care delivery, and for other purposes.
The Library of Congress
Thomas (Select “Bill Number” and enter H.R. 676)
http://thomas.loc.gov/home/thomas.php
As of 2/15/13 the text of the legislation has not been received from the Government Printing Office, but a draft is available at this link:
https://pnhp.org/system/assets/drupal/HR_676_2013.pdf

Congressman John Conyers has reintroduced his bill for a single payer national health program: H.R. 676, “Expanded & Improved Medicare For All Act.” Some perspective is warranted.
Our government stewards are intensely involved in implementation of the Affordable Care Act (ACA), and thus tend to dismiss any consideration of single payer reform as being irrelevant in today’s political climate. Such an attitude is decidedly unwise.
We know that a decade from now 30 million people will still be without any health insurance, and tens of millions more may be exposed to excessive medical debt because of the inadequate coverage of the health plans – the standard silver plan having an actuarial value of only 70 percent. We also know that the ACA model of reform will not be capable of adequately controlling costs and will fail to provide much needed reform such as the reduction or elimination of profound administrative waste.
Many understandably do not want to wait the years it will take to see that ACA is a failure. They are turning to their states to try to achieve single payer reform. But state efforts not only face the “political feasibility” hurdle, they also face the federal gridlock of existing programs, laws and regulations that place barriers in the way of state reform.
For example, Vermont’s highly touted single payer legislation has not enabled adequate federal flexibility with Medicare, Medicaid, and employer self-insured (ERISA) funds. Although state activists talk about obtaining federal waivers to free up these funds, without comprehensive federal legislation, the existing waiver programs cannot possibly open the gates for state-level single payer. Considering the complexity of existing federal laws and regulations, the federal legislation required to enable state single payer systems likely would be as complex, if not more so, than enacting a national single payer program. The latter simply would displace our dysfunctional financing system, whereas the former would have to negotiate the the extremely complex maze that has been constructed over many decades, most recently compounded by ACA.
The California legislature has twice passed a bill that they labeled “single payer,” but only with the promise of the Republican governor that it would be vetoed. Now that California has a Democratic governor and a two-thirds super-majority in each house of the state legislature, with only one week left to file bills for the current two year session, no state legislator has been willing to sponsor the single payer bill. They insist that all attention must now be devoted to implementation of ACA.
This is why H.R. 676 is so important. Even if Congressional barriers succeed in blocking the legislation, the Expanded and Improved Medicare for All Act serves as a very important vehicle for education and advocacy. The bill was introduced two days ago with 37 cosponsors, and yesterday, 3 more were added. That is more than they began with in the last session of Congress. We should build on this.
State efforts should be encouraged, but with a dose of reality. We need to be working on a national movement – all of us, including the state activists. We can support each other in our state efforts, but all of us must pull all stops in support of the national efforts.
Perhaps around 2017 the picture will finally emerge that the fragmented and dysfunctional model of a multitude of private plans and public programs cannot be repaired, and that a public program such as single payer or a national health service will be essential. Until then, we must continue to spread the message that there is a model that will work. People need to know that, when ACA fails, there is a place to where we can turn.