PNHP

Despite slight drop in uninsured, last year’s figure points to 48,000 preventable deaths: health expert

Despite slight drop in uninsured, last year’s figure points to 48,000 preventable deaths: health expert

Persistence of large numbers of uninsured and related deaths shows urgency of enacting an improved-Medicare-for-all system, physician says

FOR IMMEDIATE RELEASE
Sept. 12, 2012

Contact:
Steffie Woolhandler, M.D., M.P.H.
David Himmelstein, M.D.
Garrett Adams, M.D., M.P.H., president PNHP
Mark Almberg, communications director PNHP, (312) 782-6006, mark@pnhp.org. Local physicians in 44 states are available for comment. (Also see historical table of state-by-state uninsured numbers below.)

The Census Bureau’s official estimate that 48.6 million Americans lacked health insurance in 2011 means approximately 48,000 people died needlessly last year because they couldn’t get access to timely and appropriate care, a health policy expert said today.

The estimated death toll is based on a peer-reviewed Harvard study published in the American Journal of Public Health in 2009, widely cited during the health reform debate, which found that for every 1 million persons who were uninsured there were about 1,000 related, preventable deaths.

Dr. Steffie Woolhandler, professor of public health at the City University of New York and visiting professor of medicine at Harvard Medical School, is a co-author of the 2009 study. She said, “The Census Bureau’s latest figure, 48.6 million uninsured, conjures up a very grim picture: a preventable death every 11 minutes.”

She said studies have shown that uninsured people with chronic illnesses like heart disease delay or forgo care, often leading to serious complications of their medical condition and, in many cases, premature death.

Woolhandler continued: “As a physician, I simply cannot accept a situation where tens of thousands of people die every year because they lack insurance coverage. And lest anyone think this problem has been solved by the federal health law, the Congressional Budget Office estimates about 30 million people will still be uninsured in 2022. That figure translates into roughly 30,000 excess deaths annually – again, an intolerable picture.”

The slight drop in this year’s total number of uninsured – to 48.6 million from a record 50 million last year – was largely attributable to an increase in government health insurance coverage, particularly persons covered by Medicaid and Medicare, the Census Bureau said.

There was also a modest gain in coverage among people between the ages of 19 and 25 – 539,000 – approximately 40 percent of whom obtained coverage through their parent’s health plan as a result of the 2010 health law, the bureau reported.

Woolhandler said that while the number of persons covered by private health insurance last year was statistically unchanged from 2010, the share of Americans with private coverage, 63.9 percent, shows a slight drop and continues a three-decade-long trend of diminishing coverage through private insurance.

She also noted that while the national count of uninsured went down slightly, the number of uninsured climbed in 21 states, most significantly in California, where 197,000 additional people became uninsured since 2010. The Census Bureau reported that California’s uninsured numbered 7.4 million in 2011, or 19.7 percent of the population.

“We should adopt a zero-tolerance policy toward lack of health coverage,” Woolhandler said. “Today’s Census Bureau report underscores the urgency of going beyond the federal health law and swiftly implementing a single-payer, improved-Medicare-for-all program.

“Such a program would assure truly universal, comprehensive, high-quality coverage for everyone while simultaneously ridding us of the scourge of insurance-company-related waste, bureaucracy and profiteering. A single-payer system would save both lives and money.”

Woolhandler is co-founder of Physicians for a National Health Program, an organization of 18,000 doctors who advocate for single-payer national health insurance. PNHP played no role in supporting her 2009 research study, which she co-authored with Dr. David Himmelstein, among others.

Historical state-by-state data on the uninsured from 2011-2008, compiled by PNHP staff from the Census Bureau’s newly published data, can be found here.

Physicians for a National Health Program (www.pnhp.org) is an organization of more than 18,000 doctors who advocate for single-payer national health insurance. To speak with a physician/spokesperson in your area, visit www.pnhp.org/stateactions or call (312) 782-6006.

New Census Bureau numbers on the uninsured

Income, Poverty, and Health Insurance Coverage in the United States: 2011

By Carmen DeNavas-Walt, Bernadette D. Proctor, Jessica C. Smith
United States Census Bureau, September 2012
Health Insurance Coverage – 2011
48.6 million or 15.7% – people without health insurance
• 7.0 million – children under 18 uninsured
193.7 million or 63.9% – people covered by private health insurance
• 170.1 million or 55.1% – people covered by employment-based insurance
99.5 million or 32.2% – people covered by government health insurance
• 50.8 million or 16.5% – people covered by Medicaid
• 46.9 million or 15.2% – people covered by Medicare
Poverty
9.5 million or 11.8% – families living in poverty
• 31.2% – families with a female householder living in poverty
Income Inequality
Income inequality also increased between 2010 and 2011 when measured by shares of aggregate household income received by quintiles. The aggregate share of income declined for the middle and fourth quintiles. The share of aggregate income increased 1.6 percent for the highest quintile and within the highest quintile, the share of aggregate income for the top 5 percent increased 4.9 percent. The changes in the shares of aggregate income for the lowest two quintiles were not statistically significant.
http://www.census.gov/prod/2012pubs/p60-243.pdf

The numbers of uninsured decreased from 50.0 million in 2010 to 48.6 million in 2011. That might be good news for the net 1.4 million newly insured, but it is terrible news for the 48.6 million who remain without health insurance.
These numbers, of course, are transitional since new private coverage through the state insurance exchanges and the greater expansion of coverage under Medicaid will not take place until 2014. Even then, the new coverage will be either with private underinsurance plans (low actuarial value and inadequate subsidies) or with the chronically underfunded Medicaid program, with even greater impairment of health care access likely. Worse, 30 million will still have no coverage at all (CBO).
Perhaps even more shocking is that 31.2% of families with a female householder live in poverty – right here in the United States!
And income inequality? The aggregate share of household income has decreased for the middle and fourth quintiles. The middle class is being wiped out!
Of course we knew all this. So why aren’t we doing something about it? Howling in the wind doesn’t seem to be getting us very far.

Jonathan Gruber gives qualified endorsement to premium support

Mixed Message From Obama Advisers on Medicare

By Meghan McCarthy
NationalJournal, September 10, 2012

President Obama has seized on Republican proposals to overhaul Medicare as a top campaign issue, saying that the GOP plan to add a private insurance option would end seniors’ guarantee of government health care. But behind the election-season politics, influential experts who have advised Obama on health care are open to a future for Medicare that includes competition among private insurance plans.

In e-mail exchanges with the staff of the White House-appointed  fiscal commission  that were obtained by National Journal, David Cutler and Jonathan Gruber, who have both advised Obama, gave qualified support to a Medicare voucher plan offered by Ryan and former Clinton budget director Alice Rivlin in talks to reduce the deficit.

Cutler and Gruber are both hot shots of the health economics world. Cutler is a professor at Harvard, Gruber at MIT. Both advised Obama on health care in the 2008 campaign, and both had major roles in helping develop Democrats’ 2010 health care law. When they offer counsel, the White House is listening.

Cutler now says he was only proposing an idea for Medicare if insurance exchanges are “shown to work well for the non-elderly population,” by getting people into good plans and lowering costs.

Gruber also said he approved of the Ryan-Rivlin plan in 2010 e-mails to fiscal-commission staff, as long as the insurance market reforms of the Democrats’ health care law are kept in place.

Gruber now says that economists don’t know enough yet to move the majority of Medicare enrollees into private-insurance plans.  As part of the effort to expand coverage to the uninsured, President Obama’s health care law would establish insurance exchanges for people younger than 65 to buy private health care. Gruber said that this is a better way of testing out new approaches, adding that it would be “stupid” to experiment first on the older and sicker Medicare population.

“We are getting better, but we are not quite there yet,” Gruber said in an interview. “But premium support is ultimately where we need to be.”

There are three key problems that still must be worked out, Gruber said. First, policymakers have to figure out how to keep insurance companies from cherry-picking healthy people and essentially forcing the sickest patients on to traditional Medicare, which would drain the program of money. Second, policymakers must find a way to make sure insurance companies design benefits so they are easy-to-understand for beneficiaries, and don’t trick seniors into buying more expensive plans that aren’t suitable for them. Third, they have to figure out just how quickly government checks for seniors to buy coverage could grow.

Still, Gruber said he could see Medicare becoming a premium-support-style plan within a five-year timetable, after the Affordable Care Act’s health insurance exchanges start enrolling an estimated 30 million people into insurance plans in 2014.

http://www.nationaljournal.com/healthcare/mixed-obama-message-on-medicare–20120910

Comment: 

By Don McCanne, MD

So Obama advisor, MIT Professor Jonathan Gruber, says, “premium support is ultimately where we need to be.” In other words, we should replace the traditional Medicare program with vouchers that would be used to purchase private plans. Let’s look at the three problems which he says must first be addressed.

He says that policymakers must figure out how to keep insurance companies from insuring the healthy and sending the sick to the traditional government program. Actually that is only one behavior that private insurers engage in to enhance their success as private businesses. They are always going to do everything that they can to maximize revenues and minimize spending, as any reasonable business would do. The drive for profits for passive investors is not in itself inherently evil, except when it is applied to our health care system. Manipulating sick patients for the prime purpose of generating profits is immoral. Investor-owned insurance companies need to be removed from our health care system.

Gruber also says that we have to figure out “just how quickly government checks for seniors to buy coverage could grow” under premium support. This is a problem inherent with government vouchers that cover only a part of the costs. Instead of directing efforts to control total health care costs, government stewards tend to control just the government spending, passively shifting the costs of health care inflation onto the patients. The financial burden on individuals is already too great, and this would make it even worse.

More subtle, but perhaps even more important, Gruber says that the design of insurance products should be easy to understand so that seniors are not tricked into buying “more expensive plans that aren’t suitable for them.” This statement represents one of the great fallacies of private health insurance markets, that somehow there is an insurance product that is just right for you wherein you will not have to pay for benefits that you’ll never use.

There are two problems with this. The obvious one is that future health care needs cannot be predicted. Major acute disorders or the future onset of chronic disease are unknowns. Plans need to be comprehensive to insure against these potential losses, even if you hope that you won’t ever need to use the coverage that is providing you security, though you probably will someday.

The other problem is that an ideal insurance system pools all risks and funds the risk pool equitably. It is less expensive because of the much greater administrative efficiency of a universal risk pool. It also eliminates financial barriers to appropriate health care. Maybe males don’t want maternity benefits. Maybe females don’t want coverage for prostate cancer. Maybe young adults don’t want coverage for cataracts. Maybe the elderly don’t want coverage for organ transplants. Maybe children don’t want coverage for vaccines, even of their parents want them to have it.

The point is that when you start designing plans for different populations – “only the coverage you need” – you break up the universal risk pool and introduce many of the inequities and inefficiencies that characterize our current dysfunctional financing system. The administrative inefficiencies of buying “only what you need” increases costs over the entire system and redistributes those costs inequitably.

There is no substitute for establishing a single universal risk pool, funding the pool equitably based on ability to pay, and using the pool to fund health care based on medical need. And that, in a nutshell, is what a single payer national health program does.

Jonathan Gruber gives qualified endorsement to premium support

Mixed Message From Obama Advisers on Medicare

By Meghan McCarthy
NationalJournal, September 10, 2012
President Obama has seized on Republican proposals to overhaul Medicare as a top campaign issue, saying that the GOP plan to add a private insurance option would end seniors’ guarantee of government health care. But behind the election-season politics, influential experts who have advised Obama on health care are open to a future for Medicare that includes competition among private insurance plans.
In e-mail exchanges with the staff of the White House-appointed  fiscal commission  that were obtained by National Journal, David Cutler and Jonathan Gruber, who have both advised Obama, gave qualified support to a Medicare voucher plan offered by Ryan and former Clinton budget director Alice Rivlin in talks to reduce the deficit.
Cutler and Gruber are both hot shots of the health economics world. Cutler is a professor at Harvard, Gruber at MIT. Both advised Obama on health care in the 2008 campaign, and both had major roles in helping develop Democrats’ 2010 health care law. When they offer counsel, the White House is listening.
Cutler now says he was only proposing an idea for Medicare if insurance exchanges are “shown to work well for the non-elderly population,” by getting people into good plans and lowering costs.
Gruber also said he approved of the Ryan-Rivlin plan in 2010 e-mails to fiscal-commission staff, as long as the insurance market reforms of the Democrats’ health care law are kept in place.
Gruber now says that economists don’t know enough yet to move the majority of Medicare enrollees into private-insurance plans.  As part of the effort to expand coverage to the uninsured, President Obama’s health care law would establish insurance exchanges for people younger than 65 to buy private health care. Gruber said that this is a better way of testing out new approaches, adding that it would be “stupid” to experiment first on the older and sicker Medicare population.
“We are getting better, but we are not quite there yet,” Gruber said in an interview. “But premium support is ultimately where we need to be.”
There are three key problems that still must be worked out, Gruber said. First, policymakers have to figure out how to keep insurance companies from cherry-picking healthy people and essentially forcing the sickest patients on to traditional Medicare, which would drain the program of money. Second, policymakers must find a way to make sure insurance companies design benefits so they are easy-to-understand for beneficiaries, and don’t trick seniors into buying more expensive plans that aren’t suitable for them. Third, they have to figure out just how quickly government checks for seniors to buy coverage could grow.
Still, Gruber said he could see Medicare becoming a premium-support-style plan within a five-year timetable, after the Affordable Care Act’s health insurance exchanges start enrolling an estimated 30 million people into insurance plans in 2014.
http://www.nationaljournal.com/healthcare/mixed-obama-message-on-medicare–20120910

So Obama advisor, MIT Professor Jonathan Gruber, says, “premium support is ultimately where we need to be.” In other words, we should replace the traditional Medicare program with vouchers that would be used to purchase private plans. Let’s look at the three problems which he says must first be addressed.
He says that policymakers must figure out how to keep insurance companies from insuring the healthy and sending the sick to the traditional government program. Actually that is only one behavior that private insurers engage in to enhance their success as private businesses. They are always going to do everything that they can to maximize revenues and minimize spending, as any reasonable business would do. The drive for profits for passive investors is not in itself inherently evil, except when it is applied to our health care system. Manipulating sick patients for the prime purpose of generating profits is immoral. Investor-owned insurance companies need to be removed from our health care system.
Gruber also says that we have to figure out “just how quickly government checks for seniors to buy coverage could grow” under premium support. This is a problem inherent with government vouchers that cover only a part of the costs. Instead of directing efforts to control total health care costs, government stewards tend to control just the government spending, passively shifting the costs of health care inflation onto the patients. The financial burden on individuals is already too great, and this would make it even worse.
More subtle, but perhaps even more important, Gruber says that the design of insurance products should be easy to understand so that seniors are not tricked into buying “more expensive plans that aren’t suitable for them.” This statement represents one of the great fallacies of private health insurance markets, that somehow there is an insurance product that is just right for you wherein you will not have to pay for benefits that you’ll never use.
There are two problems with this. The obvious one is that future health care needs cannot be predicted. Major acute disorders or the future onset of chronic disease are unknowns. Plans need to be comprehensive to insure against these potential losses, even if you hope that you won’t ever need to use the coverage that is providing you security, though you probably will someday.
The other problem is that an ideal insurance system pools all risks and funds the risk pool equitably. It is less expensive because of the much greater administrative efficiency of a universal risk pool. It also eliminates financial barriers to appropriate health care. Maybe males don’t want maternity benefits. Maybe females don’t want coverage for prostate cancer. Maybe young adults don’t want coverage for cataracts. Maybe the elderly don’t want coverage for organ transplants. Maybe children don’t want coverage for vaccines, even of their parents want them to have it.
The point is that when you start designing plans for different populations – “only the coverage you need” – you break up the universal risk pool and introduce many of the inequities and inefficiencies that characterize our current dysfunctional financing system. The administrative inefficiencies of buying “only what you need” increases costs over the entire system and redistributes those costs inequitably.
There is no substitute for establishing a single universal risk pool, funding the pool equitably based on ability to pay, and using the pool to fund health care based on medical need. And that, in a nutshell, is what a single payer national health program does.

Herding dual eligibles into low quality plans

Obama More Flexible on Medicare Than Rhetoric Suggests

By Margot Sanger-Katz
NationalJournal, September 8, 2012

In his convention speech in Charlotte, President Obama vowed to block the Republican Medicare reform plan because “no American should ever have to spend their golden years at the mercy of insurance companies.”

But back in Washington, his Health and Human Services Department is launching a pilot program that would shift up to 2 million of the poorest and most-vulnerable seniors out of the federal Medicare program and into private health insurance plans overseen by the states.

The administration has accepted applications from 18 states to participate in the program, which would give states money to purchase managed-care plans for people who are either disabled or poor enough to qualify for both Medicare and Medicaid.

Obama’s 2010 health reform law allows experimentation in delivering health care at lower cost through demonstration projects. Many states would like permission to shift their entire population of so-called dual-eligible beneficiaries into the new plans. HHS has indicated that it will enroll about 2 million beneficiaries, out of about 7 million who qualify for full benefits from both government health programs.

California is already counting on more than $500 million in budget savings from its own program this year.

Potential cost savings are a big incentive for states. Patients who qualify for both federal health programs are a costly population and include many who need nursing-home care or other expensive services. About 40 percent of Medicaid’s costs go toward patients who are also eligible for Medicare. Advocates of the pilot program also say it could lead to better coordination of care for patients who often struggle to navigate the two different programs.

To get approval, states must guarantee that both Medicare and Medicaid would save money. They must also agree to accept a fixed payment to cover all care for each patient. While rules say the private plans must cover all standard Medicare benefits, they also waive many Medicare rules and leave insurer selection to the states.

Still, there is powerful opposition to the pilots among doctors, hospitals, nursing homes, patient groups, and key lawmakers, including Sen. Jay Rockefeller, D-W.Va., who wrote the provision in the health law that created the office in charge of the pilot program.

“I urge you to take immediate steps to halt this initiative as currently structured and to take the time necessary to develop a well-designed and thoroughly evaluated care coordination model for dual eligibles that meets the standards outlined in the law,” Rockefeller wrote in a letter to HHS.

The Medicare Payment Advisory Commission, a group of experts who advise Congress on Medicare policy, has also weighed in with an 11-page letter to HHS, warning that the speed and scope of the program raised questions about whether patients would receive the care they need.

The managed-care industry is gearing up for the expansion. Three large insurers have purchased companies that insure Medicaid beneficiaries. For years, states have been moving Medicaid patients into managed-care plans, with mixed results. But this pilot represents a new market: It is the first large program that would pool Medicare and Medicaid benefits in a single, state-administered plan.

“The problem with this population is that all the strategies that the health plans have been used to using historically are going to backfire,” said Chris Duff, executive director of the Disability Practice Institute, an umbrella organization for small programs that provide coordinated care to dual-eligibles. He warned that slashing provider rates, limiting visits, and using other conventional cost-control measures could lead to expensive hospitalizations for frail dual-eligible patients.

But the states are enthusiastic about the pilot programs and believe they will be able to provide better care at lower cost.

http://www.nationaljournal.com/healthcare/obama-more-flexible-on-medicare-than-rhetoric-suggests-20120908

And…

Assessing the Quality of California Dual Eligible Demonstration Health Plans

National Senior Citizens Law Center
May 2012

California has proposed a three-year demonstration project to enroll individuals dually eligible for Medicare and Medi-Cal (dual eligibles) into managed care. An analysis of both Medicare and Medi-Cal quality ratings for the eight health plans selected by the California Department of Health Care Services (DHCS) for the first phase of the project raises cause for concern.

Approved health plans in participating counties would be responsible for providing enrolled dual eligibles with all Medicare and Medi-Cal benefits and services, including all needed medical care, long-term services and supports, and behavioral health care, beginning in January 2013.

According to a DHCS report assessing the quality of health plans in the Medi-Cal Managed Care (MCMC) Program, seven of the eight plans received a global health plan rating of 1 out of 5 stars.

Looking at Medicare evaluations, two of the plans selected have received a notice of non-compliance from the Medicare program. One of those has been marked as a low-performing plan for three consecutive years and is at risk for termination of its Medicare contract. Another plan was recently sanctioned by Medicare as a result of beneficiary access problems. Medicare continues to restrict enrollment of dual eligibles into that plan. All eight proposed demonstration plans were found to be low-performing on a least one composite Medicare quality measure.

http://dualsdemoadvocacy.org/wp-content/uploads/2012/02/Plan-Ratings-Report-May-2012.pdf

Comment: 

By Don McCanne, MD

President Obama is currently campaigning against the Republican proposal to privatize Medicare through a voucher program that would move Medicare patients into private plans. Yet, based on provisions in the Affordable Care Act, the administration is moving Medicare patients whose coverage also is supplemented with Medicaid (dual eligibles) into private managed care plans.

California has been a leader in health care financing innovations. Look at the head start that they have on this program. Seven of the eight plans they have selected to initiate the program have a global health plan rating of only 1 star out of 5!

These plans greatly limit patients’ choices of their providers and will undoubtedly impair access by eliminating choices of most other health care providers within the state. Having to transfer buses three times when you are very ill can make you question whether you have the access that the state has promised to you. And quality ratings? Forget it.

These low-income patients, under the law, have more coverage than do traditional Medicare patients… more, but worse. We can do far better. We can improve Medicare so that it includes the additional benefits provided by Medicaid. Then you wouldn’t need a special “dual eligible” program.

If the improved Medicare program included everyone, then you wouldn’t have to herd patients into inferior managed care programs just to save money (precisely what this new dual eligible program is designed to do). As a beneficent public monopsony, the improved Medicare program would save us all money while being in a position to demand quality throughout the health care delivery system. We couldn’t ask for more – for all of us!

Medical debt still problem in Mass.

Scant change since passage of ’06 health law

By Chelsea Conaboy
The Boston Globe, Sept. 10, 2012

Architects of the pioneering 2006 Massachusetts health law, which required most residents to have insurance, expected it would reduce families’ medical debt. But the most recent data suggest the scope of medical debt has remained largely unchanged.

Temporary lapses in insurance coverage and increasingly common plans with high deductibles and copayments have contributed to medical debt, leaving some people struggling to pay bills for hospitals, doctors, and ambulance companies. Rising health costs and the recession also probably played a role.

Although the law has failed to cut medical debt, some analysts say it may have prevented an increase in Massachusetts.

Of more than 3,000 Massachusetts adults surveyed in fall 2010 — the most recent survey data available — 17.5 percent reported having problems paying medical bills in the previous year. Twenty percent said they were carrying medical debt and paying it over time. Those figures changed slightly from 2006, but researchers said the difference was not statistically significant. The figures are from a report released earlier this year by the Blue Cross Blue Shield of Massachusetts Foundation.

“The 2006 law didn’t eliminate medical debt by a long shot,” said Matt Selig, executive director of Health Law Advocates in Boston, whose office has worked in recent years with hundreds of Massachusetts residents with medical debt. “It’s an underappreciated problem.”

Among his office’s clients is Amy Torro, a 39-year-old mother of two. After a double mastectomy, surgical complications, and rounds of radiation, doctors have told Torro that her body is clear of the cancer she discovered in December 2008 as a lump in her breast.

Torro has had insurance coverage throughout her treatment. Local foundations and a fund-raiser covered some bills. But deductibles and copayments for visits to specialists and prescription drugs have outpaced her ability to pay, leaving Torro with at least $1,800 in outstanding hospital bills and daily calls from collection agencies.

“It got to the point where it was bread or milk for my family or my cancer meds,” she said. An attorney in Selig’s office is working to negotiate a payment plan with Winchester Hospital, where she was treated.

The 2010 survey did find some change in how much debt people reported, according to additional analysis provided for the Globe by Sharon Long, a senior fellow at the Urban Institute’s Health Policy Center and an author of the Blue Cross report. The portion of people who had unpaid medical bills of between $500 and $1,000 dropped about 40 percent between 2006 and 2010. But there was no statistically significant change in people reporting smaller or larger amounts. Long cautioned that the analysis was based on a small group of people.

Research elsewhere has shown that insurance coverage reduces overall financial strain. In Oregon, 35,000 low-income adults randomly selected to receive Medicaid coverage in 2008 were 25 percent less likely, one year later, to have a medical bill sent for collection than those not selected for the program. (That figure reflects the effect of covering a large group of people who were uninsured, while the Blue Cross study analyzes the overall population in Massachusetts, where a large majority of people had coverage before and after the state law.)

“There’s always going to be some issue of some people having medical spending that stretches their budget,” said Jonathan Gruber, a Massachusetts Institute of Technology health economist who was an author of the Oregon study and former consultant to the Obama administration and Massachusetts lawmakers. “The question is, do you make the number smaller with health care reform? And the answer is, undoubtedly, yes.”

Still, small persistent debts can cause big problems for patients, said Chi Chi Wu, a staff attorney for the National Consumer Law Center in Boston who has focused on issues of medical debt. Bills sent to a collection agency may reflect on a person’s credit report for years, often even after they are paid off, she said.

Although ambulance companies, independent physician practices, and other providers also play a role, hospitals are a significant source of medical debt. The Affordable Care Act includes provisions meant to lessen the chance that people will leave the hospital with bills they cannot pay.

The Internal Revenue Service is taking comments until Sept. 24 on draft rules that require nonprofit hospitals to distribute documents explaining their financial assistance program and talk to patients about available help with bills, in order to maintain tax exemption. They would be prohibited from billing patients who qualify for hospital assistance using “gross charges,” or hospital sticker prices. Most patients are charged a significantly lower rate negotiated by their insurance carrier.

The proposed rules, however, do not set income standards dictating who is eligible for hospital assistance, so it is not clear who would benefit from the limit, said Jessica Curtis, director of the Hospital Accountability Project at Community Catalyst, a national consumer advocacy group.

Despite that, she said, the rules have “struck a pretty fair balance,” giving hospitals flexibility and patients more information. The rules also would require hospitals to wait four months before taking any “extraordinary” collection actions, such as placing a lien on a patient’s home.

Most Massachusetts hospitals have filed documents with the state attorney general’s office stating that they follow best practices for debt collection proposed by that office, including a four-month waiting period. Those practices are voluntary.

Officials with the Massachusetts Hospital Association would not comment on the draft IRS rules, which it had not fully reviewed. Tim Gens, executive vice president, said the state already has “very strong, well-tested” protections for patients, though the group has been talking with Selig’s office about areas where hospitals could do more.

Selig’s office also has been working with Representative Jeffrey Sánchez, a Boston Democrat, on a proposal that would, among other things, require hospitals to do more to notify patients of assistance programs and impose limits on the use of gross charges stricter than those in the federal law.

Neither Sánchez’s proposal nor the Affordable Care Act would fully address a thornier issue for Massachusetts: Low-income people commonly lose insurance for brief periods when they move from one state assistance program to another. Others can get lost in a maze of eligibility requirements.

The state is developing a website meant to streamline the enrollment process. Meanwhile, bills can add up during those gaps in coverage.

Carlos Vazquez, of Springfield, moved his family back to Massachusetts last year after leaving the military. The 27-year-old tried unsuccessfully to get coverage from MassHealth, the state’s Medicaid program, and the unemployment office. He did not learn until late last year that he and his wife could qualify for a subsidized plan through Commonwealth Care.

In December, as the family waited for their plan to take effect on Jan. 1, his wife was rushed by ambulance to a Springfield hospital. Vazquez, who is studying criminal justice at Holyoke Community College and is in the Air Force Reserves, said he has not been able to pay the $1,675 bill.

“The bill is inconvenient, and the fact that we went for so long without health insurance is really inconvenient,” said Vazquez, who now has MassHealth coverage because of a change in the program’s income guidelines. “I wouldn’t want this to happen to other veterans.”

http://www.bostonglobe.com/metro/massachusetts/2012/09/09/medical-debt-massachusetts-persists-despite-health-law/QztpbflGjmUfVcf8J8tjbI/story.html

Herding dual eligibles into low quality plans

Obama More Flexible on Medicare Than Rhetoric Suggests

By Margot Sanger-Katz
NationalJournal, September 8, 2012
In his convention speech in Charlotte, President Obama vowed to block the Republican Medicare reform plan because “no American should ever have to spend their golden years at the mercy of insurance companies.”
But back in Washington, his Health and Human Services Department is launching a pilot program that would shift up to 2 million of the poorest and most-vulnerable seniors out of the federal Medicare program and into private health insurance plans overseen by the states.
The administration has accepted applications from 18 states to participate in the program, which would give states money to purchase managed-care plans for people who are either disabled or poor enough to qualify for both Medicare and Medicaid.
Obama’s 2010 health reform law allows experimentation in delivering health care at lower cost through demonstration projects. Many states would like permission to shift their entire population of so-called dual-eligible beneficiaries into the new plans. HHS has indicated that it will enroll about 2 million beneficiaries, out of about 7 million who qualify for full benefits from both government health programs.
California is already counting on more than $500 million in budget savings from its own program this year.
Potential cost savings are a big incentive for states. Patients who qualify for both federal health programs are a costly population and include many who need nursing-home care or other expensive services. About 40 percent of Medicaid’s costs go toward patients who are also eligible for Medicare. Advocates of the pilot program also say it could lead to better coordination of care for patients who often struggle to navigate the two different programs.
To get approval, states must guarantee that both Medicare and Medicaid would save money. They must also agree to accept a fixed payment to cover all care for each patient. While rules say the private plans must cover all standard Medicare benefits, they also waive many Medicare rules and leave insurer selection to the states.
Still, there is powerful opposition to the pilots among doctors, hospitals, nursing homes, patient groups, and key lawmakers, including Sen. Jay Rockefeller, D-W.Va., who wrote the provision in the health law that created the office in charge of the pilot program.
“I urge you to take immediate steps to halt this initiative as currently structured and to take the time necessary to develop a well-designed and thoroughly evaluated care coordination model for dual eligibles that meets the standards outlined in the law,” Rockefeller wrote in a letter to HHS.
The Medicare Payment Advisory Commission, a group of experts who advise Congress on Medicare policy, has also weighed in with an 11-page letter to HHS, warning that the speed and scope of the program raised questions about whether patients would receive the care they need.
The managed-care industry is gearing up for the expansion. Three large insurers have purchased companies that insure Medicaid beneficiaries. For years, states have been moving Medicaid patients into managed-care plans, with mixed results. But this pilot represents a new market: It is the first large program that would pool Medicare and Medicaid benefits in a single, state-administered plan.
“The problem with this population is that all the strategies that the health plans have been used to using historically are going to backfire,” said Chris Duff, executive director of the Disability Practice Institute, an umbrella organization for small programs that provide coordinated care to dual-eligibles. He warned that slashing provider rates, limiting visits, and using other conventional cost-control measures could lead to expensive hospitalizations for frail dual-eligible patients.
But the states are enthusiastic about the pilot programs and believe they will be able to provide better care at lower cost.
http://www.nationaljournal.com/healthcare/obama-more-flexible-on-medicare-than-rhetoric-suggests-20120908

And…

Assessing the Quality of California Dual Eligible Demonstration Health Plans

National Senior Citizens Law Center
May 2012
California has proposed a three-year demonstration project to enroll individuals dually eligible for Medicare and Medi-Cal (dual eligibles) into managed care. An analysis of both Medicare and Medi-Cal quality ratings for the eight health plans selected by the California Department of Health Care Services (DHCS) for the first phase of the project raises cause for concern.
Approved health plans in participating counties would be responsible for providing enrolled dual eligibles with all Medicare and Medi-Cal benefits and services, including all needed medical care, long-term services and supports, and behavioral health care, beginning in January 2013.
According to a DHCS report assessing the quality of health plans in the Medi-Cal Managed Care (MCMC) Program, seven of the eight plans received a global health plan rating of 1 out of 5 stars.
Looking at Medicare evaluations, two of the plans selected have received a notice of non-compliance from the Medicare program. One of those has been marked as a low-performing plan for three consecutive years and is at risk for termination of its Medicare contract. Another plan was recently sanctioned by Medicare as a result of beneficiary access problems. Medicare continues to restrict enrollment of dual eligibles into that plan. All eight proposed demonstration plans were found to be low-performing on a least one composite Medicare quality measure.
http://dualsdemoadvocacy.org/wp-content/uploads/2012/02/Plan-Ratings-Report-May-2012.pdf

President Obama is currently campaigning against the Republican proposal to privatize Medicare through a voucher program that would move Medicare patients into private plans. Yet, based on provisions in the Affordable Care Act, the administration is moving Medicare patients whose coverage also is supplemented with Medicaid (dual eligibles) into private managed care plans.
California has been a leader in health care financing innovations. Look at the head start that they have on this program. Seven of the eight plans they have selected to initiate the program have a global health plan rating of only 1 star out of 5!
These plans greatly limit patients’ choices of their providers and will undoubtedly impair access by eliminating choices of most other health care providers within the state. Having to transfer buses three times when you are very ill can make you question whether you have the access that the state has promised to you. And quality ratings? Forget it.
These low-income patients, under the law, have more coverage than do traditional Medicare patients… more, but worse. We can do far better. We can improve Medicare so that it includes the additional benefits provided by Medicaid. Then you wouldn’t need a special “dual eligible” program.
If the improved Medicare program included everyone, then you wouldn’t have to herd patients into inferior managed care programs just to save money (precisely what this new dual eligible program is designed to do). As a beneficent public monopsony, the improved Medicare program would save us all money while being in a position to demand quality throughout the health care delivery system. We couldn’t ask for more – for all of us!

Institute of Medicine's "Best Care at Lower Cost"

Transformation of Health System Needed to Improve Care and Reduce Costs

Institute of Medicine
The National Academies, September 6, 2012

America’s health care system has become too complex and costly to continue business as usual, says a new report from the Institute of Medicine (Best Care at Lower Cost: The Path to Continuously Learning Health Care in America).

The costs of the system’s current inefficiency underscore the urgent need for a systemwide transformation. The committee calculated that about 30 percent of health spending in 2009 — roughly $750 billion — was wasted on unnecessary services, excessive administrative costs, fraud, and other problems. Moreover, inefficiencies cause needless suffering.  By one estimate, roughly 75,000 deaths might have been averted in 2005 if every state had delivered care at the quality level of the best performing state.

“The threats to Americans’ health and economic security are clear and compelling, and it’s time to get all hands on deck,” said committee chair Mark D. Smith, president and CEO, California HealthCare Foundation, Oakland. “Our health care system lags in its ability to adapt, affordably meet patients’ needs, and consistently achieve better outcomes. But we have the know-how and technology to make substantial improvement on costs and quality. Our report offers the vision and road map to create a learning health care system that will provide higher quality and greater value.”

http://www8.nationalacademies.org/onpinews/newsitem.aspx?RecordID=13444

And…

Best Care at Lower Cost: The Path to Continuously Learning Health Care in America

Institute of Medicine

Recommendations

Recommendation 1: The Digital Infrastructure
Improve the capacity to capture clinical, care delivery process, and financial data for better care, system improvement, and the generation of new knowledge.
 
Recommendation 2: The Data Utility
Streamline and revise research regulations to improve care, promote the capture of clinical data, and generate knowledge.

Recommendation 3: Clinical Decision Support
Accelerate integration of the best clinical knowledge into care decisions.

Recommendation 4: Patient-Centered Care
Involve patients and families in decisions regarding health and health care, tailored to fit their preferences.

Recommendation 5: Community Links
Promote community-clinical partnerships and services aimed at managing and improving health at the community level.
 
Recommendation 6: Care Continuity 
Improve coordination and communication within and across organizations.

Recommendation 7: Optimized Operations 
Continuously improve health care operations to reduce waste, streamline care delivery, and focus on activities that improve patient health.

Recommendation 8: Financial Incentives 
Structure payment to reward continuous learning and improvement in the provision of best care at lower cost.
 
Recommendation 9: Performance Transparency  
Increase transparency on health care system performance.

Recommendation 10: Broad Leadership  
Expand commitment to the goals of a continuously learning health care system.

http://www.iom.edu/~/media/Files/Report%20Files/2012/Best-Care/Best%20Care%20at%20Lower%20Cost_Recs.pdf

Best Care at Lower Cost: The Path to Continuously Learning Health Care in America (Full report – 360 pages):
http://books.nap.edu/openbook.php?record_id=13444

Comment:

By Don McCanne, MD

On release yesterday of the Institute of Medicine’s new report, “Best Care at Lower Cost: The Path to Continuously Learning Health Care in America,” headlines throughout the nation proclaimed that the U.S. health system wastes about $765 billion a year. The articles reported that the Institute of Medicine has recommended an overhaul to recover this waste. So what is it that they recommend?

When you read their ten recommendations listed above, it is difficult to come to any other conclusion than that the efforts to produce this 360 page report have resulted in not much more than, well… platitudes.

The report does list strategies for each of the ten recommendations, but, perhaps oversimplified, much of it depends on information technology and really offers little hope that most of this waste could be recovered.

Instead of stumbling along towards trying to achieve a “learning health care system,” we should first adopt a single payer national health program. We would then have an efficient infrastructure to which the recommended strategies that are potentially beneficial could be applied.

Institute of Medicine’s “Best Care at Lower Cost”

Transformation of Health System Needed to Improve Care and Reduce Costs

Institute of Medicine
The National Academies, September 6, 2012

America’s health care system has become too complex and costly to continue business as usual, says a new report from the Institute of Medicine (Best Care at Lower Cost: The Path to Continuously Learning Health Care in America).

The costs of the system’s current inefficiency underscore the urgent need for a systemwide transformation. The committee calculated that about 30 percent of health spending in 2009 — roughly $750 billion — was wasted on unnecessary services, excessive administrative costs, fraud, and other problems. Moreover, inefficiencies cause needless suffering.  By one estimate, roughly 75,000 deaths might have been averted in 2005 if every state had delivered care at the quality level of the best performing state.

“The threats to Americans’ health and economic security are clear and compelling, and it’s time to get all hands on deck,” said committee chair Mark D. Smith, president and CEO, California HealthCare Foundation, Oakland. “Our health care system lags in its ability to adapt, affordably meet patients’ needs, and consistently achieve better outcomes. But we have the know-how and technology to make substantial improvement on costs and quality. Our report offers the vision and road map to create a learning health care system that will provide higher quality and greater value.”

http://www8.nationalacademies.org/onpinews/newsitem.aspx?RecordID=13444

And…

Best Care at Lower Cost: The Path to Continuously Learning Health Care in America

Institute of Medicine

Recommendations

Recommendation 1: The Digital Infrastructure
Improve the capacity to capture clinical, care delivery process, and financial data for better care, system improvement, and the generation of new knowledge.
 
Recommendation 2: The Data Utility
Streamline and revise research regulations to improve care, promote the capture of clinical data, and generate knowledge.

Recommendation 3: Clinical Decision Support
Accelerate integration of the best clinical knowledge into care decisions.

Recommendation 4: Patient-Centered Care
Involve patients and families in decisions regarding health and health care, tailored to fit their preferences.

Recommendation 5: Community Links
Promote community-clinical partnerships and services aimed at managing and improving health at the community level.
 
Recommendation 6: Care Continuity 
Improve coordination and communication within and across organizations.

Recommendation 7: Optimized Operations 
Continuously improve health care operations to reduce waste, streamline care delivery, and focus on activities that improve patient health.

Recommendation 8: Financial Incentives 
Structure payment to reward continuous learning and improvement in the provision of best care at lower cost.
 
Recommendation 9: Performance Transparency  
Increase transparency on health care system performance.

Recommendation 10: Broad Leadership  
Expand commitment to the goals of a continuously learning health care system.

http://www.iom.edu/~/media/Files/Report%20Files/2012/Best-Care/Best%20Care%20at%20Lower%20Cost_Recs.pdf

Best Care at Lower Cost: The Path to Continuously Learning Health Care in America (Full report – 360 pages):
http://books.nap.edu/openbook.php?record_id=13444

Comment:

By Don McCanne, MD

On release yesterday of the Institute of Medicine’s new report, “Best Care at Lower Cost: The Path to Continuously Learning Health Care in America,” headlines throughout the nation proclaimed that the U.S. health system wastes about $765 billion a year. The articles reported that the Institute of Medicine has recommended an overhaul to recover this waste. So what is it that they recommend?

When you read their ten recommendations listed above, it is difficult to come to any other conclusion than that the efforts to produce this 360 page report have resulted in not much more than, well… platitudes.

The report does list strategies for each of the ten recommendations, but, perhaps oversimplified, much of it depends on information technology and really offers little hope that most of this waste could be recovered.

Instead of stumbling along towards trying to achieve a “learning health care system,” we should first adopt a single payer national health program. We would then have an efficient infrastructure to which the recommended strategies that are potentially beneficial could be applied.

Institute of Medicine's "Best Care at Lower Cost"

Transformation of Health System Needed to Improve Care and Reduce Costs

Institute of Medicine
The National Academies, September 6, 2012
America’s health care system has become too complex and costly to continue business as usual, says a new report from the Institute of Medicine (Best Care at Lower Cost: The Path to Continuously Learning Health Care in America).
The costs of the system’s current inefficiency underscore the urgent need for a systemwide transformation. The committee calculated that about 30 percent of health spending in 2009 — roughly $750 billion — was wasted on unnecessary services, excessive administrative costs, fraud, and other problems. Moreover, inefficiencies cause needless suffering.  By one estimate, roughly 75,000 deaths might have been averted in 2005 if every state had delivered care at the quality level of the best performing state.
“The threats to Americans’ health and economic security are clear and compelling, and it’s time to get all hands on deck,” said committee chair Mark D. Smith, president and CEO, California HealthCare Foundation, Oakland. “Our health care system lags in its ability to adapt, affordably meet patients’ needs, and consistently achieve better outcomes. But we have the know-how and technology to make substantial improvement on costs and quality. Our report offers the vision and road map to create a learning health care system that will provide higher quality and greater value.”
http://www8.nationalacademies.org/onpinews/newsitem.aspx?RecordID=13444

And…

Best Care at Lower Cost: The Path to Continuously Learning Health Care in America

Institute of Medicine
Recommendations
Recommendation 1: The Digital Infrastructure
Improve the capacity to capture clinical, care delivery process, and financial data for better care, system improvement, and the generation of new knowledge.
Recommendation 2: The Data Utility
Streamline and revise research regulations to improve care, promote the capture of clinical data, and generate knowledge.
Recommendation 3: Clinical Decision Support
Accelerate integration of the best clinical knowledge into care decisions.
Recommendation 4: Patient-Centered Care
Involve patients and families in decisions regarding health and health care, tailored to fit their preferences.
Recommendation 5: Community Links
Promote community-clinical partnerships and services aimed at managing and improving health at the community level.
Recommendation 6: Care Continuity
Improve coordination and communication within and across organizations.
Recommendation 7: Optimized Operations
Continuously improve health care operations to reduce waste, streamline care delivery, and focus on activities that improve patient health.
Recommendation 8: Financial Incentives
Structure payment to reward continuous learning and improvement in the provision of best care at lower cost.
Recommendation 9: Performance Transparency
Increase transparency on health care system performance.
Recommendation 10: Broad Leadership
Expand commitment to the goals of a continuously learning health care system.
http://www.iom.edu/~/media/Files/Report%20Files/2012/Best-Care/Best%20Care%20at%20Lower%20Cost_Recs.pdf
Best Care at Lower Cost: The Path to Continuously Learning Health Care in America (Full report – 360 pages):
http://books.nap.edu/openbook.php?record_id=13444

On release yesterday of the Institute of Medicine’s new report, “Best Care at Lower Cost: The Path to Continuously Learning Health Care in America,” headlines throughout the nation proclaimed that the U.S. health system wastes about $765 billion a year. The articles reported that the Institute of Medicine has recommended an overhaul to recover this waste. So what is it that they recommend?
When you read their ten recommendations listed above, it is difficult to come to any other conclusion than that the efforts to produce this 360 page report have resulted in not much more than, well… platitudes.
The report does list strategies for each of the ten recommendations, but, perhaps oversimplified, much of it depends on information technology and really offers little hope that most of this waste could be recovered.
Instead of stumbling along towards trying to achieve a “learning health care system,” we should first adopt a single payer national health program. We would then have an efficient infrastructure to which the recommended strategies that are potentially beneficial could be applied.

Maine should resist the rise of for-profit hospital chains

By Philip Caper, M.D.
The Portland Press Herald, Sept. 6, 2012

The recent news about the possibility that nonprofit Mercy Hospital will be acquired by a for-profit chain owned by Cerberus Capital should raise red flags all over Maine.

With the possible exception of Eastern Maine Health System’s flirtation over the sale of a few renal dialysis centers to the for-profit Da Vita Dialysis Center chain, Maine has so far escaped the dubious “benefits” of for-profit medicine, and should continue to resist this malignant trend.

If Mercy Hospital goes to for-profit status, its compassionate and healing mission would inevitably be transformed into one with a much different focus — the creation of wealth for its investors. There is already speculation that this acquisition will simply be the first in a chain of such conversions in Maine of nonprofit institutions into for-profit ones.

Medical care, despite its scientific trappings, is still largely an art. As such, the “business” of medicine is vulnerable to changes in its incentive structure.

An intensified focus on the bottom line will lead to a proliferation of “profitable” services, such as imaging, orthopedics and cancer care — regardless of their medical benefits — and a suppression of “unprofitable” services, such as emergency services, maternity services and pediatric and primary care services — regardless of their medical benefits. The recent spate of news about the sociopathic behavior of the for-profit hospital chain HCA is ample proof of that.

I support the Portland Press Herald’s editorial call for finding better ways to provide incentives to doctors and other health care providers to encourage better integration, efficiency and quality control of health care (Our View, “Mercy Hospital sale could be change for the better,” Aug. 22). 

But you don’t have to be for-profit to do that. It can be (and is being) done by many nonprofit entities, where the mission is diagnosing, treating, curing and healing — not profit generation and the creation of wealth.

In medicine, we try to root out and kill cancerous growths early in order to keep them from spreading and becoming life-threatening. We should do the same with for-profit medicine.

Philip Caper, M.D., is a founding board member of Maine AllCare. He lives in Brooklin.

http://www.pressherald.com/opinion/maine-should-resist-the-rise-of-for-profit-hospital-chains_2012-09-06.html

McCanne on free markets in health care

First, do no harm; second, nationalize

By Teryl Zarnow
The Orange County Register, August 19, 2012

(Dr. Don) McCanne, now 74, volunteers as a policy fellow for Physicians for a National Health Program, where he was a past president. His group favors a single-payer national health program often called “Improved Medicare for All.”

It’s not socialized medicine, just socialized insurance.

I can’t decide if the doctor is out of touch with reality or a prophet in blue jeans.

Link for full article:
http://www.ocregister.com/news/-183873-ocprint–.html

And…

Health care cure is an Rx for economic ruin

The Orange County Register
August 25, 2012

NEWPORT COAST, Anita Boyd:

Columnist Teryl Zarnow failed to do her homework. “First, do no harm; second, nationalize” [Aug. 19] would be better titled, “No choice for patients.” What was presented as a “news” article was a one-sided promotional piece for socialized medicine.

Perusing the online mission statement of “Physicians for a National Health Care Program,” one notes that “the program should be financed by truly progressive taxation,” and “views this campaign as part of the campaign for social justice in the United States.” Among its allied groups are All Unions Committee for Single Payer Healthcare, Progressive Democrats of America, and Healthcare-NOW!

The leadership, membership and network are particularly illustrative of those wishing to “change” America, including Kim Gandy and Terry O’Neill, past and present presidents of NOW, respectively; Medea Benjamin of Code Pink San Francisco. The California Nurses Association participates to “provide leadership in winning organized labor support for HR676,” which is the single-payer bill sponsored by John Conyers, D-Mich., in the House of Representatives.

The smiling Dr. Don McCanne and his cadre of liberal progressives speciously suggest that the “cure” for health care in America is another entitlement to be paid for through the income tax system, as if this country is not already $16 trillion in debt (not counting unfunded liabilities.) The state of our entitlement system is completely ignored: Social Security is operating in the red with more funds flowing out than in for the first time in our nation’s history, propped up by a “trust fund” consisting of IOU’s from the Treasury. Medicare will follow that scenario sooner, rather than later, now that Obamacare has siphoned $716 billion in funding from Medicare over the next 10 years. All of this while Dr. McCanne proposes to place yet another burden on the barely 50 percent of Americans who pay taxes, mostly to be borne on the backs of the middle class, for that is where one finds the real wealth of this country. McCanne’s “cure” for health care is a prescription for the financial collapse of this country.

Using Nobel Laureate Milton Friedman’s logic, a medical system that provides the best quality to the most must necessarily embrace free-market principles, but the free market is absent in our health care industry today. In 1945 Congress passed the McCarran-Ferguson Act, which exempted the business of medical insurance from federal antitrust laws.

Thus insurance companies may freely conspire to price-fix without legal repercussion, and consumers cannot readily compare prices for products and services. Coupled with expensive and unnecessary tests defensively prescribed to ward off meritless malpractice suits, our system is certainly sick, but it is not incurable. Just as the computer evolved from a slow, clunky but pricey desktop to a sleek, fast laptop at less than one-fourth the price of the original 30 years ago, competition and innovation can bring down the cost of health care, improve quality and enhance affordability. A free-market prescription begins with the embrace of free-market principles: repealing McCarran-Ferguson, posting prices for services and products, competition across state lines, tort reform and empowering the consumer.

The inevitable result of McCanne’s alternative is all too evident in the United Kingdom’s single-payer system, where months-long waits for simple surgeries are commonplace, and breast cancer patients were denied the use of life-saving Tamoxifen until public outrage became so loud that the government caved. How many lives were lost before this concession? There was no choice for patients under this plan. There will be none under Dr. McCanne’s.

http://letters.ocregister.com/2012/08/25/health-care-cure-is-an-rx-for-economic-ruin/

And…

How the U.S. should fix health care

The Orange County Register
September 5, 2012

SAN JUAN CAPISTRANO, Don McCanne, M.D., Senior Health Policy Fellow, Physicians for a National Health Program:

Letter-writer Anita Boyd [“Health care cure is an Rx for economic ruin,” Aug, 23], in responding to Teryl Zarnow’s column on me and my advocacy for single-payer reform [“First, do no harm; second, nationalize,” Aug. 19], stated, “Using Nobel Laureate Milton Friedman’s logic, a medical system that provides the best quality to the most must necessarily embrace free-market principles, but the free market is absent in our health-care industry today.”

She then proposes a “free-market prescription.” In doing so, she ignores Nobel Laureate Kenneth Arrow’s seminal work of a half century ago demonstrating that health care fails competitive market preconditions, and “when the market fails to achieve an optimal state, society will, to some extent at least, recognize the gap and nonmarket social institutions will arise attempting to bridge it.”

In 2004, I was on a panel debate with Milton Friedman discussing prescription drugs. In that debate he said, regarding the government’s defense of patents, “My initial reaction was to say, of course we want to let the market completely work, and instead of having the government defend the patent, let the patent owner defend it. But the more you look at it, the more you see that’s inconsistent.” He also acknowledged the importance of government in drug research. Even in Friedman’s view, pure free markets are an illusion.

Further, the oracle of free markets, Noble Laureate Friedrich A. Hayek, in “The Road to Serfdom,” wrote, “There is no reason why, in a society which has reached the general level of wealth ours has, (the certainty of a given minimum of sustenance) should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision.”

Every other wealthy nation provides comprehensive health care to virtually everyone, and they do it at a per person cost that averages close to half of what we spend. The secret is that they all use some form of social insurance, acknowledging the fact that health care markets inevitably fail for far too many with significant health care needs.

The Affordable Care Act of President Barack Obama supposedly relies on market principles by expanding competition of private health plans. Under the act, 30 million people will remain uninsured, inadequate health plans with low actuarial values will become the new standard and costs will continue to increase out of control. This is the most expensive of all possible models of health care reform, and yet falls miserably short of achieving a high-performance system. It is a mistake to pretend that marke
ts will work since free markets do not and cannot possibly ever exist in health care, as the current reform effort once again demonstrates.

As Herbert Stein would say, the current status cannot continue. It is absolutely inevitable that eventually we will enact some form of social insurance. Although there are several possible models, the most likely for the United States will be our popular Medicare program, in an improved version. It would cover everyone. It would rely on progressive taxes to make it affordable based on ability to pay. It would improve efficiency, especially by eliminating the profound administrative waste that characterizes our current, fragmented, dysfunctional financing system. It would remove private insurer intrusions, returning choice in actual health care to the patient. Though a public social insurance program, it would perpetuate our private health care delivery system (i.e., it is not socialized medicine). Especially important is that it would exercise its purchasing power as a public monopsony, finally bending the cost curve to sustainable levels.

Much of the debate today includes distortions and exaggerations, driven by ideology. In this information age, the true facts are readily available. Instead of chasing after the ever-elusive fantasy of free markets in health care, we should join together in supporting the crafting of a bona fide social insurance program that works for all of us, based on solid health policy science.

http://letters.ocregister.com/2012/09/05/how-the-u-s-should-fix-health-care/