PNHP

Everyone should be entitled to Medicare

Everyone should be entitled to Medicare

By Bill Moyers
Moyers & Company, Aug. 4, 2012

PNHP note: The 7-minute video corresponding to the transcript below is available here.

BILL MOYERS: I read a news story this week that sent me on a nostalgic trip down memory lane. This past Monday, July 30th was the 47th anniversary of Medicare, and to celebrate it, the “Raging Grannies,” as they’re known, gathered outside the county office building in Rochester, New York to protest rumored cuts to their Medicare coverage.

RAGING GRANNIES: This old grey granny now needs a test or two –

BILL MOYERS: They praised Medicare in song as “the best deal we have in the country,” and even called for expanding it Medicare into universal health care for everyone.

It seems the Republican Speaker of the House, John Boehner, was coming up from Washington to raise funds for Republican congressional candidate Maggie Brooks. The “Raging Grannies” wanted to make certain Ms. Brooks didn’t sign on to the GOP budget which includes cuts to Medicare.

For myself, the “Raging Grannies” channeled a familiar voice, the Texas twang of my boss back in 1965, Lyndon Baines Johnson. I was a White House assistant at the time and had been working with the President and others on the team trying to get Medicare through Congress. Even with overwhelming Democratic majorities in the House and Senate, it was one tough fight. Others had tried before us.

In his 1948 State of the Union message, President Harry Truman said:

HARRY TRUMAN: This great Nation cannot afford to allow its citizens to suffer needlessly from the lack of proper medical care. Our ultimate aim must be a comprehensive insurance system to protect all our people equally against insecurity and ill health.

BILL MOYERS: But every time Harry Truman proposed legislation to do just that, Congress refused to budge. In the 1960s, John F. Kennedy took up the cause:

JOHN F. KENNEDY: Our working men and women, instead of being forced to ask for help from public charity, once they are old and ill, should start contributing now to their own retirement health program through the Social Security System…

BILL MOYERS: But his proposal failed in the Senate by just two votes.

On the other side, actor Ronald Reagan, still in private life, had signed on as the American Medical Association’s hired spokesman in their campaign against Medicare. Doctors’ wives organized thousands of small meetings in homes around the country, where guests listened to a phonograph record of Reagan deploring the evils of “socialized medicine”:

RONALD REAGAN: Behind it will come other Federal programs that will invade every area of freedom as we have known it in this country […] until one day, as Norman Thomas said […] you and I are going to spend our sunset years telling our children and our children’s children what it once was like in America when men were free.

BILL MOYERS: But now, it was Lyndon Johnson’s turn. Tragically thrust into the White House by Kennedy’s assassination, LBJ, the son of Franklin Roosevelt’s New Deal and Harry Truman’s Fair Deal, vowed to finish what they had started. He pushed us relentlessly to get it done. Here he is talking to his Vice President, Hubert Humphrey, in early March of 1965:

LYNDON JOHNSON: They are bogged down. The House had nothing this week, all damn week. Now that’s where you and Moyers and Larry O’Brien have got to find something for them. And the Senate had nothing […] so we just wasted three weeks […] Now we are here in the first week in March, and we have just got to get these things passed […] I want that program carried. And I’ll put every Cabinet officer behind you. I’ll put every banker behind you. I’ll put every organization we got behind you […] I’ll put the labor unions behind you.”

BILL MOYERS: About all he had left was the White House kitchen sink, and pretty soon he threw that behind us, too.

Later that March he called me to talk about a retroactive increase in Social Security payments that we were supporting. I had argued for it as a stimulus to the economy. LBJ said okay, but reminded me that social security and Medicare were about a lot more than economics:

LYNDON JOHNSON: My inclination would be […] that it ought to be retroactive as far back as you can get it […] because none of them ever get enough. That they are entitled to it. That that’s an obligation of ours. It’s just like your mother writing you and saying she wants $20, and I’d always sent mine a $100 when she did. I never did it because I thought it was going to be good for the economy of Austin. I always did it because I thought she was entitled to it. And I think that’s a much better reason and a much better cause and I think it can be defended on a hell of a lot better basis […] We do know that it affects the economy […] But that’s not the basis to go to the Hill, or the justification. We’ve just got to say that by God you can’t treat grandma this way. She’s entitled to it and we promised it to her.

BILL MOYERS: LBJ kept that promise. He pushed and drove and cajoled and traded, until Congress finally said yes. And so it was that 47 years ago, we traveled to Independence, Missouri, the hometown of Harry Truman, and there with the former president at his side, LBJ signed Medicare into law. Turning to Truman, whom he called “the real daddy of Medicare, ” Johnson signed him up as its first beneficiary. Harry Truman was 81.

All this was high drama, touched with history, sentimentality, politics, and compromise. A whole lot of compromise. The bill wasn’t all LBJ wanted. It was, in fact, deeply flawed. There were too few cost controls, as some principled conservatives warned, who were then rudely ignored. Co-pays and deductibles remain a problem. And we didn’t anticipate the impact of new technology, or the impact of a burgeoning population.

In fact, even as he signed the bill we still weren’t sure what all was in it. As LBJ himself once told me, never watch hogs slaughtered before breakfast and never, never, never show young children how legislation gets enacted.

But Lyndon Johnson had warned: “We will face a new challenge and that will be what to do within our economy to adjust ourselves to a life span and a work span for the average man or woman of 100 years.”

That longevity, and the cost, are what we must now reckon with. As the historian Robert Dallek has written, Medicare and Medicaid, the similar program for the very poor, “…did not solve the problem of care at reasonable cost for all Americans,” but “the benefits to the elderly and the indigent…are indisputable.” And there’s no going back, current efforts notwithstanding. A new study in the journal Health Affairs finds that Medicare beneficiaries age 65 and older are more satisfied with their health insurance, have better access to care, and are less likely to have problems paying medical bills than working-age adults who get insurance through employers or purchase coverage on their own.

So sing on, Raging Grannies, sing on. The surest way to save so popular and efficient a health care system is to make it available to everyone.

RAGING GRANNIES: Everybody in and nobody out, single-payer Medicare for all.

At least one man thinks the answer is Medicare for everyone

By Tom Eblen
Lexington (Ky.) Herald-Leader, Aug. 6, 2012

Medicare turned 47 years old last Monday. Bill Mahan celebrated by setting up a booth on Main Street to try to convince passersby that America’s health insurance crisis could be eased considerably if everyone had Medicare.

The Lexington retiree collected about 125 signatures for his petition. It asks members of Congress to support proposed legislation that would strengthen Medicare, which now covers more than 47 million seniors and disabled people, and make it the vehicle for providing basic universal health insurance coverage.

But Mahan spent much of his seven hours on Main Street listening to people tell him their horror stories: lack of insurance, inadequate coverage, baffling paperwork, treatment they can’t afford to get and medical bills they can’t afford to pay.

“I’ve heard so many stories, it’s just unbelievable,” said Mahan, 68, who went on Medicare three years ago. “I don’t know what to tell these people.”

What Mahan mostly tells them is that these problems are likely to continue until the United States has a single-payer health insurance system.

Under proposed single-payer systems, private doctors and hospitals would provide health care services, but the government would pay the cost from tax revenue. It is the system used in Canada and most European countries, which the World Heath Organization says offers better care for less cost than the United States does.

President Harry S. Truman proposed a single- payer system after World War II, but business interests fought it. President Lyndon Johnson was able to muster enough political support to create Medicare for seniors, which he signed into law July 30, 1965.

When President Barack Obama and a Democratic-controlled Congress pushed through health care reform legislation in 2010, a single-payer system wasn’t even considered. That was because of opposition from insurance companies, which wouldn’t even allow a “public option” choice.

Instead, we ended up with reform legislation that will cover more people and outlaw the worst insurance industry abuses but still will leave an estimated 23 million people uninsured and do too little to curb rising costs.

Republicans have vowed to repeal “Obamacare” but have proposed no adequate alternatives. Senate Republican Leader Mitch McConnell of Kentucky complains that Obama’s health care law is “Europeanizing” America, but he fails to mention that those European systems provide high-quality, universal care with much less administrative cost and hassle.

The most radical GOP plan, proposed by Rep. Paul Ryan of Wisconsin and endorsed by many Republican leaders, essentially would privatize Medicare. But an independent analysis by the non-partisan Congressional Budget Office found that Ryan’s plan, rather than reducing costs, would increase them dramatically, including almost doubling seniors’ out-of-pocket expenses.

Ironically, Obama’s reform law was based on market concepts developed by the conservative Heritage Foundation. Republican presidential candidate Mitt Romney created a similar — and rather successful — health insurance system for Massachusetts when he was governor.

Single-payer advocates say “Obamacare” is better than what we had, but it just further subsidizes private insurance companies. It reinforces our current system’s fatal flaw: the inherent conflict between businesses trying to make as much money as possible and society’s need to provide basic health care to everyone at an affordable cost.

“Insurance companies don’t improve health care,” Mahan said. “They only add cost and complexity.”

Improving and expanding Medicare would require tax increases, but single-payer advocates think that, on balance, they would amount to far less than we now pay for private insurance that costs more and covers less with each passing year. That has been the experience in countries with single-payer systems.

House Resolution 676, introduced by Rep. John Conyers, D-Mich., to create a single-payer system, has been endorsed by dozens of consumer groups, church denominations and organizations representing thousands of physicians and other health professionals. Advocacy groups include Kentuckians for Single Payer Healthcare (Kyhealthcare.org), Improved Medicare for All (Medicareforall.org) and Physicians for a National Health Program (Pnhp.org).

But without public pressure, the legislation is unlikely to get a fair hearing in the Republican-controlled House of Representatives or the Democratic-controlled Senate. The health insurance industry is just too powerful.

During Romney’s recent overseas campaign trip, the Republican presidential candidate praised Israel for having a healthy population while spending only 8 percent of gross domestic product on health care, compared to 18 percent in the United States.

How does Israel do it? Since 1995, the Jewish state has had a non-profit insurance system heavily controlled by the government that provides basic health care for everyone. Imagine that.

Tom Eblen is a Herald-Leader columnist.

http://www.kentucky.com/2012/08/06/2286868/tom-eblen-at-least-one-man-thinks.html

Oregon single-payer advocates hold house parties for their cause

By Bennett Hall
Gazette-Times (Corvallis, Ore.), Aug. 5, 2012

On a recent Wednesday night in Corvallis, a dozen people sit around Nadine Grzeskowiak’s living room sipping organic lemonade and munching gluten-free pie while video images flickered on a screen.

But they’re not watching the London Olympics. They’re viewing a Power Point presentation on America’s health care crisis.

After a series of statistics detailing soaring insurance premiums, worsening health problems and widespread medical bankruptcies, up pops a slide on the benefits of single-payer health care.

It’s not a government takeover of private medical care, Grzeskowiak tells the intimate gathering of friends and neighbors. It’s simply a rational response to a national emergency.

“People in this country don’t want anybody to take their freedoms away,” she says. “The thing is, we actually lost our freedom in this country a long time ago when it comes to health care.”

Statewide push

House parties like this one are being organized all over Oregon by reform advocates like Grzeskowiak, a registered nurse whose struggles with undiagnosed celiac disease soured her on a system she believes puts profits before patients.

“Why should I look for celiac disease,” she said one doctor asked her, “when there’s no treatment I can bill for?”

Grzeskowiak is the vice chair of Mid-Valley Health Care Advocates, one of several regional organizations working under the umbrella of Health Care for All Oregon in a statewide push to declare health care a human right.

The grassroots campaign is modeled after a successful effort in Vermont and is seen as a stepping stone on the road to establishing universal, taxpayer-funded health insurance for all Oregonians — a single-payer system.

Mid-Valley Health Care Advocates has held more than a dozen house parties to date, said Bud Laurent, the organization’s chair. Each one usually attracts 12 to 15 people, and they seem to create a self-sustaining momentum.

“We’re averaging about three a month,” Laurent said. “Often what happens is that a house party will spawn a house party.”

It’s a bottom-up strategy calculated to win a few supporters at a time. Attendees are encouraged to get involved in various ways, from distributing promotional materials and writing letters to the editor to recording video testimonials and posing for a photo holding a “Health Care Is a Human Right” placard.

The idea is to gradually build a groundswell of support for single-payer health care in this state, then push for legislative action.

New momentum?

Previous efforts to promote the idea in the Legislature have fallen short, and voters roundly rejected a Health Care for All Oregon ballot measure in 2002. Oregon reformers want to make sure they have public opinion firmly on their side before going back to the political well again.

“In my mind, we need to work at least a year, maybe two,” Laurent said, before introducing another single-payer bill or launching another initiative petition.

Not everyone at Grzeskowiak’s party was ready to jump on the single-payer bandwagon, with some of the guests asking pointed questions about the advisability of scrapping private insurance and replacing it with a government-run system financed by tax money.

That was a cue for some of the other reform advocates at the gathering to jump into the fray.

Private insurance is wasteful, argued Paul Hochfeld, an emergency room physician who co-founded a single-payer advocacy group called the Mad As Hell Doctors.

The mishmash of health plans we have now takes money away from patient care and diverts it to overhead, while the payment system creates perverse incentives to do costly and unnecessary procedures, Hochfeld said.

Meanwhile, those who can’t afford insurance put off treatment until they get desperately ill and show up in the ER, driving up the amount of uncompensated care hospitals must provide and pushing up costs for everyone else.

“What we have to do is get people to understand that we are all paying for everybody anyway,” he said.

“We just have to find a way to get value for our money.”

Eventually the conversation becomes more general, with many of the guests sharing personal horror stories of rejected insurance claims, crushing medical bills and illness left untreated for lack of coverage.

There’s also a lively exchange of ideas on different ways to improve the system.

Hochfeld said he doesn’t expect to change anyone’s mind about health reform at a house party. Most people, he believes, stake out their positions based on political ideology or personal values. But some are receptive, and those are the ones he’s hoping to reach.

“It’s not about converting people,” he said. “It’s about talking to the people who haven’t made up their minds yet one way or the other.”

Cheryl Lohman came to Grzeskowiak’s house willing to be persuaded. A small business owner with no health insurance, she recently helped her mother through a health crisis and worries about what would happen if she got sick herself.

“I’m kind of scared,” she told the group. “And I wonder what the United States would look like if we didn’t have to worry about health care.”

By the end of the meeting, Lohman is aflame with enthusiasm for single-payer health care. She grabs a stack of promotional literature, picks up some “Health Care Is a Human Right” buttons featuring a Rosie the Riveter look-alike in a nurse’s uniform, and gets her picture taken for the photo petition.

Before she leaves, Lohman tells Grzeskowiak she’s determined to do something to help promote the cause.

“It’s bubbling up inside,” she says. “I know I want to make a difference.”

http://www.gazettetimes.com/news/local/reform-party/article_aa7ac65e-ddd1-11e1-aa60-001a4bcf887a.html

Vermont Wields New Power Over Hospital Budgets

By Bob Kinzel
Vermont Public Radio, August 2nd, 2012

Vermont’s Green Mountain Care Board, established by state law in May 2011 and given new powers last spring, is taking over responsibility for virtually every aspect of health care in the state. This month’s project for the new regulatory board: How much hospital budgets should go up on an annual basis.

The board has established a cap on spending increases of no more than 3.75 percent annually. But as a group, Vermont’s 14 hospitals are seeking increases of roughly 7 percent for the coming 12 month period.

“We know there are some legitimate reasons that hospitals might need to grow higher than the 3.75 percent, most of those having to do with circumstances beyond their control,” said Anya Rader Wallack, the chairwoman of the Green Mountain Care Board.

The board may allow some increases above 3.75 percent, if the hospitals can prove that they are using the money to make investments that will lower costs in the long run.

But Wallack says the bottom line is that hospital spending needs to be kept under control: “We have a responsibility to hold down costs. So we’ll be looking at all of these requests with an eye toward how we can stay within that target, because we don’t think Vermonters can afford more than that.”

She says reviewing hospital budgets is a critical piece of the board’s efforts to help control health care costs in the state.

“I think this is significant in two senses,” Wallack said. “One is that hospital expenditures are a very significant portion of the total health care spending in Vermont.  The other is that this is the first time that the responsibility for hospital budgets and the responsibility for insurer rates has been in the same place.”

The board will hold a public hearing on the hospital requests in the middle of August. It will issue its ruling about the proposed spending increases in September.

Vermont is in the process of becoming the first state to have a single-payer health system. Gov. Peter Shumlin, a Democrat, said he would like to see the single-payer system implemented as early as 2016, a year earlier than previous estimates.

This story is part of a collaboration that includes Vermont Public Radio, NPR and Kaiser Health News.

Another Lesson From Colorado

By Dr. Marvin Malek
The Rutland Herald, Aug 5, 2012

Three hospitals in Colorado have announced that they will forgive the medical bills of the victims of the Aurora, Colo., mass shooting. A kind gesture. These individuals suffered serious gunshot wounds, and many will be left with lifelong disabilities. It seemed like this was enough suffering for these individuals and their families to endure.

These hospitals may forgive the bills of the victims of the shootings, but the care these patients received is anything but free. Teams of critical care nurses, trauma surgeons, physical therapists, and many others were there, and are always ready to handle victims of falls, crashes—and even mass shootings. The readiness of this team is a key part of the health care infrastructure.

It is safe to assume that the same day the shootings occurred, dozens of other people also utilized the services these three hospitals provide. Chances are that some have cancer, others heart disease, some may have neurologic disorders robbing them of the ability to think, to walk, to talk. These people did as much to cause their suffering as the victims of the shooting. But these individuals will not see their bills forgiven. Instead, innumerable bills will head their way. The worrisome letters from the insurance companies will arrive, possibly denying payment for all or part of their care. Some of these families will be taking out loans to pay the bills, a few will go bankrupt, others sell or foreclose on their homes. Hard not to think of this as kicking people when they’re down: If such patients become too ill to continue working, they may then lose their health care coverage at the very time they need it most, and their family members may become uninsured as well if they are included in the policy.

In every other developed country, major financial burdens are never imposed on individuals who take ill, and there is no country where loss of employment will lead anyone to end up without health insurance. Instead, the health care infrastructure is viewed as an essential resource.

This is what single payer health care is about. We all pay in when we’re well to support the health care infrastructure that will be there to care for us when we’re sick. To many Americans, this sounds utopian. But this pretty much describes the structure of health care financing in nearly every other developed country. And this is why their single payer health care systems are viewed as an essential benefit of civilized society. Not only is every citizen cared for when they’re sick, but these systems are far less costly compared to the complicated morass of a health care system we are forced to put up with here in the United States.

We’ve heard scare tactics against single payer health care for so long, that it must have come as a surprise to many Americans when one of the main highlights of the Opening Ceremony at the Olympic Games in London was a tribute to the British National Health Service. The idea of an American Olympics holding a tribute to our health insurance system would be viewed by any American as laughable.

So let’s have Vermont lead the way on single payer health care. Maybe the effort here in Vermont will be the first step toward America joining the rest of the developed world in creating a single payer health care system. Perhaps the way the shooting victims were treated in Colorado will be an inspiration. Caring for our neighbors. It’s a matter of basic decency.

Marvin Malek is an internist practicing at Central Vermont Medical Center in Berlin.

http://www.rutlandherald.com/article/20120805/OPINION06/708059911/1018/OPINION

Fireworks! Orchestras! and dancing doctors!

Fireworks! Orchestras! and dancing doctors!

Health Care – A Counter-Ceremony Honoring America’s Health Care System

By Kevin Horrigan
St. Louis Post-Dispatch, August 5, 2012

“Perhaps not surprisingly in a country where health care reform is so controversial, it was the high-profile presence of the NHS that stunned many American writers…. Certainly the U.S. equivalent, which would be dancing health insurance corporate executives, was hard to imagine.”

— Paul Harris, in The Guardian, June 28

Hah, hah, hah. Very funny. It’s not hard at all to imagine what the “U.S. equivalent” to your Olympic Opening Ceremony’s salute to Britain’s National Health Service would look like. I’m already working on it.

Sure, “dancing health insurance corporate executives” will be part of it. If you’d made that much money last year, you’d want to dance, too.

“Executives in the top spots at the country’s seven largest publicly traded health plans were paid a collective $87 million for their services in 2011,” American Medical News reported in May.

Picture this: It’s night in Florida. We’re in a darkened Raymond James Stadium in Tampa, jammed with 66,000 delegates to the Republican National Convention and their guests. A spotlight illuminates the stage. The seven top health care CEOs, carrying canes and dressed in white top hats and tails, prance on stage as the Mormon Tabernacle Choir sings “Puttin’ on the Ritz.”

Pretty nice, huh? And that’s just the start.

The spotlight widens to show 94 primary care doctors, in multi-colored scrub suits, forming a ring around David Cordani, the CEO of Cigna Health Care, bowing and scraping to honor the fact that at $19.1 million, Cordani made more in 2011 than all 94 of them combined.

The orchestra breaks into Gershwin’s “It Ain’t Necessarily So” as the stadium floor is lighted, revealing 400 actual health insurance bureaucrats wearing telephone headsets and sitting at small desks. They shake their heads back and forth in our “Salute to Rescission.”

The crowd erupts, because fans know that if Republicans repeal the Affordable Care Act, God will be in his heaven, all will be right with the world and insurance companies once again will be allowed to retroactively cancel coverage when someone needs it.

But now! What’s that? Lights around the stadium’s upper tier are forming a large donut, signifying the “Medicare donut hole” that will return once “Obamacare” is eliminated, thus insuring that drugs for anything between basic coverage and catastrophe are not covered. The orchestra swings into “Live and Let Die.”

Cannons in the end zones fire clouds of pills into the sky. As they fall to the floor, out of the stadium tunnels limp thousands of senior citizens who are allowed to scrounge for the pills. But only for three minutes, because it’s time for our….

Tribute to the ER! Giant video boards flash the image of former President George W. Bush uttering these immortal words in 2007: “I mean, people have access to health care in America. After all, you just go to an emergency room.”

The theme from the TV show “ER” comes up as sirens wail, ambulances and EMS trucks tear around the stadium floor, disgorging patients into the busy “emergency department” on center stage, already jammed with insured adults and children who have no primary care doctors.

Our ER “treats” them and send them on their way with big weights (symbolizing hospital bills) strapped to their backs, which they then pass to the people in the crowd — who are delighted to get them!

On guy-wires stretched across the top of the stadium a huge number “17.6” sparkles in gold and silver lights. It represents the percentage of the gross domestic product devoted to health care — 8 percent higher than the Brits. The music swells into Creed’s “Can You Take Me Higher?”

The crowd sings along, waving 66,000 foam “We’re Number 1” fingers, signaling America’s status as the nation with the most expensive health care in the world — 2.4 times more expensive than the silly Brits.

KA-BOOM! go the fireworks. We crane our heads skyward to see a giant figure “37,” symbolizing the World Health Organization’s ranking of the American health care system.

The big finale: With the crowd’s attention diverted skyward, volunteers — all of them from health insurance companies — have erected cardboard cutouts of men, women, children and babies around the floor of the stadium. There are so many of them — 45,000 — that they loop around the field in a squiggly line almost a mile long.

They represent the 45,000 Americans whose lack of health insurance contributes to their premature death each year, according to a 2009 study by the Harvard Medical School. Now riding into the stadium atop Rafalca, his wife’s Olympic dressage horse, is Mitt Romney, who will be nominated for president on the following night.

He guides the mare’s nose to the first cardboard figure. A simple nudge and, like dominoes, they topple over in spectacular sequence. The crowd goes wild.

http://www.stltoday.com/news/opinion/columns/kevin-horrigan/horrigan-fireworks-orchestras-and-dancing-doctors/article_3416f532-c574-5985-8ea6-802428691c1d.html

Comment: 

By Don McCanne, MD

Of course, depending on what happens in November, we could see an alternative “big finale.”

Obama could enter the stadium on his trusty steed “Single Payer,” and immediately run into the obscure maze of “Machinery Politics,” knocking Obama off of “Single Payer” who is immediately diverted to the glue factory as Obama remounts on “Pragmatic Incrementalist” who saunters over and nudges the first of 30,000 cardboard cutouts. The crowd goes wild (though only those sitting in the far left saw what really happened).

We’re going to have to do something about that crowd!

(They say that practical jokes have to be executed absolutely perfectly or you shouldn’t even try them. There is something about the domino cascade of 30,000 to 45,000 cutouts of American men, women, children and babies that just doesn’t sit well. Can we ever get the crowd to understand?)

Where ‘Socialized Medicine’ Has a U.S. Foothold

By UWE E. REINHARDT
Economix Blog, The New York Times, August 3, 2012

Last Friday’s exuberant celebration of Britain’s National Health Service during the opening ceremony for the 2012 Olympics, directed by the Oscar-winning filmmaker Danny Boyle, got me thinking about American attitudes about socialized medicine.

As might be expected, the event elicited a few tut-tuts from Conservative members of Parliament, and more stern rebukes from the commentariat in the United States, most vehemently by Rush Limbaugh.

Bashing the N.H.S. has become a favorite ritual during any debate on health care reform on this side of the Atlantic. As the disgraceful treatment of Dr. Donald Berwick, former administrator of the Centers for Medicare and Medicare Services, illustrates, any American remarking positively on the N.H.S. runs the risk of being declared unfit to serve in government and vehemently attacked in the blogosphere.

The most humorous illustration of American N.H.S.-bashing was supplied during the heated health reform discussions in 2009 by Investor’s Business Daily. In an editorial, the paper asserted, “People such as scientist Stephen Hawking wouldn’t have a chance in the U.K., where the National Health Service would say the quality of life of this brilliant man, because of his physical handicaps, is essentially worthless.”

Dr. Hawking, who has lived and worked in Britain all of his life, responded: “I wouldn’t be here today if it were not for the N.H.S. I have received a large amount of high-quality treatment without which I would not have survived.”

Eventually, Prof. Ara Darzi, a former minister of health, head of surgery at Imperial College in London and Britain’s ambassador for health and life sciences, and Tom Kibasi of McKinsey & Company, an honorary lecturer at Imperial College, gently lectured American readers on this amusing episode and on the actual modus operandi of the N.H.S. The episode also opened a lively and sometimes bemused blog traffic in Britain.

Although I personally have never advocated adopting an N.H.S.-style approach to health reform in the United States, I have been puzzled for decades by the almost instinctive habit among many Americans of incessantly running down every other country’s approach to health care and health insurance.

Is this habit born of the deep-seated insecurity that might naturally arise from the cognitive dissonance of boasting “ours is the best health system in the world,” all the while beholding daily the travails and hand-wringing over the sometimes glaring shortcomings of the American health care system?

I have found that one effective way I can stop N.H.S.-bashing dead in its track is to ask bashers this simple question: “Why don’t you like my son?” I posed that question to a congressman who had berated “socialized medicine” during a hearing on health insurance reform at which I testified.

In response to the stunned look this question invariably elicits, I go on: ”You see, our son is a retired captain of the U.S. Marine Corps. He is an American veteran. Remarkably, Americans of all political stripes have long reserved for our veterans the purest form of socialized medicine, the vast health system operated by the U.S. Department of Veterans Affairs (generally known as the V.A. health system). If socialized medicine is as bad as so many on this side of the Atlantic claim, why have both political parties ruling this land deemed socialized medicine the best health system for military veterans? Or do they just not care about them?”

I must note that there is a widespread confusion in this country over the terms “social health insurance” and “socialized medicine.”

Among policy wonks, “social health insurance” is understood to be health insurance to which the individual makes contributions on the basis of ability to pay, rather than on the basis of health status. Such a system can be coupled, and often is, with purely private health care delivery systems, including for-profit enterprises. Canada, Taiwan, Japan, South Korea, Germany, the Netherlands and Switzerland come to mind.

Socialized medicine refers to systems that couple social health insurance with government-owned and operated health care facilities, such as Britain’s N.H.S. or the Hong Kong Hospital Authority, a still-appreciated legacy of British colonialism. Socialized medicine also typified the health systems operated by the former socialist countries in the Soviet orbit. Evidently, the V.A. health system perfectly fits the definition of socialized medicine.

Occasionally one does come across an American politician who mutters something about privatizing the V.A. health system. I doubt this idea would have much political traction, either as part of a party’s platform or in the presidential candidates’ campaign repertoire.

In fact, I would dare presidential candidates professing a distaste for socialized medicine to call openly for abolition of the V.A. health system in favor of a purely privatized system – e.g., a defined contribution system such as that advocated for Medicare by Representative Paul D. Ryan, Republican of Wisconsin and chairman of the House Budget Committee.

So far I have not received a satisfactory answer from detractors of “socialized medicine” to my question of why we have the V.A. health system when socialized medicine putatively is so evil. Perhaps some commentators on this blog will enlighten me.

Before responding, however, readers might consider these readings, which can be found in an Internet search on “V.A. Health Care and Quality”: a book by Phillip Longman, “The Best Care Anywhere: Why V.A. Health Care Is Better Than Yours”; an article on V.A. health care in the American Medical Association’s amednews.com, and, finally, from the Rand Corporation’s nationally recognized team of experts on the quality of health care in the United States this eye-opening report.

http://economix.blogs.nytimes.com/2012/08/03/where-socialized-medicine-has-a-u-s-foothold/

Fireworks! Orchestras! and dancing doctors!

Fireworks! Orchestras! and dancing doctors!

Health Care – A Counter-Ceremony Honoring America’s Health Care System

By Kevin Horrigan
St. Louis Post-Dispatch, August 5, 2012
“Perhaps not surprisingly in a country where health care reform is so controversial, it was the high-profile presence of the NHS that stunned many American writers…. Certainly the U.S. equivalent, which would be dancing health insurance corporate executives, was hard to imagine.”
— Paul Harris, in The Guardian, June 28
Hah, hah, hah. Very funny. It’s not hard at all to imagine what the “U.S. equivalent” to your Olympic Opening Ceremony’s salute to Britain’s National Health Service would look like. I’m already working on it.
Sure, “dancing health insurance corporate executives” will be part of it. If you’d made that much money last year, you’d want to dance, too.
“Executives in the top spots at the country’s seven largest publicly traded health plans were paid a collective $87 million for their services in 2011,” American Medical News reported in May.
Picture this: It’s night in Florida. We’re in a darkened Raymond James Stadium in Tampa, jammed with 66,000 delegates to the Republican National Convention and their guests. A spotlight illuminates the stage. The seven top health care CEOs, carrying canes and dressed in white top hats and tails, prance on stage as the Mormon Tabernacle Choir sings “Puttin’ on the Ritz.”
Pretty nice, huh? And that’s just the start.
The spotlight widens to show 94 primary care doctors, in multi-colored scrub suits, forming a ring around David Cordani, the CEO of Cigna Health Care, bowing and scraping to honor the fact that at $19.1 million, Cordani made more in 2011 than all 94 of them combined.
The orchestra breaks into Gershwin’s “It Ain’t Necessarily So” as the stadium floor is lighted, revealing 400 actual health insurance bureaucrats wearing telephone headsets and sitting at small desks. They shake their heads back and forth in our “Salute to Rescission.”
The crowd erupts, because fans know that if Republicans repeal the Affordable Care Act, God will be in his heaven, all will be right with the world and insurance companies once again will be allowed to retroactively cancel coverage when someone needs it.
But now! What’s that? Lights around the stadium’s upper tier are forming a large donut, signifying the “Medicare donut hole” that will return once “Obamacare” is eliminated, thus insuring that drugs for anything between basic coverage and catastrophe are not covered. The orchestra swings into “Live and Let Die.”
Cannons in the end zones fire clouds of pills into the sky. As they fall to the floor, out of the stadium tunnels limp thousands of senior citizens who are allowed to scrounge for the pills. But only for three minutes, because it’s time for our….
Tribute to the ER! Giant video boards flash the image of former President George W. Bush uttering these immortal words in 2007: “I mean, people have access to health care in America. After all, you just go to an emergency room.”
The theme from the TV show “ER” comes up as sirens wail, ambulances and EMS trucks tear around the stadium floor, disgorging patients into the busy “emergency department” on center stage, already jammed with insured adults and children who have no primary care doctors.
Our ER “treats” them and send them on their way with big weights (symbolizing hospital bills) strapped to their backs, which they then pass to the people in the crowd — who are delighted to get them!
On guy-wires stretched across the top of the stadium a huge number “17.6” sparkles in gold and silver lights. It represents the percentage of the gross domestic product devoted to health care — 8 percent higher than the Brits. The music swells into Creed’s “Can You Take Me Higher?”
The crowd sings along, waving 66,000 foam “We’re Number 1” fingers, signaling America’s status as the nation with the most expensive health care in the world — 2.4 times more expensive than the silly Brits.
KA-BOOM! go the fireworks. We crane our heads skyward to see a giant figure “37,” symbolizing the World Health Organization’s ranking of the American health care system.
The big finale: With the crowd’s attention diverted skyward, volunteers — all of them from health insurance companies — have erected cardboard cutouts of men, women, children and babies around the floor of the stadium. There are so many of them — 45,000 — that they loop around the field in a squiggly line almost a mile long.
They represent the 45,000 Americans whose lack of health insurance contributes to their premature death each year, according to a 2009 study by the Harvard Medical School. Now riding into the stadium atop Rafalca, his wife’s Olympic dressage horse, is Mitt Romney, who will be nominated for president on the following night.
He guides the mare’s nose to the first cardboard figure. A simple nudge and, like dominoes, they topple over in spectacular sequence. The crowd goes wild.
http://www.stltoday.com/news/opinion/columns/kevin-horrigan/horrigan-fireworks-orchestras-and-dancing-doctors/article_3416f532-c574-5985-8ea6-802428691c1d.html

Of course, depending on what happens in November, we could see an alternative “big finale.”
Obama could enter the stadium on his trusty steed “Single Payer,” and immediately run into the obscure maze of “Machinery Politics,” knocking Obama off of “Single Payer” who is immediately diverted to the glue factory as Obama remounts on “Pragmatic Incrementalist” who saunters over and nudges the first of 30,000 cardboard cutouts. The crowd goes wild (though only those sitting in the far left saw what really happened).
We’re going to have to do something about that crowd!
(They say that practical jokes have to be executed absolutely perfectly or you shouldn’t even try them. There is something about the domino cascade of 30,000 to 45,000 cutouts of American men, women, children and babies that just doesn’t sit well. Can we ever get the crowd to understand?)

Single payer slips into CAP forum

Cutting Health Care Costs: Leading Experts Propose Bold Solutions

Center for American Progress
August 2, 2012

The Center for American Progress convened leading health policy experts—including current and former federal and state officials, executives of health insurers and hospital systems, physicians, and economists—to develop bold and innovative solutions. These solutions are designed to reduce overall health care spending for both public and private payers.

Please join us as we release alternative strategies that would protect Americans’ access to necessary care. Several of the experts will be on hand to present the solutions, lead a discussion of the issues, and answer your questions.

From the Q&A discussion:

Harvey Fernbach, MD, a practicing physician with Physicians for a National Health Program: Wouldn’t you think that many of the bold solutions would do better if we simply expanded and improved Medicare, and take the insurance companies which are profit oriented and the businesses out of the equation because they wouldn’t have to play a major role.  That’s why President Obama was for it. I believe… we believe that… (inaudible) …a related metaphor… single payer is the gold medal for health care. I’d like to get your opinion on it.

Tom Daschle: Let me start with that because that’s as much of a political question as it is a medical one, or a health related question. I personally believe that a Medicare for all approach would be terrific. I’d be very enthusiastic about it. The problem is the current political lay of the land prevents it. So we have to deal with what’s possible, and in dealing with what’s possible, it seems to me that taking the concepts that we know could work, redesigning them and improving what we’ve got may the the next step. The ACA is the next step. It creates a new infrastructure that allows for a lot of the things we know work well, to work better across the entire country. But one day, perhaps, we’ll be in a position to alter that political landscape to accommodate something a little bit more aggressive.

Harvey Fernbach: (inaudible) … ACA eventually to single payer.

Tom Daschle: I think ACA puts us on the thirty yard line in terms of what it is we have to do with seventy yards to go. (Audience laughter.) But we’ve got a good start.

Video of CAP forum:
http://www.americanprogress.org/events/2012/08/cuttingcosts.html

Comment:

By Don McCanne, MD

This is a followup to yesterday’s Quote of the Day message on a forum on recommendations to contain health care spending, sponsored by the Center for American Progress. It was noted that single payer advocates were once again excluded from the process. Well, not quite. PNHP’s Harvey Fernback was in the audience and asked a question that prompted Tom Daschle to proclaim that “a Medicare for all approach would be terrific” and he would be “very enthusiastic about it.”

Thanks, Harvey, for being there. It’s a lesson for all of us in our reform advocacy activities. Be there and do it!

Daschle says that we still have seventy yards to go, so let’s get with it.

Single payer slips into CAP forum

Cutting Health Care Costs: Leading Experts Propose Bold Solutions

Center for American Progress
August 2, 2012
The Center for American Progress convened leading health policy experts—including current and former federal and state officials, executives of health insurers and hospital systems, physicians, and economists—to develop bold and innovative solutions. These solutions are designed to reduce overall health care spending for both public and private payers.
Please join us as we release alternative strategies that would protect Americans’ access to necessary care. Several of the experts will be on hand to present the solutions, lead a discussion of the issues, and answer your questions.
From the Q&A discussion:
Harvey Fernbach, MD, a practicing physician with Physicians for a National Health Program:Wouldn’t you think that many of the bold solutions would do better if we simply expanded and improved Medicare, and take the insurance companies which are profit oriented and the businesses out of the equation because they wouldn’t have to play a major role.  That’s why President Obama was for it. I believe… we believe that… (inaudible) …a related metaphor… single payer is the gold medal for health care. I’d like to get your opinion on it.
Tom Daschle: Let me start with that because that’s as much of a political question as it is a medical one, or a health related question. I personally believe that a Medicare for all approach would be terrific. I’d be very enthusiastic about it. The problem is the current political lay of the land prevents it. So we have to deal with what’s possible, and in dealing with what’s possible, it seems to me that taking the concepts that we know could work, redesigning them and improving what we’ve got may the the next step. The ACA is the next step. It creates a new infrastructure that allows for a lot of the things we know work well, to work better across the entire country. But one day, perhaps, we’ll be in a position to alter that political landscape to accommodate something a little bit more aggressive.
Harvey Fernbach: (inaudible) … ACA eventually to single payer.
Tom Daschle: I think ACA puts us on the thirty yard line in terms of what it is we have to do with seventy yards to go. (Audience laughter.) But we’ve got a good start.
Video of CAP forum:
http://www.americanprogress.org/events/2012/08/cuttingcosts.html

This is a followup to yesterday’s Quote of the Day message on a forum on recommendations to contain health care spending, sponsored by the Center for American Progress. It was noted that single payer advocates were once again excluded from the process. Well, not quite. PNHP’s Harvey Fernback was in the audience and asked a question that prompted Tom Daschle to proclaim that “a Medicare for all approach would be terrific” and he would be “very enthusiastic about it.”
Thanks, Harvey, for being there. It’s a lesson for all of us in our reform advocacy activities. Be there and do it!
Daschle says that we still have seventy yards to go, so let’s get with it.

Remember Managed Care? It’s Quietly Coming Back

By ANNA WILDE MATHEWS
The Wall Street Journal, August 2, 2012

Under pressure to squeeze out costs, some of the U.S.’s biggest health insurers are quietly erecting more hurdles for patients seeking medical care.

The companies are in many cases reaching back to the 1990s and boosting the use of techniques that antagonized patients and doctors alike.

Today’s approaches are tweaked, but may feel familiar to many: Insurers are rolling out plans with more restricted choices of doctors and hospitals, and weighing new requirements for referrals before patients can see specialists.

UnitedHealth Group Inc., Cigna Corp. and others are increasingly requiring doctors to get prior authorization before patients can get certain care such as spinal surgeries.

Earlier versions of these practices were closely identified with the managed-care era of the 90s. They later receded in many parts of the country, as employers switched away from restrictive health-maintenance organizations, and insurers backed off some limits.

Health insurers say today’s versions of 1990s strategies are very different, and use new technology to focus closely on improving care as well as reining in expenses.

UnitedHealth, for one, said it is using prior authorization “surgically” to counter “extreme variations in quality and cost.” But doctors aren’t sure how much things have changed.

“There seems to be a return we’re hearing about to some of the old practices that have been very frustrating to physicians,” said Jeremy A. Lazarus, president of the American Medical Association.

In its 2012 analysis of medical billing claims, the AMA saw a 23% increase in the share that included an insurer pre-authorization review, to 4.7%. For certain types of procedures, the percentage is far higher, according to athenahealth Inc., which provides electronic health records. Still, the company said, only 4.9% of all the prior authorization requests it processed were denied in 2011.

Erica Swegler, a family physician in Keller, Texas, said the growing number of prior authorizations she has to secure for treatments such as high-tech imaging scans “costs me a tremendous amount of time.” The approvals typically take 48 to 72 hours, and sometimes longer if she needs to have a phone conversation with an insurer, she said. “It’s a huge headache.”

Insurers are responding to pressure from employers to tamp down costs and address evidence of disparities in quality. In recent years, employers have shifted a growing share of the expense of coverage onto workers, and companies are betting employees will accept trade-offs they rejected 15 years ago in order to prevent premiums from jumping even faster.

“This is back to the future,” said Eric Grossman, a senior partner at Mercer, a consulting unit of Marsh & McLennan Cos. Employers are interested in “rigorous, aggressive medical management,” including prior authorization, as well as limited networks of health-care providers, he said. Some insurers have promised savings of 3% to 5% from narrow-network plans, he said, and reductions of more than 10% if other restrictions are added, including even fewer choices of medical providers, strong pre-authorization, and requirements for patients to get a referral to access specialty care.

Managed-care limits “did slow the growth of costs in the 1990s,” said David Cutler, a Harvard University economist. But after consumers and doctors revolted, “managed care got neutered.” According to the nonpartisan Kaiser Family Foundation, private health spending flattened in the 1990s, adjusted for inflation, and decreased in one year, 1994, before surging back toward the end of the decade. The foundation’s analysts attribute the dip largely to managed-care practices.

In a move widely seen as a symbolic end of the era, UnitedHealth in 1999 said it would stop second-guessing doctors’ decisions before treatment, and adopted a “care coordination” process that wasn’t supposed to require formal preclearance.

But this spring, UnitedHealth’s insurance arm, the nation’s biggest, told employers that over the next 18 months, care coordination will generally be replaced by a new “prior authorization” process, according to company documents prepared for clients.

For certain services and tests, including joint replacements and spine surgeries, the documents said, “services determined to be not medically necessary” beforehand wouldn’t be covered.

The shift discussed in the documents is aimed at moving to a common standard, and some plans acquired after 1999 were already using forms of prior authorization, a UnitedHealth official said. Insurers also said they are working with doctor groups to smooth the process.

Other insurers are expanding prior authorization in some areas, which they say are targeted narrowly based on patterns of pricey care that doesn’t always match medical guidelines.

WellPoint Inc. is developing a program for certain cancer drugs and this fall will start one for tests that diagnose sleep-related conditions. Aetna Inc. said it generally expects to use the process “more in the future, not less.”

Cigna started requiring prior authorization for certain back surgeries last year, and is considering procedures in radiation oncology and cardiology.

“It’s very low friction, it’s clinical quality, and we lower costs,” said Alan Muney, chief medical officer at Cigna, which he said has also in the past eliminated the requirements in some areas.

Care, a health-advocacy firm based in Milwaukee, has seen an uptick in patients like Sandi Kane, a community education director in Shawano, Wis., who says her doctor’s office submitted a request for a machine to help treat her sleep apnea in mid-June, and it’s been tied up in red tape since then. The administrator of her employer’s insurance wanted more documentation for why she needed the pricier model, and she still hasn’t gotten an approval, she said.

“There are just so many steps that need to be taken,” Ms. Kane said, and she feels caught in the middle between the recommendation of her doctor’s office and her plan’s rules. Alliance Benefit Group Medical Services Ltd., which administers Ms. Kane’s coverage under the Auxiant brand name, said it declined to comment on “individual plan participant matters.”

Insurers have been experimenting with smaller provider networks for years, and are now rapidly ramping up, though they continue to simultaneously sell typical broad preferred-provider organization plans. The narrower plans can have closed structures that work like the classic HMOs. But they also have “tiered” designs, with patients facing bigger out-of-pocket charges if they go to providers that aren’t in the top category, then even-larger bills if they go completely out of network.

Plans that include fewer medical providers are seen as likely to appeal to people shopping for their own budget-conscious coverage starting in 2014, since consumers may only need to lock in access to their own favored doctors or hospitals, rather than the broadest variety.

Insurers can reduce costs with narrow networks because they can exclude the priciest doctors and hospitals. Also, they can wring rate concessions from medical providers that fear losing patients.

WellPoint is “rolling out a number of narrow and tiered networks” across its markets, said Ken Goulet, executive vice president. These networks involve around 30% to 70% of the company’s full list of providers, he said. They will be available in six of WellPoint’s 14 states by the end of this year, and are aimed at all of them by January 2014, the company said.

Aetna has long had tiers for specialists, and last year added a new version for hospitals, with the smaller group generally representing 50% to 60% of the insurer’s full network. This year it started creating even skinnier—and cheaper—options that generally include just 30% to 40% of Aetna’s specialists and hospitals, said Carl King, the company’s head of national networks and contracting services. Those will be available in more than 20 markets by the end of next year.

Another 1990s twist, forcing patients to get sign-offs from primary-care doctors before seeing specialists, also may see a comeback. UnitedHealth last year introduced in four states a plan design called “Navigate” that has such a requirement, and the company is expanding it to 16 states this year and more in 2013; the company said it helps build the doctor-patient relationship to “emphasize quality care and more efficient use of care.”

WellPoint’s Mr. Goulet said his company, which is starting to pay primary-care doctors more to help coordinate care, is also considering more plans with such rules; it already has them in some older HMOs.

Insurers said current versions of old approaches are driven by better information, which helps them focus on improving care, not just saving money. The doctors and hospitals in the narrow networks are selected based on quality measures as well as cost, they say, while data help them ensure they use prior authorization only where it is needed.

“Technology is fundamentally different from what it was in the 1990s,” said John Wilson, vice president of analytics at UnitedHealth Group’s OptumInsight unit.

Write to Anna Wilde Mathews at anna.mathews@wsj.com

http://online.wsj.com/article_email/SB10000872396390444840104577552823507551472-lMyQjAxMTAyMDAwMjAwODI3Wj.html

Center for American Progress effort to contain health care spending

A Systemic Approach to Containing Health Care Spending

By Ezekiel Emanuel, M.D., Ph.D., Neera Tanden, J.D., Stuart Altman, Ph.D., Scott Armstrong, M.B.A., Donald Berwick, M.D., M.P.P., François de Brantes, M.B.A., Maura Calsyn, J.D., Michael Chernew, Ph.D., John Colmers, M.P.H., David Cutler, Ph.D., Tom Daschle, B.A., Paul Egerman, B.S., Bob Kocher, M.D., Arnold Milstein, M.D., M.P.H., Emily Oshima Lee, M.A., John D. Podesta, J.D., Uwe Reinhardt, Ph.D., Meredith Rosenthal, Ph.D., Joshua Sharfstein, M.D., Stephen Shortell, Ph.D., M.P.H., M.B.A., Andrew Stern, B.A., Peter R. Orszag, Ph.D., and Topher Spiro, J.D.
The New England Journal of Medicine, August 1, 2012

Although the Affordable Care Act (ACA) will significantly reduce Medicare spending over the next decade, health costs remain a major challenge. To effectively contain costs, solutions must target the drivers of both the level of costs and the growth in costs — and both medical prices and the quantity of services play important roles. Solutions will need to reduce costs not only for public payers but also for private payers. Finally, solutions will need to root out administrative costs that do not improve health status and outcomes.

The Center for American Progress convened leading health-policy experts with diverse perspectives to develop bold and innovative solutions that meet these criteria. Although these solutions are not intended to be exhaustive, they have the greatest probability of both being implemented and successfully controlling health costs. The following solutions could be implemented separately or, more effectively, integrated as a package.

PROMOTE PAYMENT RATES WITHIN GLOBAL TARGETS

ACCELERATE USE OF ALTERNATIVES TO FEE-FOR-SERVICE PAYMENT

USE COMPETITIVE BIDDING FOR ALL COMMODITIES

REQUIRE EXCHANGES TO OFFER TIERED PRODUCTS

REQUIRE ALL EXCHANGES TO BE ACTIVE PURCHASERS

SIMPLIFY ADMINISTRATIVE SYSTEMS FOR ALL PAYERS AND PROVIDERS

REQUIRE FULL TRANSPARENCY OF PRICES

MAKE BETTER USE OF NONPHYSICIAN PROVIDERS

EXPAND THE MEDICARE BAN ON PHYSICIAN SELF-REFERRALS

LEVERAGE THE FEDERAL EMPLOYEES PROGRAM TO DRIVE REFORM

REDUCE THE COSTS OF DEFENSIVE MEDICINE

Conclusions

These are the types of large-scale solutions that are necessary to contain health costs. Although many in the health industry perceive that it is not in their interest to contain national health spending, it is a fact that what cannot continue will not continue.

Americans therefore face a choice. Payers could simply shift costs to individuals. As those costs become more and more unaffordable, people would severely restrict their consumption of health care and might forgo necessary care. Alternatively, governments could impose deep cuts in provider payments unrelated to value or the quality of care. Without an alternative innovative strategy, these options will become the default. They are not in the long-term interests of patients, employers, states, insurers, or providers.

We present alternative strategies to contain national health spending that allow Americans to access necessary care. Our approach addresses the system as a whole, not just Medicare and Medicaid. It is the path to rising wages, a sustainable federal budget, and the health system that all Americans deserve.

http://www.nejm.org/doi/full/10.1056/NEJMsb1205901?query=TOC

And…

Bending the Cost Curve through Market-Based Incentives

By Joseph R. Antos, Ph.D., Mark V. Pauly, Ph.D., and Gail R. Wilensky, Ph.D.
The New England Journal of Medicine, August 1, 2012

In a market-based approach, open-ended subsidies to beneficiaries and price-controlled reimbursements to providers should be replaced with fixed dollar subsidies — effectively shifting Medicare from a defined-benefit to a defined-contribution approach. The business model would shift from one that is driven by the volume and intensity of services to one that rewards cost-effective and efficient care.

Under this approach, Medicare would adopt a premium-support model, which provides a fixed subsidy for each beneficiary’s purchase of insurance. Health plans, including traditional Medicare, would compete with each other on equal terms. Beneficiaries could purchase more expensive coverage if they felt the extra cost was worth it to them.

Similarly, the principle of defined contribution should be applied to the currently unlimited tax subsidy for employer-sponsored insurance. Employer contributions to health insurance are not counted as part of the employees’ taxable income. That subsidy encourages the purchase of health insurance, but it also provides an incentive to increase the amount of coverage, which helps fuel the growth of private health spending. Converting the current exclusion to a predetermined refundable credit would be a reform similar to premium support for Medicare. A less dramatic compromise would set a dollar limit on the tax exclusion that is indexed to grow more slowly than the trend in medical spending.

Well-functioning competitive markets are required for these types of decentralized approaches to work effectively. Objective, understandable information needs to be available so that consumers can make informed decisions about their choice of health plans. The plans need to be able to adjust their benefit offerings to respond to changes in consumer demand. This could be facilitated by public and private health insurance exchanges without limiting what plans can offer and what consumers may buy.

A defined-contribution approach to subsidies would help resolve the federal budget problem without limiting the way in which consumers are able to spend their own funds. Reliance on competitive markets rather than on regulatory controls provides strong incentives for more efficient delivery of the health care services that consumers truly value.

Conclusions

Policies that attempt to reengineer the health system without changing the underlying financial incentives that drive health spending will ultimately fail. The adoption of a defined-benefit approach to federal health subsidies can improve the understanding of both consumers and providers that resources are limited and choices must be made, but those decisions should not be dictated from Washington through regulatory controls. A market-based approach that relies on competition and financial incentives can promote efficient health care delivery, reduce the unit cost of care, and thus help resolve the federal budget problem without placing limits on how individuals choose to spend their own money. Consumers will decide for themselves whether more costly coverage buys them access to better care and more effective medical technology, and those decisions will ultimately determine the pace of health spending growth. Budget-driven fiscal targets that are inconsistent with public wishes and the capacity of the health system to deliver are not sustainable.

http://www.nejm.org/doi/full/10.1056/NEJMsb1207996?query=TOC

Comment:

By Don McCanne, MD

With some fanfare today the recommendations on containing health care spending, advanced by a group of experts convened by the Center for American Progress (CAP), are being presented at a forum for the media at CAP headquarters in Washington, D.C. The recommendations of these experts are being released in a NEJM article, along with another article representing a different approach to cost containment by authors known for their support of market solutions to health care cost escalation.

The two supposedly contrasting views are being reported as representing the conservativ
e Republican position on the one hand, and the progressive Democratic views on the other. This is not quite true since the Center for American Progress is a centrist organization and does not represent progressive/liberal views, even though it is more aligned with the Democratic Party. The point here is that the policy packages should be evaluated based on their soundness, and not on their alleged political leaning.

The proposal of Joseph Antos and colleagues can be summarized as a conversion of our health care financing to a defined-contribution approach, both for Medicare and for private health plans. It is based on the terribly simplistic concept that patients should select their insurance products and their health care based on what they have to pay out of their own funds. Supposedly this drives quality up and prices down. In reality, this erects greater financial barriers to health care, compounding physical suffering and financial hardship. It is astounding that these ideas have not yet been dumped on the trash heap of health policy failures.

The proposals by Ezekiel Emanuel and his colleagues are more of a laundry list of ideas intended to slow the increase in health care costs. Each one needs to be addressed separately, which we can’t do adequately in this message. Some of the ideas have been around for awhile and show little promise of having much impact on spending. Some are similar to a few of the measures in the Affordable Care Act which also provide little promise of containing costs without significantly restricting access because of issues of affordability or failure to adequately finance the health care infrastructure. Some are terrible ideas such as tiering of insurance products, or depending on patient-consumer price shopping. Protecting against malpractice claims by use of safe harbors depends on the fantasy that such harbors can be precisely defined when the variables in real-life clinical situations are too great. Competitive bidding can be disruptive to those that lose out in the bidding process, impairing access as losers leave the market.

Some of the better ideas such as reduction of administrative waste and global budgeting are commendable except for the fact that they are not recommending the fundamental repair of our health care financing infrastructure that would be required for these concepts to have any significant impact on future health care spending. Our fragmented, dysfunctional system is incapable of adapting such concepts in a broad manner.

CAP was part of the process that excluded single payer (improved Medicare for all) advocates during the reform process. Viewing the list of the CAP authors (above), it is clear that single payer advocates are still excluded. Many of the authors are fully aware of the superiority of the single payer model, but have bought into the concept that it is not politically feasible, whereas supporting our private insurance industry is. Some of the authors also seem to have neoliberal, pro-market views.

In sum, this effort to provoke a renewed interest in seriously addressing our American exceptionalism in our misdirected and wasteful spending in health care is a major disappointment. Other nations have been far more effective in achieving greater value in health care spending, and we know how they do it. It is a terrible shame that we are once again allowing committee-think to lead us down the wrong path.