PNHP

Disastrous results of higher premiums and cost sharing for Oregon Health Plan

Disastrous results of higher premiums and cost sharing for Oregon Health Plan

Raising Premiums And Other Costs For Oregon Health Plan Enrollees Drove Many To Drop Out

By Bill J. Wright, Matthew J. Carlson, Heidi Allen, Alyssa L. Holmgren and D. Leif Rustvold
Health Affairs
December 2010

The Oregon Health Plan was created to be a sustainable program that could weather budgetary storms without having to cut enrollees from Medicaid. A 2003 redesign of the program increased premiums, raised cost sharing, and imposed rigid premium payment deadlines for members in the “Standard” version of the program but not for members of the “Plus” version. This paper adds two years of longitudinal data to a previous study on the impacts of these changes. It shows that the redesign was a key factor driving a 77 percent disenrollment rate in the Standard program, from a high of 104,000 enrollees in February 2003 to just 24,000 by the end of the study period, November 2005. Those who were in the Standard plan when the reduced benefits and higher member costs went into effect were also nearly twice as likely to have unmet health care needs compared to those in the Plus plan.

Impact In Oregon

The 2003 Medicaid redesign had profound effects on the Oregon Health Plan Standard population. In the months immediately after the redesign, many of those enrolled in the Standard plan left the program entirely. These people, as well as those who remained in the program, subsequently experienced greater unmet health care needs, reduced use of care, more medical debt, and greater household financial strain than members of the Plus plan, to whom the redesign did not apply.

Changes to the cost-sharing structure, which consisted of mandatory copays, increased monthly premiums for some members, and tightened administrative rules including a loss of coverage for nonpayment of premiums, affected Standard plan members in two main ways. First, the changes in premium rules led to heavy disenrollment initially, and those who left often experienced periods of uninsurance throughout the study time frame along with the other changes, such as higher rates of unmet need.

Second, even after gaps in coverage and other known differences between the populations were controlled for, members of the Standard plan experienced poorer outcomes than members of the Plus plan. This suggests that even for those who managed to stay enrolled in spite of higher premiums, increased cost sharing in the form of mandatory copays may have limited members’ access to and use of care, in addition to having a direct financial impact.

Implications For Other States

These findings contain lessons for other states, particularly as they implement Medicaid expansions under the Affordable Care Act. Some states already provide Medicaid coverage to nonelderly adults with incomes up to 133 percent of the federal poverty level, but the act is expected to result in more than seventeen million Americans’ becoming eligible for Medicaid by 2014.

Cost Sharing:

The first lesson is that although strict cost-sharing rules might be an appealing way to offset the costs associated with increased Medicaid enrollment, they create barriers for people to get and keep insurance.

Our data show that Medicaid members are sensitive to even small cost-sharing increases. Coupling those increases with stricter payment policies can create widespread coverage loss. In fact, previously published analyses of this study’s data suggest that the most vulnerable Standard plan members were the most likely to leave in response to changes in cost-sharing rules.

This fact is particularly important because recent analyses of census data suggest that nearly half of those who will become eligible for Medicaid under the new federal eligibility guidelines have incomes below 50 percent of the federal poverty level. In this newly eligible, very-low-income population, offering payment flexibility and exemptions might help ensure that the neediest benefit from coverage expansion.

Coverage Gaps:

Second, those who leave Medicaid in response to changes in cost-sharing rules are very likely to experience major coverage gaps. Over time, they have more difficulty meeting their health care needs, accumulate more medical debt, and experience greater financial strain than those who stay insured.

Unmet Need:

Third, even among those who remain enrolled, increased cost sharing in the form of copayments may result in greater unmet need for health care, along with increased household financial strain and medical debt. It may also greatly depress health care use. Although reducing unnecessary use is one of the goals of cost sharing, when reduced use is paired with an increase in unmet need, the question arises, does the reduction represent care that is needed or that would help prevent costly complications in the future?

http://content.healthaffairs.org/content/29/12/2311.abstract

Currently there is a fixation in the health policy community on designing plans that require a significant financial contribution from the beneficiary on the theory that high health care costs can be moderated by making patients more sensitive to those costs.

Many studies have now confirmed that these plan designs impair access to health care because of affordability issues, and result in impaired health outcomes. Although this is certainly true for those with moderate incomes, this new study confirms once again that it is particularly disastrous for low-income individuals.

As a result of the Patient Protection and Affordable Care Act (PPACA), in 2014 an estimated 17 million individuals will be added to state Medicaid programs. Because of tight budgets, states are already seeking federal waivers that would relax the PPACA requirements.

It is likely that most states will soon seek waivers for their Medicaid programs to allow flexibility in innovation. The innovations will not be for the purpose of assisting patients in getting the care that they need, but rather they will be for the purpose of reducing the Medicaid component of the state budgets.

PPACA has already enshrined high cost-sharing by establishing low-actuarial value plans (high deductibles, etc.) as the standard within the state insurance exchanges. The temptation for states to expand this concept to Medicaid will be great.

The Oregon Health Plan may have provided an important lesson for other states, but that won’t prevent them from doing the same. After all, making price-sensitive shoppers out of people who have no money is effective in reducing health care spending, even if it does result in further financial hardship, physical suffering, and even death, and dead patients are the least expensive of all.

Are private insurers better than Medicare in controlling costs in McAllen?

McAllen And El Paso Revisited: Medicare Variations Not Always Reflected In The Under-Sixty-Five Population

By Luisa Franzini, Osama I. Mikhail and Jonathan S. Skinner
Health Affairs
December 2010

Medicare spending for the elderly is much higher in McAllen, Texas, than in El Paso, Texas, as reported in a 2009 New Yorker article by Atul Gawande. To investigate whether this disparity was present in the non-Medicare populations of those two cities, we obtained medical use and expense data for patients privately insured by Blue Cross and Blue Shield of Texas.

Variations In Medicare Use And Spending

Total price-adjusted Medicare spending was 86 percent higher in McAllen than in El Paso, and was 75 percent above the national average in 2007.

In 2007, Medicare enrollees in McAllen were far more likely to be admitted to the hospital and to die in the hospital than they were in El Paso. They were also much more likely to be seen near the end of their lives by more than ten physicians — a good measure for fragmentation, in that the involvement of a large number of physicians typically signals a lack of coordination of care provided to patients. Finally, there were sharp differences in the extent of cardiac surgical procedures; again, rates were higher in McAllen.

Variations For The Insured Population Under Age Sixty-Five

Surprisingly, and in contrast to the Medicare data, for the population insured by Blue Cross Blue Shield of Texas, total spending per member per year in McAllen was 7 percent lower than in El Paso. Although spending for professional and inpatient services were similar in the two regions, spending for outpatient services in McAllen was 31 percent less.

Use of medical services was also similar or somewhat lower in McAllen compared to El Paso. Inpatient admissions in McAllen were 84 percent of admissions in El Paso; professional and outpatient services in McAllen were 94 percent and 72 percent, respectively, of those in El Paso.

(Variations by age for those under sixty-five)

For those age fifty and younger, use rates were generally similar or lower in McAllen than in El Paso — particularly for the population ages 25–50, for whom use of inpatient, outpatient, and professional services in McAllen were 66 percent, 80 percent, and 86 percent, respectively, of those in El Paso. Patterns were similar for spending measures.

It was in the population age 50 and older – largely people ages 50–64 — that strong differences between El Paso and McAllen in the use of inpatient medical services and spending emerged. Indeed, inpatient admissions for the Blue Cross and Blue Shield of Texas population age 50 and older were 89 percent higher in McAllen. Per patient inpatient spending for this same age group was 117 percent higher in McAllen — roughly the same difference as the overall difference in the use of Medicare services and spending. In part, the higher inpatient use of medical services and costs for this group are offset by lower outpatient medical services use and spending, leaving overall spending in McAllen for this age group 23 percent above those in El Paso. That is still well below the 86 percent Medicare differential between the two cities.

Conclusions

We have demonstrated that the sharp differences in the use of Medicare services between El Paso and McAllen, Texas, were not generally found in the population of Blue Cross and Blue Shield enrollees under age sixty-five in Hidalgo County (McAllen) and El Paso County. We considered several explanations for these patterns, including differences in prices, health, incomes, and other factors. Ultimately, we hypothesize that some part of the puzzle may be explained by private insurance companies and Medicare exhibiting very different interactions with local health care providers.

Thus, our study is consistent with Gawande’s finding of a “culture of money “— increasing the use of profitable Medicare services when there is diagnostic and procedural discretion and clinical latitude — but that such a culture may also be constrained by private insurance plans with their more stringent reviews of the use of medical services.

Because our study was limited to just two regions, we do not know to what extent providers may compensate for lower pricing from Medicare by negotiating higher prices, or cost shifting, to private insurance. Nor do we entirely understand why hospitalization rates for the privately insured residents of McAllen who are older than age fifty are so much higher — and outpatient rates so much lower — than in El Paso.

Further research is needed, such as the variations study mandated by the Affordable Care Act that is now being carried out under the auspices of the Institute of Medicine. But our preliminary results are consistent with the idea that health care providers can respond quite differently to incentives embedded in large federal programs such as Medicare compared to those present in private insurance programs.

http://content.healthaffairs.org/cgi/content/abstract/29/12/2302

And…

Study: Private insurance plans better at controlling costs

By Jason Millman
The Hill
December 7, 2010

Private insurance plans might be better at controlling healthcare costs than Medicare, according to a Health Affairs study released Tuesday morning.

http://thehill.com/blogs/healthwatch/medicare/132329-study-private-insurance-plans-better-at-controlling-costs

And…

The Cost Conundrum

Posted by Atul Gawande
The New Yorker
December 6, 2010

A new study introduces a fascinating — and hopeful — wrinkle to the McAllen, Texas, cost conundrum.

I visited McAllen, some readers may recall, to speak with doctors and hospital leaders about why its costs for Medicare patients have, for going on a decade, run almost double that for Medicare patients up the border in El Paso—almost sixteen thousand dollars per person versus eight thousand three hundred dollars in 2007. The populations had similar levels of poverty and poor health. By many quality measures, the hospitals were, if anything, better in El Paso. Yet the Medicare data showed McAllen doctors ordering markedly more tests, more surgery, more specialist visits, more home health services, more hospital admissions, more everything.

Yet can we really extrapolate from the costs of older Medicare patients to all younger ones? After the article was published, Texas Blue Cross Blue Shield gave unusual access to the complete cost files of their members under the age of sixty-five to researchers at the University of Texas School of Public Health and Dartmouth. This week, in the journal Health Affairs, the researchers published their findings. They discovered a shift with age. For members fifty or older, McAllen was indeed significantly more expensive than El Paso. But for those under fifty, McAllen was downright ordinary — even less costly than El Paso. They had escaped high-cost care.

It’s true that employees younger than fifty with Blue Cross coverage are a somewhat distinctive group. They are healthier than average and account for only a small percentage of local health costs. Nationally, people older than fifty account for about seventy per cent of total spending; among people under fifty, the poor and disabled account for much of the rest. The overall cost problem remains. But there is an important revelati
on here: not all the health care in a high-cost community has to be out of whack. The questions we then must ask are why the pattern is different for some groups of people, and whether such differences suggest ways to change the pattern for everyone.

There are two main explanations for the discrepancy: McAllen doctors could simply offer a lower-cost care for the kinds of conditions people under fifty have (pregnancies and traumatic injuries tend to be the big-ticket items); or Blue Cross could be particularly effective at restricting overspending. It’s hard to know which is the answer. Looking at the evidence available, we can’t be sure. But I am rooting for the idea that Blue Cross is making a difference.

http://www.newyorker.com/online/blogs/newsdesk/2010/12/the-cost-conundrum.html

Comment: 

By Don McCanne, MD

According to this new study published in Health Affairs, the widely-publicized differences in Medicare use and spending between McAllen and El Paso did not occur in those individuals covered by Blue Cross and Blue Shield of Texas (BCBST), at least not quite. Today the media are reporting this study as demonstrating that private insurance plans are better at controlling costs than is Medicare. A closer look at the findings should make us question this conclusion.

Atul Gawande’s original report certainly confirmed that both health care use and spending in Medicare were much higher in McAllen than in El Paso, which he attributed to a culture of doctors in McAllen who treated patients as profit centers by increasing the intensity of services.

Is it true that BCBST was able to control the excesses of the McAllen physicians through managed care and other incentives? Or is there a more plausible explanation?

The population studied was insured by BCBST, which meant that, especially for the portion under 50, they were primarily healthy employees and their young, healthy families, certainly much healthier than the Medicare population. These individuals do not need much health care, and what they do use is quite straightforward. Preventive services, maternity care, fractures, acute illnesses and the such all have simple diagnostic and management algorithms. There really isn’t much leeway for adding superfluous services, so it is no surprise that use and spending would be about the same in both McAllen and El Paso.

What about the people over 50 on BCBST? These people are beginning to develop chronic disorders that do require more health care. During a continuum of care, there are more options for physicians to increase the frequency and intensity of services. For patients over 65 on Medicare, McAllen physicians do provide greater intensity of care, but does BCBST’s private insurer management techniques successfully control these excesses for patents under 65?

For BCBST patients aged 50 to 64, inpatient admissions in McAllen were 89 percent higher than in El Paso. Per patient inpatient spending was 117 percent higher in McAllen. Although outpatient use and spending were lower, overall spending was still 23 percent higher in McAllen for this age group. Besides, where are the real bucks? In the hospital or in outpatient care?

Gawande is “rooting for the idea that Blue Cross is making a difference.” Is an 89 percent increase in hospitalization rates really an endorsement of the management services that the private insurers keep selling us?

And the media? You would think that they would read the study before reporting on it (only 8 pages) instead of merely lifting a few points from the Health Affairs press release this morning. The title: “New Health Affairs Study Suggests That Private Insurers Control Health Care Spending Better Than Medicare.” Maybe the Health Affairs editors also should read their own articles before issuing press releases on them.

Are private insurers better than Medicare in controlling costs in McAllen?

McAllen And El Paso Revisited: Medicare Variations Not Always Reflected In The Under-Sixty-Five Population

By Luisa Franzini, Osama I. Mikhail and Jonathan S. Skinner
Health Affairs
December 2010

Medicare spending for the elderly is much higher in McAllen, Texas, than in El Paso, Texas, as reported in a 2009 New Yorker article by Atul Gawande. To investigate whether this disparity was present in the non-Medicare populations of those two cities, we obtained medical use and expense data for patients privately insured by Blue Cross and Blue Shield of Texas.

Variations In Medicare Use And Spending

Total price-adjusted Medicare spending was 86 percent higher in McAllen than in El Paso, and was 75 percent above the national average in 2007.

In 2007, Medicare enrollees in McAllen were far more likely to be admitted to the hospital and to die in the hospital than they were in El Paso. They were also much more likely to be seen near the end of their lives by more than ten physicians — a good measure for fragmentation, in that the involvement of a large number of physicians typically signals a lack of coordination of care provided to patients. Finally, there were sharp differences in the extent of cardiac surgical procedures; again, rates were higher in McAllen.

Variations For The Insured Population Under Age Sixty-Five

Surprisingly, and in contrast to the Medicare data, for the population insured by Blue Cross Blue Shield of Texas, total spending per member per year in McAllen was 7 percent lower than in El Paso. Although spending for professional and inpatient services were similar in the two regions, spending for outpatient services in McAllen was 31 percent less.

Use of medical services was also similar or somewhat lower in McAllen compared to El Paso. Inpatient admissions in McAllen were 84 percent of admissions in El Paso; professional and outpatient services in McAllen were 94 percent and 72 percent, respectively, of those in El Paso.

(Variations by age for those under sixty-five)

For those age fifty and younger, use rates were generally similar or lower in McAllen than in El Paso — particularly for the population ages 25–50, for whom use of inpatient, outpatient, and professional services in McAllen were 66 percent, 80 percent, and 86 percent, respectively, of those in El Paso. Patterns were similar for spending measures.

It was in the population age 50 and older – largely people ages 50–64 — that strong differences between El Paso and McAllen in the use of inpatient medical services and spending emerged. Indeed, inpatient admissions for the Blue Cross and Blue Shield of Texas population age 50 and older were 89 percent higher in McAllen. Per patient inpatient spending for this same age group was 117 percent higher in McAllen — roughly the same difference as the overall difference in the use of Medicare services and spending. In part, the higher inpatient use of medical services and costs for this group are offset by lower outpatient medical services use and spending, leaving overall spending in McAllen for this age group 23 percent above those in El Paso. That is still well below the 86 percent Medicare differential between the two cities.

Conclusions

We have demonstrated that the sharp differences in the use of Medicare services between El Paso and McAllen, Texas, were not generally found in the population of Blue Cross and Blue Shield enrollees under age sixty-five in Hidalgo County (McAllen) and El Paso County. We considered several explanations for these patterns, including differences in prices, health, incomes, and other factors. Ultimately, we hypothesize that some part of the puzzle may be explained by private insurance companies and Medicare exhibiting very different interactions with local health care providers.

Thus, our study is consistent with Gawande’s finding of a “culture of money “— increasing the use of profitable Medicare services when there is diagnostic and procedural discretion and clinical latitude — but that such a culture may also be constrained by private insurance plans with their more stringent reviews of the use of medical services.

Because our study was limited to just two regions, we do not know to what extent providers may compensate for lower pricing from Medicare by negotiating higher prices, or cost shifting, to private insurance. Nor do we entirely understand why hospitalization rates for the privately insured residents of McAllen who are older than age fifty are so much higher — and outpatient rates so much lower — than in El Paso.

Further research is needed, such as the variations study mandated by the Affordable Care Act that is now being carried out under the auspices of the Institute of Medicine. But our preliminary results are consistent with the idea that health care providers can respond quite differently to incentives embedded in large federal programs such as Medicare compared to those present in private insurance programs.

http://content.healthaffairs.org/cgi/content/abstract/29/12/2302

And…

Study: Private insurance plans better at controlling costs

By Jason Millman
The Hill
December 7, 2010

Private insurance plans might be better at controlling healthcare costs than Medicare, according to a Health Affairs study released Tuesday morning.

http://thehill.com/blogs/healthwatch/medicare/132329-study-private-insurance-plans-better-at-controlling-costs

And…

The Cost Conundrum

Posted by Atul Gawande
The New Yorker
December 6, 2010

A new study introduces a fascinating — and hopeful — wrinkle to the McAllen, Texas, cost conundrum.

I visited McAllen, some readers may recall, to speak with doctors and hospital leaders about why its costs for Medicare patients have, for going on a decade, run almost double that for Medicare patients up the border in El Paso—almost sixteen thousand dollars per person versus eight thousand three hundred dollars in 2007. The populations had similar levels of poverty and poor health. By many quality measures, the hospitals were, if anything, better in El Paso. Yet the Medicare data showed McAllen doctors ordering markedly more tests, more surgery, more specialist visits, more home health services, more hospital admissions, more everything.

Yet can we really extrapolate from the costs of older Medicare patients to all younger ones? After the article was published, Texas Blue Cross Blue Shield gave unusual access to the complete cost files of their members under the age of sixty-five to researchers at the University of Texas School of Public Health and Dartmouth. This week, in the journal Health Affairs, the researchers published their findings. They discovered a shift with age. For members fifty or older, McAllen was indeed significantly more expensive than El Paso. But for those under fifty, McAllen was downright ordinary — even less costly than El Paso. They had escaped high-cost care.

It’s true that employees younger than fifty with Blue Cross coverage are a somewhat distinctive group. They are healthier than average and account for only a small percentage of local health costs. Nationally, people older than fifty account for about seventy per cent of total spending; among people under fifty, the poor and disabled account for much of the rest. The overall cost problem remains. But there is an important revelation here: not all the health care in a high-cost community has to be out of whack. The questions we then must ask are why the pattern is different for some groups of people, and whether such differences suggest ways to change the pattern for everyone.

There are two main explanations for the discrepancy: McAllen doctors could simply offer a lower-cost care for the kinds of conditions people under fifty have (pregnancies and traumatic injuries tend to be the big-ticket items); or Blue Cross could be particularly effective at restricting overspending. It’s hard to know which is the answer. Looking at the evidence available, we can’t be sure. But I am rooting for the idea that Blue Cross is making a difference.

http://www.newyorker.com/online/blogs/newsdesk/2010/12/the-cost-conundrum.html

According to this new study published in Health Affairs, the widely-publicized differences in Medicare use and spending between McAllen and El Paso did not occur in those individuals covered by Blue Cross and Blue Shield of Texas (BCBST), at least not quite. Today the media are reporting this study as demonstrating that private insurance plans are better at controlling costs than is Medicare. A closer look at the findings should make us question this conclusion.

Atul Gawande’s original report certainly confirmed that both health care use and spending in Medicare were much higher in McAllen than in El Paso, which he attributed to a culture of doctors in McAllen who treated patients as profit centers by increasing the intensity of services.

Is it true that BCBST was able to control the excesses of the McAllen physicians through managed care and other incentives? Or is there a more plausible explanation?

The population studied was insured by BCBST, which meant that, especially for the portion under 50, they were primarily healthy employees and their young, healthy families, certainly much healthier than the Medicare population. These individuals do not need much health care, and what they do use is quite straightforward. Preventive services, maternity care, fractures, acute illnesses and the such all have simple diagnostic and management algorithms. There really isn’t much leeway for adding superfluous services, so it is no surprise that use and spending would be about the same in both McAllen and El Paso.

What about the people over 50 on BCBST? These people are beginning to develop chronic disorders that do require more health care. During a continuum of care, there are more options for physicians to increase the frequency and intensity of services. For patients over 65 on Medicare, McAllen physicians do provide greater intensity of care, but does BCBST’s private insurer management techniques successfully control these excesses for patents under 65?

For BCBST patients aged 50 to 64, inpatient admissions in McAllen were 89 percent higher than in El Paso. Per patient inpatient spending was 117 percent higher in McAllen. Although outpatient use and spending were lower, overall spending was still 23 percent higher in McAllen for this age group. Besides, where are the real bucks? In the hospital or in outpatient care?

Gawande is “rooting for the idea that Blue Cross is making a difference.” Is an 89 percent increase in hospitalization rates really an endorsement of the management services that the private insurers keep selling us?

And the media? You would think that they would read the study before reporting on it (only 8 pages) instead of merely lifting a few points from the Health Affairs press release this morning. The title: “New Health Affairs Study Suggests That Private Insurers Control Health Care Spending Better Than Medicare.” Maybe the Health Affairs editors also should read their own articles before issuing press releases on them.

Socialized medicine comes to Yosemite

Innovative Plan To Keep Yosemite Clinic Open

By Diana Marcum
California Healthline
December 6, 2010

The medical clinic in Yosemite National Park… will become the first medical clinic in a national park to be operated by the U.S. Public Health Service Commissioned Corps.

It’s an unusual solution to a problem that threatened to leave the storied tourist draw without a clinic.

Tenet — the Dallas-based investor-owned hospital company that’s owned the clinic since 1995 — has been losing money on the facility every year.

“There’s lots of patients, but not a lot of revenue,” said Yosemite spokesperson Scott Gediman, adding, “The bottom line was we were looking for a way to keep a clinic open when it couldn’t make money.”

Most national parks don’t have their own clinics because they are near cities. But no clinic in Yosemite would mean rangers, tourists and workers in the country’s most visited park would be more than an hour’s drive away from medical care.

In October, as the clinic’s fate remained precarious, local climbers hung a sign reading “Save Our Clinic ” high up on El Capitan, the iconic 3,000-foot vertical rock formation at the north end of Yosemite Valley.

Housed in a stone and timber lodge in the heart of Yosemite Village, the clinic, which opened in 1929, is a family practice and outdoor adventure emergency department rolled into one. The clinic has served about 7,000 patients annually.

“We see everything here,” Sean Pence, the clinic manager, said. He added, “We get colds and flus, abrasions, heart attacks. We’re orthopedic central — lots of ankles and wrist injuries from falls. We see snowboarders with head injuries, climbers with frostbite.”

The two agencies — Public Health Service and the National Park Service — will man the clinic together. The health service is providing doctors and nurses, and the park service is providing building maintenance and support staff.

http://www.californiahealthline.org/features/2010/innovative-plan-to-keep-yosemite-clinic-open.aspx

Comment:

By Don McCanne, MD

Yosemite visitors know how isolated Yosemite Valley is. With a large permanent park staff and the highest volume of tourists of all national parks, Yosemite’s 24-hour clinic has been a godsend for those with urgent or sometimes life-threatening needs. So what were they to do when the clinic’s operator, investor-owned Tenet, decided to leave because the clinic wasn’t profitable?

Where do we usually turn when there is a crying need that the private sector fails to fulfill? Did I hear… The Government?

Yes. Talk about an ideal solution. Our own Public Health Service providing health care in our own national park. Socialized medicine at its finest. This is an essential service being provided to those who need it – not based on the ability to milk a profit, but based simply on meeting the health care needs of a community, albeit an unusual community including many foreign visitors.

Think of how fortunate the park employees and visitors will be. They will have available, 24 hours a day, medical services of which we can be envious. Think about that. Wouldn’t it be nice if we had in our own communities 24-hour clinics staffed with our own public employees who were there with a mission to serve, rather than a mission to enhance profits?

Maybe we’ve been too wimpy in pushing merely for a single payer insurance program. We’re already pay more per capita through the tax system than do nations with socialized medicine. Maybe we should be advocating for a better deal by improving and expanding the National Health Service so that we could all have access to it. Not just Medicare for all, but National Health Service for all.

The opponents of health care reform have moved the goal posts so far to the right that even a Blue Cross/Blue Shield-like public option has been excluded. Suppose we move our goal posts far to the left to a program of socialized medicine – an improved National Health Service for all. If the opponents of reform really believed that was a genuine threat, maybe they would meet us center field with a private health care delivery system financed by a single payer Medicare for all.

Can we expect that coming from a government that is too timid to stand up to the billionaires who have benefited from the massive transfer from the workers to the wealthy? A government that would dig our deficit hole deeper by not allowing a temporary, decade-long, partial tax holiday for billionaires to expire as scheduled? Don’t think so. Obama promised health care for all, but instead he is delivering much more wealth for the wealthiest, and we’re paying.

Single-Payer Health Insurance for Oregon

By Rep. Michael Dembrow
BlueOregon.com
December 3, 2010

Rep. Dembrow is a Democrat that represents House District 45, which includes portions of Northeast Portland, Maywood Park, and Parkrose.

There are many good things we can say about health care reform at the state and federal level. Here in Oregon we passed the Healthy Kids Act, extending coverage to all of Oregon’s uninsured children, a really remarkable achievement. As a result of the federal reforms, children all over the country can no longer be denied coverage because of pre-existing conditions, and in a few years that will extend to everyone. Young adults can stay on their parents’ coverage until they are 26. Seniors see an end to the donut-hole in their prescription drug coverage. If things stay on track, an insurance exchange for individuals and small businesses is coming, and perhaps even some kind of public option for Oregon.

Despite these points of progress, though, many gaps will still remain in these plans. I see three problems in particular:

  • First, there will still be people who will be left out, and that’s going to continue to drive up the cost of coverage for the rest of us.
  • Second, for most people insurance is still going to be tied to employment. So if you lose your job, change your job, or drop below full-time at your job, you’re going to have to change your coverage or even worse–you’re going to lose your coverage entirely.
  • Third, for the most part our system will still rely on private insurance companies, who charge very high administrative fees, and whose primary interest is their own profits.

At best, what we’re going to continue to have is a patchwork system. There’s a real danger that people are going to fall through the cracks, middle-class families are going to pay more, and small businesses are going to continue to be hammered.

Fortunately, one of the best things that federal health insurance reform did was open the door to further experimentation by the states. Thanks in large part to work done by Senator Wyden, states can try out their own solutions, as long as they are expanding access to quality healthcare to more people more affordably.

I believe that the best solution to the three problems that I mentioned above will be a “single payer” system. This would be a system like Medicare, but extended to all. Everyone would pay into the system in a progressive manner, and it would relieve the burden on Oregon’s small businesses. Initial projections show that we could create a system that in total would cost no more than we are currently paying as individuals, businesses, and the state—but everyone would be covered, would have access to quality care by the provider of their choice, and the rise in costs could be contained.

One of the real problems with the Federal reform process was that advocates of single payer were never allowed a seat at the table. For reasons of politics and influence and strategy it was ruled out before it was even considered. That’s wrong, it’s bad government, and we need to try to make it right.

I would like to see Oregon taking steps to move in this direction. So I’ve partnered with a coalition of single payer advocates—Health Care for All Oregon, Physicians for a National Health Program, Jobs with Justice, and the Oregon League of Women Voters—to develop The Affordable Health Care for All Oregonians Act for the 2011 legislative session. To see the concepts behind the bill, go to the Health Care for All Oregon (HCAO) website. Senator Chip Shields has committed to introduce the bill on the Senate side, and a number of my legislative colleagues have indicated interest in co-sponsoring.

Obviously, getting to single payer is a long-term project. It’s not just about moving a piece of legislation; it’s a movement. It’s going to require ongoing commitment, an enormous amount of effort, organizing, and education. It’s a movement that needs to reach beyond the usual confines of the mainstream media. Please let me know if you’re willing to help.

http://www.blueoregon.com/2010/12/single-payer-health-insurance-oregon/

Socialized medicine comes to Yosemite

Innovative Plan To Keep Yosemite Clinic Open

By Diana Marcum
California Healthline
December 6, 2010

The medical clinic in Yosemite National Park… will become the first medical clinic in a national park to be operated by the U.S. Public Health Service Commissioned Corps.

It’s an unusual solution to a problem that threatened to leave the storied tourist draw without a clinic.

Tenet — the Dallas-based investor-owned hospital company that’s owned the clinic since 1995 — has been losing money on the facility every year.

“There’s lots of patients, but not a lot of revenue,” said Yosemite spokesperson Scott Gediman, adding, “The bottom line was we were looking for a way to keep a clinic open when it couldn’t make money.”

Most national parks don’t have their own clinics because they are near cities. But no clinic in Yosemite would mean rangers, tourists and workers in the country’s most visited park would be more than an hour’s drive away from medical care.

In October, as the clinic’s fate remained precarious, local climbers hung a sign reading “Save Our Clinic ” high up on El Capitan, the iconic 3,000-foot vertical rock formation at the north end of Yosemite Valley.

Housed in a stone and timber lodge in the heart of Yosemite Village, the clinic, which opened in 1929, is a family practice and outdoor adventure emergency department rolled into one. The clinic has served about 7,000 patients annually.

“We see everything here,” Sean Pence, the clinic manager, said. He added, “We get colds and flus, abrasions, heart attacks. We’re orthopedic central — lots of ankles and wrist injuries from falls. We see snowboarders with head injuries, climbers with frostbite.”

The two agencies — Public Health Service and the National Park Service — will man the clinic together. The health service is providing doctors and nurses, and the park service is providing building maintenance and support staff.

http://www.californiahealthline.org/features/2010/innovative-plan-to-keep-yosemite-clinic-open.aspx

Yosemite visitors know how isolated Yosemite Valley is. With a large permanent park staff and the highest volume of tourists of all national parks, Yosemite’s 24-hour clinic has been a godsend for those with urgent or sometimes life-threatening needs. So what were they to do when the clinic’s operator, investor-owned Tenet, decided to leave because the clinic wasn’t profitable?

Where do we usually turn when there is a crying need that the private sector fails to fulfill? Did I hear… The Government?

Yes. Talk about an ideal solution. Our own Public Health Service providing health care in our own national park. Socialized medicine at its finest. This is an essential service being provided to those who need it – not based on the ability to milk a profit, but based simply on meeting the health care needs of a community, albeit an unusual community including many foreign visitors.

Think of how fortunate the park employees and visitors will be. They will have available, 24 hours a day, medical services of which we can be envious. Think about that. Wouldn’t it be nice if we had in our own communities 24-hour clinics staffed with our own public employees who were there with a mission to serve, rather than a mission to enhance profits?

Maybe we’ve been too wimpy in pushing merely for a single payer insurance program. We’re already pay more per capita through the tax system than do nations with socialized medicine. Maybe we should be advocating for a better deal by improving and expanding the National Health Service so that we could all have access to it. Not just Medicare for all, but National Health Service for all.

The opponents of health care reform have moved the goal posts so far to the right that even a Blue Cross/Blue Shield-like public option has been excluded. Suppose we move our goal posts far to the left to a program of socialized medicine – an improved National Health Service for all. If the opponents of reform really believed that was a genuine threat, maybe they would meet us center field with a private health care delivery system financed by a single payer Medicare for all.

Can we expect that coming from a government that is too timid to stand up to the billionaires who have benefited from the massive transfer from the workers to the wealthy? A government that would dig our deficit hole deeper by not allowing a temporary, decade-long, partial tax holiday for billionaires to expire as scheduled? Don’t think so. Obama promised health care for all, but instead he is delivering much more wealth for the wealthiest, and we’re paying.

Shumlin meets Obama during Washington visit

By Nicole Gaudiano
Burlington Free Press
Friday, December 3, 2010

WASHINGTON — Vermont Gov.-elect Peter Shumlin said health care and education dominated his conversations during a “productive and exciting” two-day trip to Washington.

Thursday, he was one of four Democrats among 23 newly elected governors to meet President Barack Obama and Vice President Joe Biden. He met with administration officials and the Vermont congressional delegation, as well.

“I come away optimistic that the changes that we need to make to create jobs for Vermonters and lift the middle class will be met with enthusiasm by the Obama administration,” Shumlin said after his visit.

Shumlin said he was encouraged about the prospects of getting a federal waiver to implement a single-payer health care system in Vermont.

He said Obama and Health and Human Services Secretary Kathleen Sebelius made it clear that they see states as laboratories for change. He met twice with Sebelius, who said she is open to working with states as long as governors aren’t trying to reduce health-care standards.

He didn’t use the controversial term “single-payer” with Obama, but he did with Sebelius and the White House council on health care.

The first step, however, is to work on designing a system that contains costs, he said.

Shumlin said he didn’t get much one-on-one time with Obama but mentioned his goals for health care and early childhood development to him during lunch.

During a brief meeting with Education Secretary Arne Duncan, Shumlin said, he urged Duncan to seek state matching funds as he presses Congress for $300 million for early childhood education grants to states. Vermont could have a disproportionate advantage if the states are required to match the funding, he said.

“A lot of these governors got swept in on the tea party movement, and I don’t think you’ll see their states committing to early childhood education,” he said.

http://www.burlingtonfreepress.com/article/20101203/NEWS03/12030308/Shumlin-meets-Obama-during-Washington-visit

Deficit panel's Rx the wrong medicine, plus holiday wishes

December 3, 2010

Dear PNHP colleagues and friends,

On Wednesday the co-chairs of the Deficit Commission, Erskine Bowles and former Sen. Alan Simpson, called for shifting more health costs onto the shoulders of Medicare beneficiaries as a way to reduce federal spending, among other measures.

Almost instantly, PNHP issued a news release containing a rejoinder by Dr. Margaret Flowers, our congressional fellow. That release, which was picked up by The Hill and other news outlets, is but the latest action PNHP has taken this year to protect the Medicare program, even as we continue to vigorously advocate for an improved Medicare for all, i.e. single-payer national health insurance.

Other actions have included Dr. Flowers’ testimony before the president’s Deficit Commission, PNHP members getting opinion pieces published in leading newspapers, and the holding of a Congressional Briefing on the issue with Princeton professor Tsung-Mei Cheng and PNHP board member Dr. Olveen Carrasquillo, among others.

This morning, 11 members of the 18-member Deficit Commission, a mix of conservatives and liberals, Republicans and Democrats, voted to support the Bowles-Simpson plan. Seven voted against it. The 11 votes for the plan fell short of the 14 votes needed to trigger immediate congressional action.

However, already the commission co-chairs and others are hailing the vote as a mandate to re-raise their proposals, in whole or in part, in the next session of Congress. So defenders of our nation’s social insurance programs, as imperfect as those programs may be, must remain vigilant.

Of course, much more work needs to be done to assure that everyone in the United States receives the comprehensive, quality health care they deserve. Single-payer health reform remains a moral and economic imperative.

During this holiday season we appeal to you to help PNHP continue its many-sided work by making a generous tax-deductible donation. Reaffirm your commitment to see “Everybody in, nobody out.”

And best wishes to you and your family in the coming days and New Year.

Cordially,


Quentin Young, M.D., M.A.C.P.
National Coordinator    


Mark Almberg
Communications Director

FOR IMMEDIATE RELEASE
Dec. 1, 2010
 
Contact:
Margaret Flowers, M.D.
Garrett Adams, M.D., M.P.H.
Oliver Fein, M.D.
Quentin Young, M.D.Mark Almberg, PNHP, (312) 782-6006, mark@pnhp.org

Deficit panel’s Rx is wrong medicine: doctors’ group

Requiring Medicare beneficiaries to pay more for their care will fail to control skyrocketing health costs and lead to worse health outcomes and increased poverty

Only an improved Medicare for All can rein in costs and provide quality, universal care, says Physicians for a National Health Program

Proposed changes to Medicare unveiled by the co-chairs of the Deficit Commission, including their proposal to increase out-of-pocket payments by Medicare beneficiaries, won’t control health costs but will hurt patients and should be rejected, a national physicians’ group said today. The only effective way to rein in costs is through an improved Medicare-for-All program, they said.

“The co-chairmen’s plan to impose increased cost-sharing on Medicare beneficiaries is the wrong medicine,” said Dr. Margaret Flowers, congressional fellow for the 18,000-member Physicians for a National Health Program.

“Seniors and people with disabilities in the Medicare program already face substantial financial barriers to care in the form of existing co-payments and deductibles,” she said. “For example, recent research shows that the 25 percent of Medicare beneficiaries with the highest spending spend at least 30 percent of their income on health care.

“Raising these financial barriers still further with increased deductibles and co-insurance costs will result in seniors delaying or forgoing doctor visits and other needed care, while increasing the incidence of costly hospitalizations. Greater out-of-pocket expenses will also increase the economic hardship faced by their families.”

“Medicare is not the cause of rising health care costs but its victim,” she said. “The real culprit for skyrocketing costs is our irrational, fragmented, market-based model of paying for health care, which chiefly benefits the private health insurance industry and Big Pharma, not patients or physicians. The commission co-chairs are silent on this matter.”

Flowers continued: “Rising health costs can be reined in, but only if we adopt a single-payer, Medicare-for-All program. Such a program would slash $400 billion annually in administrative waste associated with our present private-insurance model of financing care, enough to cover the 50 million uninsured and to eliminate everyone’s co-pays and deductibles. It would also employ proven single-payer cost-control tools like the ability to negotiate drug prices and provider fees and to set global budgets for hospitals.”

She continued: “Enacting an improved Medicare for all is the only rational, evidence-based way to control costs, in contrast with the co-chairs’ proposals. The latter would simply shift the problem of rising costs onto vulnerable seniors at the time they need care – precisely when they are least able to navigate the complex health system.”

Noting that some commission members favor privatizing the Medicare program by giving seniors vouchers to buy skimpy private coverage, Flowers said that this would also shift costs onto Medicare beneficiaries, because the value of the vouchers would fall over time as health care costs rise faster than the value of the coupons.

“Vouchers or so-called premium supports don’t control costs, they shift them to the sick,” she said.

“Studies also show that per capita health costs are rising more slowly for those on Medicare than for those with private health insurance, so pushing more seniors into the clutches of the private insurers will only accelerate rising costs,” she said. “Private, for-profit Medicare Advantage plans are also 13 percent more costly than traditional Medicare, due in large part to their higher administrative costs, including lavish CEO salaries.”

She said the proposed cuts in Medicare payments to hospitals for medical education will harm the training of badly needed primary care doctors and the primary care infrastructure, and will disproportionately hurt safety-net hospitals and other hospitals that serve large numbers of the poor.

Flowers said her group has deep concerns about the co-chairs’ other proposals pertaining to Medicare, Medicaid and Social Security, most of which would place even greater financial burdens on backs of the nation’s working population, the poor and the sick.

She said the new federal health law, despite some of its beneficial provisions, perpetuates the private-insurance-based model of financing care and therefore effectively precludes real cost control and universal cover
age.

“The fundamental solution to our health care woes is an improved Medicare for All,” Flowers said. “The evidence shows a single-payer national health insurance program will save lives and save money. It will be financially sustainable. An improved Medicare for All will put our nation on the path of becoming one of the best health systems in the world.”

Physicians for a National Health Program (www.pnhp.org) is an organization of 18,000 doctors who support single-payer national health insurance. Dr. Flowers testified before the National Commission on Fiscal Responsibility and Reform at its public forum on July 6, 2010, and her testimony can be found here. To speak with a physician/spokesperson in your area, visit www.pnhp.org/stateactions or call (312) 782-6006.

Deficit panel’s Rx the wrong medicine, plus holiday wishes

December 3, 2010

Dear PNHP colleagues and friends,

On Wednesday the co-chairs of the Deficit Commission, Erskine Bowles and former Sen. Alan Simpson, called for shifting more health costs onto the shoulders of Medicare beneficiaries as a way to reduce federal spending, among other measures.

Almost instantly, PNHP issued a news release containing a rejoinder by Dr. Margaret Flowers, our congressional fellow. That release, which was picked up by The Hill and other news outlets, is but the latest action PNHP has taken this year to protect the Medicare program, even as we continue to vigorously advocate for an improved Medicare for all, i.e. single-payer national health insurance.

Other actions have included Dr. Flowers’ testimony before the president’s Deficit Commission, PNHP members getting opinion pieces published in leading newspapers, and the holding of a Congressional Briefing on the issue with Princeton professor Tsung-Mei Cheng and PNHP board member Dr. Olveen Carrasquillo, among others.

This morning, 11 members of the 18-member Deficit Commission, a mix of conservatives and liberals, Republicans and Democrats, voted to support the Bowles-Simpson plan. Seven voted against it. The 11 votes for the plan fell short of the 14 votes needed to trigger immediate congressional action.

However, already the commission co-chairs and others are hailing the vote as a mandate to re-raise their proposals, in whole or in part, in the next session of Congress. So defenders of our nation’s social insurance programs, as imperfect as those programs may be, must remain vigilant.

Of course, much more work needs to be done to assure that everyone in the United States receives the comprehensive, quality health care they deserve. Single-payer health reform remains a moral and economic imperative.

During this holiday season we appeal to you to help PNHP continue its many-sided work by making a generous tax-deductible donation. Reaffirm your commitment to see “Everybody in, nobody out.”

And best wishes to you and your family in the coming days and New Year.

Cordially,


Quentin Young, M.D., M.A.C.P.
National Coordinator    


Mark Almberg
Communications Director

FOR IMMEDIATE RELEASE
Dec. 1, 2010
 
Contact:
Margaret Flowers, M.D.
Garrett Adams, M.D., M.P.H.
Oliver Fein, M.D.
Quentin Young, M.D.Mark Almberg, PNHP, (312) 782-6006, mark@pnhp.org

Deficit panel’s Rx is wrong medicine: doctors’ group

Requiring Medicare beneficiaries to pay more for their care will fail to control skyrocketing health costs and lead to worse health outcomes and increased poverty

Only an improved Medicare for All can rein in costs and provide quality, universal care, says Physicians for a National Health Program

Proposed changes to Medicare unveiled by the co-chairs of the Deficit Commission, including their proposal to increase out-of-pocket payments by Medicare beneficiaries, won’t control health costs but will hurt patients and should be rejected, a national physicians’ group said today. The only effective way to rein in costs is through an improved Medicare-for-All program, they said.

“The co-chairmen’s plan to impose increased cost-sharing on Medicare beneficiaries is the wrong medicine,” said Dr. Margaret Flowers, congressional fellow for the 18,000-member Physicians for a National Health Program.

“Seniors and people with disabilities in the Medicare program already face substantial financial barriers to care in the form of existing co-payments and deductibles,” she said. “For example, recent research shows that the 25 percent of Medicare beneficiaries with the highest spending spend at least 30 percent of their income on health care.

“Raising these financial barriers still further with increased deductibles and co-insurance costs will result in seniors delaying or forgoing doctor visits and other needed care, while increasing the incidence of costly hospitalizations. Greater out-of-pocket expenses will also increase the economic hardship faced by their families.”

“Medicare is not the cause of rising health care costs but its victim,” she said. “The real culprit for skyrocketing costs is our irrational, fragmented, market-based model of paying for health care, which chiefly benefits the private health insurance industry and Big Pharma, not patients or physicians. The commission co-chairs are silent on this matter.”

Flowers continued: “Rising health costs can be reined in, but only if we adopt a single-payer, Medicare-for-All program. Such a program would slash $400 billion annually in administrative waste associated with our present private-insurance model of financing care, enough to cover the 50 million uninsured and to eliminate everyone’s co-pays and deductibles. It would also employ proven single-payer cost-control tools like the ability to negotiate drug prices and provider fees and to set global budgets for hospitals.”

She continued: “Enacting an improved Medicare for all is the only rational, evidence-based way to control costs, in contrast with the co-chairs’ proposals. The latter would simply shift the problem of rising costs onto vulnerable seniors at the time they need care – precisely when they are least able to navigate the complex health system.”

Noting that some commission members favor privatizing the Medicare program by giving seniors vouchers to buy skimpy private coverage, Flowers said that this would also shift costs onto Medicare beneficiaries, because the value of the vouchers would fall over time as health care costs rise faster than the value of the coupons.

“Vouchers or so-called premium supports don’t control costs, they shift them to the sick,” she said.

“Studies also show that per capita health costs are rising more slowly for those on Medicare than for those with private health insurance, so pushing more seniors into the clutches of the private insurers will only accelerate rising costs,” she said. “Private, for-profit Medicare Advantage plans are also 13 percent more costly than traditional Medicare, due in large part to their higher administrative costs, including lavish CEO salaries.”

She said the proposed cuts in Medicare payments to hospitals for medical education will harm the training of badly needed primary care doctors and the primary care infrastructure, and will disproportionately hurt safety-net hospitals and other hospitals that serve large numbers of the poor.

Flowers said her group has deep concerns about the co-chairs’ other proposals pertaining to Medicare, Medicaid and Social Security, most of which would place even greater financial burdens on backs of the nation’s working population, the poor and the sick.

She said the new federal health law, despite some of its beneficial provisions, perpetuates the private-insurance-based model of financing care and therefore effectively precludes real cost control and universal coverage.

“The fundamental solution to our health care woes is an improved Medicare for All,” Flowers said. “The evidence shows a single-payer national health insurance program will save lives and save money. It will be financially sustainable. An improved Medicare for All will put our nation on the path of becoming one of the best health systems in the world.”

Physicians for a National Health Program (www.pnhp.org) is an organization of 18,000 doctors who support single-payer national health insurance. Dr. Flowers testified before the National Commission on Fiscal Responsibility and Reform at its public forum on July 6, 2010, and her testimony can be found here. To speak with a physician/spokesperson in your area, visit www.pnhp.org/stateactions or call (312) 782-6006.

Victor Fuchs explains resistance to national health insurance

Government Payment for Health Care — Causes and Consequences

By Victor R. Fuchs, Ph.D.
The New England Journal of Medicine
December 1, 2010

The most obvious, easily quantifiable difference between the United States and countries that have national health insurance is that those countries spend much less on health care, whether measured per capita or as a share of the gross domestic product. Not only is the United States the highest spender, but the gap between it and the other countries is unnaturally large.

The difficult question is why the special interests have more influence over health policy in the United States than they do elsewhere. The answer probably lies in part in the structure of the U.S. political system, including the role of primary elections, long and expensive election campaigns, the separation of powers, the numerous congressional committees and subcommittees with overlapping authority, and the need for supermajorities in the Senate in order to pass meaningful legislation. But the quirks of the political system can’t be the whole answer. If the U.S. public wanted a different outcome, over time they could move policy in that direction.

A second large difference between health care in the United States and in countries with national health insurance is the more important role of redistribution in the latter countries. Such redistribution is evident in the greater equality of access to care and in the sharing of costs through taxes on income or payroll, value-added tax or sales tax, or other forms of taxation that are either proportional or progressive with respect to income. Of course, all insurance is redistributive after the fact. The large amount of care utilized by a small proportion of policy holders is paid from the premiums of others who use little care. The important distinction is that under a national health insurance system, the redistribution occurs before the event, since it is clear that some individuals will pay much less tax than the value of their insurance and some will pay much more.

Since redistribution plays a greater role in the health care systems of other countries than it does in the United States, there is an implication that a more egalitarian ethos holds sway in Europe, Canada, Australia, and New Zealand. From de Tocqueville to the present, many observers have commented on the stronger role of individualism in the United States than elsewhere, but there is no consensus regarding its explanation. Possible contributors to the phenomenon include the heterogeneity of the population, the revolutionary origins of the country with its dedication to “life, liberty, and the pursuit of happiness,” and the absence of many centuries of a common language, history, and culture. In speculating about the possible rise of despotism in a democracy, de Tocqueville painted a grim picture of individualism taken to the extreme. He wrote, “Each . . . living apart, was a stranger to all the rest — his children and private friends constitute to him the whole of mankind; as for the rest of his fellow citizens, he is close to them, but he sees them not; he exists but in himself and for himself alone.”

The lower spending and the greater redistribution in countries that have national health insurance are not independent phenomena. If spending in these countries were at U.S. levels, the taxation required to accomplish their redistribution goals would probably wreck the economy. Given the social or political desire to redistribute health care resources, constraints on spending become a necessity. These constraints take various forms, such as controls over the number and specialty mix of physicians, limits on facilities and acquisition of expensive technologies, hard bargaining over prices charged by drug companies and other suppliers, and restraints on physicians’ fees and incomes, among others.

Because the governments in these countries pay for most medical care — usually 70 to 90% of total expenditures — they are in a good position to apply these cost-restraining measures. They have what economists call “monopsony power.” The U.S. government, although it pays for almost 50% of health care, makes very little use of its power to restrain costs. Thus, in one sense, Americans wind up in the worst of all worlds, with government bearing a big part of the burden of paying for health care, with the concomitant large burden of taxes, but exercising very little control over the cost of care. As an indication of how absurd the situation is in the United States, government currently spends more per capita for health care than eight European countries spend from all sources on health care.

http://healthpolicyandreform.nejm.org/?p=13263

And…

What’s Ahead for Health Insurance in the United States?

By Victor R. Fuchs, Ph.D.
The New England Journal of Medicine
June 6, 2002

The announcement that most of the nation’s biggest insurers — Aetna, CIGNA, Humana, the United Health Group, and Wellpoint Health Network — will be introducing a new kind of health plan during the next year or two signals the beginning of a new era in health insurance in the United States. These plans feature a complicated menu of premiums, copayments, and deductibles. One of their major effects will be to shift the burden of health care costs from employees who use little care to those who use more. Thus, the new plans will be another nail in the coffin of health insurance as a form of social insurance.

The Reemergence of Social Insurance

The case for the fairness of the social-insurance model will be strengthened as people realize that most health problems have, at least in part, a genetic basis. The case for the model’s efficiency will benefit from recognition that employment-based insurance has high administrative costs but provides no advantages to society as a whole. The desire to exert more direct control over increasing expenditures will provide an additional reason to introduce some form of national health insurance.

The timing of such a change, however, will depend largely on factors external to health care. Major changes in health policy are political acts undertaken for political purposes. The political nature of such changes was apparent when Bismarck introduced national health insurance to the new German state in the 19th century. It was apparent when England adopted national health insurance after World War II; and it will be apparent in the United States as well. National health insurance will probably come to the United States after a major change in the political climate — the kind of change that often accompanies a war, a depression, or large-scale civil unrest. Until then, the chief effect of the new plans will be to make young and healthy workers better off at the expense of their older, sicker colleagues.

http://www.nejm.org/doi/full/10.1056/NEJM200206063462314

Comment: 

By Don McCanne, MD

In his 2002 NEJM article, Victor Fuchs explained the inevitability of national health insurance in the United States, but cautioned that will likely only come to our nation “after a major change in the political climate – the kind of change that often accompanies a war, a depression, or large-scale civil unrest.” In his current NEJM article, he provides plausible reasons as to why there has been such resistance to the inevitability of national health insurance – intense enough perhaps to require political upheaval, if we expect action. We have been trying war and deep recession. Does that mean our only hope left is “large-scale civil unrest”?

Victor Fuchs explains resistance to national health insurance

Government Payment for Health Care — Causes and Consequences

By Victor R. Fuchs, Ph.D.
The New England Journal of Medicine
December 1, 2010

The most obvious, easily quantifiable difference between the United States and countries that have national health insurance is that those countries spend much less on health care, whether measured per capita or as a share of the gross domestic product. Not only is the United States the highest spender, but the gap between it and the other countries is unnaturally large.

The difficult question is why the special interests have more influence over health policy in the United States than they do elsewhere. The answer probably lies in part in the structure of the U.S. political system, including the role of primary elections, long and expensive election campaigns, the separation of powers, the numerous congressional committees and subcommittees with overlapping authority, and the need for supermajorities in the Senate in order to pass meaningful legislation. But the quirks of the political system can’t be the whole answer. If the U.S. public wanted a different outcome, over time they could move policy in that direction.

A second large difference between health care in the United States and in countries with national health insurance is the more important role of redistribution in the latter countries. Such redistribution is evident in the greater equality of access to care and in the sharing of costs through taxes on income or payroll, value-added tax or sales tax, or other forms of taxation that are either proportional or progressive with respect to income. Of course, all insurance is redistributive after the fact. The large amount of care utilized by a small proportion of policy holders is paid from the premiums of others who use little care. The important distinction is that under a national health insurance system, the redistribution occurs before the event, since it is clear that some individuals will pay much less tax than the value of their insurance and some will pay much more.

Since redistribution plays a greater role in the health care systems of other countries than it does in the United States, there is an implication that a more egalitarian ethos holds sway in Europe, Canada, Australia, and New Zealand. From de Tocqueville to the present, many observers have commented on the stronger role of individualism in the United States than elsewhere, but there is no consensus regarding its explanation. Possible contributors to the phenomenon include the heterogeneity of the population, the revolutionary origins of the country with its dedication to “life, liberty, and the pursuit of happiness,” and the absence of many centuries of a common language, history, and culture. In speculating about the possible rise of despotism in a democracy, de Tocqueville painted a grim picture of individualism taken to the extreme. He wrote, “Each . . . living apart, was a stranger to all the rest — his children and private friends constitute to him the whole of mankind; as for the rest of his fellow citizens, he is close to them, but he sees them not; he exists but in himself and for himself alone.”

The lower spending and the greater redistribution in countries that have national health insurance are not independent phenomena. If spending in these countries were at U.S. levels, the taxation required to accomplish their redistribution goals would probably wreck the economy. Given the social or political desire to redistribute health care resources, constraints on spending become a necessity. These constraints take various forms, such as controls over the number and specialty mix of physicians, limits on facilities and acquisition of expensive technologies, hard bargaining over prices charged by drug companies and other suppliers, and restraints on physicians’ fees and incomes, among others.

Because the governments in these countries pay for most medical care — usually 70 to 90% of total expenditures — they are in a good position to apply these cost-restraining measures. They have what economists call “monopsony power.” The U.S. government, although it pays for almost 50% of health care, makes very little use of its power to restrain costs. Thus, in one sense, Americans wind up in the worst of all worlds, with government bearing a big part of the burden of paying for health care, with the concomitant large burden of taxes, but exercising very little control over the cost of care. As an indication of how absurd the situation is in the United States, government currently spends more per capita for health care than eight European countries spend from all sources on health care.

http://healthpolicyandreform.nejm.org/?p=13263

And…

What’s Ahead for Health Insurance in the United States?

By Victor R. Fuchs, Ph.D.
The New England Journal of Medicine
June 6, 2002

The announcement that most of the nation’s biggest insurers — Aetna, CIGNA, Humana, the United Health Group, and Wellpoint Health Network — will be introducing a new kind of health plan during the next year or two signals the beginning of a new era in health insurance in the United States. These plans feature a complicated menu of premiums, copayments, and deductibles. One of their major effects will be to shift the burden of health care costs from employees who use little care to those who use more. Thus, the new plans will be another nail in the coffin of health insurance as a form of social insurance.

The Reemergence of Social Insurance

The case for the fairness of the social-insurance model will be strengthened as people realize that most health problems have, at least in part, a genetic basis. The case for the model’s efficiency will benefit from recognition that employment-based insurance has high administrative costs but provides no advantages to society as a whole. The desire to exert more direct control over increasing expenditures will provide an additional reason to introduce some form of national health insurance.

The timing of such a change, however, will depend largely on factors external to health care. Major changes in health policy are political acts undertaken for political purposes. The political nature of such changes was apparent when Bismarck introduced national health insurance to the new German state in the 19th century. It was apparent when England adopted national health insurance after World War II; and it will be apparent in the United States as well. National health insurance will probably come to the United States after a major change in the political climate — the kind of change that often accompanies a war, a depression, or large-scale civil unrest. Until then, the chief effect of the new plans will be to make young and healthy workers better off at the expense of their older, sicker colleagues.

http://www.nejm.org/doi/full/10.1056/NEJM200206063462314

In his 2002 NEJM article, Victor Fuchs explained the inevitability of national health insurance in the United States, but cautioned that will likely only come to our nation “after a major change in the political climate – the kind of change that often accompanies a war, a depression, or large-scale civil unrest.” In his current NEJM article, he provides plausible reasons as to why there has been such resistance to the inevitability of national health insurance – intense enough perhaps to require political upheaval, if we expect action. We have been trying war and deep recession. Does that mean our only hope left is “large-scale civil unrest”?