PNHP

Deficit panel's Rx is wrong medicine: doctors group

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 but instead 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

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

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 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.

Fiscal Commission – "hastening the public option"

Final Report of National Commission on Fiscal Responsibility and Reform

C-SPAN
December 1, 2010

From a discussion of the final recommendations, to be voted on by December 3:

Sen Dick Durbin (D-IL):  We are hastening the day when the only option left will be a public option. 

Rep. Paul Ryan (R-WI):  I think Sen. Durbin probably said it right. We are hastening the day when the only option is the public option. I think you’re right (directed to Sen. Durbin), and I think that this advances that possibility and likelihood.

Rep. Jeb Hensarling (R-TX):  I would agree with Sen. Durbin… you are hastening more people into the public option.

Rep. Jan Schakowsky (D-IL):  To say that we’re going to reduce our deficit and our debt by asking Medicare beneficiaries to pay more for their health care, I think is absolutely unconscionable.   …already 30 percent of their income going to health care costs, I think is absolutely the wrong way to go when we do have other options. I put on the table, not as an if-all-else fails, a public option to reduce health care costs.

http://www.c-span.org/Watch/Media/2010/12/01/HP/R/41336/Debt+Commission+recommends+Dramatic+Budget+Cuts+Votes+Friday.aspx

PNHP has issued a response to the commission recommendations:
“Deficit panel’s Rx is wrong medicine: doctors’ group”
https://pnhp.org/news/2010/december/deficit-panels-rx-is-wrong-medicine-doctors-group

Comment: 

By Don McCanne, MD

The commission members understand that health care is the greatest contributor to our federal budget deficit. Most of them recognize that the health spending recommendations in their final report are inadequate to control continuing cost escalation.

Some would reduce government spending by shifting more costs to Medicare beneficiaries, even though they understand that current out-of-pocket costs are already excessively burdensome. To others, that would be unconscionable.

There seemed to be an understanding by both Democratic and Republican commission members that the failure to control Medicare spending will hasten the day when the public option will be the only option.

Why a public option? Apparently there is bipartisan agreement that a government insurance program would be more effective in slowing future health care spending. They understand that government systems have worked well in other nations.

Where they are confused is that they seem to think that all you need is the option of choosing a government plan, and that is enough to enable all of the single payer efficiencies. Of course, this is where they’re wrong. A government plan offered within our market of private plans is incapable of instituting most of the changes that make single payer systems work. As simply another player in our fragmented, dysfunctional system, it would be a very feeble force for efficiency.

So what does this really mean? It says that both Republicans and Democrats know that we are going to have to have direct government involvement if we ever hope to control health care spending, but they still need to learn that there is a tremendous difference between a powerful single payer monopsony and a wimpy public option.

Fiscal Commission – “hastening the public option”

Final Report of National Commission on Fiscal Responsibility and Reform

C-SPAN
December 1, 2010

From a discussion of the final recommendations, to be voted on by December 3:

Sen Dick Durbin (D-IL):  We are hastening the day when the only option left will be a public option. 

Rep. Paul Ryan (R-WI):  I think Sen. Durbin probably said it right. We are hastening the day when the only option is the public option. I think you’re right (directed to Sen. Durbin), and I think that this advances that possibility and likelihood.

Rep. Jeb Hensarling (R-TX):  I would agree with Sen. Durbin… you are hastening more people into the public option.

Rep. Jan Schakowsky (D-IL):  To say that we’re going to reduce our deficit and our debt by asking Medicare beneficiaries to pay more for their health care, I think is absolutely unconscionable.   …already 30 percent of their income going to health care costs, I think is absolutely the wrong way to go when we do have other options. I put on the table, not as an if-all-else fails, a public option to reduce health care costs.

http://www.c-span.org/Watch/Media/2010/12/01/HP/R/41336/Debt+Commission+recommends+Dramatic+Budget+Cuts+Votes+Friday.aspx

PNHP has issued a response to the commission recommendations:
“Deficit panel’s Rx is wrong medicine: doctors’ group”
https://www.pnhp.org/news/2010/december/deficit-panels-rx-is-wrong-medicine-doctors-group

Comment: 

By Don McCanne, MD

The commission members understand that health care is the greatest contributor to our federal budget deficit. Most of them recognize that the health spending recommendations in their final report are inadequate to control continuing cost escalation.

Some would reduce government spending by shifting more costs to Medicare beneficiaries, even though they understand that current out-of-pocket costs are already excessively burdensome. To others, that would be unconscionable.

There seemed to be an understanding by both Democratic and Republican commission members that the failure to control Medicare spending will hasten the day when the public option will be the only option.

Why a public option? Apparently there is bipartisan agreement that a government insurance program would be more effective in slowing future health care spending. They understand that government systems have worked well in other nations.

Where they are confused is that they seem to think that all you need is the option of choosing a government plan, and that is enough to enable all of the single payer efficiencies. Of course, this is where they’re wrong. A government plan offered within our market of private plans is incapable of instituting most of the changes that make single payer systems work. As simply another player in our fragmented, dysfunctional system, it would be a very feeble force for efficiency.

So what does this really mean? It says that both Republicans and Democrats know that we are going to have to have direct government involvement if we ever hope to control health care spending, but they still need to learn that there is a tremendous difference between a powerful single payer monopsony and a wimpy public option.

Fiscal Commission – “hastening the public option”

Final Report of National Commission on Fiscal Responsibility and Reform

C-SPAN
December 1, 2010

From a discussion of the final recommendations, to be voted on by December 3:

Sen Dick Durbin (D-IL): We are hastening the day when the only option left will be a public option.

Rep. Paul Ryan (R-WI): I think Sen. Durbin probably said it right. We are hastening the day when the only option is the public option. I think you’re right (directed to Sen. Durbin), and I think that this advances that possibility and likelihood.

Rep. Jeb Hensarling (R-TX): I would agree with Sen. Durbin… you are hastening more people into the public option.

Rep. Jan Schakowsky (D-IL): To say that we’re going to reduce our deficit and our debt by asking Medicare beneficiaries to pay more for their health care, I think is absolutely unconscionable.   …already 30 percent of their income going to health care costs, I think is absolutely the wrong way to go when we do have other options. I put on the table, not as an if-all-else fails, a public option to reduce health care costs.

http://www.c-span.org/Watch/Media/2010/12/01/HP/R/41336/Debt+Commission+recommends+Dramatic+Budget+Cuts+Votes+Friday.aspx

PNHP has issued a response to the commission recommendations:
“Deficit panel’s Rx is wrong medicine: doctors’ group”
https://pnhp.org/news/2010/december/deficit-panels-rx-is-wrong-medicine-doctors-group

The commission members understand that health care is the greatest contributor to our federal budget deficit. Most of them recognize that the health spending recommendations in their final report are inadequate to control continuing cost escalation.

Some would reduce government spending by shifting more costs to Medicare beneficiaries, even though they understand that current out-of-pocket costs are already excessively burdensome. To others, that would be unconscionable.

There seemed to be an understanding by both Democratic and Republican commission members that the failure to control Medicare spending will hasten the day when the public option will be the only option.

Why a public option? Apparently there is bipartisan agreement that a government insurance program would be more effective in slowing future health care spending. They understand that government systems have worked well in other nations.

Where they are confused is that they seem to think that all you need is the option of choosing a government plan, and that is enough to enable all of the single payer efficiencies. Of course, this is where they’re wrong. A government plan offered within our market of private plans is incapable of instituting most of the changes that make single payer systems work. As simply another player in our fragmented, dysfunctional system, it would be a very feeble force for efficiency.

So what does this really mean? It says that both Republicans and Democrats know that we are going to have to have direct government involvement if we ever hope to control health care spending, but they still need to learn that there is a tremendous difference between a powerful single payer monopsony and a wimpy public option.

California's largest insurers continue to cheat

Blue Shield, Kaiser among state insurers fined

By Victoria Colliver
San Francisco Chronicle
November 30, 2010

State regulators Monday fined seven of California’s largest health insurers nearly $5 million for systematically failing to pay doctors and hospitals fairly and on time.

The California Department of Managed Health Care issued the fines following an 18-month audit in which investigators looked at a small but statistically significant sample of claims. The investigation found the plans were paying on average about 80 percent of the claims correctly, far below the legal threshold of 95 percent.

“Our clear and consistent message is that California’s hospitals and physicians must be paid fairly and on time,” said Cindy Ehnes, director of the Department of Managed Health Care, which is charged with regulating the states’ health maintenance organizations, or HMOs.

In addition to the fines, the companies must pay the doctors and hospitals restitution that is expected to run into the “tens of millions of dollars,” Ehnes said. The plans will also be required to come up with a plan to correct the problem and submit to future audits.

Five of the insurers, excluding Anthem and Blue Shield, were also found to have improper provider appeals processes.

When doctors and hospital officials try to dispute a claim, they often have to deal with the same individual who originally denied the claim in the appeals process, Ehnes said.

Cracking down on the health plans for not properly paying providers helps consumers, said Anthony Wright, executive director of Health Access California.

“Consumers would rather that the time and resources of health providers go to patient care, rather than in fighting to get insurers to pay correctly,” he said.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/11/30/BUSR1GJ01V.DTL

Comment: 

By Don McCanne, MD

What services do the private insurers provide for us? Processing claims? They won’t even do that right 20 percent of the time, according to this California audit. The total of $5 million in fines that they were assessed is so paltry that they have no incentive to discontinue their highly profitable policy of delaying and denying legitimate claims.

Let’s have the members of Congress fire the insurers and set up our own national health program – an improved Medicare that covers everyone. If they won’t do that then let’s fire them, replacing them with responsible elected stewards who will.

California’s largest insurers continue to cheat

Blue Shield, Kaiser among state insurers fined

By Victoria Colliver
San Francisco Chronicle
November 30, 2010

State regulators Monday fined seven of California’s largest health insurers nearly $5 million for systematically failing to pay doctors and hospitals fairly and on time.

The California Department of Managed Health Care issued the fines following an 18-month audit in which investigators looked at a small but statistically significant sample of claims. The investigation found the plans were paying on average about 80 percent of the claims correctly, far below the legal threshold of 95 percent.

“Our clear and consistent message is that California’s hospitals and physicians must be paid fairly and on time,” said Cindy Ehnes, director of the Department of Managed Health Care, which is charged with regulating the states’ health maintenance organizations, or HMOs.

In addition to the fines, the companies must pay the doctors and hospitals restitution that is expected to run into the “tens of millions of dollars,” Ehnes said. The plans will also be required to come up with a plan to correct the problem and submit to future audits.

Five of the insurers, excluding Anthem and Blue Shield, were also found to have improper provider appeals processes.

When doctors and hospital officials try to dispute a claim, they often have to deal with the same individual who originally denied the claim in the appeals process, Ehnes said.

Cracking down on the health plans for not properly paying providers helps consumers, said Anthony Wright, executive director of Health Access California.

“Consumers would rather that the time and resources of health providers go to patient care, rather than in fighting to get insurers to pay correctly,” he said.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/11/30/BUSR1GJ01V.DTL

Comment: 

By Don McCanne, MD

What services do the private insurers provide for us? Processing claims? They won’t even do that right 20 percent of the time, according to this California audit. The total of $5 million in fines that they were assessed is so paltry that they have no incentive to discontinue their highly profitable policy of delaying and denying legitimate claims.

Let’s have the members of Congress fire the insurers and set up our own national health program – an improved Medicare that covers everyone. If they won’t do that then let’s fire them, replacing them with responsible elected stewards who will.

Guess Who Opposes Reversing the Individual Mandate in Health Reform?

Insurers and other health care companies view the mandate as the law's bedrock—and the source of new profits

By Drew Armstrong
BusinessWeek, November 18, 2010

When the White House and Democratic lawmakers wrote the health-care overhaul bill, they concocted a sweet coating for the bitter medicine the health industry would have to swallow. In exchange for tighter regulation and numerous new directives, insurers, drugmakers, hospitals, and physicians got some 30 million new paying customers under the individual mandate requiring almost everyone to buy insurance starting in 2014 or pay a fine.

The individual mandate is now under attack in the courts and on Capitol Hill by Republicans, libertarians, and Tea Party enthusiasts who call it an affront to personal liberty. The industry, however, views it as the bedrock supporting the entire health reform law and is lobbying to keep it. The prospect of a vastly bigger market has helped spark a 7.4 percent rise since Jan. 1 in the Standard & Poor’s 500 Managed Health Care Index of publicly traded health-care companies.

For insurers, eliminating millions of potential customers while keeping other aspects of the overhaul would be a “nuclear nightmare,” says Robert Laszewski, president of Health Policy and Strategy Associates, a consulting firm that works with insurers. It would leave insurers without the extra revenue to cover higher costs from the law’s ban on the denial of coverage to people with pre-existing conditions or charging sicker patients higher premiums. “It’s the No. 1 lobby issue in the insurance industry right now,” says Laszewski.

At the same time, some industry groups are worried that Republican plans to undo the centerpiece of the law, which President Barack Obama signed in March, could unravel other backroom deals they cut with the White House, forcing them to fight costly legislative battles all over again.

Drugmakers, for example, agreed to pay $80 billion in taxes over 10 years and give discounts to help the elderly pay for drugs. In return, the manufacturers are guaranteed millions of new customers. The White House and Senate Democrats also arranged not to allow the Medicare program, which covers the elderly and disabled, to negotiate drug prices, as do most state Medicaid programs that cover the poor. Additionally, the Administration agreed to continue blocking the re-importation of drugs from Canada. Some lawmakers in both parties favor re-importation, and the pharmaceutical industry adamantly opposes it. Both deals help drugmakers fend off pressures to lower prices. Hospitals, drug and device makers, and doctors also stand to benefit from the law’s expansion of Medicaid coverage to 16 million more people by 2017.

Republicans have already proposed alternatives to the mandate that put less emphasis on covering the uninsured. Their plan, offered by soon-to-be Speaker of the House John A. Boehner of Ohio, has no individual mandate, allows people to buy coverage across state lines, and would cover just 3 million people, according to the Congressional Budget Office.

Republicans traditionally have supported the insurance industry, but the Tea Party’s success in redefining the debate in Washington has changed the equation, says Laszewski. Democratic ranks were also thinned in the recent midterm elections that, in many districts, turned on voter distaste for the health law. Now, neither party may be happy with the individual mandate. “It’s hard to find a provision with more bipartisan opposition,” says Doug Badger, a lobbyist and partner with Nickles Group, which counts Philadelphia-based insurer Cigna (CI) among its clients. Says Thomas P. Miller, a health-care fellow at the American Enterprise Institute: “When you pull that mandate apart from the rest, you have to wonder why you’re doing all those other things.”

Cigna Chief Executive Officer David M. Cordani has said he does not think it’s in the country’s best interest to repeal the law or pull out specific provisions. “It’s a dangerous path to remove individual components from the law without understanding the impact,” he said in a Nov. 9 PBS television interview.

The insurance mandate, though, is more than just a policy issue for some Republicans. It’s an assault on the Constitution. In the Senate, for instance, Utah Republican Orrin G. Hatch, the current ranking member of the Judiciary Committee, called the mandate “an astonishing expansion of federal power and busts the limits that the Constitution imposes on the federal government.”

In the House, Republican Representative Eric Cantor of Virginia, who will be House Majority Leader in January, “is not supportive” of the mandate, according to John Murray, his communications director. “The individual mandate is something the insurance industry is hyperfocused on,” Murray says. “They feel they’ve got to have that to be successful. Our team is not supportive of that. We don’t like mandates.”

While Democrats who backed the law might now seem a more natural ally in defending the mandate, issues exist there as well. Insurers just spent $1.1 million funding opponents to Democratic campaigns. Now they will have to count on many of those same Democrats to defend them. Some may not. Joe Manchin, the Democratic senator-elect from West Virginia, called the mandate “far overreaching” during his campaign. The U.S. shouldn’t “mandate and dictate” how people act, he said. Manchin did not respond to requests for comment.

The one thing going for the individual mandate may be political gridlock. Next year’s split in Congress between Democrats who control the Senate and Republicans who will control the House could lead to a standoff that results in little change. Republican efforts to roll back the law over the next two years could be a table-setter for the real push to come after the next election, says James C. Capretta, a health-care fellow at the Ethics and Public Policy Center, a Washington think tank. “The decisive battle on the overhaul is likely to be the 2012 Presidential contest; that’s what everyone’s preparing for.”

The bottom line: As Republicans take aim at the individual mandate in the health reform law, health-care industry groups are lobbying to preserve it.

Drew Armstrong is a reporter for Bloomberg News.

http://www.businessweek.com/magazine/content/10_48/b4205037210208.htm

Health care tipping point, redux

By Dr. Howie Wolf
Daily Camera (Boulder, Colo.), Nov. 28, 2010

Nearly five years ago the Boulder Daily Camera published my Guest Opinion article, “What is ‘The Tipping Point’ for American’s Health Care Non-System?” There is a widely read book by Malcomb Gladwell called “The Tipping Point,” where the author points out how so many societal changes seem to happen quickly and unexpectedly. An example given was the sudden fashion frenzy over “Hush Puppies” for cool shoes in the fifties.

But social movements and reform also may reach a “tipping point” wherein it is accepted by most people that something needs to give. The civil rights movement and subsequent laws came into being partly because most of society could not tolerate racial inequality. There have been countless marches for and against various causes when a group of people reach their tipping point. Howard Beale, who played Peter Finch in the movie “Network,” utilized his famous line: “I’m mad as hell and I’m not going to take this anymore.”

As a family physician that has practiced in Boulder County for 48 years, I feel our inadequate health care system is significantly closer to a “tipping point” than in 2006. I see more patients who are uninsured or underinsured, many due to layoffs in our sluggish economy and the inability of business owners to continue paying exorbitant costs to provide employees with health care benefits.

Nationally, there now are nearly 60 million uninsured Americans compared with the 46.8 million cited in my 2006 article. Further, nearly 45,000 of our citizens die annually because of lack of or delayed access to care. That number was 18,000 in 2006. These shameful statistics represent not just numbers, but fellow Americans: our parents, brothers, sisters, other relatives, and friends.

Despite spending more per capita for health care than other country, our statistics for longevity, maternal death, and infant death rank the United States in 37th place according to the World Health Organization.

Although there are those who cried “socialism” when a government health reform program was proposed, the new Patient Protection and Affordable Care Act was signed into law by President Obama in March, 2010. It is far from perfect but PPACA does begin to address some significant issues, mainly some of the egregious actions which have been the modus operandi for private health insurance companies. The new program reverses such policies as the exclusion of applicants with pre-existing conditions, dropping coverage for families whose health expenses are too high, and not allowing coverage in families to go beyond age 19, even for college students. In the future this new law will extend coverage to 32 million Americans currently underserved, provide coverage for most preventive services, and improve end-of-life care.

Sixty percent of Americans actually favor a tax supported, government-run health system, according to a Pew Research poll. All industrialized countries have various types of insurance plans, but none except America permits insurance companies to profit from basic health care policies. The lobbyists for insurance and pharmaceutical companies will influence our elected officials to resist movements toward a public option or single payer type plan. Such reform would certainly be more economical and efficacious than our present dysfunctional non-system.

In my view, health care reform in the near future must focus primarily on insurance and pharmaceutical company reform. That Americans pay as much as 80 percent more than Canadians for the same prescription drugs is inexplicable without using the word “greed.” Insurance companies take 25-33 percent of our premium dollars for operating expenses, salaries, including as much as $30 million annually by some CEO’s.

There are those who say: “Let the market work. Competition will drive the prices lower.” Since the introduction of “managed care” in the early nineties, this credo has been proven untrue. Insurance premiums, deductibles and co-pay costs have escalated at unconscionable rates. Private insurance companies do not feature oversight or accountability, both required with any government-run health care system. Incidentally, our own “socialist” health programs — the VAH and Medicare — remain popular and operate at about a 3 percent overhead.

A recent international study revealed that 20 percent of U.S. adults had serious problems paying medical bills. The other ten countries in the survey reported less than ten percent! Even Americans with insurance spend more than citizens of other countries in out-of-pocket costs. Most Americans are frustrated with what their insurance company pays, and do not understand their so-called explanation of benefits.

Each of us knows many who are uninsured or underinsured. Most of us recognize how unfair our health care non-system can be, able to deliver excellent care to many, but marginalizes those who cannot pay. The U.S. system forces physicians and other providers to make unethical choices — offering services, prescription drugs, imaging studies, and referrals only to those who can afford them.

What can we do to stem the tide of the tipping point? We must become activists to support health and insurance/pharmaceutical reform efforts. We need a health system that includes all Americans and funds care fairly. There should be preventive care, lifetime enrollment, and choice of providers of many types, and no exclusions for pre-existing conditions.

If the federal government cannot make these changes, then individual states may be able to take the initiative. Good news: The newly elected governor of Vermont, Peter Shumlin, ran on a single payer platform for his state.

For more information check healthcareforallcolorado.org

Howie Wolf is a physician in Boulder.

http://www.dailycamera.com/ci_16703948#ixzz16hcXraCP

'The US model of private health insurers is inefficient, expensive'

Times of India
Nov 26, 2010

Joseph Stiglitz the Nobel prize-winning economist has written several articles on the inequity in access to health and the flaws in the drug discovery process of pharmaceutical companies. On a recent visit to Delhi, Professor Stiglitz spoke to Rema Nagarajan about the negative role of patents in drug discovery and the pitfalls of private insurance in health.

Why have you been pitching for a single payer system for health insurance rather than a system where several private companies compete?
The US model of private health insurers has been proven inefficient and expensive. Insurance companies have a very strong incentive to do cream skimming. They make more money figuring out the high cost and low cost people. Rather than provide better healthcare at lower costs, insurance companies innovate at finding better ways of discrimination. They are inefficient because they are trying to figure out how to insure people who don’t need the cover and keep out people who need it. With many companies, they also need to spend on marketing and advertising. The incentives are all wrong and the transaction costs are very high and you have to give them a high profit. In health, social and private incentives are totally disparate. Competition does not work in healthcare especially in the health insurance market. Several countries like the UK, France and Sweden have a single payer system, differing only in the organisation of healthcare delivery. People in these countries have done much better than the US.

Several health insurance companies are setting up business here. Should India be worried?
India would be in a terrible mess, given the size of its population, if it went down the wrong route (of private companies for health insurance). They should learn from the mess that the US has got into. Once the companies start making profits, special interests in politics will come into play and it will be difficult to get them out. In India, given the disparities in income, a single system for delivery might not work. So, it will probably need a mixture of public and private provision or maybe public healthcare for basic clinics and reimbursement for others, or the UK model where provisioning or delivery is also through public institutions.

Are you against intellectual property especially in health research into medicines?
I am not against intellectual property (IP). But the benefits of IP have been exaggerated and the costs underestimated. IP creates monopolies. And it does interfere with economic efficiency by interfering with the flow of knowledge and the use of knowledge, particularly for developing countries. IP is related to many different categories, like IP related to entertainment which is a completely different category from IP related to medicines. And IP appropriate to developing countries is different from what is appropriate to developed countries. The Trade related aspects of intellectual property rights (TRIPS) agreement is trying to impose the same IP framework on everybody. The question is whether IP promotes innovation. Increasingly, the evidence is that it may actually impede innovation. It is leading to infinite negotiations around patents. More money is being spent on lawyers than on research. The legal cost of using the system takes up more resources than the benefits from the system. New ideas are the most important input into research. IP is making that input difficult to get. We need some IP. But we also need to find better ways of financing and incentivising research such as government-sponsored research.

Is it viable for governments to finance drug research?
Yes, public financing of drug research is financially viable. In a system where government pays for drugs, it is in effect, the government or the public who pay for hugely expensive drugs. Is this an efficient way of public spending? Drug companies greatly exaggerate the cost, especially on research and if you broke down their costs, you would see that basic research is done by the government. The applied research of a particular molecule is mostly done by small companies, often linked to universities, which is still private. But the biggest cost is testing of the drugs and that is usually blown up and often includes promotion costs. There could be public funded testing of drugs and the costs could be recovered when you sell the drugs. The net saving would be enormous. For India, this alternative model of drug testing could be a revenue generator also because India has the scientific and research capacity and the production capacity, being a dominant player in the generic business. Maybe, the IP framework is actually impeding India. I have argued that for the US too.

Will clinical trials conducted by governments be more reliable?
The very guy who will make billions from the sale of a drug is asked to do the clinical trial to test its safety. It gives rise to conflict of interest. There is always an accident or mistake or whatever by which they fail to report the negative effects of a drug as happened in the case of the drug Vioxx. From an economist point of view it is predictable. You cannot have people, who will make billions from the drug, test it. It is like self regulation of banking structures. It is totally flawed from an economic point of view. The government could set up a separate agency or company that is government financed to do the clinical trials and recuperate the money spent from the fees charged for the drugs.

http://timesofindia.indiatimes.com/home/opinion/edit-page/The-US-model-of-private-health-insurers-is-inefficient-expensive/articleshow/6989634.cms

‘The US model of private health insurers is inefficient, expensive’

Times of India
Nov 26, 2010

Joseph Stiglitz the Nobel prize-winning economist has written several articles on the inequity in access to health and the flaws in the drug discovery process of pharmaceutical companies. On a recent visit to Delhi, Professor Stiglitz spoke to Rema Nagarajan about the negative role of patents in drug discovery and the pitfalls of private insurance in health.

Why have you been pitching for a single payer system for health insurance rather than a system where several private companies compete?
The US model of private health insurers has been proven inefficient and expensive. Insurance companies have a very strong incentive to do cream skimming. They make more money figuring out the high cost and low cost people. Rather than provide better healthcare at lower costs, insurance companies innovate at finding better ways of discrimination. They are inefficient because they are trying to figure out how to insure people who don’t need the cover and keep out people who need it. With many companies, they also need to spend on marketing and advertising. The incentives are all wrong and the transaction costs are very high and you have to give them a high profit. In health, social and private incentives are totally disparate. Competition does not work in healthcare especially in the health insurance market. Several countries like the UK, France and Sweden have a single payer system, differing only in the organisation of healthcare delivery. People in these countries have done much better than the US.

Several health insurance companies are setting up business here. Should India be worried?
India would be in a terrible mess, given the size of its population, if it went down the wrong route (of private companies for health insurance). They should learn from the mess that the US has got into. Once the companies start making profits, special interests in politics will come into play and it will be difficult to get them out. In India, given the disparities in income, a single system for delivery might not work. So, it will probably need a mixture of public and private provision or maybe public healthcare for basic clinics and reimbursement for others, or the UK model where provisioning or delivery is also through public institutions.

Are you against intellectual property especially in health research into medicines?
I am not against intellectual property (IP). But the benefits of IP have been exaggerated and the costs underestimated. IP creates monopolies. And it does interfere with economic efficiency by interfering with the flow of knowledge and the use of knowledge, particularly for developing countries. IP is related to many different categories, like IP related to entertainment which is a completely different category from IP related to medicines. And IP appropriate to developing countries is different from what is appropriate to developed countries. The Trade related aspects of intellectual property rights (TRIPS) agreement is trying to impose the same IP framework on everybody. The question is whether IP promotes innovation. Increasingly, the evidence is that it may actually impede innovation. It is leading to infinite negotiations around patents. More money is being spent on lawyers than on research. The legal cost of using the system takes up more resources than the benefits from the system. New ideas are the most important input into research. IP is making that input difficult to get. We need some IP. But we also need to find better ways of financing and incentivising research such as government-sponsored research.

Is it viable for governments to finance drug research?
Yes, public financing of drug research is financially viable. In a system where government pays for drugs, it is in effect, the government or the public who pay for hugely expensive drugs. Is this an efficient way of public spending? Drug companies greatly exaggerate the cost, especially on research and if you broke down their costs, you would see that basic research is done by the government. The applied research of a particular molecule is mostly done by small companies, often linked to universities, which is still private. But the biggest cost is testing of the drugs and that is usually blown up and often includes promotion costs. There could be public funded testing of drugs and the costs could be recovered when you sell the drugs. The net saving would be enormous. For India, this alternative model of drug testing could be a revenue generator also because India has the scientific and research capacity and the production capacity, being a dominant player in the generic business. Maybe, the IP framework is actually impeding India. I have argued that for the US too.

Will clinical trials conducted by governments be more reliable?
The very guy who will make billions from the sale of a drug is asked to do the clinical trial to test its safety. It gives rise to conflict of interest. There is always an accident or mistake or whatever by which they fail to report the negative effects of a drug as happened in the case of the drug Vioxx. From an economist point of view it is predictable. You cannot have people, who will make billions from the drug, test it. It is like self regulation of banking structures. It is totally flawed from an economic point of view. The government could set up a separate agency or company that is government financed to do the clinical trials and recuperate the money spent from the fees charged for the drugs.

http://timesofindia.indiatimes.com/home/opinion/edit-page/The-US-model-of-private-health-insurers-is-inefficient-expensive/articleshow/6989634.cms

California’s largest insurers continue to cheat

Blue Shield, Kaiser among state insurers fined

By Victoria Colliver
San Francisco Chronicle
November 30, 2010

State regulators Monday fined seven of California’s largest health insurers nearly $5 million for systematically failing to pay doctors and hospitals fairly and on time.

The California Department of Managed Health Care issued the fines following an 18-month audit in which investigators looked at a small but statistically significant sample of claims. The investigation found the plans were paying on average about 80 percent of the claims correctly, far below the legal threshold of 95 percent.

“Our clear and consistent message is that California’s hospitals and physicians must be paid fairly and on time,” said Cindy Ehnes, director of the Department of Managed Health Care, which is charged with regulating the states’ health maintenance organizations, or HMOs.

In addition to the fines, the companies must pay the doctors and hospitals restitution that is expected to run into the “tens of millions of dollars,” Ehnes said. The plans will also be required to come up with a plan to correct the problem and submit to future audits.

Five of the insurers, excluding Anthem and Blue Shield, were also found to have improper provider appeals processes.

When doctors and hospital officials try to dispute a claim, they often have to deal with the same individual who originally denied the claim in the appeals process, Ehnes said.

Cracking down on the health plans for not properly paying providers helps consumers, said Anthony Wright, executive director of Health Access California.

“Consumers would rather that the time and resources of health providers go to patient care, rather than in fighting to get insurers to pay correctly,” he said.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/11/30/BUSR1GJ01V.DTL

What services do the private insurers provide for us? Processing claims? They won’t even do that right 20 percent of the time, according to this California audit. The total of $5 million in fines that they were assessed is so paltry that they have no incentive to discontinue their highly profitable policy of delaying and denying legitimate claims.

Let’s have the members of Congress fire the insurers and set up our own national health program – an improved Medicare that covers everyone. If they won’t do that then let’s fire them, replacing them with responsible elected stewards who will.

Is Uwe Reinhardt for or against single payer?

Reinhardt: Repeal Health Care, Make GOP Cut Costs

By John Greenwald
The Fiscal Times
November 28, 2010

In a freewheeling interview with The Fiscal Times, (Uwe Reinhardt) critiques the new health care reform law — including its lack of cost containment — and recent proposals from the president’s deficit-cutting panel. Never one to mince words, Reinhardt also discusses what he sees as the real culprit behind soaring health care costs, why he doubts a single payer health care system could work in the United States — and where he believes the country’s founding fathers went wrong.

The Fiscal Times (TFT): What would a high-performing national health care system look like?

Uwe Reinhardt (UR): I think the Germans, the Swiss, the Dutch have a perfectly fine approach. It’s not a single-payer system. While I’m a Canadian I am not for [single payer] in the U.S. because we do not have a political system that can handle it responsibly. Canada has a parliamentary system that insulates considerably the public program from lobbying.

TFT: So you favor universal coverage but not a single payer system?

UR: For other countries I do [favor single payer] but we can’t run it. You need a responsible system of governance. Whatever you can say about U.S. governance, you cannot call it responsible. You really couldn’t. I think the founding fathers gave us an impotent government that acts quite irresponsibly. I don’t think parliamentary systems are that bad.

http://www.thefiscaltimes.com/Issues/Health-Care/2010/11/28/GOP-Health-Reform-Repeal.aspx

Comment:

By Don McCanne, MD

Single payer advocates frequently are perplexed by Uwe Reinhardt’s positions on health care reform.

He seems to support health care justice. He frequently uses the example of the waitress who is trying her best to support herself and her child, but who is unable to afford health care. By extrapolation, a just society would not let her or her child go without the essential health care services that they might need.

Yet what about single payer? He is a supporter for single payer, but for other countries. In this interview he states that he does not support single payer for the United States. The reason he gives is that “the founding fathers gave us an impotent government that acts quite irresponsibly.”

Right now the British and the Canadians are facing an assault on their public health systems by their conservative governments. In the United States, we are facing an assault on our Medicare program by the conservatives and right-leaning moderates. Although we don’t know how much damage, if any, will be done to the systems, it is highly probable that all three of the systems will survive intact considering the strong public support in each nation.

Does our government act irresponsibly? Wars? Income transfer from the workers to the wealthy? Neglect of poverty and other social inequities? Of course our leaders have been irresponsible, and so have the leaders of all other nations, but only at times. Social Security? Medicare? Our national parks? Most government activities are quite responsible and certainly do not set us apart from other nations.

Although Reinhardt criticizes the new health care reform law for failing to contain costs, he states, “The private sector is the inflationary component of health care, not Medicare or Medicaid.” Can he seriously contend that these government programs are irresponsible and impotent when they continue to outperform the private plans on cost containment? Considering this, how can he support single payer for other nations, yet reject it for the United States?

Government impotence and irresponsibility are not reasons to reject single payer. They are merely an excuse as to why we haven’t enacted it yet. What we need is more responsible people power. Let’s get busy stirring it up.