PNHP

Nation’s Largest RN Organization Says Healthcare Bill Cedes Too Much to Insurance Industry

Nation’s Largest RN Organization Says Healthcare Bill Cedes Too Much to Insurance Industry

By National Nurses United

The 150,000 member National Nurses United, the nation’s largest union and professional organization of registered nurses in the U.S., today [Dec. 22] criticized the healthcare bill now advancing in the U.S. Senate saying it is deeply flawed and grants too much power to the giant insurers.

“It is tragic to see the promise from Washington this year for genuine, comprehensive reform ground down to a seriously flawed bill that could actually exacerbate the healthcare crisis and financial insecurity for American families, and that cedes far too much additional power to the tyranny of a callous insurance industry,” said NNU co-president Karen Higgins, RN.

NNU Co-president Deborah Burger, RN challenged arguments of legislation proponents that the bill should still be passed because of expanded coverage, new regulations on insurers, and the hope that it will be improved in the House-Senate conference committee or future years.

“Those wishful statements ignore the reality that much of the expanded coverage is based on forced purchase of private insurance without effective controls on industry pricing practices or real competition and gaping loopholes in the insurance reforms,” said Burger.

Further, said NNU Co-president Jean Ross, RN, “the bill seems more likely to be eroded, not improved, in future years due to the unchecked influence of the healthcare industry lobbyists and the lessons of this year in which all the compromises have been made to the right.”

“Sadly, we have ended up with legislation that fails to meet the test of true healthcare reform, guaranteeing high quality, cost effective care for all Americans, and instead are further locking into place a system that entrenches the chokehold of the profit-making insurance giants on our health. If this bill passes, the industry will become more powerful and could be beyond the reach of reform for generations,” Higgins said.

NNU cited ten significant problems in the legislation, noting many of the same flaws also exist in the House version and are likely to remain in the bill that emerges from the House-Senate reconciliation process:

1. The individual mandate forcing all those without coverage to buy private insurance, with insufficient cost controls on skyrocketing premiums and other insurance costs.

2. No challenge to insurance company monopolies, especially in the top 94 metropolitan areas where one or two companies dominate, severely limiting choice and competition.

3. An affordability mirage. Congressional Budget Office estimates say a family of four with a household income of $54,000 would be expected to pay 17 percent of their income, $9,000, on healthcare exposing too many families to grave financial risk.

4. The excise tax on comprehensive insurance plans which will encourage employers to reduce benefits, shift more costs to employees, promote proliferation of high-deductible plans, and lead to more self-rationing of care and medical bankruptcies, especially as more plans are subject to the tax every year due to the lack of adequate price controls. A Towers-Perrin survey in September found 30 percent of employers said they would reduce employment if their health costs go up, 86 percent said they’d pass the higher costs to their employees.

5. Major loopholes in the insurance reforms that promise bans on exclusion for pre-existing conditions, and no cancellations for sickness.

The loopholes include:

* Provisions permitting insurers and companies to more than double charges to employees who fail “wellness” programs because they have diabetes, high blood pressure, high cholesterol readings, or other medical conditions.

* Insurers are permitted to sell policies “across state lines”, exempting patient protections passed in other states. Insurers will thus set up in the least regulated states in a race to the bottom threatening public protections won by consumers in various states.

* Insurers can charge four times more based on age plus more for certain conditions, and continue to use marketing techniques to cherry-pick healthier, less costly enrollees.

* Insurers may continue to rescind policies for “fraud or intentional misrepresentation” – the main pretext insurance companies now use to cancel coverage.

6. Minimal oversight on insurance denials of care; a report by the California Nurses Association/NNOC in September found that six of California’s largest insurers have rejected more than one-fifth of all claims since 2002.

7. Inadequate limits on drug prices, especially after Senate rejection of an amendment, to protect a White House deal with pharmaceutical giants, allowing pharmacies and wholesalers to import lower-cost drugs.

8. New burdens for our public safety net. With a shortage of primary care physicians and a continuing fiscal crisis at the state and local level, public hospitals and clinics will be a dumping ground for those the private system doesn’t want.

9. Reduced reproductive rights for women.

10. No single standard of care. Our multi-tiered system remains with access to care still determined by ability to pay. Nothing changes in basic structure of the system; healthcare remains a privilege, not a right.

“Desperation to pass a bill, regardless of its flaws, has made the White House and Congress subject to the worst political extortion and new, crippling concessions every day,” Burger said.

“NNU and nurses will continue to work with the thousands of grassroots activists across the nation to campaign for the best reform, which would be to expand Medicare to cover everyone, the same type of system working more effectively in every other industrial country. The day of that reform will come,” said Ross.

Dec. 22, 2009

David Brooks on single payer

The Roundtable

This Week, ABC News
December 27, 2009

David Brooks:  I don’t oppose it (health care reform act) because I want to step on the necks of the poor, as you could say. I oppose it, and it’s a close call for me, because we used to spend 10 percent of our GNP on health care, now it’s 17, soon it’ll be 20, 22, more on health care, less on education, less on infrastructure, less on investment, less on everything else. This bill will do absolutely nothing. It will slightly increase the amount of money we spend on health care. So what could you do politically to do something about that? Well, I wouldn’t mind a single payer. Frankly I prefer a single payer to what we have now, because that actually would control costs. My preferred option though would be to give consumers choice (Enthoven, Wyden-Bennett).

http://abcnews.go.com/video/playerIndex?id=9428760

Comment: 

By Don McCanne, MD

On controlling costs, conservative but credible New York Times columnist David Brooks tells us, quite accurately, that this bill will do nothing. As he says, “Frankly I prefer a single payer to what we have now because that actually would control costs.”

Admittedly it is difficult to follow him on the leap from single payer to a consumer-based approach. Single payer helps get people the care they need while controlling costs. Consumer-based health plan choices control costs by erecting financial barriers to care.

Maybe he doesn’t want to step on their necks, but a consumer directed choke collar (demand side control) does seem less humane than optimal single payer resource management (supply side control).

David Brooks on single payer

The Roundtable

This Week, ABC News
December 27, 2009
David Brooks: I don’t oppose it (health care reform act) because I want to step on the necks of the poor, as you could say. I oppose it, and it’s a close call for me, because we used to spend 10 percent of our GNP on health care, now it’s 17, soon it’ll be 20, 22, more on health care, less on education, less on infrastructure, less on investment, less on everything else. This bill will do absolutely nothing. It will slightly increase the amount of money we spend on health care. So what could you do politically to do something about that? Well, I wouldn’t mind a single payer. Frankly I prefer a single payer to what we have now, because that actually would control costs. My preferred option though would be to give consumers choice (Enthoven, Wyden-Bennett).
http://abcnews.go.com/video/playerIndex?id=9428760

On controlling costs, conservative but credible New York Times columnist David Brooks tells us, quite accurately, that this bill will do nothing. As he says, “Frankly I prefer a single payer to what we have now because that actually would control costs.”
Admittedly it is difficult to follow him on the leap from single payer to a consumer-based approach. Single payer helps get people the care they need while controlling costs. Consumer-based health plan choices control costs by erecting financial barriers to care.
Maybe he doesn’t want to step on their necks, but a consumer directed choke collar (demand side control) does seem less humane than optimal single payer resource management (supply side control).

An Inglorious End to the Promise of Reform

By Rose Ann DeMoro | Huffington Post

After all the fanfare and high expectations that accompanied the prospect of national health care reform at the outset of this year, the legislation is staggering to a particularly inglorious end.

At its heart, the single biggest weakness of the bill rapidly advancing in the Senate, which mirrors the central flaw of the House bill as well, is that it “cedes far too much power to the tyranny of a callous insurance industry,” as Karen Higgins, RN, co-president of the 150,000-member newly created National Nurses United, the largest union and professional association of nurses in U.S. history, has said.

In a year when lobbyists, led by the health care industry, are poised to smash all records for influence peddling in Washington, we should not be surprised.

But the greater tragedy is that the current bill may lock into place a dysfunctional and inhumane system that threatens to move beyond the reach of more comprehensive reform for generations to come.

For those who counsel us to accept the steady stream of concessions to the obstructionists and the health care industry with the anticipation that the legislation will be improved in the House-Senate conference process, or in future years, the experience of this year suggests a very different outcome.

As Jean Ross, NNU co-president noted, “the bill seems more likely to be eroded, not improved, in future years due to the unchecked influence of the health care industry lobbyists and the lessons of this year in which all the compromises have been made to the right.”

Advocates of the current bill say it’s most important feature is that it expands coverage to 30 million Americans. But their method for accomplishing what NNU Co-president Deborah Burger calls a “wishful statement” is an individual mandate forcing the uninsured to buy private insurance or be criminalized and subject to fines, in fact symbolizes the power of the insurance industry.

Individual mandate was the top priority of the insurance industry, which also succeeded in fending off meaningful restraints of its predatory pricing practices. The likely outcome is that far too many people will still face health care insecurity or medical bankruptcy due to ever rising out-of-pocket costs, or continue to skip needed medical care because of the high prices.

Indeed, discouraging provision of care as the preferred way to control costs, rather than rein in the pricing practices of the insurance and drug giants, is a central tenet of the insurance industry and conservative policy wonks.

That is also symbolized by the Senate bill’s excise tax on comprehensive insurance, deceptively labeled as “Cadillac plans.” In practice that tax will push employers to further reduce benefits for workers, and shift more costs to employees. Especially as more and more plans are subject to the tax every year due to the weak price controls on insurers in the legislation.

The Senate amendment exempting certain “high risk” occupations only serves to remind us of the inequity of the entire provision. Why are some protected, but others are not? It has not escaped notice that the targeted occupations are all male dominated — mining, construction, police, and fire — yet another gender imbalance in legislation that further erodes reproductive choice for women.

In exchange for lining up millions of new customers for the insurance giants, while failing to stop their price gouging or significantly cracking down on denials of claims they don’t want to pay for, we’re told that the legislation is historic for “ending” the worst industry abuses by banning exclusions of patients with pre-existing conditions and the shameful practice of dropping people when they become sick.

Yet both of those provisions are seriously marred by gaping loopholes for an industry which has perfected the art of adverse selection and gaming the system.

As the NNU has said in its statement on the bill, the loopholes include:

    * Provisions permitting insurers and companies to more than double charges to employees who fail “wellness” programs because they have diabetes, high blood pressure, high cholesterol readings, or other medical conditions.

    * Permitting insurers to sell policies “across state lines”, exempting patient protections passed in other states. Insurers will thus set up in the least regulated states in a race to the bottom threatening public protections won by consumers in various states.

    * Allowing insurers to charge four times more based on age plus more for certain conditions, and continue to use marketing techniques to cherry-pick healthier, less costly enrollees.

    * Insurers may continue to rescind policies for “fraud or intentional misrepresentation” – the main pretext insurance companies now use to cancel coverage.

The health care industry hardly needs the help. Within the last 35 years or – at least dating to the 1970s the Nixon administration’s push for the HMO Act to stave off the ‘threat’ of a single payer system – we have witnessed the emergence of “corporate giantism” in the health care sector:

    * The top five sectors have squandered more than $2 trillion on mergers and acquisitions since 1993 with the end result that care is even less accessible and costs have skyrocketed.

    * The top ten pharmaceutical corporations reported nearly $77 billion in profits last year

    * The top 19 HMOs made about $17 billion in profits last year.

    * In California, the home of the managed care, just six insurers control more than two-thirds of the market. Overall, one or two companies dominate the top 94 metropolitan areas, severely limiting choice and competition

Helping these giant corporations become even bigger and more powerful is not a compromise with an eye to history or a step on the way to something greater; it is an historical blindness to the uniqueness of the current historical era and an ultimate surrender to corporate domination of our nation’s health.

But nurses, who sustain the current flawed system and are highly motivated to continue to campaign for real change, are neither discouraged, nor giving up.

“NNU and nurses,” said Ross, “will continue to work with the thousands of grassroots activists across the nation to campaign for the best reform, which would be to expand Medicare to cover everyone, the same type of system working more effectively in every other industrial country. The day of that reform will come.”

Rose Ann DeMoro is executive director of the National Nurses United.

http://www.huffingtonpost.com/rose-ann-demoro/an-inglorious-end-to-the_b_400842.html

Private insurers, Wall Street, Tiny Tim, and my granddaughter

3 Stocks Soaring on Health-Care Bill

By Jack Hough
SmartMoney
December 22, 2009

America is getting augmented health care for Christmas, it seems. But of course, whether the changes count as reform is a matter of opinion.

Michael Cannon, director of health policy studies for the Cato Institute, a think tank that calls itself libertarian, wrote that the bill is… “a massive $450 billion bailout for private insurance companies that will drive health insurance premiums and taxes higher…”

Insurer shares, in particular, are zooming. There are three reasons. First, stripped from the Senate bill is the so-called public option — a government health plan that threatened to undersell private insurers. Second, a proposed $6.7 billion industry tax is now likely to be phased in only gradually beginning in 2011, which should give health plans enough time to raise prices accordingly. Third, individuals will be required to purchase insurance — a fine deal for insurance sellers — although critics say the penalties for noncompliance are weak, suggesting many individuals will prefer to remain uninsured.

Below are three health-care companies whose shares are soaring…

Aetna
Stock gain since end of October: 31%

Cigna
Stock gain since end of October: 29%

WellPoint
Stock gain since end of October: 28%

http://www.smartmoney.com/investing/stocks/3-stocks-soaring-on-healthcare-bill/

And…

Health Care Stocks Booming

The Kudlow Report
CNBC
December 17, 2009

Larry Kudlow:  I want health care to grow. I want government health care to be limited. I want our private health care to grow and soar with technology and baby boomers and rising incomes. I want health care to be a third of the economy. I just don’t want all this taxing and spending.

http://www.cnbc.com/id/15840232?video=1362269505

Comment: 

By Don McCanne, MD

Many individuals, including single payer supporters, disagree with the decision of PNHP’s leadership to oppose the reform bill currently before Congress. There are two basic issues that need to be sorted out: 1) the beneficial measures in the bill, and 2) the structure of the financing system.

The beneficial measures, such as expanding community health centers and reinforcing our primary infrastructure, we support. These measures, several of which were independent bills added into the omnibus package, should be taken out and immediately enacted separately.

The expansion of health care financing, based on private health plans, is quite another matter. In spite of the various pilot proposals in the legislation, health care costs are expected to continue to increase at rates well in excess of the growth of the GDP.

The only truly effective way to control the growth in government spending that would result from the subsidies used to purchase the private plans would be to allow the subsidies to increase at a slower rate than the rate of increases in the premiums (and the proposed indexing would do that). That shifts more of the premium costs to the individuals. The only truly effective way that the increase in spending on insurance premiums can be slowed is to shift more of the costs to out-of-pocket expenses for individuals who need health care (and the low actuarial values in the legislation would do that).

The proposal begins with a financial burden that is so great for middle and upper-middle income individuals and families that tens of millions will not be able to afford coverage. The private insurance model crafted will continue to expand that burden, adding more to the ranks of the uninsured, whereas underinsurance will have become the national standard (because of the low actuarial values). After another decade or two of this we may be ready for reform that works, but at the cost of tremendous unnecessary suffering and grief.

If you enjoy suffering and grief, then support the bill before Congress. As Larry Kudlow says, let’s make health care one-third of the economy, but without all the taxing and spending. Look how well it’s working for Aetna, Cigna and WellPoint. The private insurance-based bill will work just fine, providing we tell Tiny Tim and the others like him to go to hell.

A personal note:

Obviously I’m angry. I’m especially annoyed with our friends who should know better who keep telling us that we will have nothing if this bill fails, or that we are letting the perfect be the enemy of the good, or that our second choice is the status quo, or the rest of the crap that provides them with an excuse for being strange bedfellows with the private insurance industry.

Right now I’m especially emotional. Today is our granddaughter’s tenth birthday. She was recently in intensive care with newly diagnosed Type I diabetes. Decisions now about how birthday cake will fit into her medical regimen are hardly a glimmer of the future she faces.

When we inevitably depart, my wife and I want to know that we have in place a quality health care system that will always be there for our granddaughter when she needs it. It’s what any of us would want for our loved ones. Since she herself likely will never have to face rationing based on ability to pay, I feel comfortable that she will receive the care that she should have.

But what about the others? What about hard working American families who will not be able to afford the private insurers’ ticket to health care? What patchwork system will they have to take care of their ten year old granddaughter with newly diagnosed diabetes? I want a quality system to be there for them as well, and for everyone.

We can no longer allow the mediocre to be the enemy of the perfect. We know how to fix our dysfunctional health care system, and we can do it now. If you’re not ready to support that, then you go to hell!

And… oh yes… Merry Christmas!

Private insurers, Wall Street, Tiny Tim, and my granddaughter

3 Stocks Soaring on Health-Care Bill

By Jack Hough
SmartMoney
December 22, 2009
America is getting augmented health care for Christmas, it seems. But of course, whether the changes count as reform is a matter of opinion.
Michael Cannon, director of health policy studies for the Cato Institute, a think tank that calls itself libertarian, wrote that the bill is… “a massive $450 billion bailout for private insurance companies that will drive health insurance premiums and taxes higher…”
Insurer shares, in particular, are zooming. There are three reasons. First, stripped from the Senate bill is the so-called public option — a government health plan that threatened to undersell private insurers. Second, a proposed $6.7 billion industry tax is now likely to be phased in only gradually beginning in 2011, which should give health plans enough time to raise prices accordingly. Third, individuals will be required to purchase insurance — a fine deal for insurance sellers — although critics say the penalties for noncompliance are weak, suggesting many individuals will prefer to remain uninsured.
Below are three health-care companies whose shares are soaring…
Aetna
Stock gain since end of October: 31%
Cigna
Stock gain since end of October: 29%
WellPoint
Stock gain since end of October: 28%
http://www.smartmoney.com/investing/stocks/3-stocks-soaring-on-healthcare-bill/

And…

Health Care Stocks Booming

The Kudlow Report
CNBC
December 17, 2009
Larry Kudlow: I want health care to grow. I want government health care to be limited. I want our private health care to grow and soar with technology and baby boomers and rising incomes. I want health care to be a third of the economy. I just don’t want all this taxing and spending.
http://www.cnbc.com/id/15840232?video=1362269505

Many individuals, including single payer supporters, disagree with the decision of PNHP’s leadership to oppose the reform bill currently before Congress. There are two basic issues that need to be sorted out: 1) the beneficial measures in the bill, and 2) the structure of the financing system.
The beneficial measures, such as expanding community health centers and reinforcing our primary infrastructure, we support. These measures, several of which were independent bills added into the omnibus package, should be taken out and immediately enacted separately.
The expansion of health care financing, based on private health plans, is quite another matter. In spite of the various pilot proposals in the legislation, health care costs are expected to continue to increase at rates well in excess of the growth of the GDP.
The only truly effective way to control the growth in government spending that would result from the subsidies used to purchase the private plans would be to allow the subsidies to increase at a slower rate than the rate of increases in the premiums (and the proposed indexing would do that). That shifts more of the premium costs to the individuals. The only truly effective way that the increase in spending on insurance premiums can be slowed is to shift more of the costs to out-of-pocket expenses for individuals who need health care (and the low actuarial values in the legislation would do that).
The proposal begins with a financial burden that is so great for middle and upper-middle income individuals and families that tens of millions will not be able to afford coverage. The private insurance model crafted will continue to expand that burden, adding more to the ranks of the uninsured, whereas underinsurance will have become the national standard (because of the low actuarial values). After another decade or two of this we may be ready for reform that works, but at the cost of tremendous unnecessary suffering and grief.
If you enjoy suffering and grief, then support the bill before Congress. As Larry Kudlow says, let’s make health care one-third of the economy, but without all the taxing and spending. Look how well it’s working for Aetna, Cigna and WellPoint. The private insurance-based bill will work just fine, providing we tell Tiny Tim and the others like him to go to hell.
A personal note:
Obviously I’m angry. I’m especially annoyed with our friends who should know better who keep telling us that we will have nothing if this bill fails, or that we are letting the perfect be the enemy of the good, or that our second choice is the status quo, or the rest of the crap that provides them with an excuse for being strange bedfellows with the private insurance industry.
Right now I’m especially emotional. Today is our granddaughter’s tenth birthday. She was recently in intensive care with newly diagnosed Type I diabetes. Decisions now about how birthday cake will fit into her medical regimen are hardly a glimmer of the future she faces.
When we inevitably depart, my wife and I want to know that we have in place a quality health care system that will always be there for our granddaughter when she needs it. It’s what any of us would want for our loved ones. Since she herself likely will never have to face rationing based on ability to pay, I feel comfortable that she will receive the care that she should have.
But what about the others? What about hard working American families who will not be able to afford the private insurers’ ticket to health care? What patchwork system will they have to take care of their ten year old granddaughter with newly diagnosed diabetes? I want a quality system to be there for them as well, and for everyone.
We can no longer allow the mediocre to be the enemy of the perfect. We know how to fix our dysfunctional health care system, and we can do it now. If you’re not ready to support that, then you go to hell!
And… oh yes… Merry Christmas!

Pro-single-payer physicians call for defeat of Senate health bill

Legislation ‘would bring more harm than good,’ group says

For Immediate Release
Dec. 22, 2009

Contact:
David Himmelstein, M.D.
Steffie Woolhandler, M.D., M.P.H.
Oliver Fein, M.D.
Mark Almberg, PNHP, (312) 782-6006, mark@pnhp.org

A national organization of 17,000 physicians who favor a single-payer health care system called on the U.S. Senate today to defeat the health care legislation presently before it and to immediately consider the adoption of an expanded and improved Medicare-for-All program.

While noting that the Senate bill includes some “salutary provisions” like an expansion of Medicaid, increased funding for community clinics and the curbing of some of the worst practices of the private insurance industry, the group says the negatives in the bill outweigh the positives.

The negatives, the group says, include the individual mandate requiring that people buy private insurance policies, large government subsidies to private insurers, new restrictions on abortion, the unfair taxing of high-cost health plans, and cuts of $43 billion in Medicare payments to safety-net hospitals. Moreover, at least 23 million people will remain uninsured when the plan finally takes effect, they said.

“We have concluded that the Senate bill’s passage would bring more harm than good,” the group said in a statement signed by its president, Dr. Oliver Fein, and two co-founders, Drs. David Himmelstein and Steffie Woolhandler.

Addressing the Senate in an open letter, they write: “We ask that you defeat the bill currently under debate, and immediately move to consider the single-payer approach – an expanded and improved Medicare-for-All program – which prioritizes the advancement of our nation’s health over the enhancement of private, profit-seeking interests.”

The full statement appears below.

To the Members of the U.S. Senate:

It is with great sadness that we urge you to vote against the health care reform legislation now before you. As physicians, we are acutely aware of the unnecessary suffering that our nation’s broken health care financing system inflicts on our patients. We make no common cause with the Republicans’ obstructionist tactics or alarmist rhetoric. However, we have concluded that the Senate bill’s passage would bring more harm than good.

We are fully cognizant of the salutary provisions included in the legislation, notably an expansion of Medicaid coverage, increased funds for community clinics and regulations to curtail some of private insurers’ most egregious practices. Yet these are outweighed by its central provisions – particularly the individual mandate – that would reinforce private insurers’ stranglehold on care. Those who dislike their current employer-sponsored coverage would be forced to keep it. Those without insurance would be forced to pay private insurers’ inflated premiums, often for coverage so skimpy that serious illness would bankrupt them. And the $476 billion in new public funds for premium subsidies would all go to insurance firms, buttressing their financial and political power, and rendering future reform all the more difficult.

Some paint the Senate bill as a flawed first step to reform that will be improved over time, citing historical examples such as Social Security. But where Social Security established the nidus of a public institution that grew over time, the Senate bill proscribes any such new public institution. Instead, it channels vast new resources – including funds diverted from Medicare – into the very private insurers who caused today’s health care crisis. Social Security’s first step was not a mandate that payroll taxes which fund pensions be turned over to Goldman Sachs!

While the fortification of private insurers is the most malignant aspect of the bill, several other provisions threaten harm to vulnerable patients, including:

* The bill’s anti-abortion provisions would restrict reproductive choice, compromising the health of women and adolescent girls.
   
* The new 40 percent tax on high-cost health plans – deceptively labeled a “Cadillac tax” – would hit many middle-income families. The costs of group insurance are driven largely by regional health costs and the demography of the covered group. Hence, the tax targets workers in firms that employ more women (whose costs of care are higher than men’s), and older and sicker employees, particularly those in high-cost regions such as Maine and New York.

* The bill would drain $43 billion from Medicare payments to safety-net hospitals, threatening the care of the 23 million who will remain uninsured even if the bill works as planned. These threatened hospitals are also a key resource for emergency care, mental health care and other services that are unprofitable for hospitals under current payment regimes. In many communities, severely ill patients will be left with no place to go – a human rights abuse.

* The bill would leave hundreds of millions of Americans with inadequate insurance – an “actuarial value” as low as 60 percent of actual health costs. Predictably, as health costs continue to grow, more families will face co-payments and deductibles so high that they preclude adequate access to care. Such coverage is more akin to a hospital gown than to a warm winter coat.

Congress’ capitulation to insurers – along with concessions to the pharmaceutical industry – fatally undermines the economic viability of reform. The bill would inflate the already crushing burden of insurance-related paperwork that currently siphons $400 billion from care annually. According to CMS’ own projections, the bill will cause U.S. health costs to increase even more rapidly than presently, and budget neutrality is to be achieved by draining funds from Medicare and an accounting trick – front-loading the new revenues while delaying most new coverage until 2014. As homeowners seduced into balloon mortgages have learned, pushing costs off to the future is neither prudent nor sustainable.

We ask that you defeat the bill currently under debate, and immediately move to consider the single-payer approach – an expanded and improved Medicare-for-All program – which prioritizes the advancement of our nation’s health over the enhancement of private, profit-seeking interests.

Oliver Fein, M.D., President
David U. Himmelstein, M.D., Co-founder
Steffie Woolhandler, M.D., M.P.H., Co-founder
Physicians for a National Health Program

************

Physicians for a National Health Program (www.pnhp.org) is an organization of 17,000 doctors who advocate for single-payer national health insurance. To contact a physician-spokesperson near you, visit www.pnhp.org/stateactions or call (312) 782-6006.

PNHP's Letter to the Members of the Senate

Physicians for a National Health Program
December 22, 2009

To the Members of the U.S. Senate:

It is with great sadness that we urge you to vote against the health care reform legislation now before you. As physicians, we are acutely aware of the unnecessary suffering that our nation’s broken health care financing system inflicts on our patients. We make no common cause with the Republicans’ obstructionist tactics or alarmist rhetoric. However, we have concluded that the Senate bill’s passage would bring more harm than good.

We are fully cognizant of the salutary provisions included in the legislation, notably an expansion of Medicaid coverage, increased funds for community clinics and regulations to curtail some of private insurers’ most egregious practices. Yet these are outweighed by its central provisions – particularly the individual mandate – that would reinforce private insurers’ stranglehold on care. Those who dislike their current employer-sponsored coverage would be forced to keep it. Those without insurance would be forced to pay private insurers’ inflated premiums, often for coverage so skimpy that serious illness would bankrupt them. And the $476 billion in new public funds for premium subsidies would all go to insurance firms, buttressing their financial and political power, and rendering future reform all the more difficult.

Some paint the Senate bill as a flawed first step to reform that will be improved over time, citing historical examples such as Social Security. But where Social Security established the nidus of a public institution that grew over time, the Senate bill proscribes any such new public institution. Instead, it channels vast new resources – including funds diverted from Medicare – into the very private insurers who caused today’s health care crisis. Social Security’s first step was not a mandate that payroll taxes which fund pensions be turned over to Goldman Sachs!

While the fortification of private insurers is the most malignant aspect of the bill, several other provisions threaten harm to vulnerable patients, including:

* The bill’s anti-abortion provisions would restrict reproductive choice, compromising the health of women and adolescent girls.

* The new 40 percent tax on high-cost health plans – deceptively labeled a “Cadillac tax” – would hit many middle-income families. The costs of group insurance are driven largely by regional health costs and the demography of the covered group. Hence, the tax targets workers in firms that employ more women (whose costs of care are higher than men’s), and older and sicker employees, particularly those in high-cost regions such as Maine and New York.

* The bill would drain $43 billion from Medicare payments to safety-net hospitals, threatening the care of the 23 million who will remain uninsured even if the bill works as planned. These threatened hospitals are also a key resource for emergency care, mental health care and other services that are unprofitable for hospitals under current payment regimes. In many communities, severely ill patients will be left with no place to go – a human rights abuse.

* The bill would leave hundreds of millions of Americans with inadequate insurance – an “actuarial value” as low as 60 percent of actual health costs. Predictably, as health costs continue to grow, more families will face co-payments and deductibles so high that they preclude adequate access to care. Such coverage is more akin to a hospital gown than to a warm winter coat.

Congress’ capitulation to insurers – along with concessions to the pharmaceutical industry – fatally undermines the economic viability of reform. The bill would inflate the already crushing burden of insurance-related paperwork that currently siphons $400 billion from care annually. According to CMS’ own projections, the bill will cause U.S. health costs to increase even more rapidly than presently, and budget neutrality is to be achieved by draining funds from Medicare and an accounting trick – front-loading the new revenues while delaying most new coverage until 2014. As homeowners seduced into balloon mortgages have learned, pushing costs off to the future is neither prudent nor sustainable.

We ask that you defeat the bill currently under debate, and immediately move to consider the single-payer approach – an expanded and improved Medicare-for-All program – which prioritizes the advancement of our nation’s health over the enhancement of private, profit-seeking interests.

Oliver Fein, M.D., President
David U. Himmelstein, M.D., Co-founder
Steffie Woolhandler, M.D., M.P.H., Co-founder
Physicians for a National Health Program

https://pnhp.org/news/2009/december/pro-single-payer-physicians-call-for-defeat-of-senate-health-bill

Comment:

By Don McCanne, MD

reform (noun): 1) amendment of what is defective, vicious, corrupt, or depraved, 2) a removal or correction of an abuse, a wrong, or errors (Merriam-Webster)

In this day when cognitive processes are often displaced by political sound bites, we are likely to hear that PNHP IS AGAINST REFORM!

That is the exact opposite of the truth. PNHP has long advocated for reform that will bring everyone the health care that they need without being exposed to financial hardship.

But we want real reform. We want to replace the “defective, vicious, corrupt, and depraved” private insurance industry with a proven model that will work: an expanded and improved Medicare-for-All program.

For those who say that there are too many beneficial features in this bill that we can’t afford to pass up, our response is that we can pull those out and enact them immediately.

For those who say that we can’t do it because of politics, our response is that then we must change the politics.

Absolutely everyone agrees that the legislation before Congress falls far short of what we need. On the other hand, a great many agree that an expanded and improved Medicare-for-All program is precisely what we need. If it were already in place, Americans would be aggressively protecting it, just as our seniors are protecting our current Medicare program.

So when people grumble that PNHP is not a team player, you can respond by saying that’s because PNHP DEMANDS REFORM!

PNHP’s Letter to the Members of the Senate

Physicians for a National Health Program
December 22, 2009

To the Members of the U.S. Senate:

It is with great sadness that we urge you to vote against the health care reform legislation now before you. As physicians, we are acutely aware of the unnecessary suffering that our nation’s broken health care financing system inflicts on our patients. We make no common cause with the Republicans’ obstructionist tactics or alarmist rhetoric. However, we have concluded that the Senate bill’s passage would bring more harm than good.

We are fully cognizant of the salutary provisions included in the legislation, notably an expansion of Medicaid coverage, increased funds for community clinics and regulations to curtail some of private insurers’ most egregious practices. Yet these are outweighed by its central provisions – particularly the individual mandate – that would reinforce private insurers’ stranglehold on care. Those who dislike their current employer-sponsored coverage would be forced to keep it. Those without insurance would be forced to pay private insurers’ inflated premiums, often for coverage so skimpy that serious illness would bankrupt them. And the $476 billion in new public funds for premium subsidies would all go to insurance firms, buttressing their financial and political power, and rendering future reform all the more difficult.

Some paint the Senate bill as a flawed first step to reform that will be improved over time, citing historical examples such as Social Security. But where Social Security established the nidus of a public institution that grew over time, the Senate bill proscribes any such new public institution. Instead, it channels vast new resources – including funds diverted from Medicare – into the very private insurers who caused today’s health care crisis. Social Security’s first step was not a mandate that payroll taxes which fund pensions be turned over to Goldman Sachs!

While the fortification of private insurers is the most malignant aspect of the bill, several other provisions threaten harm to vulnerable patients, including:

* The bill’s anti-abortion provisions would restrict reproductive choice, compromising the health of women and adolescent girls.

* The new 40 percent tax on high-cost health plans – deceptively labeled a “Cadillac tax” – would hit many middle-income families. The costs of group insurance are driven largely by regional health costs and the demography of the covered group. Hence, the tax targets workers in firms that employ more women (whose costs of care are higher than men’s), and older and sicker employees, particularly those in high-cost regions such as Maine and New York.

* The bill would drain $43 billion from Medicare payments to safety-net hospitals, threatening the care of the 23 million who will remain uninsured even if the bill works as planned. These threatened hospitals are also a key resource for emergency care, mental health care and other services that are unprofitable for hospitals under current payment regimes. In many communities, severely ill patients will be left with no place to go – a human rights abuse.

* The bill would leave hundreds of millions of Americans with inadequate insurance – an “actuarial value” as low as 60 percent of actual health costs. Predictably, as health costs continue to grow, more families will face co-payments and deductibles so high that they preclude adequate access to care. Such coverage is more akin to a hospital gown than to a warm winter coat.

Congress’ capitulation to insurers – along with concessions to the pharmaceutical industry – fatally undermines the economic viability of reform. The bill would inflate the already crushing burden of insurance-related paperwork that currently siphons $400 billion from care annually. According to CMS’ own projections, the bill will cause U.S. health costs to increase even more rapidly than presently, and budget neutrality is to be achieved by draining funds from Medicare and an accounting trick – front-loading the new revenues while delaying most new coverage until 2014. As homeowners seduced into balloon mortgages have learned, pushing costs off to the future is neither prudent nor sustainable.

We ask that you defeat the bill currently under debate, and immediately move to consider the single-payer approach – an expanded and improved Medicare-for-All program – which prioritizes the advancement of our nation’s health over the enhancement of private, profit-seeking interests.

Oliver Fein, M.D., President
David U. Himmelstein, M.D., Co-founder
Steffie Woolhandler, M.D., M.P.H., Co-founder
Physicians for a National Health Program

https://www.pnhp.org/news/2009/december/pro-single-payer-physicians-call-for-defeat-of-senate-health-bill

Comment:

By Don McCanne, MD

reform (noun): 1) amendment of what is defective, vicious, corrupt, or depraved, 2) a removal or correction of an abuse, a wrong, or errors (Merriam-Webster)

In this day when cognitive processes are often displaced by political sound bites, we are likely to hear that PNHP IS AGAINST REFORM!

That is the exact opposite of the truth. PNHP has long advocated for reform that will bring everyone the health care that they need without being exposed to financial hardship.

But we want real reform. We want to replace the “defective, vicious, corrupt, and depraved” private insurance industry with a proven model that will work: an expanded and improved Medicare-for-All program.

For those who say that there are too many beneficial features in this bill that we can’t afford to pass up, our response is that we can pull those out and enact them immediately.

For those who say that we can’t do it because of politics, our response is that then we must change the politics.

Absolutely everyone agrees that the legislation before Congress falls far short of what we need. On the other hand, a great many agree that an expanded and improved Medicare-for-All program is precisely what we need. If it were already in place, Americans would be aggressively protecting it, just as our seniors are protecting our current Medicare program.

So when people grumble that PNHP is not a team player, you can respond by saying that’s because PNHP DEMANDS REFORM!

PNHP's Letter to the Members of the Senate

Physicians for a National Health Program
December 22, 2009
To the Members of the U.S. Senate:
It is with great sadness that we urge you to vote against the health care reform legislation now before you. As physicians, we are acutely aware of the unnecessary suffering that our nation’s broken health care financing system inflicts on our patients. We make no common cause with the Republicans’ obstructionist tactics or alarmist rhetoric. However, we have concluded that the Senate bill’s passage would bring more harm than good.
We are fully cognizant of the salutary provisions included in the legislation, notably an expansion of Medicaid coverage, increased funds for community clinics and regulations to curtail some of private insurers’ most egregious practices. Yet these are outweighed by its central provisions – particularly the individual mandate – that would reinforce private insurers’ stranglehold on care. Those who dislike their current employer-sponsored coverage would be forced to keep it. Those without insurance would be forced to pay private insurers’ inflated premiums, often for coverage so skimpy that serious illness would bankrupt them. And the $476 billion in new public funds for premium subsidies would all go to insurance firms, buttressing their financial and political power, and rendering future reform all the more difficult.
Some paint the Senate bill as a flawed first step to reform that will be improved over time, citing historical examples such as Social Security. But where Social Security established the nidus of a public institution that grew over time, the Senate bill proscribes any such new public institution. Instead, it channels vast new resources – including funds diverted from Medicare – into the very private insurers who caused today’s health care crisis. Social Security’s first step was not a mandate that payroll taxes which fund pensions be turned over to Goldman Sachs!
While the fortification of private insurers is the most malignant aspect of the bill, several other provisions threaten harm to vulnerable patients, including:
* The bill’s anti-abortion provisions would restrict reproductive choice, compromising the health of women and adolescent girls.
* The new 40 percent tax on high-cost health plans – deceptively labeled a “Cadillac tax” – would hit many middle-income families. The costs of group insurance are driven largely by regional health costs and the demography of the covered group. Hence, the tax targets workers in firms that employ more women (whose costs of care are higher than men’s), and older and sicker employees, particularly those in high-cost regions such as Maine and New York.
* The bill would drain $43 billion from Medicare payments to safety-net hospitals, threatening the care of the 23 million who will remain uninsured even if the bill works as planned. These threatened hospitals are also a key resource for emergency care, mental health care and other services that are unprofitable for hospitals under current payment regimes. In many communities, severely ill patients will be left with no place to go – a human rights abuse.
* The bill would leave hundreds of millions of Americans with inadequate insurance – an “actuarial value” as low as 60 percent of actual health costs. Predictably, as health costs continue to grow, more families will face co-payments and deductibles so high that they preclude adequate access to care. Such coverage is more akin to a hospital gown than to a warm winter coat.
Congress’ capitulation to insurers – along with concessions to the pharmaceutical industry – fatally undermines the economic viability of reform. The bill would inflate the already crushing burden of insurance-related paperwork that currently siphons $400 billion from care annually. According to CMS’ own projections, the bill will cause U.S. health costs to increase even more rapidly than presently, and budget neutrality is to be achieved by draining funds from Medicare and an accounting trick – front-loading the new revenues while delaying most new coverage until 2014. As homeowners seduced into balloon mortgages have learned, pushing costs off to the future is neither prudent nor sustainable.
We ask that you defeat the bill currently under debate, and immediately move to consider the single-payer approach – an expanded and improved Medicare-for-All program – which prioritizes the advancement of our nation’s health over the enhancement of private, profit-seeking interests.
Oliver Fein, M.D., President
David U. Himmelstein, M.D., Co-founder
Steffie Woolhandler, M.D., M.P.H., Co-founder
Physicians for a National Health Program
https://pnhp.org/news/2009/december/pro-single-payer-physicians-call-for-defeat-of-senate-health-bill

reform (noun): 1) amendment of what is defective, vicious, corrupt, or depraved, 2) a removal or correction of an abuse, a wrong, or errors (Merriam-Webster)
In this day when cognitive processes are often displaced by political sound bites, we are likely to hear that PNHP IS AGAINST REFORM!
That is the exact opposite of the truth. PNHP has long advocated for reform that will bring everyone the health care that they need without being exposed to financial hardship.
But we want real reform. We want to replace the “defective, vicious, corrupt, and depraved” private insurance industry with a proven model that will work: an expanded and improved Medicare-for-All program.
For those who say that there are too many beneficial features in this bill that we can’t afford to pass up, our response is that we can pull those out and enact them immediately.
For those who say that we can’t do it because of politics, our response is that then we must change the politics.
Absolutely everyone agrees that the legislation before Congress falls far short of what we need. On the other hand, a great many agree that an expanded and improved Medicare-for-All program is precisely what we need. If it were already in place, Americans would be aggressively protecting it, just as our seniors are protecting our current Medicare program.
So when people grumble that PNHP is not a team player, you can respond by saying that’s because PNHP DEMANDS REFORM!

The wisdom of a legislated medical loss ratio

Democrats Move To Regulate How Insurers’ Spend Customers’ Money

By Julie Appleby
Kaiser Health News
December 20, 2009

Both the House measure and the newly recast Senate bill would force insurers to spend the vast majority of premium revenue on medical care for their customers, reducing the amount available for profits, executive salaries, sales and administration. The Senate bill would require insurers to spend at least 80 percent on medical care and quality improvements (85 percent minimum for plans sold to large groups), while the House bill specifies 85 percent.

Congressional supporters say those provisions would pressure insurance companies to be more efficient and help restrain price increases. But even some advocates say companies could game the system by broadly defining medical costs, for example. And spending limits alone may not stop insurers from raising rates. When New York State tried to limit non-medical care spending, many insurers companies complied – but still instituted double-digit rate increases.

http://www.kaiserhealthnews.org/Stories/2009/December/20/insurers.aspx

Comment: 

By Don McCanne, MD

If we are serious about providing everyone with health care while controlling costs, it is imperative that we reduce the profound administrative waste of our current fragmented system of financing health care.

Insurers consume typically about 18 percent of premium dollars (range 8 to 30 percent or sometimes even 50 percent), and they place an administrative burden on physicians and hospitals that consumes another 12 percent or so of the premium dollar. Thus about one-fourth to one-third of premiums paid to private insurers are largely wasted on just the administration of the health care finances. A single, universal, publicly-administered program can provide the same or better financing services for a small fraction of that level of administrative spending.

Congress and the Obama administration understand this waste, so what do they propose? They are going to limit the private insurers take of the premium to 15 to 20 percent, not much different from the typical 18 percent they are already consuming. And they will do very little to reduce the administrative burden placed on physicians and hospitals (suggesting that they use computers for billing, which they already do). Change we can believe in? Not much change here.

At our nearly intolerable level of health care spending, reducing this waste should have been one of the highest priorities during the reform process. It is unthinkable that we would allow the private insurance industry to continue to skim off a major portion of our health care dollars while inflicting this costly burden on the health care delivery system. Unthinkable, but that’s exactly what Congress is doing.

Think a moment about the irony of Congress’s decision to set in stone a medical loss ratio of 80 to 85 percent, meaning that they must spend that amount on patient care. That means that they have an ironclad guarantee, written into law, that they can keep 15 to 20 percent of the premiums they receive – our health care dollars.

Think of what that means. Though a public financing program is designed to use our dollars efficiently through a public service model, private insurer financing is designed on a business model. That business model dictates that they do everything possible to maximize revenues and, of course, profits for the investor-owned companies.

By fixing the insurers’ cut at a percentage of gross premium revenues, they can no longer reach down into the funds allocated for patient care, preventing medical loss ratios in the 50 to 80 percent range. The actual net revenues for the insurers would be the 15 to 20 percent that they keep.

If they can’t glom on to more of the health care dollars actually spend on care, then how do they increase their revenues? Since their revenues are limited to a percentage based on how much is spent on health care, to increase their own net revenues they are highly incentivized to dramatically increase spending on health care! The more dollars they throw at health care, the more their net revenues grow since they receive a fixed percentage of all dollars spent.

Just imagine entrepreneurial innovation at work. They will encourage every imaginable program that they can label as patient care because they will receive a fixed percentage of the spending on those programs. Think of it: more expensive electronic medical records and information technology systems, more home health services with a motorized scooter for each level in the home, more costly high-tech services regardless of demonstrated value, higher-priced brand drugs instead of generics, six-figure biologics and cancer drugs, rewarding increased frequency and intensity of services, and, the clincher, blinders to the massive fraud that would be rewarded under this system!

The hurdle cleared by the Senate reform bill in the early morning hours today has made it quite likely that President Obama will be signing the bill within the next several weeks. This should not be construed as a signal for supporters of health care justice to go into hibernation!

There are many measures in this bill that will benefit the nation, but the fundamental structure of a dysfunctional, fragmented financing system based on private insurance plans is a disaster and cannot possibly achieve the goal of affordable, high quality care for everyone.

The mandate for individuals to purchase private health plans will not begin until 2014. We still have a window of opportunity to educate, intensify grassroots efforts, intensify coalition efforts, and get this thing fixed! But we can’t wait for four more years to recharge our activism. Get off your duffs now!

The wisdom of a legislated medical loss ratio

Democrats Move To Regulate How Insurers’ Spend Customers’ Money

By Julie Appleby
Kaiser Health News
December 20, 2009
Both the House measure and the newly recast Senate bill would force insurers to spend the vast majority of premium revenue on medical care for their customers, reducing the amount available for profits, executive salaries, sales and administration. The Senate bill would require insurers to spend at least 80 percent on medical care and quality improvements (85 percent minimum for plans sold to large groups), while the House bill specifies 85 percent.
Congressional supporters say those provisions would pressure insurance companies to be more efficient and help restrain price increases. But even some advocates say companies could game the system by broadly defining medical costs, for example. And spending limits alone may not stop insurers from raising rates. When New York State tried to limit non-medical care spending, many insurers companies complied – but still instituted double-digit rate increases.
http://www.kaiserhealthnews.org/Stories/2009/December/20/insurers.aspx

If we are serious about providing everyone with health care while controlling costs, it is imperative that we reduce the profound administrative waste of our current fragmented system of financing health care.
Insurers consume typically about 18 percent of premium dollars (range 8 to 30 percent or sometimes even 50 percent), and they place an administrative burden on physicians and hospitals that consumes another 12 percent or so of the premium dollar. Thus about one-fourth to one-third of premiums paid to private insurers are largely wasted on just the administration of the health care finances. A single, universal, publicly-administered program can provide the same or better financing services for a small fraction of that level of administrative spending.
Congress and the Obama administration understand this waste, so what do they propose? They are going to limit the private insurers take of the premium to 15 to 20 percent, not much different from the typical 18 percent they are already consuming. And they will do very little to reduce the administrative burden placed on physicians and hospitals (suggesting that they use computers for billing, which they already do). Change we can believe in? Not much change here.
At our nearly intolerable level of health care spending, reducing this waste should have been one of the highest priorities during the reform process. It is unthinkable that we would allow the private insurance industry to continue to skim off a major portion of our health care dollars while inflicting this costly burden on the health care delivery system. Unthinkable, but that’s exactly what Congress is doing.
Think a moment about the irony of Congress’s decision to set in stone a medical loss ratio of 80 to 85 percent, meaning that they must spend that amount on patient care. That means that they have an ironclad guarantee, written into law, that they can keep 15 to 20 percent of the premiums they receive – our health care dollars.
Think of what that means. Though a public financing program is designed to use our dollars efficiently through a public service model, private insurer financing is designed on a business model. That business model dictates that they do everything possible to maximize revenues and, of course, profits for the investor-owned companies.
By fixing the insurers’ cut at a percentage of gross premium revenues, they can no longer reach down into the funds allocated for patient care, preventing medical loss ratios in the 50 to 80 percent range. The actual net revenues for the insurers would be the 15 to 20 percent that they keep.
If they can’t glom on to more of the health care dollars actually spend on care, then how do they increase their revenues? Since their revenues are limited to a percentage based on how much is spent on health care, to increase their own net revenues they are highly incentivized to dramatically increase spending on health care! The more dollars they throw at health care, the more their net revenues grow since they receive a fixed percentage of all dollars spent.
Just imagine entrepreneurial innovation at work. They will encourage every imaginable program that they can label as patient care because they will receive a fixed percentage of the spending on those programs. Think of it: more expensive electronic medical records and information technology systems, more home health services with a motorized scooter for each level in the home, more costly high-tech services regardless of demonstrated value, higher-priced brand drugs instead of generics, six-figure biologics and cancer drugs, rewarding increased frequency and intensity of services, and, the clincher, blinders to the massive fraud that would be rewarded under this system!
The hurdle cleared by the Senate reform bill in the early morning hours today has made it quite likely that President Obama will be signing the bill within the next several weeks. This should not be construed as a signal for supporters of health care justice to go into hibernation!
There are many measures in this bill that will benefit the nation, but the fundamental structure of a dysfunctional, fragmented financing system based on private insurance plans is a disaster and cannot possibly achieve the goal of affordable, high quality care for everyone.
The mandate for individuals to purchase private health plans will not begin until 2014. We still have a window of opportunity to educate, intensify grassroots efforts, intensify coalition efforts, and get this thing fixed! But we can’t wait for four more years to recharge our activism. Get off your duffs now!