PNHP

PNHP testimony before two House committees today

PNHP testimony before two House committees today

Testimony of Quentin D. Young, M.D.

U.S. House Committee on Ways and Means
June 24, 2009
I wish to make two points to the Members of this Committee. The first is that the best health policy science, literature, and experience indicate that the Tri-Committee proposal will fail miserably in its purported goal of providing comprehensive, sustainable health coverage to all Americans. And it will fail whether or not it includes a so-called “public option” health plan.
The second point I wish to make is that single-payer national health insurance is not just the only path to universal coverage, it is the most politically feasible path to health care for all, because it pays for itself, requiring no new sources of revenue.
http://waysandmeans.house.gov/hearings.asp?formmode=detail&hearing=684
Testimony posted on PNHP website:
https://pnhp.org/news/2009/june/testimony_of_quentin.php

And…

Testimony of Steffie Woolhandler, M.D.

Health Subcommittee of the House Energy and Commerce Committee
June 24, 2009
Private insurance is a defective product. Unfortunately, the Tri-Committee health reform plan would keep private insurers in the driver’s seat, and, indeed, require Americans to buy their shoddy goods.
Eight decades of experience teach that private insurers cannot control costs or provide families with the coverage they need. A government-run clone of private insurers cannot fix these flaws. Only single payer national health insurance can assure all Americans the care they need at a price they can afford.
http://energycommerce.house.gov/index.php?option=com_content&view=article&id=1691:energy-and-commerce-committee-and-health-subcommittee-hearing-on-comprehensive-health-reform-discussion-draft&catid=132:subcommittee-on-health&Itemid=72
Testimony posted on PNHP website:
https://pnhp.org/news/2009/june/testimony_of_steffie.php

Single payer is now a part of the dialogue in Congress. Now if only we can convert the single payer dialogue into single payer policy.

PNHP testimony before two House committees today

Testimony of Quentin D. Young, M.D.

U.S. House Committee on Ways and Means
June 24, 2009

I wish to make two points to the Members of this Committee. The first is that the best health policy science, literature, and experience indicate that the Tri-Committee proposal will fail miserably in its purported goal of providing comprehensive, sustainable health coverage to all Americans. And it will fail whether or not it includes a so-called “public option” health plan.

The second point I wish to make is that single-payer national health insurance is not just the only path to universal coverage, it is the most politically feasible path to health care for all, because it pays for itself, requiring no new sources of revenue.

http://waysandmeans.house.gov/hearings.asp?formmode=detail&hearing=684

Testimony posted on PNHP website:
https://pnhp.org/news/2009/june/testimony_of_quentin.php

And…

Testimony of Steffie Woolhandler, M.D.

Health Subcommittee of the House Energy and Commerce Committee
June 24, 2009

Private insurance is a defective product. Unfortunately, the Tri-Committee health reform plan would keep private insurers in the driver’s seat, and, indeed, require Americans to buy their shoddy goods.

Eight decades of experience teach that private insurers cannot control costs or provide families with the coverage they need. A government-run clone of private insurers cannot fix these flaws. Only single payer national health insurance can assure all Americans the care they need at a price they can afford.

http://energycommerce.house.gov/index.php?option=com_content&view=article&id=1691:energy-and-commerce-committee-and-health-subcommittee-hearing-on-comprehensive-health-reform-discussion-draft&catid=132:subcommittee-on-health&Itemid=72

Testimony posted on PNHP website:
https://pnhp.org/news/2009/june/testimony_of_steffie.php

Comment:

By Don McCanne, MD

Single payer is now a part of the dialogue in Congress. Now if only we can convert the single payer dialogue into single payer policy.

Testimony of Quentin Young, M.D., to the House Ways and Means Committee

[The following testimony is the prepared text of the remarks given by Dr. Quentin Young at a hearing on health care reform conducted by the House Ways and Means Committee on June 24 in Washington.]

Testimony of Quentin D. Young, M.D., M.A.C.P., national coordinator, Physicians for a National Health Program

Mr. Chairman, members of the Committee, thank you for giving me the opportunity to comment on the proposal that has emerged from the three key House committees and to articulate the single-payer alternative. I am national coordinator of Physicians for a National Health Program, an organization of 16,000 American physicians who support single-payer national health insurance. Our organization represents the views of the majority of U.S. physicians, 59 percent of whom support national health insurance.

I wish to make two points to the Members of this Committee. The first is that the best health policy science, literature, and experience indicate that the Tri-Committee proposal will fail miserably in its purported goal of providing comprehensive, sustainable health coverage to all Americans. And it will fail whether or not it includes a so-called “public option” health plan.

The second point I wish to make is that single-payer national health insurance is not just the only path to universal coverage, it is the most politically feasible path to health care for all, because it pays for itself, requiring no new sources of revenue.

The difference between single payer and the Tri-Committee proposal could not be more stark: single-payer has at its core the elimination of U.S.-style private insurance, using huge administrative savings and inherent cost control mechanisms to provide comprehensive, sustainable universal coverage. The Tri-Committee discussion draft preserves all of the systemic defects inherent in reliance on a patchwork of private insurance companies to finance health care, a system which has been a miserable failure both in providing health coverage and controlling costs. Elimination of U.S.-style private insurance has been a prerequisite to the achievement of universal health care in every other industrialized country in the world. In contrast, public program expansions coupled with mandates, like those in the Tri-Committee proposal, have failed everywhere they’ve been tried, both domestically and internationally.

First, because the discussion draft is built around the retention of private insurance companies, it is unable — in contrast to single payer — to recapture the $400 billion in administrative waste that private insurers currently generate in their drive to fight claims, issue denials and screen out the sick. A single-payer system would redirect these huge savings back into the system, requiring no net increase in health spending.

Second, because the discussion draft fails to contain the cost control mechanisms inherent in single payer, such as global budgeting, bulk purchasing, negotiated fees and planned capital expenditures, any gains in coverage will quickly be erased as costs skyrocket and government is forced to choose between raising revenue and cutting benefits.

Third, because of this inability to control costs or realize administrative savings, the coverage and benefits that can be offered under the discussion draft will be of the same type currently offered by private carriers, which cause millions of insured Americans to go without needed care due to costs and have led to an epidemic of medical bankruptcies.

Virtually all of the reforms contained in the discussion draft have been tried, and have failed repeatedly. Plans that combined mandates to purchase coverage with Medicaid expansions fell apart in Massachusetts (1988), Oregon (1992), and Washington state (1993); the latest iteration (Massachusetts, 2006) is already stumbling, with uninsurance again rising and costs soaring. Tennessee’s experiment with a massive Medicaid expansion and a public plan option worked — for one year, until rising costs sank it.

The inclusion of a so-called “public option” cannot salvage this structurally defective reform package. A public plan option does not lead toward single payer, but toward the segregation of patients, with profitable ones in private plans and unprofitable ones in the public plan. A quarter-century of experience with public/private competition in the Medicare program demonstrates that the private plans will not allow a level playing field. Despite strict regulation, private insurers have successfully cherry-picked healthier seniors, and have exploited regional health spending differences to their advantage. They have progressively undermined the public plan — which started as a single-payer system for seniors but has now become a funding mechanism for HMOs — and a place to dump the unprofitably ill.

The $1 trillion price tag on the Tri-Committee proposal already threatens to capsize our new President’s flagship initiative. In contrast, single payer avoids these hazardous political waters entirely because it requires no new sources of funding.

In tumultuous economic times, single payer is the only fiscally responsible option. Two-thirds of the American people support it. The majority of physicians are in favor of it, as are the U.S. Conference of Mayors, 39 state labor federations and hundreds of local unions across the country. Millions of Americans are mobilized to struggle for single payer, but your leadership is crucial. I hope this Committee will see fit to provide it.

Thank you.

Testimony of Steffie Woolhandler, M.D., to the Health Subcommittee of the House Energy and Commerce Committee

[The following testimony is the prepared text of the remarks given by Dr. Steffie Woolhandler at a hearing on health care reform conducted by the Health Subcommitee of the House Energy and Commerce Committee on June 24 in Washington.]

Testimony of Steffie Woolhandler, M.D., M.P.H.

Mr. Chairman, members of the Committee. I’m Steffie Woolhandler. I am a primary care doctor in Cambridge, Massachusetts, and associate professor of medicine at Harvard. I also co-founded Physicians for a National Health Program. Our 16,000 physician members support nonprofit, single-payer national health insurance because of overwhelming evidence that lesser reforms — even with a robust public plan option – will fail.

Private insurance is a defective product. Unfortunately, the Tri-Committee health reform plan would keep private insurers in the driver’s seat, and, indeed, require Americans to buy their shoddy goods. Once failure to buy health insurance is a federal offense, what’s next? A Ford Pinto in every garage? Lead-painted toys for every child? Melamine-laced chow for every puppy?

Even middle-class families with supposedly good coverage are just one serious illness away from financial ruin. My colleagues and I recently found that medical bills and illness contribute to 62 percent of all personal bankruptcies — a 50 percent increase since 2001. Strikingly, three-quarters of the medically bankrupt had insurance — at least when they first got sick.

In case after case, the insurance families bought in good faith failed them when they needed it most. Some were bankrupted by co-payments and deductibles, and loopholes that allowed their insurer to deny coverage. Others got too sick to work, leaving them unemployed and uninsured. And insurance regulations like those proposed in the tri-committee bill cannot fix these problems.

We in Massachusetts have seen in action a plan like the one you’re considering. In my state, beating your wife, communicating a terrorist threat and being uninsured all carry $1,000 fines. Yet despite these steep fines, most of the new coverage in our state has come from expanding Medicaid-like programs at great public expense. According to the state’s disclosure to its bondholders, our health reform has cost about $5,000 annually for each newly insured adult. That’s equivalent to over $200 billion annually to cover all of America’s uninsured.

But even such vast expenditures haven’t made care affordable for middle-class families in Massachusetts. If I were to lose my Harvard coverage I’d be forced to lay out $4,800 for a policy with a $2,000 deductible before it pays for any care, and 20 percent co-payments after that. Skimpy, overpriced coverage like this left 1 in 6 Massachusetts residents unable to pay their medical bills last year.

Meanwhile, rising costs have forced the Legislature to rob Peter in order to pay Paul. Funding cuts have decimated safety-net hospitals and clinics, and the current budget drops coverage for 28,000 people.

As research I published in the New England Journal of Medicine showed, a single-payer reform could save about $400 billion annually by shrinking health care bureaucracy — enough to cover the uninsured and to provide first dollar coverage for all Americans. A single-payer system would also include effective cost-containment mechanisms like bulk purchasing and global budgeting. As a result, everyone would be covered with no net increase in U.S. health spending. But these savings aren’t available unless we go all the way to single payer.

Adding a public insurance plan option can’t fix the flaws in Massachusetts-style reform. A public plan might cut private insurers’ profits, which is why they hate it. But their profits account for only about 3 percent of the money squandered on bureaucracy. Far more goes for marketing (to attract healthy, profitable members) and demarketing (to avoid the sick). And tens of billions are spent on the armies of insurance administrators who fight over payment and their counterparts at hospitals and doctors offices. All of these would be retained with a public plan option.

And overhead for even the most efficient competitive public plan would be far higher than Medicare’s, which automatically enrolls seniors when they turn 65 and disenrolls them only at death, deducts premiums directly from Social Security checks, and does no marketing.

Unfortunately, competition in health insurance involves a race to the bottom, not the top. Insurers compete by NOT paying for care: by denying payment and shifting costs onto patients or other payers. These bad behaviors confer a decisive competitive advantage. A public plan option would either emulate them — becoming a clone of private insurance — or go under. A kinder, gentler public plan option would quickly fail in the marketplace, saddled with the sickest, most expensive patients, whose high costs would drive premiums to uncompetitive levels.

In contrast, a single-payer reform would radically simplify the payment system and redirect the vast savings to care. Hospitals could be paid like a fire department, receiving a single monthly check for their entire budget, eliminating most billing. Physicians’ billing could be similarly simplified.

Eight decades of experience teach that private insurers cannot control costs or provide families with the coverage they need. A government-run clone of private insurers cannot fix these flaws. Only single payer national health insurance can assure all Americans the care they need at a price they can afford.

Thank you.

The Health Care Industry vs. Health Reform

By Wendell Potter
Center for Media and Democracy
June 24, 2009

I’m the former insurance industry insider now speaking out about how big for-profit insurers have hijacked our health care system and turned it into a giant ATM for Wall Street investors, and how the industry is using its massive wealth and influence to determine what is (and is not) included in the health care reform legislation members of Congress are now writing.

Although by most measures I had a great career in the insurance industry (four years at Humana and nearly 15 at CIGNA), in recent years I had grown increasingly uncomfortable serving as one of the industry’s top PR executives. In addition to my responsibilities at CIGNA, which included serving as the company’s chief spokesman to the media on all corporate and financial matters, I also served on a lot of trade association committees and industry-financed coalitions, many of which were essentially front groups for insurers. So I was in a unique position to see not only how Wall Street analysts and investors influence decisions insurance company executives make but also how the industry has carried out behind-the-scenes PR and lobbying campaigns to kill or weaken any health care reform efforts that threatened insurers’ profitability.

I also have seen how the industry’s practices — especially those of the for-profit insurers that are under constant pressure from Wall Street to meet their profit expectations — have contributed to the tragedy of nearly 50 million people being uninsured as well as to the growing number of Americans who, because insurers now require them to pay thousands of dollars out of their own pockets before their coverage kicks in — are underinsured. An estimated 25 million of us now fall into that category.

What I saw happening over the past few years was a steady movement away from the concept of insurance and toward “individual responsibility,” a term used a lot by insurers and their ideological allies. This is playing out as a continuous shifting of the financial burden of health care costs away from insurers and employers and onto the backs of individuals. As a result, more and more sick people are not going to the doctor or picking up their prescriptions because of costs. If they are unfortunate enough to become seriously ill or injured, many people enrolled in these plans find themselves on the hook for such high medical bills that they are losing their homes to foreclosure or being forced into bankruptcy.

As an industry spokesman, I was expected to put a positive spin on this trend that the industry created and euphemistically refers to as “consumerism” and to promote so-called “consumer-driven” health plans. I ultimately reached the point of feeling like a huckster.

I thought I could live with being a well-paid huckster and hang in there a few more years until I could retire. I probably would have if I hadn’t made a completely spur-of-the-moment decision a couple of years ago that changed the direction of my life. While visiting my folks in northeast Tennessee where I grew up, I read in the local paper about a health “expedition” being held that weekend a few miles up U.S. 23 in Wise, Va. Doctors, nurses and other medical professionals were volunteering their time to provide free medical care to people who lived in the area. What intrigued me most was that Remote Area Medical, a non-profit group whose original mission was to provide free care to people in remote villages in South America, was organizing the expedition. I decided to check it out.

That 50-mile stretch of U.S. 23, which twists through the mountains where thousands of men have made their living working in the coalmines, turned out to be my “road to Damascus.”

Nothing could have prepared me for what I saw when I reached the Wise County Fairgrounds, where the expedition was being held. Hundreds of people had camped out all night in the parking lot to be assured of seeing a doctor or dentist when the gates opened. By the time I got there, long lines of people stretched from every animal stall and tent where the volunteers were treating patients.

That scene was so visually and emotionally stunning it was all I could do to hold back tears. How could it be that citizens of the richest nation in the world were being treated this way?

A couple of weeks later I was boarding a corporate jet to fly from Philadelphia to a meeting in Connecticut. When the flight attendant served my lunch on gold-rimmed china and gave me a gold-plated knife and fork to eat it with, I realized for the first time that someone’s insurance premiums were paying for me to travel in such luxury. I also realized that one of the reasons those people in Wise County had to wait in long lines to be treated in animal stalls was because our Wall Street-driven health care system has created one of the most inequitable health care systems on the planet.

Although I quit my job last year, I did not make a final decision to speak out as a former insider until recently when it became clear to me that the insurance industry and its allies (often including drug and medical device makers, business groups and even the American Medical Association) were succeeding in shaping the current debate on health care reform. While the thought of speaking out had crossed my mind during the months leading up to the day I gave notice, I initially decided instead to hang out my shingle as a consultant to small businesses and nonprofit organizations.

I decided to take the shingle down, though, at least for a while, when I heard members of Congress reciting talking points like the ones I used to write to scare people away from real reform. I’ll have more to say about that over the coming weeks and months, but, for now, remember this: whenever you hear a politician or pundit use the term “government-run health care” and warn that the creation of a public health insurance option that would compete with private insurers (or heaven forbid, a single-payer system like the one Canada has) will “lead us down the path to socialism,” know that the original source of the sound bite most likely was some flack like I used to be.

Bottom line: I ultimately decided the stakes are too high for me to just sit on the sidelines and let the special interests win again. So I have joined forces with thousands of other Americans who are trying to persuade our lawmakers to listen to us for a change, not just to the insurance and drug company executives who are spending millions to shape reform to benefit them and the Wall Street hedge fund managers they are beholden to.

Take it from me, a former insider, who knows what really motivates those folks. You need to know where the hard-earned money you pay in health insurance premiums — if you lucky enough to have coverage at all — really goes.

I decided to speak out knowing that some people will not like what I have to say and will do all they can to discredit me. In anticipation of that, here are some facts:

* I am not doing this because my former employer was pushing me out the door or because I had become a disgruntled employee. I had not been passed over for a promotion or anything like that. As I noted earlier, I had a financially rewarding career in the industry, and I’m very grateful for that. I had numerous promotions, raises, bonuses, stock options and stock grants over the years. When I left my last job, I was as close on the corporate ladder to the CEO as any PR person has ever climbed at the company. I reported to the general counsel, the company’s top lawyer, whose boss is the chairman and CEO, a man I like and worked closely with over many years.

* The decision to leave was entirely my own, and I left on good terms with everybody at the company. In fact, I agreed to postpone my last day at work by more than two months at the company’s request. My coworkers gave me a terrific going-away party, and I received dozens of kind notes from people all across the country including friends at other companies and at America’s Health Insurance Plans, the industry trade association.

I still consider all of them my friends. In fact, the thing I have missed most since I left is working as part of a team, even though I eventually came to the conclusion that I was playing for the wrong side. Being a consultant has its advantages, but I have missed the camaraderie. After a few months, I thought that maybe I should consider working for another company again. At one point, a former boss told me that another insurer had posted a PR job and encouraged me to contact a former CIGNA executive who worked there about it. Against my better judgment, I did, but I immediately decided not to pursue it. The last thing I wanted to do was to go from one big insurer to another one. What the hell was I thinking?

I’m writing this because, knowing how things work, I’m fully expecting insurers’ PR firms to quietly feed friends of the industry (which include a roster of editorial writers and pundits, lawmakers and many others who fall under the broad category of “third-party advocates,”) with anything they can think of to discredit me and what I say. This will go on behind the scenes because the insurers will want to preserve the image they are working so hard to cultivate — as a group of kind and caring folks who think only of you and your health and are working hard as real partners to Congress and the White House to find “a uniquely American solution” to what ails our system.

I expect this because I have worked closely with the industry’s PR firms over many years whenever the insurers were being threatened with bad publicity, litigation or legislation that might hinder profits.

One of the reasons I chose to become affiliated with the Center for Media and Democracy is because of the important work the organization does to expose often devious, dishonest and unethical PR practices that further the self interests of big corporations and special interest groups at the expense of the American people and the democratic principles this country was founded on.

After a long career in PR, I am looking forward to providing an insider’s perspective as a senior fellow at CMD, and I am very grateful for the opportunity to speak out for the rights and dignity of ordinary people. The people of Wise County and every county deserve much better than to be left behind to suffer or die ahead of their time due to Wall Street’s efforts to keep our government from ensuring that all Americans have real access to first-class health care.

Wendell Potter is the Senior Fellow on Health Care for the Center for Media and Democracy in Madison, Wisconsin.

Physicians to tell House panels: single payer is only true health reform

Doctors say Democrats' plan offers micro-coverage for macro-costs

Media Advisory
June 23, 2009

Contacts:
Quentin Young, M.D., (312) 782-6006
Steffie Woolhandler, M.D., M.P.H., steffie_woolhandler@hms.harvard.edu
Mark Almberg, PNHP, (312) 782-6006, cell: (312) 622-0996, mark@pnhp.org

Two leading physician advocates for single-payer national health insurance will testify on Capitol Hill Wednesday, June 24, telling lawmakers that the latest House “Tri-Committee” proposal to reform the U.S. health care system — with or without a “public plan option” — will be unable to deliver on its stated goal of providing comprehensive and sustainable health coverage to all Americans. Only single payer can accomplish that goal, they will say.

Dr. Quentin Young, national coordinator of Physicians for a National Health Program, is scheduled to testify shortly after 9 a.m. EDT before the House Ways and Means Committee in the main committee hearing room, 1100 Longworth House Office Building. The committee is chaired by Rep. Charles Rangel (D-N.Y.).

Dr. Young’s testimony reads in part: “I wish to make two points to the Members of this Committee. The first is that the best health policy science, literature, and experience indicate that the Tri-Committee proposal will fail miserably in its purported goal of providing comprehensive, sustainable health coverage to all Americans. And it will fail whether or not it includes a so-called ‘public option’ health plan. The second point is that single-payer national health insurance is not just the only path to universal coverage, it is the most politically feasible path to health care for all, because it pays for itself, requiring no new sources of revenue.”

Dr. Steffie Woolhandler, associate professor of medicine at Harvard Medical School and a primary care physician in Cambridge, Mass., is set to testify before the Health Subcommittee of the House Energy and Commerce Committee at 1 p.m. EDT or shortly thereafter in Room 2123 of the Rayburn Office Building.

Her testimony reads in part: “As research I published in the New England Journal of Medicine showed, a single-payer reform could save about $400 billion annually by shrinking health care bureaucracy — enough to cover the uninsured and to provide first dollar coverage for all Americans. A single-payer system would also include effective cost-containment mechanisms like bulk purchasing and global budgeting. As a result, everyone would be covered with no net increase in U.S. health spending. But these savings aren’t available unless we go all the way to single payer.”

Both Dr. Young and Dr. Woolhandler will be available for comment upon the adjournment of their respective panels.

David Brooks – Kill this effort and start over

Something for Nothing

By David Brooks
The New York Times
June 22, 2009
On May 12, the Senate Finance Committee held a hearing on health care reform. There was a long table of 13 experts, and a vast majority agreed that ending the tax exemption on employer-provided health benefits should be part of a reform package.
They gave the reasons that experts — on right or left — always give for supporting this idea. The exemption is a giant subsidy to the affluent. It drives up health care costs by encouraging luxurious plans and by separating people from the consequences of their decisions. Furthermore, repealing the exemption could raise hundreds of billions of dollars, which could be used to expand coverage to the uninsured.
Democratic Senator Ron Wyden piped up and noted that he and Republican Senator Robert Bennett have a plan that repeals the exemption and provides universal coverage. The Wyden-Bennett bill has 14 bipartisan co-sponsors and the Congressional Budget Office has found that it would be revenue-neutral.
The Finance Committee’s chairman, Senator Max Baucus, looked exasperated. With that haughty and peremptory manner that they teach in Committee Chairman School, he told Wyden and the world that this idea was not going to happen.
In the World’s Greatest Deliberative Body, senators don’t run things. Chairmen and their staffs run things. During the spring, as the Obama administration faded to invisibility, the finance and health committees separately put together plans. These plans did not alter the employer exemption. They did build on the current system. They did include approaches that have been around since Richard Nixon.
The problem with the committee plans is that they don’t do much to change the underlying incentives, and consequently don’t do much to control costs. “The single most expensive option is to build on the existing system,” says the health care costs guru John Sheils of the Lewin Group.
The C.B.O. measured the plans, and the results were devastating. A successful plan has to be revenue-neutral for the government over the next 10 years, and it has to reduce the total health care burden over the long term so the country doesn’t go bankrupt. The Senate committee plans failed both criteria. They would cost the government more than $1 trillion this decade and send total health care costs zooming at least twice as fast as the economy as a whole.
The C.B.O. reports sent shock waves through Washington. Senators and staffs began casting about for a way to get a good C.B.O. score. President Obama redoubled his rhetoric about fundamentally reducing health care costs. Everybody continued looking around for a compromise that could get a bipartisan majority.
Now you might think that in these circumstances someone might take a second look at the ideas incorporated in the Wyden-Bennett plan, which already has a good C.B.O. score, bipartisan support and a recipe for fundamental reform.
If you did think that, you are mistaking the Senate for a rational organism. For while there are brewing efforts to incorporate a few Wyden-Bennett ideas, there is stiff resistance to the aspects that fundamentally change incentives.
The committee staffs don’t like the approach because it’s not what they’ve been thinking about all these years. The left is uncomfortable with the language of choice and competition. Unions want to protect the benefits packages in their contracts. Campaign consultants are horrified at the thought of fiddling with a popular special privilege.
So the process is moving along as it has been. There is a great deal of talk about the need to restrain costs. There’s discussion about interesting though speculative ideas to bend the cost curve. There are a series of frantic efforts designed to reduce the immediate federal price tag. Some senators and advisers suggest cutting back on universal coverage. Others have come up with a bunch of little cuts in hopes of getting closer to the trillion-dollar tab. The administration has ambitious plans to slash Medicare spending.
But there is almost nothing that gets to the core of the problem. Under the leading approaches, health care providers would still have powerful incentives to provide more and more services and use more expensive technology.
We’ve built an entire health care system (maybe an entire government) on the illusion of something for nothing. Instead of tackling that basic logic, we’ve got a reform process that is trying to evade it.
This would be bad enough in normal times. But the country is already careening toward fiscal ruin. We’ve already passed a nearly $800 billion stimulus package. The public debt is already projected to double over the next 10 years.
Health care reform is important, but it is not worth bankrupting the country over. If this process goes as it has been going — with grand rhetoric and superficial cost containment — then we will be far better off killing this effort and starting over in a few years. Maybe then there will be leaders willing to look at the options staring them in the face.

http://www.nytimes.com/2009/06/23/opinion/23brooks.html

Readers’ Comments:
Don McCanne
San Juan Capistrano, CA
June 23rd, 2009
9:16 am
Two very pertinent points left out would entirely change any conclusions drawn from this commentary:
1) You state that John Sheils has shown that building on the existing system is the single most expensive option for reform. What you didn’t state is that Sheils has also shown that a single payer national health program is the least expensive, and is the most effective in achieving the goals of universality and cost containment.
2) Although you state that Wyden-Bennett has a favorable C.B.O. score, you left out the fact that it was achieved after months of negotiation with the C.B.O. during which numerous changes were made that would shift the burden of future cost increases from the federal budget to individual patients. Financial hardship and bankruptcy due to medical debt is already a problem for insured individuals, and Wyden-Bennett would compound that problem.
Instead of worrying about the federal budget as an isolated problem, Congress needs to start addressing the combined public and private costs for patients. Policy solutions that would work are no secret.

David Brooks – Kill this effort and start over

Something for Nothing

By David Brooks
The New York Times
June 22, 2009

On May 12, the Senate Finance Committee held a hearing on health care reform. There was a long table of 13 experts, and a vast majority agreed that ending the tax exemption on employer-provided health benefits should be part of a reform package.

They gave the reasons that experts — on right or left — always give for supporting this idea. The exemption is a giant subsidy to the affluent. It drives up health care costs by encouraging luxurious plans and by separating people from the consequences of their decisions. Furthermore, repealing the exemption could raise hundreds of billions of dollars, which could be used to expand coverage to the uninsured.

Democratic Senator Ron Wyden piped up and noted that he and Republican Senator Robert Bennett have a plan that repeals the exemption and provides universal coverage. The Wyden-Bennett bill has 14 bipartisan co-sponsors and the Congressional Budget Office has found that it would be revenue-neutral.

The Finance Committee’s chairman, Senator Max Baucus, looked exasperated. With that haughty and peremptory manner that they teach in Committee Chairman School, he told Wyden and the world that this idea was not going to happen.

In the World’s Greatest Deliberative Body, senators don’t run things. Chairmen and their staffs run things. During the spring, as the Obama administration faded to invisibility, the finance and health committees separately put together plans. These plans did not alter the employer exemption. They did build on the current system. They did include approaches that have been around since Richard Nixon.

The problem with the committee plans is that they don’t do much to change the underlying incentives, and consequently don’t do much to control costs. “The single most expensive option is to build on the existing system,” says the health care costs guru John Sheils of the Lewin Group.

The C.B.O. measured the plans, and the results were devastating. A successful plan has to be revenue-neutral for the government over the next 10 years, and it has to reduce the total health care burden over the long term so the country doesn’t go bankrupt. The Senate committee plans failed both criteria. They would cost the government more than $1 trillion this decade and send total health care costs zooming at least twice as fast as the economy as a whole.

The C.B.O. reports sent shock waves through Washington. Senators and staffs began casting about for a way to get a good C.B.O. score. President Obama redoubled his rhetoric about fundamentally reducing health care costs. Everybody continued looking around for a compromise that could get a bipartisan majority.

Now you might think that in these circumstances someone might take a second look at the ideas incorporated in the Wyden-Bennett plan, which already has a good C.B.O. score, bipartisan support and a recipe for fundamental reform.

If you did think that, you are mistaking the Senate for a rational organism. For while there are brewing efforts to incorporate a few Wyden-Bennett ideas, there is stiff resistance to the aspects that fundamentally change incentives.

The committee staffs don’t like the approach because it’s not what they’ve been thinking about all these years. The left is uncomfortable with the language of choice and competition. Unions want to protect the benefits packages in their contracts. Campaign consultants are horrified at the thought of fiddling with a popular special privilege.

So the process is moving along as it has been. There is a great deal of talk about the need to restrain costs. There’s discussion about interesting though speculative ideas to bend the cost curve. There are a series of frantic efforts designed to reduce the immediate federal price tag. Some senators and advisers suggest cutting back on universal coverage. Others have come up with a bunch of little cuts in hopes of getting closer to the trillion-dollar tab. The administration has ambitious plans to slash Medicare spending.

But there is almost nothing that gets to the core of the problem. Under the leading approaches, health care providers would still have powerful incentives to provide more and more services and use more expensive technology.

We’ve built an entire health care system (maybe an entire government) on the illusion of something for nothing. Instead of tackling that basic logic, we’ve got a reform process that is trying to evade it.

This would be bad enough in normal times. But the country is already careening toward fiscal ruin. We’ve already passed a nearly $800 billion stimulus package. The public debt is already projected to double over the next 10 years.

Health care reform is important, but it is not worth bankrupting the country over. If this process goes as it has been going — with grand rhetoric and superficial cost containment — then we will be far better off killing this effort and starting over in a few years. Maybe then there will be leaders willing to look at the options staring them in the face.

Readers’ Comments

Don McCanne
San Juan Capistrano, CA
June 23rd, 2009
9:16 am

Two very pertinent points left out would entirely change any conclusions drawn from this commentary:

1) You state that John Sheils has shown that building on the existing system is the single most expensive option for reform. What you didn’t state is that Sheils has also shown that a single payer national health program is the least expensive, and is the most effective in achieving the goals of universality and cost containment.

2) Although you state that Wyden-Bennett has a favorable C.B.O. score, you left out the fact that it was achieved after months of negotiation with the C.B.O. during which numerous changes were made that would shift the burden of future cost increases from the federal budget to individual patients. Financial hardship and bankruptcy due to medical debt is already a problem for insured individuals, and Wyden-Bennett would compound that problem.

Instead of worrying about the federal budget as an isolated problem, Congress needs to start addressing the combined public and private costs for patients. Policy solutions that would work are no secret.

Medicare 2.0: Doctors group urges health care for all

By Casey Selix
MinnPost.com
Monday, June 22, 2009

Dr. Oliver Fein, president of the 16,000-member Physicians for a National Health Program, thinks the civil rights movement of the 21st century will be health care.

As health policy reform moves up the domestic agenda of the president and Congress, a single-payer, government-run program appears to be off the table. But Fein, who was in the Twin Cities last week to launch the Hazardous to Your Health! series at St. Catherine University, thinks the single-payer concept is gaining momentum in the United States.

He urges skeptics to think of a single-payer system as Medicare 2.0 or a new and improved Medicare for All. Fein, an internist and professor at Weill Medical College of Cornell University, explained his reasoning in a Q&A with MinnPost.com.

MinnPost: One report says that those at either end of the health policy spectrum — a single-payer, government-run plan on one end, a free-market approach on the other — are being marginalized in Congress and the administration. Is there any way to revive a single-payer proposal at this point and how would your group go about doing that?

Dr. Oliver Fein: We have been very active in attempting to do that over this period, and what we would say, frankly, is that actually we’ve gotten more visibility during this time, more discussion of single payer over the last six months than we’ve had before. So whether people say that we’re marginalized or not, the fact of the matter is there seems to be more actual discussion of single payer. What I think is really interesting is that although Sen. [Max] Baucus says that single payer is off the table, at the minimum, we’re the elephant under the table. Everybody is referring to us.

So, you have someone like [Health and Human Services Secretary Kathleen] Sebelius now saying we’ll create a public option that will not go to single payer. You have Republicans saying that the thing they fear is single payer; you have a whole variety of discussion that’s going on that keeps referring to this thing called single payer. Probably one of the real problems is there’s not enough of a definition for the public to make an assessment about what that really is.

MP: Would you like to explain that?

OF: I think there are certain principles that really define what single payer is. The first is automatic enrollment in a national plan, which would lead to universal coverage. What we have now are discussions of universal coverage favored by the health insurance industry — provided that there’s a mandate to buy their product. There’s every evidence that that is not going to lead to universal coverage.

Principle two is that benefits ought to be really comprehensive. There’s a lot of discussion that single payer should be a basic package. We think it ought to be a comprehensive benefit package going from prevention, doctor, hospital, pharmaceuticals, to dental, mental health — all medically necessary services.

Principle three is that these things should be publicly financed; that means one would not use insurance premiums for financing. Premiums are really regressive because the president of a company pays the same as the secretary of a company. That seems to us grossly unfair because the incomes of those two parties are so different. So, we would propose either a payroll tax the way the Medicare program, Part A, is funded, or a mix of payroll and income taxes so that you have a progressive way of paying for health insurance. The only way you can do that is through public financing.

The fourth principle is single payer, and what that means is we’re really able to eliminate the administrative waste that occurs when you have multiple payers. The Medicare program has an overhead of about 3 percent in contrast to private health insurance which, on average, has an overhead of 20 to 30 percent. It’s not just the insurance overhead, but every hospital has to have a large billing department to deal with the multiple payers. In my personal office, I have to hire extra people to deal with prior approval, denials of claims, each insurance company having different regulations and different things that I have to fill out.

Single payer would eliminate all of that. A study published in the New England Journal shows that $300 billion could be redirected if we went from a multi-payer system to a single-payer system. That would cover everyone who’s uninsured and many of the people who are underinsured because they have high deductibles — without costing the overall system more. And that’s the real dilemma that the Obama administration is facing right now with their notion of mandates.

The fifth principle is maximizing choice. Under our present private insurance system, health plans limit you to their network of doctors and network of hospitals and you have to pay more if you go out of network or not get covered at all. Many employers offer only one plan — 42 percent of employees in America are offered only one plan. That doesn’t increase choice. The program in the country now with the most choice is Medicare. You have a choice of physician, a choice of hospital; so, again, single payer would lead to increased choice.

The final principle is essentially that this system would be delivered through a nonprofit, privately controlled system. Doctors would not be employed by the government; hospitals would not be owned by the government. What you have is public financing and collection of money by the single payer, but the private delivery system would continue.

So, then people usually ask me is there a model for this, any place in the world that does this? And I respond, “Yes, right here in the United States. It’s the Medicare program.” The traditional Medicare program is very much what we’re talking about. It needs improvement and better coverage. Dental care isn’t covered, for instance; nursing home care isn’t covered; the prescription drug benefit is a real problem because you have to use a private insurance company. The Medicare program can’t negotiate directly with pharmaceutical companies. Medicare is structured on an 80-20 rule where the beneficiary has to come up with 20 percent of the cost. I would eliminate that.

So, what we talk about is Medicare 2.0 — an expanded program of Medicare for all and an improved program that deals with many of these other programs. That would be the way a single-payer program would operate in the United States.

MP: What is your best hope — and worst fear — about the health reform proposals floated by Congress and the Obama administration?

OF: I guess our worst fear would be that Congress would pass essentially an individual mandate that everybody had to purchase health insurance AND that there would be nothing like a public option. That would be our worst fear because what that would do is essentially act as a bailout for the private health insurance industry — just like the bailout for Wall Street, frankly. It probably would not benefit patients but benefit the industry. Private health insurers have been losing people who pay premiums because essentially employer coverage has dropped over 10 million people over the last decade. We think they’re out now for this individual mandate so that they can reverse that and have more people buy private health insurance.

When it comes to the public option, we think there are many problems with it potentially. It could become a multi-payer system where private health insurance persists — a system in which the sickest patient would be dumped into the public option. The public option would, in fact on a per-beneficiary basis, become very expensive. People would say, “Oh, the government can’t run a program.” There would be strong attempts to underfund the program; it could become a total fiasco.

The other thing that worries us a little bit is how are we going to pay for this public option and some of the proposals like taxing health benefits — why are we doing such a ridiculous thing? So we really think that’s the major dilemma for the Obama administration at this point.

MP: Your best hope?

OF: It’s really difficult to say what that would be other than that there would be an increasing awareness of the single-payer option and essentially out of all of this, an increasingly large mass movement that really begins to say, “Well, we need this kind of Medicare 2.0 type program in the United States.” I’m not impressed with the idea that that’s impossible.

One has to think of the kinds of things we thought were really impossible. If you were in the 1960s and looking at the segregation that was in our society — separate waiting rooms in bus stations, train stations … in the South, you would come to think it was impossible that segregation would be erased in our lifetimes. But in four short years because there was a civil rights movement, we got the Civil Rights Act.

My best hope is that there would be a growing awareness and mass movement for health care as a right. What I think that means is health care as a single payer. I think that is growing in the country. It’s just not yet being recognized by politicians. Politicians are, to some degree, beholden to various interest groups, and that can change if there is this growing mass movement.

The civil rights movement of the 21st century, I think, is going to be for health care as a right.

MP: Why do you think this nation has resisted universal coverage and/or a single-payer program for so long?

OF: I think it’s an accident of history. During World War II, wages were frozen and unions couldn’t bargain for raises. But they could bargain for fringe benefits. So, what happened is that health insurance got linked to employment and that then began to expand. Government involvement in guaranteeing health care is very young in the world. In Europe, it started in post-World War II. There, the accident of history was that they were in very devastated economies and devastated societies; they were rebuilding. The decision there was we’ve got to offer medical care, in essence, as a right.

Well, we had a different model linking it to employment. Gradually, we got to 1965, the Medicare program was passed; why was that? What happened to most people when they turned 65? They retired. They lost their health insurance because they were no longer working for an employer. So, we instituted single-payer national health insurance for the elderly.

Now, we have many more formidable interest groups that have built up since 1965 — the private health insurance industry, the pharmaceutical industry who really worry that they’re at jeopardy if we go to single payer — and they’re probably right. So I think it’s no mystery why things have moved a little slower here. The problem is it’s not sustainable in a global world, and in a global world, which is really the way things are moving, we’re going to see single payer in the United States. It’s inevitable.

Casey Selix, a news editor and staff writer for MinnPost.com, can be reached at cselix[at]minnpost[dot]com.

House Tri-Committee public option

The House Tri-Committee Health Reform Draft

June 19, 2009
H.R. (discussion draft)
Short Title (to be supplied)
SEC. 223. PAYMENT RATES FOR ITEMS AND SERVICES.
(a) RATES ESTABLISHED BY SECRETARY.–
(1) IN GENERAL.–The Secretary shall establish payment rates for the public health insurance option for services and health care providers consistent with this section and may change such payment rates in accordance with section 224.
(2) INITIAL PAYMENT RULES.–
(A) IN GENERAL.–Except as provided in subparagraph (B) and subsection (b)(1), during Y1, Y2, and Y3, the Secretary shall base the payment rates under this section for services and providers described in paragraph (1) on the payment rates for similar services and providers under parts A and B of Medicare.
(b) INCENTIVES FOR PARTICIPATING PROVIDERS.–
(1) INITIAL INCENTIVE PERIOD.–
(A) IN GENERAL.–The Secretary shall provide, in the case of services described in sub paragraph (B), for payment rates that are 5 percent greater than the rates established under subsection (a).
(B) SERVICES DESCRIBED.–The services described in this subparagraph are items and professional services furnished during Y1, Y2, and Y3, under the public health insurance option by a physician or other health care practitioner who participates in both Medicare and the public health insurance option.
(2) SUBSEQUENT PERIODS.– Beginning with Y4 and for subsequent years, the Secretary may adjust such rates in order to promote payment accuracy, to ensure adequate beneficiary access to providers, or to promote affordablility and the efficient delivery of medical care.
http://edlabor.house.gov/blog/2009/06/health-care-reform-house-dems.shtml
PUBLIC HEALTH INSURANCE OPTION PROVISIONS IN THE DISCUSSION DRAFT:
OVERVIEW
Available in the new Health Insurance Exchange (Exchange) along with all of the private health insurance plans.
LEVEL PLAYING FIELD
Require public plan to meet the same benefit requirements, and comply with the same insurance market reforms as private plans.
Establish the public planā€™s premiums for the local market areas that are designated by the Exchange, just as other insurers do.
PROVIDER PAYMENTS AND PARTICIPATION
Initially utilizes rates similar to those used in Medicare; this tie is severed over time as more flexible payment systems are developed.
http://edlabor.house.gov/documents/111/pdf/publications/DraftHealthCareReform-PublicOption.pdf

And…

House Health Care Plan

Posted by Karen Tumulty
TIME
Swampland (a blog)
June 19, 2009
The key committee chairmen put out an outline today of their approach to health care reform, and there’s one thing they want you to know about it: “Uniquely American,” said House Education and Labor Committee Chairman George Miller.
“We need a uniquely American approach to health care reform,” warns Robert Zirkelbach, a spokesman for the trade lobby America’s Health Insurance Plans.
Anyone who has followed this debate for more than 20 seconds will immediately recognize all this talk of unique Americanism as another way of saying NOT SINGLE PAYER, which is the government-financed system that just about every other industrialized country uses in one form or another. And all this skittishness about single payer explains the delicacy with which the House drafters have tried to finesse the question of whether their system will have a public plan, something like Medicare, but for people under 65.
The answer is, it will have a public plan, and a strong one–at first.
In the early stage, the public plan would reimburse health care providers at rates that are “similar to those used in Medicare”–that is, significantly lower than most private insurers pay them. This is something that the insurance industry, doctors and hospitals will all hate. “A government-run plan that pays based on Medicare rates — for any period of time — is a recipe for disaster,” Scott P. Serota, president and Chief Executive Officer of the Blue Cross and Blue Shield Association, said in a statement issued by the association.
Advocates would argue, on the other hand, that those lower rates could be a powerful engine to bring down health costs. Which is why they won’t be happy with what happens next. According to the summary, this tie to Medicare rates would be “severed over time as more flexible payment systems are developed.” In other words, this public plan would eventually evolve into something that looks–and competes–more like a private insurance company, albeit one that happens to be run by the government. At the news conference, I asked the committee chairmen precisely what that means–When would that happen? And under what circumstances? They couldn’t tell me, and demurred that this is the kind of thing that still needs to be worked out. Waxman said it would take “a period of time” for the public plan to get started, but that “they will at some point compete.”
The House committee chairmen are trying to have it both ways on the public plan.
Of course, the biggest thing that needs to be worked out is how they are going to pay for this bill, which they said would ultimately assure that 95% of Americans have health coverage. What they are looking at is a combination of reductions in Medicare and Medicaid spending and taxes.
Until they figure that part out, all of this other stuff is written in smoke.
http://swampland.blogs.time.com/2009/06/19/house-health-care-plan/

With the release of the discussion draft of the House Tri-Committee reform proposal, the progressive community is celebrating the decision to include a “strong public option” within the health insurance exchange. Its innovative feature, different from other public option proposals, is that it would use lower Medicare-based rates for the first three years, enabling the public option to displace some higher-premium private plans within the insurance exchange. Then in the fourth year, rates would be adjusted to provide a level playing field with the private plans.
Is this the model of the public option that is going to ensure that reform will bring affordable health care to everyone? Well, here are a few things that this reform will NOT accomplish:
* Not a single one of the Republicans or conservative Democrats who are opposed to the public option will sign on to this version. It is a government program not only in name, but in fact. Not only would it eliminate any hope of bipartisan legislation, it is quite likely that it could not even muster the vote of a simple majority.
* By requiring the public option to have the same market reforms as the private plans, it will prevent the government from using the great power of beneficent public social policies. A regulated insurance exchange within a fragmented, multi-payer, business-oriented insurance market would provide a very shaky infrastructure for delivering to the community the benefits of a social insurance program. Even with greater regulation, our private insurers have a business mission whereas the European private insurers have a social mission.
* A public plan that is required to comply with private insurer rules could never provide a back door entry to a single payer system. As Medicare Advantage demonstrates, the private insurers will always use devious means to provide them with an unfair advantage over our public program, even though they provide lower value per dollar spent.
* An insurance exchange, with or without a public option, perpetuates a fragmented system that prevents us from obtaining greater health care value by having the powerful purchasing strength of our own public monopsony – the secret of other systems that have slowed cost inflation.
* The administrative complexity of this model of reform makes it impossible to cover everyone. Initial estimates that this would cover 95 percent of the population are likely overly optimistic. Regardless, supporting a program that would leave even 15 million people on their own to fend for health care reflects a callous disregard for the needs of these individuals, and certainly belies the notion that we are a caring nation.
* Although this proposal shifts spending between individuals, employers and the government, creating the appearance of financing reform, it does very little to slow the continuing escalation in health care costs. Until that is seriously addressed, as it could be through an improved Medicare for everyone, the rest of this “stuff is written in smoke,” as Karen Tumulty writes.

House Tri-Committee public option

The House Tri-Committee Health Reform Draft

June 19, 2009
H.R. (discussion draft)
Short Title (to be supplied)

SEC. 223. PAYMENT RATES FOR ITEMS AND SERVICES.
(a) RATES ESTABLISHED BY SECRETARY.–
(1) IN GENERAL.–The Secretary shall establish payment rates for the public health insurance option for services and health care providers consistent with this section and may change such payment rates in accordance with section 224.
(2) INITIAL PAYMENT RULES.–
(A) IN GENERAL.–Except as provided in subparagraph (B) and subsection (b)(1), during Y1, Y2, and Y3, the Secretary shall base the payment rates under this section for services and providers described in paragraph (1) on the payment rates for similar services and providers under parts A and B of Medicare.

(b) INCENTIVES FOR PARTICIPATING PROVIDERS.–
(1) INITIAL INCENTIVE PERIOD.–
(A) IN GENERAL.–The Secretary shall provide, in the case of services described in sub paragraph (B), for payment rates that are 5 percent greater than the rates established under subsection (a).
(B) SERVICES DESCRIBED.–The services described in this subparagraph are items and professional services furnished during Y1, Y2, and Y3, under the public health insurance option by a physician or other health care practitioner who participates in both Medicare and the public health insurance option.

(2) SUBSEQUENT PERIODS.– Beginning with Y4 and for subsequent years, the Secretary may adjust such rates in order to promote payment accuracy, to ensure adequate beneficiary access to providers, or to promote affordablility and the efficient delivery of medical care.

http://edlabor.house.gov/blog/2009/06/health-care-reform-house-dems.shtml

PUBLIC HEALTH INSURANCE OPTION PROVISIONS IN THE DISCUSSION DRAFT:

OVERVIEW
Available in the new Health Insurance Exchange (Exchange) along with all of the private health insurance plans.

LEVEL PLAYING FIELD
Require public plan to meet the same benefit requirements, and comply with the same insurance market reforms as private plans.
Establish the public planĆ¢ā‚¬ā„¢s premiums for the local market areas that are designated by the Exchange, just as other insurers do.

PROVIDER PAYMENTS AND PARTICIPATION
Initially utilizes rates similar to those used in Medicare; this tie is severed over time as more flexible payment systems are developed.

http://edlabor.house.gov/documents/111/pdf/publications/DraftHealthCareReform-PublicOption.pdf

And…

House Health Care Plan

Posted by Karen Tumulty
TIME
Swampland (a blog)
June 19, 2009

The key committee chairmen put out an outline today of their approach to health care reform, and there’s one thing they want you to know about it: “Uniquely American,” said House Education and Labor Committee Chairman George Miller.

“We need a uniquely American approach to health care reform,” warns Robert Zirkelbach, a spokesman for the trade lobby America’s Health Insurance Plans.

Anyone who has followed this debate for more than 20 seconds will immediately recognize all this talk of unique Americanism as another way of saying NOT SINGLE PAYER, which is the government-financed system that just about every other industrialized country uses in one form or another. And all this skittishness about single payer explains the delicacy with which the House drafters have tried to finesse the question of whether their system will have a public plan, something like Medicare, but for people under 65.

The answer is, it will have a public plan, and a strong one–at first.

In the early stage, the public plan would reimburse health care providers at rates that are “similar to those used in Medicare”–that is, significantly lower than most private insurers pay them. This is something that the insurance industry, doctors and hospitals will all hate. “A government-run plan that pays based on Medicare rates — for any period of time — is a recipe for disaster,” Scott P. Serota, president and Chief Executive Officer of the Blue Cross and Blue Shield Association, said in a statement issued by the association.

Advocates would argue, on the other hand, that those lower rates could be a powerful engine to bring down health costs. Which is why they won’t be happy with what happens next. According to the summary, this tie to Medicare rates would be “severed over time as more flexible payment systems are developed.” In other words, this public plan would eventually evolve into something that looks–and competes–more like a private insurance company, albeit one that happens to be run by the government. At the news conference, I asked the committee chairmen precisely what that means–When would that happen? And under what circumstances? They couldn’t tell me, and demurred that this is the kind of thing that still needs to be worked out. Waxman said it would take “a period of time” for the public plan to get started, but that “they will at some point compete.”

The House committee chairmen are trying to have it both ways on the public plan.

Of course, the biggest thing that needs to be worked out is how they are going to pay for this bill, which they said would ultimately assure that 95% of Americans have health coverage. What they are looking at is a combination of reductions in Medicare and Medicaid spending and taxes.

Until they figure that part out, all of this other stuff is written in smoke.

http://swampland.blogs.time.com/2009/06/19/house-health-care-plan/

Comment:

By Don McCanne, MD

With the release of the discussion draft of the House Tri-Committee reform proposal, the progressive community is celebrating the decision to include a “strong public option” within the health insurance exchange. Its innovative feature, different from other public option proposals, is that it would use lower Medicare-based rates for the first three years, enabling the public option to displace some higher-premium private plans within the insurance exchange. Then in the fourth year, rates would be adjusted to provide a level playing field with the private plans.

Is this the model of the public option that is going to ensure that reform will bring affordable health care to everyone? Well, here are a few things that this reform will NOT accomplish:

* Not a single one of the Republicans or conservative Democrats who are opposed to the public option will sign on to this version. It is a government program not only in name, but in fact. Not only would it eliminate any hope of bipartisan legislation, it is quite likely that it could not even muster the vote of a simple majority.

* By requiring the public option to have the same market reforms as the private plans, it will prevent the government from using the great power of beneficent public social policies. A regulated insurance exchange within a fragmented, multi-payer, business-oriented insurance market would provide a very shaky infrastructure for delivering to the community the benefits of a social insurance program. Even with greater regulation, our private insurers have a business mission whereas the European private insurers have a social mission.

* A public plan that is required to comply with private insurer rules could never provide a back door entry to a single payer system. As Medicare Advantage demonstrates, the private insurers will always use devious means to provide them with an unfair advantage over our public program, even though they provide lower value per dollar spent.

* An insurance exchange, with or without a public option, perpetuates a fragmented system that prevents us from obtaining greater health care value by having the powerful purchasing strength of our own public monopsony – the secret of other systems that have slowed cost inflation.

* The administrative complexity of this model of reform makes it impossible to cover everyone. Initial estimates that this would cover 95 percent of the population are likely overly optimistic. Regardless, supporting a program that would leave even 15 million people on their own to fend for health care reflects a callous disregard for the needs of these individuals, and certainly belies the notion that we are a caring nation.

* Although this proposal shifts spending between individuals, employers and the government, creating the appearance of financing reform, it does very little to slow the continuing escalation in health care costs. Until that is seriously addressed, as it could be through an improved Medicare for everyone, the rest of this “stuff is written in smoke,” as Karen Tumulty writes.

Single-minded on healthcare

By ELIZABETH COONEY
Boston Globe
June 22, 2009

The debate in Washington about how to overhaul the nation’s healthcare system has included little from advocates for a single-payer plan. Dr. Steffie Woolhandler, a Cambridge Health Alliance internist and Harvard Medical School professor who cofounded Physicians for a National Health Care Program, has been raising her voice for a national plan for more than two decades, contending that the current system based on private insurance – including the Massachusetts model mandating near-universal coverage – does not serve people well, whether they are rich or poor, insured or uninsured. Here is an edited version of an interview last week.

ELIZABETH COONEY

Q. What do you think of current efforts in Washington to improve healthcare?

A. What’s currently on the table, what [President] Obama and [Senator Edward M.] Kennedy are talking about, will not fix healthcare. They don’t have any way to pay for it. We can’t just keep pumping money into the system. We actually have to fix the system.

Q. Why aren’t single-payer advocates at the table?

A. I think that was due to the tremendous influence of the private health insurance industry. We’ve pushed some and the process has moved some. At first Senator [Max] Baucus had 13 people, mostly doctors and nurses, arrested outside the hearing he was leading. We did get a hearing on single payer for the first time in history in the House Education and Labor Committee.

Q. How would a single-payer system pay for itself?

A. A single-payer system contains its own funding. It would fix the system by dramatically reducing administrative costs. Just the complexity of having competing insurance firms and the system overhead make costs go way up. In the United States, administration costs us 31 cents of every healthcare dollar. In Canada, it’s about 16.5 cents for every healthcare dollar. If we could have the administrative efficiency they have in Canada, we could move $400 billion in annual costs.

Q. What about waiting lists for care?

A. Canada spends half of what we do per capita on healthcare and they do have some waiting lists, but they’re really not as bad as the right wing portrays them. The waiting lists are a result of their level of spending. Our problem in the US is we spend a lot of money but we have a bad system. In Canada they have a good system but they just don’t spend enough money on it. We have great hospitals and great nurses and well-trained doctors and lots of fancy technology. We have what we need, and yet we still can’t take care of patients because the financing system doesn’t work.