PNHP

CBO score: everyone covered, except 37 million

CBO score: everyone covered, except 37 million

Letter to Sen. Edward Kennedy, Chairman, Committee on Health, Education, Labor, and Pensions

From CBO Director Douglas Elmendorf
Congressional Budget Office
June 15, 2009
The Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT) have completed a preliminary analysis of the major provisions related to health insurance coverage that are contained in title I of draft legislation called the Affordable Health Choices Act, which was released by the Senate Committee on Health, Education, Labor, and Pensions (HELP) on June 9, 2009. Among other things, that draft legislation would establish insurance exchanges (called “gateways”) through which individuals and families could purchase coverage and would provide federal subsidies to substantially reduce the cost of that coverage for some enrollees.
Effects on Insurance Coverage.
According to the preliminary analysis, once the proposal was fully implemented, the number of people who are uninsured would decline to about 36 million or 37 million, representing about 13 percent of the nonelderly population.
Budgetary Impact of Insurance Coverage Provisions.
On a preliminary basis, CBO and the JCT staff estimate that the major provisions in title I of the Affordable Health Choices Act affecting health insurance coverage would result in a net increase in federal deficits of about $1.0 trillion for fiscal years 2010 through 2019. That estimate primarily reflects the subsidies that would be provided to purchase coverage through the new insurance exchanges, which would amount to nearly $1.3 trillion in that period.
Those costs would be partly offset by receipts or savings from three sources: increases in tax revenues stemming from the decline in employment-based coverage; payments of penalties by uninsured individuals; and reductions in outlays for Medicaid and CHIP (relative to current-law projections).
It is important to note, however, that those figures do not represent a formal or complete cost estimate for the draft legislation, for reasons outlined (in the letter). Moreover, because expanded eligibility for the Medicaid program may be added at a later date, those figures are not likely to represent the impact that more comprehensive proposals — which might include a significant expansion of Medicaid or other options for subsidizing coverage for those with income below 150 percent of the federal poverty level — would have both on the federal budget and on the extent of insurance coverage.
http://www.cbo.gov/ftpdocs/103xx/doc10310/06-15-HealthChoicesAct.pdf

Since the Affordable Health Choices Act and the CBO analysis of it are works in progress, the estimates of the net numbers who will gain insurance coverage and the net cost to the government are only preliminary and will likely change with refinements in the legislation and the analysis. What will not change are the fundamental implications of financing health care through government subsidized private health plans plus public programs.
The primary reform goals that most of us support include providing health insurance for everyone that is effective in preventing financial hardship, and controlling the rate of increase in our health care costs. What does the CBO response tell us about the potential of this legislation to meet these two goals?
Regarding the impact on our national health expenditures (NHE), the analysis tells us almost nothing. As with most reports of this nature, they looked primarily at government spending rather than total health care spending. Individuals, employers and the government are all concerned about health care costs. Tax and budget policies that satisfy fiscally conservative legislators by effectively capping government spending while shifting cost increases to individuals and employers do not help us, as a nation, to meet the challenges of run-away health care costs that are harming so many of us. Looking at government spending while ignoring private spending is of little value to us when we are trying to figure out how we are going to pay for health care.
CBO needs to provide us with an estimate of changes in our NHE since we are all paying that. Providing us, in addition, with estimates of government spending can be helpful in establishing tax policies that would help bring equity to health care financing. But let’s have transparency on our full health care spending, public and private.
Regarding the impact on the numbers who will become insured, analyses such as this can provide a ballpark figure. The fact that the policies outlined in the current draft of the legislation would leave 37 million people without coverage likely has Senate HELP Committee members scurrying to patch the holes in the legislation and to look for other refinements that would expand coverage to more individuals.
There is an inverse relationship between government subsidies and the numbers of individuals who are left uninsured. Increasing the number of individuals eligible for the subsidies and increasing the amounts of the subsidies reduce the numbers of individuals left out, but that number will never be zero. A policy of using government subsidies to purchase private plans will always fall short of universality. The only way to cover absolutely everyone is to make enrollment automatic, and to separate the financing by changing from premiums linked to individual plans to a global system financed through equitable tax policies.
Looking only at the numbers of individuals left without insurance skirts another crucial issue. The rate of underinsurance is exploding. Offering multiple tiers of different priced plans in an insurance exchange automatically results in an expansion of underinsurance. Even with subsidies, healthy individuals will select inadequate plans with the lowest premiums, sincerely believing that this is all they can afford. But what good is insurance if you can still be left bankrupt with medical bills?
This proposal leaves too many without health insurance, fails to control our escalating health care costs, and expands the market of underinsurance products. The staff members at CBO, JCT, the HELP Committee, the Finance Committee, and the House Committees will get busy introducing policy refinements for the legislative proposals. Then they will finally bring us a product that leaves too many without health insurance, fails to control our escalating health care costs, and expands the market of underinsurance products.

CBO score: everyone covered, except 37 million

Letter to Sen. Edward Kennedy, Chairman, Committee on Health, Education, Labor, and Pensions

From CBO Director Douglas Elmendorf
Congressional Budget Office
June 15, 2009

The Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT) have completed a preliminary analysis of the major provisions related to health insurance coverage that are contained in title I of draft legislation called the Affordable Health Choices Act, which was released by the Senate Committee on Health, Education, Labor, and Pensions (HELP) on June 9, 2009. Among other things, that draft legislation would establish insurance exchanges (called “gateways”) through which individuals and families could purchase coverage and would provide federal subsidies to substantially reduce the cost of that coverage for some enrollees.

Effects on Insurance Coverage.

According to the preliminary analysis, once the proposal was fully implemented, the number of people who are uninsured would decline to about 36 million or 37 million, representing about 13 percent of the nonelderly population.

Budgetary Impact of Insurance Coverage Provisions.

On a preliminary basis, CBO and the JCT staff estimate that the major provisions in title I of the Affordable Health Choices Act affecting health insurance coverage would result in a net increase in federal deficits of about $1.0 trillion for fiscal years 2010 through 2019. That estimate primarily reflects the subsidies that would be provided to purchase coverage through the new insurance exchanges, which would amount to nearly $1.3 trillion in that period.

Those costs would be partly offset by receipts or savings from three sources: increases in tax revenues stemming from the decline in employment-based coverage; payments of penalties by uninsured individuals; and reductions in outlays for Medicaid and CHIP (relative to current-law projections).

It is important to note, however, that those figures do not represent a formal or complete cost estimate for the draft legislation, for reasons outlined (in the letter). Moreover, because expanded eligibility for the Medicaid program may be added at a later date, those figures are not likely to represent the impact that more comprehensive proposals — which might include a significant expansion of Medicaid or other options for subsidizing coverage for those with income below 150 percent of the federal poverty level — would have both on the federal budget and on the extent of insurance coverage.

http://www.cbo.gov/ftpdocs/103xx/doc10310/06-15-HealthChoicesAct.pdf

Comment:

By Don McCanne, MD

Since the Affordable Health Choices Act and the CBO analysis of it are works in progress, the estimates of the net numbers who will gain insurance coverage and the net cost to the government are only preliminary and will likely change with refinements in the legislation and the analysis. What will not change are the fundamental implications of financing health care through government subsidized private health plans plus public programs.

The primary reform goals that most of us support include providing health insurance for everyone that is effective in preventing financial hardship, and controlling the rate of increase in our health care costs. What does the CBO response tell us about the potential of this legislation to meet these two goals?

Regarding the impact on our national health expenditures (NHE), the analysis tells us almost nothing. As with most reports of this nature, they looked primarily at government spending rather than total health care spending. Individuals, employers and the government are all concerned about health care costs. Tax and budget policies that satisfy fiscally conservative legislators by effectively capping government spending while shifting cost increases to individuals and employers do not help us, as a nation, to meet the challenges of run-away health care costs that are harming so many of us. Looking at government spending while ignoring private spending is of little value to us when we are trying to figure out how we are going to pay for health care.

CBO needs to provide us with an estimate of changes in our NHE since we are all paying that. Providing us, in addition, with estimates of government spending can be helpful in establishing tax policies that would help bring equity to health care financing. But let’s have transparency on our full health care spending, public and private.

Regarding the impact on the numbers who will become insured, analyses such as this can provide a ballpark figure. The fact that the policies outlined in the current draft of the legislation would leave 37 million people without coverage likely has Senate HELP Committee members scurrying to patch the holes in the legislation and to look for other refinements that would expand coverage to more individuals.

There is an inverse relationship between government subsidies and the numbers of individuals who are left uninsured. Increasing the number of individuals eligible for the subsidies and increasing the amounts of the subsidies reduce the numbers of individuals left out, but that number will never be zero. A policy of using government subsidies to purchase private plans will always fall short of universality. The only way to cover absolutely everyone is to make enrollment automatic, and to separate the financing by changing from premiums linked to individual plans to a global system financed through equitable tax policies.

Looking only at the numbers of individuals left without insurance skirts another crucial issue. The rate of underinsurance is exploding. Offering multiple tiers of different priced plans in an insurance exchange automatically results in an expansion of underinsurance. Even with subsidies, healthy individuals will select inadequate plans with the lowest premiums, sincerely believing that this is all they can afford. But what good is insurance if you can still be left bankrupt with medical bills?

This proposal leaves too many without health insurance, fails to control our escalating health care costs, and expands the market of underinsurance products. The staff members at CBO, JCT, the HELP Committee, the Finance Committee, and the House Committees will get busy introducing policy refinements for the legislative proposals. Then they will finally bring us a product that leaves too many without health insurance, fails to control our escalating health care costs, and expands the market of underinsurance products.

The AMA Does Not Represent Us

Dr. Margaret Flowers and Dr. Carol Paris
TruthDig
Jun 15, 2009

As the American Medical Association begins its annual convention in Chicago, we want to take this opportunity to make it clear to the American public, to the media, and to the president and members of Congress, that the AMA does not represent us. It is a common misconception that this organization speaks on behalf of most American physicians but that is a misconception with very serious consequences at such a critical time in the health care reform debate. So long as the public, the media and our elected officials lump all physicians together as “the AMA,” then we are guilty by association of a failure of our Hippocratic oath to “first, do no harm.”

In fact, the AMA represents less than one-third of America’s physicians, and half of those are retired. In fact, the American Medical Student Association endorses universal health care reform.

The AMA’s longstanding opposition to every effort to change health care financing, including Medicare in the 1960s, has resulted in decades of needless and countless morbidity and mortality. Sixty people die every day in this country simply for lack of access to health care. And instead of being an advocate for the only solution that accomplishes the goals of universal coverage and fiscal viability, the single-payer option, the AMA continues to be primarily a trade association looking out for the financial interests of its members.

But who, then, is looking out for the interests of patients? Certainly not Congress and the president. If that were so, the United States would long ago have relieved itself of the dubious distinction of being the only developed country in the world that does not have a universal system of health care. No, the evidence is clear that our Congress and our president are looking out for themselves and continuing the tradition of pay-to-play politics. How else would a reasonable person explain the fact that our elected officials, Democrats and Republicans combined, have accepted $12 million in campaign contributions since 1998 from the American Medical Association?

We would suggest that the American people, the media, President Obama, and the members of Congress need look no further than PNHP, Physicians for a National Health Program, if they want to consult an organization that represents the interests of patients and has been doing so for 22 years.

We are proud members of PNHP. We’re waiting and eager to be consulted. And our physicians are willing and able to continue to engage in acts of nonviolent civil disobedience. Health care reform is the civil rights issue of the decade.

The AMA does not represent us.

Dr. Margaret Flowers and Dr. Carol Paris are members of Physicians for a National Health Program.

Australian immigrant's health insurance struggles may send him back

By Alison Knezevich
The Charleston Gazette
June 14, 2009

CHARLESTON, W.Va. — Moving boxes are stacked in the living room of Andrew and Rita Watson’s Kanawha City apartment.

The Australian immigrants are preparing for a trip neither wants to make.

“I don’t have any insurance, and I’m uninsurable,” 65-year-old Andrew Watson said.

And that could send him back to Australia.

In 1989, Australian surgeons replaced his right hip. He never got a hospital bill.

Since 1984, the country has offered universal health care through a program called Medicare, a government-operated system funded by taxes. Australians can also choose to use private insurance.

Last October, Watson’s hip replacement gave out. It was 19 years to the day he got it, he said.

He believes it’s wearing its way into the bone of his pelvic girdle. He’s sore all the time and walks with a cane.

Surgery would cost more than $50,000, he said.

In 1993, the couple settled in Charleston to be closer to Rita Watson’s children. In America, they’ve never had health insurance.

Watson pointed to his plastic green Australian Medicare card. He has dual American-Australian citizenship.

When he gets to Australia, “I’m just going to present that and say nothing.”

He plans to go by himself. If he must stay for a long period of time, he says his wife will follow.

The Watsons’ struggles come as health-care reform takes center stage in Washington, D.C. President Barack Obama and Congress are preparing legislation to overhaul the nation’s health-care system, though many questions remain unanswered.

The Watsons say their experience has given them a unique perspective. For the past seven months, they’ve worked with the state chapter of a national group called Physicians for a National Health Program to promote “single-payer” health care.

“The American people deserve it,” said Rita Watson, 71. “They’re very, very hardworking.”

They know many Americans don’t like the idea. Critics say it would lead to long waits and poor care.

Many others haven’t heard of it. A few weeks ago, Rita Watson’s son visited from Elkview.

“I brought up single-payer,” she said. “He said, ‘What’s that?'”

The single-payer system would work like America’s Medicare program for the elderly. A government-run agency, financed by taxes on employers and employees, would collect fees and pay them out to providers.

Everyone would be covered, and no one would pay co-payments or deductibles.

Proponents say the current for-profit insurance system denies people the care they need and is mired in administrative waste that drives up costs.

In December, the couple attended a meeting for Obama supporters. The conversation turned to health care.

They met Dr. Hedda Haning, an anesthesiologist with Physicians for a National Health Program.

“He got up with an obvious accent,” Haning said. “People were very interested to hear, because he was someone from elsewhere.”

Now retired, Andrew Watson has worked as an industrial plant maintenance mechanic, and maintained machines for a records management company, among other jobs. He never made enough money to pay insurance premiums.

Rita Watson has worked for a gas company, the state, and a behavioral health agency.

“I was in temporary work, and I always got 39 hours,” an hour short of qualifying for benefits, she said.

In 2004, a blood infection sent Andrew Watson to Charleston Area Medical Center for 11 days. After that, he needed bandages, saline solution and other supplies to take care of his wounds at home. His bill: $26,000.

The CAMC doctors “saved my life,” he said.

“There’s nothing wrong with the health care,” he said. “It is the way the funding and the billing is managed. And that is the trouble in the Untied States.”

Last month, the Watsons visited Washington, D.C., with Physicians for a National Health Program to lobby representatives.

When they visit the grocery store, they wear “Single Payer” buttons with the slogan, “Everybody in, nobody out.”

“It’s about equity,” he said.

Much of the debate in Washington now centers around whether a “public option” — a government-sponsored insurance plan to compete with the private industry — will be available. Obama supports such a plan. Critics say it’s a backdoor to a single-payer system.

“There are various things that have been talked about in the last week or so, but what happens next is anybody’s guess,” said Haning, who’s been pushing for a single-payer system for about 20 years. “It seems that Congress wants to protect the insurance companies.”

In Kanawha City, Rita Watson said she and her husband are “hoping and praying” that somehow, they won’t have to leave the United States.

“The American people are tops,” she said. “There’s no one like them…. Australia is a beautiful country. But it’s not America. This is home.”

A singular solution for healthcare

By Judy Norsigian and Jennifer Potter
The Boston Globe
June 15, 2009

A single-payer healthcare system would more effectively control costs than any other plan that Congress is considering as it moves toward a reform bill. And by controlling costs, existing resources could be allocated more equitably, especially for the benefit of women.

First, single-payer plans eliminate the $300 billion to $400 billion that insurance companies spend annually in administrative overhead and waste. Second, single-payer plans are best positioned to take on the enormous challenge of reducing or eliminating the financial incentives that have led to so much overtreatment and undertreatment.

Maternity care illustrates this phenomenon: We spend far more per capita than any other industrialized country and yet do worse on most birth outcome measures than most of these other countries. So-called best practices – medical practices already demonstrated to improve outcomes – are well described in the medical literature, but they are not widely implemented, even though doing so would lower costs and improve the health of mothers and babies.

For example, nearly one-third of all US women deliver their babies by caesarean section, a rate that is far higher than medically necessary. One of the reasons is that most obstetricians and hospitals are paid far more for a surgical delivery than for a vaginal birth. Such incentives not only raise costs, but ironically often produce worse health outcomes.

By reducing the ability of for-profit companies to siphon off huge sums of money for private gain, a single payer system is better able to expand best practices. Why? Because the motivations to over-treat those who are well-insured and to undertreat those with limited or no insurance coverage will no longer be built into the medical care system.

Women in particular have much to gain from single-payer healthcare. Our country has an excess of medical specialists, and is in desperate need of more primary caregivers – such as general internists, family practice physicians, nurse practitioners, and licensed midwives – who are often more aptly trained than specialists to provide the comprehensive services women need. A single payer plan would eliminate the financial incentives that have been obstacles to training more primary care professionals. It would also eliminate the need for so many medical malpractice lawsuits, as people would not have to worry about paying for medical care whenever they experienced bad outcomes.

The only national plan for healthcare reform that explicitly includes women’s reproductive health services, including abortion, is one sponsored by Representative Barbara Lee, a California Democrat. Other sponsors of single-payer plans are also amenable to including women’s reproductive health services.

Coverage with a single-payer plan is independent from employment. Because women are more likely to be self-employed, to work part time, and to move in and out of employment outside the home, they are now more likely either to lack coverage through work or to lose insurance when changing jobs.

Medical debt is an enormous concern for many women, and single-payer plans effectively address the cost issues that send women into debt and even bankruptcy. A 2009 Commonwealth Fund study found that 45 percent of women accrued medical debt or reported problems with medical bills in 2007 compared with 36 percent of men. Under Rep. John Conyers’ single-payer bill, a family of four making the median income of $56,200 would pay about $2,700 in payroll tax for all health care costs – with no deductibles or copays or concerns about catastrophic costs.

Since a single-payer plan may be the only approach that will successfully contain costs, it was a good sign that Congress finally held hearings on a single-payer system last week.

Although many progressive members of Congress now support a proposal that includes a “public insurance option” as an alternative to private insurance industry plans, numerous critiques demonstrate how this approach could fail. Unless designed to mirror the effective Medicare system – by automatically enrolling the majority of the population and using Medicare’s cost control levers – the public option will not be affordable for all.

When polled, a majority of physicians as well as the public support a single-payer plan. For example, a 2007 AP-Yahoo poll asked respondents whether they agreed with this statement: “The United States should adopt a universal health insurance program in which everyone is covered under a program like Medicare that is run by the government and financed by taxpayers.”

A whopping 65 percent said yes to that question. By political standards, this is a landslide. It is time for Congress to pay attention to the voters, not the well-funded lobbyists.

Judy Norsigian is executive director of Our Bodies Ourselves. Jennifer Potter, MD, is director of the Women’s Health Center at Beth Israel Deaconess Medical Center and director of women’s health at Fenway Health.

Australian immigrant’s health insurance struggles may send him back

By Alison Knezevich
The Charleston Gazette
June 14, 2009

CHARLESTON, W.Va. — Moving boxes are stacked in the living room of Andrew and Rita Watson’s Kanawha City apartment.

The Australian immigrants are preparing for a trip neither wants to make.

“I don’t have any insurance, and I’m uninsurable,” 65-year-old Andrew Watson said.

And that could send him back to Australia.

In 1989, Australian surgeons replaced his right hip. He never got a hospital bill.

Since 1984, the country has offered universal health care through a program called Medicare, a government-operated system funded by taxes. Australians can also choose to use private insurance.

Last October, Watson’s hip replacement gave out. It was 19 years to the day he got it, he said.

He believes it’s wearing its way into the bone of his pelvic girdle. He’s sore all the time and walks with a cane.

Surgery would cost more than $50,000, he said.

In 1993, the couple settled in Charleston to be closer to Rita Watson’s children. In America, they’ve never had health insurance.

Watson pointed to his plastic green Australian Medicare card. He has dual American-Australian citizenship.

When he gets to Australia, “I’m just going to present that and say nothing.”

He plans to go by himself. If he must stay for a long period of time, he says his wife will follow.

The Watsons’ struggles come as health-care reform takes center stage in Washington, D.C. President Barack Obama and Congress are preparing legislation to overhaul the nation’s health-care system, though many questions remain unanswered.

The Watsons say their experience has given them a unique perspective. For the past seven months, they’ve worked with the state chapter of a national group called Physicians for a National Health Program to promote “single-payer” health care.

“The American people deserve it,” said Rita Watson, 71. “They’re very, very hardworking.”

They know many Americans don’t like the idea. Critics say it would lead to long waits and poor care.

Many others haven’t heard of it. A few weeks ago, Rita Watson’s son visited from Elkview.

“I brought up single-payer,” she said. “He said, ‘What’s that?'”

The single-payer system would work like America’s Medicare program for the elderly. A government-run agency, financed by taxes on employers and employees, would collect fees and pay them out to providers.

Everyone would be covered, and no one would pay co-payments or deductibles.

Proponents say the current for-profit insurance system denies people the care they need and is mired in administrative waste that drives up costs.

In December, the couple attended a meeting for Obama supporters. The conversation turned to health care.

They met Dr. Hedda Haning, an anesthesiologist with Physicians for a National Health Program.

“He got up with an obvious accent,” Haning said. “People were very interested to hear, because he was someone from elsewhere.”

Now retired, Andrew Watson has worked as an industrial plant maintenance mechanic, and maintained machines for a records management company, among other jobs. He never made enough money to pay insurance premiums.

Rita Watson has worked for a gas company, the state, and a behavioral health agency.

“I was in temporary work, and I always got 39 hours,” an hour short of qualifying for benefits, she said.

In 2004, a blood infection sent Andrew Watson to Charleston Area Medical Center for 11 days. After that, he needed bandages, saline solution and other supplies to take care of his wounds at home. His bill: $26,000.

The CAMC doctors “saved my life,” he said.

“There’s nothing wrong with the health care,” he said. “It is the way the funding and the billing is managed. And that is the trouble in the Untied States.”

Last month, the Watsons visited Washington, D.C., with Physicians for a National Health Program to lobby representatives.

When they visit the grocery store, they wear “Single Payer” buttons with the slogan, “Everybody in, nobody out.”

“It’s about equity,” he said.

Much of the debate in Washington now centers around whether a “public option” — a government-sponsored insurance plan to compete with the private industry — will be available. Obama supports such a plan. Critics say it’s a backdoor to a single-payer system.

“There are various things that have been talked about in the last week or so, but what happens next is anybody’s guess,” said Haning, who’s been pushing for a single-payer system for about 20 years. “It seems that Congress wants to protect the insurance companies.”

In Kanawha City, Rita Watson said she and her husband are “hoping and praying” that somehow, they won’t have to leave the United States.

“The American people are tops,” she said. “There’s no one like them…. Australia is a beautiful country. But it’s not America. This is home.”

President Obama's proposal to pay for reform

Paying for Health Care Reform

The White House
June 13, 2009
Health Care Reserve Fund ($ in billions – over 10 years)
$635 – FY 2010 Budget
$309 – Medicare and Medicaid Savings
$326 – Revenues
$313 – Additional Medicare and Medicaid Savings
$110 – Incorporate productivity adjustments into Medicare payment
$106 – Reduce hospital subsidies for treating the uninsured as coverage increases
$75 – Pay better prices for Medicare Part D drugs
$22 – Other
Total: $948
http://www.whitehouse.gov/MedicareFactSheetFinal/

What does President Obama mean when he says that this is how we’re going to pay for most of his health care reform proposals? Is he referring to savings in the actual costs of health care that would offset the increased spending that would result from expanding coverage? Or is he merely referring to a decrease in government spending that helps with government budgets, but doesn’t really have much impact on our total national health expenditures (NHE)?
Two-thirds of the proposed funding already appears in his FY 2010 budget. He would reduce overpayments to Medicare Advantage plans, reduce Medicare and Medicaid fraud (sure), reduce hospital readmissions (block the entrances?), and reduce Medicare hospital payments by measuring quality (hmmm). In this fact sheet, the only revenue increase mentioned is limiting the value of itemized deductions for families making over a quarter-million dollars a year, a proposal that has proven to be quite controversial.
The new proposals in this fact sheet include a reduction in spending based on improved productivity, extrapolating the improved productivity in the entire U.S. economy and applying it to health care (not exactly noted for assembly lines, displacing health care with information technology systems, etc.). It includes a reduction in payments to Disproportionate Share Hospitals (excess share of uninsured) which would be made possible by providing insurance to those currently uninsured. This is more of an accounting gimmick since it merely moves government spending from the hospitals to the insurance plans. Also proposed is a reduction in drug reimbursement for beneficiaries dually eligible for Medicare and Medicaid, a minute fraction of what could be saved by negotiating fair prices for all of us under a universal national health program.
Merely playing with numbers does not provide us with the comprehensive structural reform that we would need to accomplish our two primary goals: 1) health care for everyone, and 2) slowing health care cost escalation to sustainable levels. As long as the politicians can continue to distract us with cat fights over the public option, or whatever, we will never have what we really need: a new and improved Medicare for all.

President Obama's proposal to pay for reform

Paying for Health Care Reform

The White House
June 13, 2009

Health Care Reserve Fund ($ in billions – over 10 years)

$635 – FY 2010 Budget
$309 – Medicare and Medicaid Savings
$326 – Revenues

$313 – Additional Medicare and Medicaid Savings
$110 – Incorporate productivity adjustments into Medicare payment
$106 – Reduce hospital subsidies for treating the uninsured as coverage increases
$75 – Pay better prices for Medicare Part D drugs
$22 – Other

Total: $948

http://www.whitehouse.gov/MedicareFactSheetFinal/

Comment:

By Don McCanne, MD

What does President Obama mean when he says that this is how we’re going to pay for most of his health care reform proposals? Is he referring to savings in the actual costs of health care that would offset the increased spending that would result from expanding coverage? Or is he merely referring to a decrease in government spending that helps with government budgets, but doesn’t really have much impact on our total national health expenditures (NHE)?

Two-thirds of the proposed funding already appears in his FY 2010 budget. He would reduce overpayments to Medicare Advantage plans, reduce Medicare and Medicaid fraud (sure), reduce hospital readmissions (block the entrances?), and reduce Medicare hospital payments by measuring quality (hmmm). In this fact sheet, the only revenue increase mentioned is limiting the value of itemized deductions for families making over a quarter-million dollars a year, a proposal that has proven to be quite controversial.

The new proposals in this fact sheet include a reduction in spending based on improved productivity, extrapolating the improved productivity in the entire U.S. economy and applying it to health care (not exactly noted for assembly lines, displacing health care with information technology systems, etc.). It includes a reduction in payments to Disproportionate Share Hospitals (excess share of uninsured) which would be made possible by providing insurance to those currently uninsured. This is more of an accounting gimmick since it merely moves government spending from the hospitals to the insurance plans. Also proposed is a reduction in drug reimbursement for beneficiaries dually eligible for Medicare and Medicaid, a minute fraction of what could be saved by negotiating fair prices for all of us under a universal national health program.

Merely playing with numbers does not provide us with the comprehensive structural reform that we would need to accomplish our two primary goals: 1) health care for everyone, and 2) slowing health care cost escalation to sustainable levels. As long as the politicians can continue to distract us with cat fights over the public option, or whatever, we will never have what we really need: a new and improved Medicare for all.