PNHP

Insurance interests total 1/4 of Baucus’ fundraising

Insurance interests total 1/4 of Baucus’ fundraising

By Mike Dennison
The Montana Standard
06/14/2009

HELENA — As Sen. Max Baucus has taken the lead on health-reform legislation in the U.S. Senate, he’s also become a leader in something else: Campaign money received from health- and insurance-industry interests.

In the past six years, nearly one-fourth of every dime raised by Baucus, D-Mont., and his political-action committee has come from groups and individuals associated with drug companies, insurers, hospitals, medical-supply firms, health-service companies and other health professionals.

These donations total about $3.4 million, or $1,500 a day, every day, from January 2003 through 2008.

Baucus, who chairs the Senate Finance Committee that is drafting a major health-care reform bill this month, insists this cavalcade of money is not unduly influencing his work.

“No matter the issue, Max always puts Montana first,” said his spokesman, Ty Matsdorf. “Max will continue to do what’s right for our state, and groups like SEIU (a union representing thousands of health-care workers) and AARP (a senior citizens’ group) wouldn’t line up in support of his health-care reform effort if this wasn’t true.” Baucus’ office also lists numerous examples of how his proposed reforms are challenging the health-care and insurance industries, such as requiring insurers to accept all customers, regardless of health condition.

Yet some reform activists and others who watch the political system say it’s foolish to think this money doesn’t hold some sway.

“When you spend so much of your time raising money, as members of Congress do, from those who have a compelling interest in the outcome of legislation, it has to change what you think about it, and the viewpoints that you have,” says David Donnelly, director of Campaign Money Watch, a Washington, D.C., group that tracks money in politics. “It’s just human nature. … and members of Congress are human.” Advocates of national, public health insurance for all — a proposal largely excluded from the health-reform debate — say their exclusion points to the power of moneyed interests in Congress.

“I’m convinced that this (money) has a profound influence,” says Quentin Young, national coordinator for Physicians for a National Health Program. “Otherwise, how could Baucus, an otherwise respected and wise politician, say categorically that single-payer (national health insurance) is off the table?” Since 2003, perhaps no other member of Congress has received more money from health and insurance interests than Baucus. Only his Republican counterpart on the Finance Committee, Sen. Charles Grassley of Iowa, rivals him in terms of percentage of funds from these business sectors.

The Lee Newspapers State Bureau examined fundraising data for Baucus, Grassley, Sen. Ted Kennedy (who chairs the Senate Health Committee, which is drafting health-reform legislation), the other two members of Montana’s congressional delegation, and President Barack Obama.

The data are compiled by the Center for Responsive Politics, a nonprofit group that tracks and sorts campaign donors by profession and industry. Here’s a summary of what the State Bureau discovered:

* From 2003-2008, the Baucus campaign and his Glacier PAC, which raises money and distributes it to other candidates, received 23 percent of their $14.8 million from health-care and insurance interests.

The $3.4 million from these sectors includes $853,000 from pharmaceutical and health-products, $851,000 from health professionals; $467,000 from hospitals and nursing homes, $466,000 from health-service and HMO interests, and $784,000 from insurance.

The insurance-sector money includes donations from all types of insurance-company interests, including health insurance.

* Five of the top 10 specific donor sources for Baucus were drug companies, health insurers or health-related firms. For example, employees of Schering-Plough Corp., a major drug firm, gave him $92,000 over the period, more than any other single source.

* Grassley, the highest-ranking Republican on the Finance Committee, received 23.5 percent of his funds from health and insurance interests, but a lesser dollar amount than Baucus ($2.3 million out of $9.8 million total funds).

* Sen. Kennedy, D-Mass, a longtime advocate of health-care reforms, received only 7.5 percent of his funds from health and insurance interests, or about $1.2 million.

* Sen. Jon Tester, D-Mont., and Rep. Denny Rehberg, R-Mont., had minimal contributions from the health and insurance sectors.

* President Obama, whose campaign raised a whopping $745 million in 2007 and 2008, received a relatively small share from health-care interests ($19 million, or 2.5 percent) and insurance interests ($2 million, or 0.3 percent).

Baucus has been leading the charge on health-care reform in the U.S. Senate since early 2008, holding numerous hearings and Finance Committee meetings on the issue. He released a lengthy “white paper” last November, outlining his reform ideas, and a major bill is expected to be introduced this month.

The general thrust of his proposals is to require all citizens to buy health insurance, while also forcing the private insurance industry to stop practices that make coverage unaffordable for many. He supports subsidies to those who may have trouble affording insurance.

However, on a reform bitterly opposed by the insurance industry and most health-care interests — a public, nonprofit insurance plan offered by the government — Baucus has been more ambivalent, saying he supports the idea, but declining to say in what form.

Baucus’s office supplied nearly 20 examples of stances he’s taken in direct opposition to drug, insurance and banking interests that have donated to his campaign funds.

For example, he has supported importing lower-cost prescription drugs from Canada, allowing the government to negotiate for lower drug prices for Medicare recipients, funding research that would show when generic drugs are a better deal than brand-name drugs and reducing Medicare payments to private insurers by $13 billion over five years.

His office also points to an April 2007 Wall Street Journal article in which Baucus was quoted as telling medical-industry contributors at a fundraiser that “You should worry about me coming after you.” Donnelly, the Campaign Money Watch director, says the proof on health-care reform will be in the final product — and that he’s not terribly optimistic.

Health and insurance interests are clearly targeting Baucus and his Finance Committee, which often have shown themselves to be receptive to their influence, he says.

“This debate on health care is a microcosm … that even after a Ć¢ā‚¬Ėœchange’ election, how much the special interests view (Washington) as their fiefdom,” Donnelly says.

Supporters of national health insurance are even less optimistic, noting how Baucus, President Obama and leaders in Congress won’t even consider their proposal, which they believe would have broad public support.

“I can’t think of any reason other than fidelity to your donors, to explain why they would keep us out of the debate,” says Dr. Young of the physicians group. “Until we get campaign-finance reform, it will be very difficult to do anything to challenge the status quo (in health care), and the status quo had better be challenged, because it’s a very bad status quo.”

The view of those in the trenches supporting health care for all

Keynote: “Health Care Reform – What Has to Be Done”

By Don McCanne, M.D.
Health Care Council of Orange County
June 11, 2009
Annual Meeting
Opening questions directed to the audience:
How many here believe that it is probable – not certain, but probable – that Congress will pass health care reform and President Obama will sign it this year?
(Most individuals raised a hand)
How many believe that the legislation will provide insurance coverage to everyone or almost everyone?
(Not one hand went up)
How many believe that the legislation will be effective in slowing the rate of health care cost increases?
(Not one hand went up)
http://www.healthoc.com/

The Health Care Council of Orange County (California) has a mission of promoting access to improved health care for all Orange County residents through unified efforts to identify and address areas of need through research, collaboration, education and advocacy. The audience attending the annual meeting was composed of individuals who are quite well informed on the problems with our health care system, and they have been following the reform efforts taking place in Washington. Their opinions should matter to us.
For over half a century, the United States has struggled with a flawed health care financing system that leaves financial barriers in place for far too many of us. Most of the nation now agrees that something must be done to ensure that everyone has access to health care without having to face financial hardship or even bankruptcy.
But the goal of covering everyone has not been what has created the strong sense that health care is now facing a crisis. The concern that virtually everyone shares is that health care costs are no longer affordable. Too many individuals are no longer able to pay their insurance premiums, nor pay the out-of-pocket expenses not covered by insurance. Many businesses are no longer able to afford the costs of their employee health benefit programs. The federal and state governments are struggling with budget constraints aggravated by the high costs of public health programs.
Everyone agrees that it is critical that we do something now to slow the rate of increases in health care costs. While addressing costs, most of us also agree that we must bring everyone in under the umbrella of financial security when facing health care needs. Since neglect of these issues has created the crisis we face, you would think that Congress and the administration would be busy attempting to fix these problems.
Congress is busy all right. But no one at the Health Care Council has been fooled. We are going to end up with legislation that will be labeled “health reform,” but the twin crises of rising costs and inadequate insurance will still be with us. Congress and the President will walk away, pretending that they did something, and it will take years or decades of more suffering and hardship before our leaders revisit the problems and finally do the right thing.
Sheer madness!

The view of those in the trenches supporting health care for all

Keynote: "Health Care Reform - What Has to Be Done"

By Don McCanne, M.D.
Health Care Council of Orange County
June 11, 2009
Annual Meeting

Opening questions directed to the audience:

How many here believe that it is probable – not certain, but probable – that Congress will pass health care reform and President Obama will sign it this year?

(Most individuals raised a hand)

How many believe that the legislation will provide insurance coverage to everyone or almost everyone?

(Not one hand went up)

How many believe that the legislation will be effective in slowing the rate of health care cost increases?

(Not one hand went up)

http://www.healthoc.com/

Comment:

By Don McCanne, MD

The Health Care Council of Orange County (California) has a mission of promoting access to improved health care for all Orange County residents through unified efforts to identify and address areas of need through research, collaboration, education and advocacy. The audience attending the annual meeting was composed of individuals who are quite well informed on the problems with our health care system, and they have been following the reform efforts taking place in Washington. Their opinions should matter to us.

For over half a century, the United States has struggled with a flawed health care financing system that leaves financial barriers in place for far too many of us. Most of the nation now agrees that something must be done to ensure that everyone has access to health care without having to face financial hardship or even bankruptcy.

But the goal of covering everyone has not been what has created the strong sense that health care is now facing a crisis. The concern that virtually everyone shares is that health care costs are no longer affordable. Too many individuals are no longer able to pay their insurance premiums, nor pay the out-of-pocket expenses not covered by insurance. Many businesses are no longer able to afford the costs of their employee health benefit programs. The federal and state governments are struggling with budget constraints aggravated by the high costs of public health programs.

Everyone agrees that it is critical that we do something now to slow the rate of increases in health care costs. While addressing costs, most of us also agree that we must bring everyone in under the umbrella of financial security when facing health care needs. Since neglect of these issues has created the crisis we face, you would think that Congress and the administration would be busy attempting to fix these problems.

Congress is busy all right. But no one at the Health Care Council has been fooled. We are going to end up with legislation that will be labeled “health reform,” but the twin crises of rising costs and inadequate insurance will still be with us. Congress and the President will walk away, pretending that they did something, and it will take years or decades of more suffering and hardship before our leaders revisit the problems and finally do the right thing.

Sheer madness!

Single payer: bold, affordable, humane

[The following is the testimony of Dr. Walter Tsou to the House Subcommittee on Health, Employment, Labor and Pensions on June 10. The hearing was titled “Examining the single-payer health care option.”]

By Walter Tsou, M.D., M.P.H.

Congressman Andrews and members of the HELP subcommittee, my name is Dr. Walter Tsou. I am a public health physician and former Health Commissioner of Philadelphia.

If you believe that every American has the right to quality, affordable health care, then the only affordable means to achieve that goal is through a properly financed, single-payer national health insurance program.

Attempting to reconcile the dual imperatives of universal coverage and cost control through alternative methods besides single payer is an exercise in futility. It is clear that cost controls mean that someone’s ox gets gored, either the taxpayers’, physicians’ and hospitals’, or the private health insurance industry’s. When some Congressional leaders declare that “single payer is off the table,” they are, in effect, saying that insurers will be protected, leaving the pain to patients, taxpayers and health care providers.

Let’s examine each of these categories:

For the taxpayers, it is difficult to understand why we must endure an additional $1.5 trillion or more over the next decade in expenses at a time when our nation already spends 50 percent more per capita on health care than any other country in the world.

For physicians and hospitals, simply cutting reimbursements is counterproductive, especially at a time when we need to increase reimbursements for primary care and mental health services.

For the private insurance industry, they have dominated health care for the past 50 years, but it does not work. Despite a supposedly competitive marketplace, health care costs have skyrocketed, nearly 50 million are currently uninsured, and the quality of care for most Americans is “suboptimal,” in the words of the Agency for Healthcare Research and Quality. Choice is a total misnomer. Americans want to be able to choose their doctor and hospital, not their health plans.

A humane health care system should reinforce the safety net in the face of our nation’s worst recession since the Great Depression, but our profit-driven system kicks millions of Americans in the gut and leaves them both jobless and uninsured. We have saddled our nation with an inefficient and exorbitantly expensive health care system that drives jobs overseas where health benefit costs are low, and discourages entrepreneurs from striking out on their own for fear of losing their insurance coverage.

We need a far greater investment in community-based public health and preventive medicine, including home visitation for newborns and public health nurses doing chronic disease management in the community. But where will we get the funds?

Single payer is the only reform that can control health care costs. It does so by cutting insurance firms’ profits, streamlining the massive administrative apparatus that adds to the costs of hospital and doctors’ offices, using bulk purchasing, negotiating fee schedules with physicians, and putting hospitals on predictable, global budgets.

The $19 billion that has been set aside for health information technology is doomed to fail because it is dependent on a complex, fragmented health care financing system. In contrast, consider Taiwan, where everyone has a smart card. Your smart card carries your medical history and can be viewed by any doctor in Taiwan. Their national database allows them to identify the few outliers who try to abuse the system, rather than hassling millions of doctors and patients.

What the Internet has done to transform telecommunications across the world is what single payer will do to transform how we deliver health care in America. A national public health database would allow us to direct resources to areas of greatest need. We can change the incentives in reimbursement to advance our national health goals embodied in Healthy People 2020 and reward communities that help achieve those goals. This would encourage health professionals and hospitals to work together with local health departments to advance national health objectives.

President Obama has stated that if he were to start over again he would favor a single-payer system, but argues that moving to single payer is too radical.

Well, I come from Philadelphia where revolutionary ideas are celebrated not dismissed. Our most famous radical document begins with the words, “We the People,” not “We the Insurers.” “We the People of the United States, in order to form a more perfect union . . . to promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity do ordain and establish this Constitution for the United States of America.” This nation captured the world’s imagination with bold ideas that put the people first. It is time for our own generation’s revolution.

AMA and PNHP on public insurance

Doctors’ Group Opposes Public Insurance Plan

By Robert Pear
The New York Times
June 10, 2009
As the health care debate heats up, the American Medical Association is letting Congress know that it will oppose creation of a government-sponsored insurance plan, which President Obama and many other Democrats see as an essential element of legislation to remake the health care system.
… in comments submitted to the Senate Finance Committee, the American Medical Association said: “The A.M.A. does not believe that creating a public health insurance option for non-disabled individuals under age 65 is the best way to expand health insurance coverage and lower costs. The introduction of a new public plan threatens to restrict patient choice by driving out private insurers, which currently provide coverage for nearly 70 percent of Americans.”
The A.M.A., an umbrella group for 180 medical societies, does not speak for all doctors. One group, Physicians for a National Health Program, supports a single-payer system of insurance, in which a single public agency would pay for health services, but most care would still be delivered by private doctors and hospitals.
http://www.nytimes.com/2009/06/11/us/politics/11health.html?hp

In opposing a government-sponsored insurance plan, why would the AMA limit its objection to a public plan that would cover only non-disabled individuals under age 65? What about those over 65 and those with long-term disabilities? Of course, they are covered by Medicare, a plan that the AMA continues to lobby for, even though they were vehemently opposed to it before it was enacted.
We can only speculate as to why the AMA leadership would object to including everyone in an improved version of our very successful Medicare program. Some believe that the AMA House of Delegates is still dominated by right-wing reactionaries, as it was during the Medicare battles. A more likely explanation is that physicians, who are uniformly unhappy with both private and public insurance programs, may perceive a greater opportunity to bypass the third-party payers in the market of private sector plans that use high-deductibles, health savings accounts, and other payment innovations that would allow physicians to capture a greater portion of their often-unrealistic list fees.
Fortunately, many physicians believe that patients, all patients, are more important than wealth-creating opportunities. That’s what Physicians for a National Health Program is all about.

AMA and PNHP on public insurance

Doctors' Group Opposes Public Insurance Plan

By Robert Pear
The New York Times
June 10, 2009

As the health care debate heats up, the American Medical Association is letting Congress know that it will oppose creation of a government-sponsored insurance plan, which President Obama and many other Democrats see as an essential element of legislation to remake the health care system.

… in comments submitted to the Senate Finance Committee, the American Medical Association said: “The A.M.A. does not believe that creating a public health insurance option for non-disabled individuals under age 65 is the best way to expand health insurance coverage and lower costs. The introduction of a new public plan threatens to restrict patient choice by driving out private insurers, which currently provide coverage for nearly 70 percent of Americans.”

The A.M.A., an umbrella group for 180 medical societies, does not speak for all doctors. One group, Physicians for a National Health Program, supports a single-payer system of insurance, in which a single public agency would pay for health services, but most care would still be delivered by private doctors and hospitals.

http://www.nytimes.com/2009/06/11/us/politics/11health.html?hp

Comment:

By Don McCanne, MD

In opposing a government-sponsored insurance plan, why would the AMA limit its objection to a public plan that would cover only non-disabled individuals under age 65? What about those over 65 and those with long-term disabilities? Of course, they are covered by Medicare, a plan that the AMA continues to lobby for, even though they were vehemently opposed to it before it was enacted.

We can only speculate as to why the AMA leadership would object to including everyone in an improved version of our very successful Medicare program. Some believe that the AMA House of Delegates is still dominated by right-wing reactionaries, as it was during the Medicare battles. A more likely explanation is that physicians, who are uniformly unhappy with both private and public insurance programs, may perceive a greater opportunity to bypass the third-party payers in the market of private sector plans that use high-deductibles, health savings accounts, and other payment innovations that would allow physicians to capture a greater portion of their often-unrealistic list fees.

Fortunately, many physicians believe that patients, all patients, are more important than wealth-creating opportunities. That’s what Physicians for a National Health Program is all about.

House HELP Committee hearing on single payer

Examining the Single Payer Health Care Option

Health, Employment, Labor, and Pensions Subcommittee Hearing
U.S. House of Representatives
June 10, 2009
Marcia Angell, M.D.:
I want to mention one final and very important reason for enacting a nonprofit single-payer health program. We live in a country that tolerates enormous and growing disparities in income, material possessions, and social privilege. That may be an inevitable consequence of a free market economy. But those disparities should not extend to denying some of our citizens certain essential services because of their income or social status.
One of those services is health care. Others are education, clean water and air, equal justice, and protection from crime, all of which we already acknowledge are public responsibilities. We need to acknowledge the same thing for health care. Providing these essential services to all Americans, regardless of who they are, marks a decent and cohesive society. It says that when it comes to vital needs, we are one nation, not 300 million individuals competing with one another.
***
Walter Tsou, M.D., M.P.H.:
President Obama has stated that if he were to start over again he would favor a single-payer system, but argues that moving to single-payer is too radical.
Well, I come from Philadelphia where revolutionary ideas are celebrated not dismissed. Our most famous radical document begins with the words, “We the People”. Not “We the Insurers”. “We the People of the United States, in order to form a more perfect union . . . to promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity do ordain and establish this Constitution for the United States of America.” This nation captured the world’s imagination with bold ideas that put the people first. It is time for our own generation’s revolution.
***
David Gratzer, M.D.:
Critics of the American system note that it fails to provide universal coverage to its citizens. But Canada’s single-payer system also denies care; instead of denying insurance coverage, Canada’s public insurance plans simply limit the supply of costly medications and capital-intensive procedures.
These challenges appear in different forms across the single-payer world. Wait times, rationed care and inefficient public management is inevitable in single-payer systems because they all face the same health-care demands as the American system.
***
During the questioning by committee members:
Rep. Dennis Kucinich: Dr. Gratzer, you’ve tried to make the case for rationing in Canada – worse than it is in the U.S. Do you know what Statistics Canada – the analogue to the U.S. Census – says the median wait time is across Canada for elective surgery?
Dr. David Gratzer: Why don’t you inform us,sir?
Kucinich: It’s four weeks. And what does Statistics Canada say the median wait time for diagnostic imaging like MRIs is?
Gratzer: I could tell you the Ontario government recently looked at that for…
Kucinich: It’s three weeks.
Gratzer: … for cancers, was six months.
Kucinich: It’s three weeks. How many uninsured are there in Canada?
Gratzer: Probably relatively few.
Kucinich: That’s right, none or very few. How many medical bankruptcies are there in Canada?
Gratzer: Depends on how you define medical bank..
Kucinich: None or very few. How many insured Americans go without needed care due to high cost of health care which is due to health insurance companies?
Gratzer: (Pause) Am I allowed to answer, or are we just going to continue to…
Kucinich: If you have an answer, you can answer. But if you don’t, I’ll answer. What’s your answer?
Gratzer: Go for it, sir.
Kucinich: What’s your answer?
Gratzer: Why don’t you answer your question, sir?
Kucinich: What’s your answer?
Gratzer: My answer…
Kucinich: How many insured Americans go without needed care due to the high cost of health care which is due to health insurance companies?
Gratzer: (Silence)
Kucinich: The witness isn’t responding.
Gratzer: The witness is delighted to speak further on those statistics and other statistics, but you keep cutting me off, sir.
Kucinich: You respond, if you have an answer. You didn’t give an answer to the other one.
Gratzer: I don’t want to be led down a garden path. If you’d like to ask me a question, I’d be…
Kucinich: You’ve shown a garden here to members of this committee and to the audience. There’s another side to this picture you don’t seem to be aware of even though you want to be an expert on Canada. Can you provide us with an answer on this one about America?
Gratzer: My position is respectable, and I dislike your comment, sir.
Kucinich: Do you have an answer? How many insured Americans, insured, go without needed care due to high costs of health care due to health insurance companies?
Gratzer: (Silence)
Kucinich: He has no answer. Well what the answer is is that it’s one out of every four. So we’re trying to make a case here that somehow Canada is in a mess, but we’re not focusing on the fact that in the United States there are people who aren’t getting needed care, and this gentleman has expected us to believe that rationing is worse in Canada. I don’t know how we can buy that. Now if single payer is so bad, maybe the gentleman – the doctor – can explain to us why sixty percent of U.S. doctors want it according to the peer-reviewed Annals of Internal Medicine, April, 2008.
(off camera voice): Are you going to let him answer this one?
Kucinich: He can answer it, if he can answer it.
Gratzer: I would suggest that many physicians in the United States are unsatisfied with their system, and rightly so. I would suggest that many physicians are looking for reform, and rightly so. But I would suggest that many physicians are unaware of what really goes on single payer systems, perhaps illustrated well by some of the comments that you’ve already made…
http://edlabor.house.gov/hearings/2009/06/examining-the-single-payer-hea.shtml

Although there are many individual heroes in the single payer movement, joint citizen activism has played a crucial role in bringing the single payer message to a formal, official hearing before a committee of the House of Representatives – a hearing devoted exclusively to single payer.
Tomorrow, Sen. Kennedy’s Health, Education, Labor, and Pensions committee will hold a hearing on “Healthcare Reform.” At the top of the list of the twenty-four witnesses is one of our heroes, PNHP’s Margaret Flowers, M.D., who previously had asked Sen. Baucus to bring single payer to the table, shortly before her arrest.
There are many effective channels for citizen activism. In whatever form you choose, let’s have a whole lot more of it please.

House HELP Committee hearing on single payer

Examining the Single Payer Health Care Option

Health, Employment, Labor, and Pensions Subcommittee Hearing
U.S. House of Representatives
June 10, 2009

Marcia Angell, M.D.:

I want to mention one final and very important reason for enacting a nonprofit single-payer health program. We live in a country that tolerates enormous and growing disparities in income, material possessions, and social privilege. That may be an inevitable consequence of a free market economy. But those disparities should not extend to denying some of our citizens certain essential services because of their income or social status.

One of those services is health care. Others are education, clean water and air, equal justice, and protection from crime, all of which we already acknowledge are public responsibilities. We need to acknowledge the same thing for health care. Providing these essential services to all Americans, regardless of who they are, marks a decent and cohesive society. It says that when it comes to vital needs, we are one nation, not 300 million individuals competing with one another.

***

Walter Tsou, M.D., M.P.H.:

President Obama has stated that if he were to start over again he would favor a single-payer system, but argues that moving to single-payer is too radical.

Well, I come from Philadelphia where revolutionary ideas are celebrated not dismissed. Our most famous radical document begins with the words, “We the People”. Not “We the Insurers”. “We the People of the United States, in order to form a more perfect union . . . to promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity do ordain and establish this Constitution for the United States of America.” This nation captured the world’s imagination with bold ideas that put the people first. It is time for our own generation’s revolution.

***

David Gratzer, M.D.:

Critics of the American system note that it fails to provide universal coverage to its citizens. But Canada’s single-payer system also denies care; instead of denying insurance coverage, Canada’s public insurance plans simply limit the supply of costly medications and capital-intensive procedures.

These challenges appear in different forms across the single-payer world. Wait times, rationed care and inefficient public management is inevitable in single-payer systems because they all face the same health-care demands as the American system.

***

During the questioning by committee members:

Rep. Dennis Kucinich: Dr. Gratzer, you’ve tried to make the case for rationing in Canada – worse than it is in the U.S. Do you know what Statistics Canada – the analogue to the U.S. Census – says the median wait time is across Canada for elective surgery?

Dr. David Gratzer: Why don’t you inform us,sir?

Kucinich: It’s four weeks. And what does Statistics Canada say the median wait time for diagnostic imaging like MRIs is?

Gratzer: I could tell you the Ontario government recently looked at that for…

Kucinich: It’s three weeks.

Gratzer: … for cancers, was six months.

Kucinich: It’s three weeks. How many uninsured are there in Canada?

Gratzer: Probably relatively few.

Kucinich: That’s right, none or very few. How many medical bankruptcies are there in Canada?

Gratzer: Depends on how you define medical bank..

Kucinich: None or very few. How many insured Americans go without needed care due to high cost of health care which is due to health insurance companies?

Gratzer: (Pause) Am I allowed to answer, or are we just going to continue to…

Kucinich: If you have an answer, you can answer. But if you don’t, I’ll answer. What’s your answer?

Gratzer: Go for it, sir.

Kucinich: What’s your answer?

Gratzer: Why don’t you answer your question, sir?

Kucinich: What’s your answer?

Gratzer: My answer…

Kucinich: How many insured Americans go without needed care due to the high cost of health care which is due to health insurance companies?

Gratzer: (Silence)

Kucinich: The witness isn’t responding.

Gratzer: The witness is delighted to speak further on those statistics and other statistics, but you keep cutting me off, sir.

Kucinich: You respond, if you have an answer. You didn’t give an answer to the other one.

Gratzer: I don’t want to be led down a garden path. If you’d like to ask me a question, I’d be…

Kucinich: You’ve shown a garden here to members of this committee and to the audience. There’s another side to this picture you don’t seem to be aware of even though you want to be an expert on Canada. Can you provide us with an answer on this one about America?

Gratzer: My position is respectable, and I dislike your comment, sir.

Kucinich: Do you have an answer? How many insured Americans, insured, go without needed care due to high costs of health care due to health insurance companies?

Gratzer: (Silence)

Kucinich: He has no answer. Well what the answer is is that it’s one out of every four. So we’re trying to make a case here that somehow Canada is in a mess, but we’re not focusing on the fact that in the United States there are people who aren’t getting needed care, and this gentleman has expected us to believe that rationing is worse in Canada. I don’t know how we can buy that. Now if single payer is so bad, maybe the gentleman – the doctor – can explain to us why sixty percent of U.S. doctors want it according to the peer-reviewed Annals of Internal Medicine, April, 2008.

(off camera voice): Are you going to let him answer this one?

Kucinich: He can answer it, if he can answer it.

Gratzer: I would suggest that many physicians in the United States are unsatisfied with their system, and rightly so. I would suggest that many physicians are looking for reform, and rightly so. But I would suggest that many physicians are unaware of what really goes on single payer systems, perhaps illustrated well by some of the comments that you’ve already made…

http://edlabor.house.gov/hearings/2009/06/examining-the-single-payer-hea.shtml

Comment:

By Don McCanne, MD

Although there are many individual heroes in the single payer movement, joint citizen activism has played a crucial role in bringing the single payer message to a formal, official hearing before a committee of the House of Representatives – a hearing devoted exclusively to single payer.

Tomorrow, Sen. Kennedy’s Health, Education, Labor, and Pensions committee will hold a hearing on “Healthcare Reform.” At the top of the list of the twenty-four witnesses is one of our heroes, PNHP’s Margaret Flowers, M.D., who previously had asked Sen. Baucus to bring single payer to the table, shortly before her arrest.

There are many effective channels for citizen activism. In whatever form you choose, let’s have a whole lot more of it please.

Expand state programs for low-income individuals?

State decides to let higher health-care premiums do dirty work

By Kyung M. Song
The Seattle Times
June 9, 2009

(Washington’s Basic Health Plan) has been open to any Washington resident who earns less than twice the poverty level.

Officials with Washington’s Basic Health Plan are resorting to steep premium increases to achieve what they were loath to do on their own — expel thousands of working-class people from the cash-strapped state insurance program.

Ending weeks of deliberations, officials announced Monday that Basic Health’s premiums will increase by an average of 70 percent on Jan. 1 as part of an ongoing strategy to boot 30,000 to 40,000 people off the taxpayer-subsidized plan, which covers roughly 100,000 members.

The bulk of the cuts will come from changes already under way. On top of that, officials are hoping that boosting premiums will prod 7,000 to 17,000 members to leave the plan on their own, sparing the state the need to kick off people involuntarily.

http://seattletimes.nwsource.com/html/localnews/2009316386_basichealth09m0.html

And…

Healthy Families Program

State of California
June 1, 2009

With the failure of the May 19th ballot Initiatives and the worsening budget situation, the Governor’s May Revision proposed limiting eligibility for the Healthy Families Program to those children with incomes at or below 200% FPL.

In addition, because of concerns about the ability to borrow funds, (Governor Schwarzenegger) directed the Department of Finance to develop additional budget reductions. One of the proposals is closing the Healthy Families Program. Both of these proposals will go through the Legislative budget process for review and consideration.

http://www.healthyfamilies.ca.gov/MyHealthyFamilies/HFP_Remains_Open_For_Enrollment.aspx

And…

Budget Conference Committee on SB 61

California State Assembly
Health
June 5, 2009

The Healthy Families Program (HFP) is California’s version of the federal Children’s Health Insurance Program (CHIP).

In this year’s initial May Revisions, the Governor proposed to reduce eligibility from 250 to 200 percent of the federal poverty level and to eliminate Certified Application Assistance. Subsequently, the Governor replaced these proposals with one proposal to fully eliminate the program.

http://www.senate.ca.gov/ftp/SEN/COMMITTEE/STANDING/BFR/_home/2009conf/6509CCHealth.pdf

Comment:

By Don McCanne, MD

Because of the very high costs of health care, the private insurers have not been able to offer products to low-income individuals that they can afford. In response, the federal and state governments have enacted programs designed to meet the health care needs of low-income individuals, usually financed jointly by the federal and state governments and administered by the states.

The current leading reform proposals would expand these programs to cover more of the low-income population. Is this a wise policy decision?

Most states have balanced budget requirements. Whenever spending exceeds revenues decisions must be made to either increase taxes or cut programs. Voters tend to penalize politicians who increase taxes. On the other hand, low-income individuals have a very weak political voice, and many of them do not even vote. Thus programs for the poor are a prime target for the budget cutting guillotine.

This background sets up the kind of thinking that is taking place at the state level.

The administrators of Washington’s Basic Health Plan are calling for individuals to voluntarily leave the program, and they are ensuring cooperation by raising premiums to levels that are unaffordable, thereby pricing them out of health care. Framing this as a voluntary decision of the beneficiaries rather than a budget-cutting decision of the administrators is blatantly dishonest and only compounds the nefariousness of their complicity.

At least California Governor Schwarzenegger is not hiding behind face-saving rhetoric. He proposes to flat-out throw a million children off of the state’s CHIP program, even though that would disqualify California from receiving generous federal subsidies.

Instead of fixing our health care financing system so that it provides everyone with affordable access to all necessary care, which we can easily do (improved Medicare for all), our leaders want to build on our uniquely American system. Surely other states can help with our budget problems by finding more children to join the ranks of the million uninsured California kids. That would be uniquely American. (I still can’t believe that they’ll go through with this, but the mere fact that it is under discussion shows how sick our health care financing system is.)

The Facts About the Health Insurance Industry

by Jeoffry B. Gordon, MD, MPH
DailyKos
Sun Jun 07, 2009

Most people are unaware how similar the major health insurers are to our failed Wall Street firms.They are corporate cash cows and have virtually no fiduciary responsibility and few activities for protecting or improving health or the health care system.They will devote their vast resources to prevent any meaningful health reform. They have controlled Congress and the mainstream media. The only cure is vigorous popular support for a single payer, Medicare for All reform.

This is a discussion about the huge and looming crisis in our nation’s health care system and the need for a radical paradigm changing reform. Because the issues discussed below necessarily involve a politically difficult restructuring of a large and well establish sector of our economy, the breadth and details of this reform have so far has been largely excluded from public policy discussions and debate. AHIP — American Health Insurance Plans — representing the private, for profit, health insurance companies and their partners had their annual national convention in San Diego, California this week. They are the association of all the major health insurers in the United States and their lobbying clout is unsurpassed. Major public political leaders of both parties, men like Jeb Bush, Dr. Howard Dean, and Tom Daschle attended.

As a practicing family physician who has been seeing patients since Medicare was started I can tell you what really ails our national health system. Making the correct diagnosis is important. Yet those in Washington — both in the White House and in Congress – both Republicans and Democrats — and the national media – are eagerly avoiding the right diagnosis and thus preventing public discussion about the necessary cures. As you all know if we don’t make the right diagnosis the disease will not be cured and the patient will not get better. Today the biggest barrier to improving our health care system in the United States is the private health insurance companies. They are the disease we suffer from. The best, and perhaps the only, public policy cure that will work is a single payer, Medicare for All, health care financing program. Yet due to financial power of the health insurance industry, their great financial lobbying clout, embarrassingly our elected officials are doing everything they can to avoid the current golden opportunity to create a single payer system.

I want to make only three main points:

1. The individual insurance companies are out for profit and must work to maximize their value on the stock market and not our friends. They treat patients like widgets or cost centers. This is not a culture of trust, caring, compassion, and fiduciary responsibility. If you were dumb enough to hope that Countrywide Mortgage would preserve your home and Lehman Brothers would preserve your retirement fund, then you will be stupid enough to expect Anthem Blue Cross and the other insurance companies to be there to protect your health. Yet it seems all Washington continues under this delusion.

2. The employer based private health insurance industry has been created by us, is hugely subsidized by public policy and public money and is expensive, inefficient, costly , and a structural barrier to a healthy America. It needs to be eliminated.

3. The only cure for our problem is a single payer, national, universal, health financing program like Medicare for All. This is not socialized medicine, but an efficient way to pool risk and share the unexpected costs of illness. Fifty percent of our population has virtually no medical expenses while five percent consume 25 percent of all personal medical care costs. This why we need the insurance principle: unexpected medical expenses are relatively rare and can be huge and should be spread across the whole population. Financial costs related to illness cause over 50 percent of personal bankruptcies in the United States. Over 46 million Americans are rationed out of the medical system (and during this economic catastrophe this number is growing by 10,000 people per day) 46 million people are subject to excess morbidity and mortality because they cannot afford financing and the insurance industry cannot profit from them. Health insurance is important and necessary. We need an efficient, national, publicaly sponsored, universal health financing system. This is the only treatment that will be a cure.

First, let me dwell on the track record of an individual insurance company, specifically United Health Plans. United Health Group is America’s largest health insurance company. According to their 2008 annual report United has 75,000 employees, insure 29.1 million Americans directly and cover up to 78 million people, contract with 650,000 doctors and 5200 hospitals. Their insurance programs include: a government subsidized Medicare Advantage program called Secure Horizons, a Medicare Part D prescription program called Prescription Solutions, and they have an exclusive arrangement with AARP to offer a Medicare supplement. The company has a subsidiary, Ingenix (remember this name) which provides “actuarial data, claims management services, and health intelligence” in 56 countries and in the USA to 6000 hospitals, 240,000 MDs, 1500 health plans, and 250 government agencies.
In 2008 United Health had total revenues of approximately $81.2 billion ($75.9 billion from health insurance and $1.6 billion from Ingenix) and their 2008 net revenue was $5.2 billion from health insurance. (This profit was in essence moneys diverted from health insurance premiums paid by government, individuals and employees to obtain medical care even after the company’s huge administrative costs are deducted.) They had an additional $229 million profit from Ingenix. According to SEC filings during our current economic and health care crisis their 2009 first quarter total revenue went up 8% to $22 billion and their net profit was $984 million. According to the company’s own report they have a medical loss ratio of about 80 per cent – that is, of collected premiums they spend only about 80 % on actual medical care, that is we loose 20 per cent of the money we pay them to their overhead and profit.

Some recent corporate history with you will demonstrate how far their corporate culture is from taking care of the sick and disabled. In 2006 The Wall Street Journal reported that company executives were back dating their stock options. Because of the ensuing scandal in October 15, 2006 company President and CEO William McGuire, who usually made between $60 and $120 million a year was forced to resign but he took with him the largest golden parachute ever paid, a compensation package estimated to be $1.1 billon. He was subsequently forced to pay back to the SEC $468 million in refunds and $7 million in penalties.In 2008 the net realized profit of the United HealthCare Group fell 36 per cent from 2007 — from $4.65 billion in 2007 to $2.98 billion in 2008 due to legal costs. In 2008, an investigation by New York State Attorney General Andrew M. Cuomo found that Ingenix and its parent UnitedHealth Group defrauded consumers and providers by manipulating its database used to quantify reasonable and customary medical care provider rates to make them remarkably lower than the actual cost of typical medical expense. This provided health insurance companies over the past 15 years the means to inappropriately lower payment of provider claims, thereby increasing the insurance companies’ profits and often leaving patients to pay the difference. The company paid a $50 million fine and set another $50 million aside to revamp its data system as an external organization under non-profit public supervision. In 2008 United Health paid another $895 million in legal and settlement costs in two other class action law suits, the major one brought by CALPERS retirement fund over the stock option deception. In addition, on January 15, 2009, UnitedHealth Group announced a $350 million settlement of three class action lawsuits filed in Federal court by the American Medical Association and others for not paying claims for out of network medical services to their patients. Anyone can easily see that the management of this company has no sense of public fiduciary responsibility and has focused major resources on making profit and manipulating the financing of health care. It is a real stretch to imagine that the same board of directors and top officials, so caught up in these huge illegal money grabs would really be interested in paying attention to my patients’, and your family’s, and our neighbors’ sickness and pain or in any remediation of our health care system’s problems.

In addition it is important to mention AARP — the AARP that supported the poorly designed Medicare Part D which became very profitable to insurance companies due to its mandated subsidies. The American Association of Retired People have an exclusive contract with this same United Health care to sell their health insurance policies. Do you know that AARP’s annual budget is over $1 billion a year and over $700 million of that comes from fees for selling insurance products. Some of these products are total rip offs as was recently revealed by our conservative Republican Senator from Iowa, Chuck Grassley who sent AARP a searing letter dated November 3, 2008. It embarrassed AARP and forced them to withdraw from the market several scandalous products (Essential Health Insurance Plan and Essential Plus Health Insurance Plan) developed by the United Health Group and sold by AARP to 44,000 people. You will note that AARP is always invited to the public policy table and the hearings to contribute to major political discussions about health care reform. This is totally inappropriate. AARP is part of the problem and not part of the solution. It is nothing but an insurance broker disguised as an advocacy group — and they will never take on the health insurance industry. AARP will represent the insurance industry rather than the public welfare in discussions about health reform.

Now examine the health insurance system as a whole: It should be obvious that the only functional purpose of the insurance company is to collect money (premiums) from one set of folks (people/patients) and pool it and then pay it to another set of folks (medical providers). Other than acting as a bank, there is NO value added. All the rest is expensive smoke and mirrors: marketing, false consumer choices, medical rating, care management — all of which they do poorly and very expensively. In fact, all these expensive activities are designed to either maximize profit or to be a window dressing rationale for their profit. Furthermore, the health insurance industry itself and its egregious expenses and profits are virtually wholly a creation of tax payer subsidy and 70 years of one sided industry supportive legislation. Federal programs such as Medicare, Medicaid, the Veteran’s Administration, Crippled Children’s Services, SCHIP, and the Ryan White Act take huge numbers of potentially expensive or chronically ill Americans out of the pool of privately insured people, allowing these private firms to cherry pick the most affordable enrollees.

Few people remember that the first private health insurance companies like the original Blue Cross and Blue Shield were not for profit entities with some charitable purpose. In 1944 FDR’s attorney general charged the South-Eastern Underwriters Association, an insurance company, with anti-trust price fixing. The case made it all the way to the Supreme Court, where the insurers made the audacious defense that they could not be regulated under the Interstate Commerce Clause of the Constitution because they were not a business, not “commerce.” The insurance company lost, but within a year their lobbyists took their revenge. In 1945 the McCarran-Ferguson Act declared that “No Act of Congress shall be construed to invalidate, impair, or supersede any law enacted by any State for regulating the business of insurance…” This why we are stuck with the relatively fragmented and impotent state attorney generals and 50 state agencies to regulate the massive corporate businesses represented by AHIP. (It takes a creative and powerful attorney general like Andrew Cuomo of New York to have an impact.) Since then and along the way the insurance lobby has had its way with state legislatures. First, the health insurance companies were allowed to give up community (a geographic standard) rating for medical rating (an individual disease history standard) — so they could increasingly exclude potentially expensive patients and secondly, not for profit health insurance companies were allowed to become for-profit so their companies and enrollees could be cheaply acquired by the expanding for-profit corporate giants like United Health care. In this process, over the last 65 years, the health insurance companies have long given up any semblance of being service organizations. They became the disease in our health care system. Now we have to deal with massive powerfully oligopolistic insurance companies. In February, 2009 the US GAO surveyed the small group health insurance market. They found “The five largest carriers in the small group market, when combined, (had)…three-quarters or more of the market in 34 of the 39 states…and they (had)…90 percent or more in 23 of these states.”

Each health provider has to deal with potentially 1500 different insurance companies, each with their own care rules and payment querks. In my office I regularly deal with about 40 payers. A study published just last month in HEALTH AFFAIRS, demonstrated that “billing and insurance-related functions” cost each FTE physician at least $85,276 a year (or about 10% of gross revenue) in time and staff. In the last 30 years the number of health system administrators has grown by 3000% while the number of physicians has grown 300%. In the past 9 years workers’ pay has grown 29% while the cost of health insurance net of administration has grown 75% and the net cost of health insurance administration has risen 106%. This year per capita health expenditures in the United States will approach $8000 a year or about 17 % of our GNP. A study by an international management consulting firm demonstrated that on an internationally adjusted comparative basis annual health care spending for each person in the United States is over $2000 a year more than would be econometrically appropriate given our nation’s wealth. This added expense is almost wholly due to the costs of the private, for profit health insurance system and adds no value. The bottom line is that the private, for profit health insurance companies divert on the order of $350 billion of insurance premium money from medical services. This is a sum which approaches the size of the peacetime Pentagon budget. Single payer reform will reallocate these moneys to care for the uninsured.

In order to understand why single payer reform has not been given a fair hearing in Washington I want to detail the power of AHIP. In 2008 alone they gave $36,695,680 to Congressional candidates – $17,493,170 to democrats and $19,128,523 to republicans. Senator Baucus, chairing the health reform hearings at the Senate Finance Committee, has raised $11.4 million from 2005 through now. Of this about $500,000 came from insurance companies, $500,000 from pharmaceutical companies, and $500,0000 from health professionals. This is why two weeks ago my concerned colleagues from the California Nurses Association and Physicians for A National Health Program had to disrupt the order of his hearings to point out he was ignoring the single payer reform option.

It is important to understand why a “public health insurance plan” created to “stand beside” existing private health insurance plans does not provide a cure. This proposal is based in part on the experience in Massachusetts. The current Massachusetts universal coverage health reform plan is being looked upon as a model for the nation. It has had some success, yet it cannot and must not be used as a model for national reform with a “stand along public health plan” option. The Massachusetts model relies on government subsidy directed through the private health insurance carriers. There are three important observations here:

1. A 2007 study sponsored by AHIP reviewed prior experience with this type of reform model in 8 states in the 1990s (Kentucky, Maine, Massachusetts (in 1996), New Hampshire, New Jersey, Vermont, and Washington). They found that “in general…, individual health insurance markets deteriorated….Often, insurance companies chose to stop selling individual insurance in the market….Enrollment in individual insurance also tended to decrease, and premium rates tended to increase, sometimes dramatically…(And) we did not observe any significant decreases in the level of uninsured persons following the enactment of these market reforms.” The result was that all these reform programs failed and went out of existence.

2. Even with state government subsidy and leverage on premium charges many residents are excused from the “universal” program because they cannot afford the premiums. Many others are faced with unacceptably high and unaffordable copayments, deductibles, and benefit limits built into the approved insurance plans.

3. The program is totally dependent on the private insurance companies and there is no cost and minimal quality control mechanisms built in. The state of Massachusetts is thus currently facing a huge and perhaps intolerable budgetary deficit.

Finally, the cure is conceptually simple, but admittedly politically difficult. If the disease is an expensive and dysfunctional private, for profit health insurance system, the only possible cure is a single payer, Medicare for All reform. This option must not only be on the table, but must be passed into law. Our elected representatives must be supported to have the courage to objectively evaluate its benefits, and then given the backbone to pass it. This option already exists in the detailed legislative form contained in HR 676 by Congressman Conyers and already endorsed by 70 Congressmen and women. It contains five simple to understand solution components:

1. AUTOMATIC ENROLLMENT — Everyone receives a card assuring payment for all needed care by any willing licensed provider. This would eliminate the need for expensive marketing and sales campaigns and the broker system. Universal coverage will also shrink the need for workman’s compensation insurance as well as medical malpractice insurance.

2. FREE CHOICE OF DOCTOR AND HOSPITAL

3. DOCTORS AND HOSPITALS REMAIN INDEPENDENT and negotiate fees and budgets with public agencies. This is not socialized medicine.

4. A PUBLIC AGENCY PROCESSES AND PAYS ALL BILLS. This should massively cut the administrative overhead drain generated both by insurance companies, by employer HR departments, and by medical providers from the order of 40 % of costs to 10% of costs allowing an estimated savings of $50 billion in the first year and up to $250 billion annually which can be used to cover the currently uninsured without the need to add new taxpayer subsidy. Money is provided by this law to retrain displaced insurance company workers.

5. The system would be FINANCED BY PROGRESSIVE TAXES. This would lift the burden of health insurance costs from America’s businesses making them more internationally competitive; widely expand the risk poll, thus lowering the cost for every individual participant, and eliminate the need for expensive HR systems.

The information, discussion, and perspective presented here has been virtually absent from White House, Congressional, and media discussions of the need to reform the health care system. This seems to be largely because of the political and financial clout of AHIP. It is important to know that single payer reform, Medicare for All, is the only proposal in the public arena with broad, enthusiastic support from the men and women on the street who must understand these facts to be motivated to get involved.