PNHP

Josh Freeman on the question of a national policy on the right to health care

Josh Freeman on the question of a national policy on the right to health care

Does the nation need a clear policy on a right to basic health care?

By Josh Freeman
Medicine and Social Justice
April 10, 2009

At a recent conference, I was asked to be a “thought provocateur” (!!) on the topic “The nation needs a clear policy on the basic right to health care”.

This is an interesting question, since my first reaction is: “Of course, we need a clear policy on the basic right to health care! I mean, I have a pretty clear idea of what that policy should be, but certainly even those who would disagree with me would agree that we need a policy!”

But, on reflection, I don’t know that they do. I think that a great deal of the perseverance of our “non-system” of health care has been a result of a consensus among our leaders to NOT talk about this issue, to NOT grapple with it, to not have to take a position one way or another on whether health care is a basic right.

This is because, if one does take a position, there are implications, and things that we would then have to do.

If health care is a basic right, then we need to provide it to everyone. We can no longer diddle around with partial fixes, tinkering around the edges, covering (maybe) children but not their parents, covering people who are poor — as long as they are children and their mothers and are really poor and not working — but not those who are poor, or nearly-poor, depending on which state you are in. Or, for that matter, working-class, or, in increasing numbers, middle class.

But the problem is most people in power, including most politicians including the President, don’t want to have to take a position against health care being a basic right. It sounds, well, mean. There aren’t many people, except, well, mean people (and maybe some reactionary ideologues), who are willing to defend this position.

So we have shows such as “Sick Around America”, the Frontline “sequel” to T.R. Reid’s “Sick Around the World” (which Reid disassociated himself from). It interviewed insurance company executives who said “sure we can insure everyone”. If we make it mandatory and can make a profit, everyone. Hmm. The cost would be ridiculous. And the option of single payer was never mentioned. There is a lot more that has to be decided if we agree that health care is a basic right, like how to provide it, how to pay for it, and what will be and will not be covered. I mean, sure, other countries seem to have solved that problem, and we could model a system on one or more of theirs, but where’s the fun in that?

And if we agree that health care is not a basic right, we solve that problem, but we have other ones — like all these uninsured, and underinsured people.

* And folks not getting preventive care but rather incredibly expensive curative care.

* And companies like our automobile companies going bankrupt in some part because of the cost of health insurance.

* And, oh yeah, people dying in the streets.

For the record, I do believe that we need a policy on health care as a basic right, and my belief is that it should be. Perhaps the most important reason is social justice; we all share in the public good. This is what virtually every other nation of the first world has long realized. When T.R. Reid asked the leaders of the countries he visited for “Sick Around the World” how many of their citizens went bankrupt as a result of health care debts, they all said none. The most dramatic response was from the President of the Swiss Confederation, a conservative who had originally opposed the Swiss program in the early 90s. “No one,” he boomed in his French-accented English, “why, it would be a national scandal!”

The health of our society depends upon the health of all of us.

* When people crowd our emergency rooms, not with minor illnesses, but with serious illnesses that could have been prevented with earlier treatment, that is a scandal.

* When parents cannot afford their own health care and their illnesses threaten their ability to keep providing for their children, that is a scandal.

* When people stay in jobs they hate, or forego the opportunity to start a new business, because they rightfully fear being uninsured, that is a scandal.

* When our friends and neighbors, parents and children, only take partial doses of their medicine because it is a choice between that and not eating, that is a scandal.

* When a hard-working man with chest pain can see the billboards advertising the superb heart care available at our local hospitals and know they are not meant for him because he is uninsured, that is a scandal.

When we are all in it together, we all have an interest in making the system be as good as it can be. The efforts of those of us who are more educated, more financially able, more vocal, more empowered will ensure that the needs of those who are less able to lobby for themselves are also met.

Just as our nation cannot survive half-slave and half-free, or with only half of adults having the vote, we cannot survive with only some of us having access to health care.

We need to do this for all of us, for, after all, ultimately, we are our brother’s and sister’s keepers.

http://medicinesocialjustice.blogspot.com/2009/04/does-nation-need-clear-policy-on-right.html

The Coastal Research Group
http://coastalresearch.org/about/

Comment:

By Don McCanne, MD

Joshua Freeman, MD is Professor and Chair of the Department of Family Medicine at the University of Kansas School of Medicine. I was fortunate to have been in the audience when Josh delivered his comments above at the Twentieth National Conference on Primary Health Care Access, sponsored by The Coastal Research Group.

Words on paper (or on a computer monitor screen) can express concepts, but they fall short in expressing the passion and inspiration communicated to the audience during the presentation of the speaker. This was one of those moments I’ll remember forever.

Josh had to leave before the discussion of a reactor panel assembled to respond to his comments. One physician from Nebraska expressed his views of health care as a matter of justice – comments which also moved me deeply. Another physician from Texas was not inclined to support health care as a right, and then he read us a passage from the Bible.

I’ll ask you, does the nation need a clear policy on a right to basic health care?

Jacob Hacker provides details for public option

Institute for America’s Future and Berkeley Center on Health, Economic & Family Security
Policy Brief
April 2009

Healthy Competition: How to Structure Public Health Insurance Plan Choice to Ensure Risk-Sharing, Cost Control, and Quality Improvement

By Jacob S. Hacker, Ph.D.
Executive Summary
The debate over health care reform has increasingly centered on the issue of “public plan choice”–whether Americans younger than 65 who lack employment-based coverage should have the choice of enrolling in a new public health insurance plan modeled after Medicare. The central argument for public plan choice is that such a plan, offered as a choice within a new national insurance “exchange,” provides an essential set of security guarantees, ensuring that Americans without insurance from their place of work can find a plan that offers them quality, affordable health care through a broad choice of providers in all parts of the country.
For public plan choice to provide such guarantees, however, the public plan must be properly structured, compete on a truly “level playing field” with private plans, and have the authority to use its bargaining power as one of many tools to encourage greater value in health care delivery. The most effective and easily implemented model for the new public plan is a “Medicare-like” plan that builds on Medicare’s administrative infrastructure and basic framework of coverage but is separate from Medicare’s risk pool and departs from Medicare in a number of key respects regarding payment and benefits.
To create a level playing field requires attention to the “three R’s” of workable public-private competition: rules that are the same for both the public plan and private plans, risk adjustment that protects plans from being competitively disadvantaged if they enroll a less healthy group of people, and regional pricing that allows private plans and the public plan to compete within regions on the same terms, rather than having the public plan compete on a national basis with regionally based private plans (whose premiums may be lower or higher in any given region).
Finally, giving the public plan the authority to bargain for reasonable rates is an essential item on the menu of cost control — and one that the Congressional Budget Office (CBO) and other budget watchdogs are likely to “score” as producing savings (in contrast with many other currently favored cost-control strategies). Nonetheless, there are reasonable concerns about how the new public plan will use its bargaining power — concerns reflected in current proposals for a price-taking (rather than price-making) public plan that would have limited ability to secure fair rates. However, a watered-down public plan would be a grave mistake. Instead, the public plan should include safeguards designed to ensure that providers are fairly represented and that bargaining for lower prices does not negatively affect patients’ access to care or shift costs onto private insurers. Indeed, a better alternative to a public plan without price-setting authority would be allowing private fee-for-service-style plans to piggyback on the public plan in setting their own prices.
Public plan choice is rooted in existing precedents that have shown themselves to work, rather than speculative convictions about how a delicately balanced new system will operate. It must be part of any successful reform package. Without public plan choice, Americans without workplace insurance will be put in jeopardy, private insurers will lack an effective check on their actions, and the opportunity to place our crumbling framework of health financing on a secure foundation will be lost.
http://www.ourfuture.org/files/Hacker_Healthy_Competition_FINAL.pdf

This is a very important paper because addresses one of the most controversial issues in the current health care reform debate: Should a Medicare-like plan be offered in competition with a market of private health plans? UC Berkeley Professor Jacob Hacker adds to his previous contributions on the private plan/public option model of reform by describing in detail what a properly-designed Medicare -like option would look like.
To understand this fairly complex model, you really need to read this 31 page report. But looking at just a few of the problems that he addresses can give you an idea of where this approach is headed.
How would the public option control costs?
From the report: “The great virtue of public plan choice as a means of cost control is that it proposes relatively minimal disruption to existing arrangements compared with other comprehensive reform proposals. It only says that a public health insurance plan will be offered alongside private plans as a coverage option for those without insurance through their employer. It is the competition between private plans and public health insurance, with its distinctive cost-control advantages, that presses both public and private plans to provide more for less and ensures that the goal of affordable quality coverage can be maintained over time at a price the nation can bear.”
DM: In the Medicare Advantage program we have already tested this concept, and the private plans required more money, not less, than the “competing” traditional Medicare program. With a single, universal public program, cost efficiencies would apply to our entire health care system.
How would this proposal spur improved quality?
From the report: “… a new public health insurance plan for the nonelderly (and Medicare, through its association with the new plan) can and should be centrally involved in obtaining better information to improve physician and patient decisions, as well as insurer decisions about coverage, pricing, and benefit structure. Because of its broad and national reach, the stability of its enrollment, and the unparalleled opportunity for data collection and use, the new public health insurance plan is the player in the system that will have the largest incentives to make these investments.”
DM: So the public program would bear the costs on research and data collection. Would those costs be allocated exclusively to the patients in the public program? Would the private insurers have a free ride? Since the mission and income needs of the private insurers are different from the public plan, would they even use the results of the research, especially if greater spending would ensue? Would the government even have access to the proprietary information of these plans competing in the private marketplace? Obviously a single, universal public program would have a more complete and accurate information database that could be applied to improve the quality of our entire health care delivery system, rather than allowing private plans to pick and choose based on bottom line issues rather than optimal quality.
What should the public plan look like?
From the report: “More specifically, the new public plan should be national (with the same basic terms nationwide for patients and providers), governmental (a true public health insurance plan, not, say, a nonprofit insurer operating under federal charter), comprehensive (providing defined benefits on the same basic administrative platform), and built on Medicare’s infrastructure.”
DM: So a bona fide public program is proposed, but…
How could the public and private plans compete “on a level playing field”?
From the report: “… a level playing field requires a set of safeguards that are easily remembered as the “three R’s”: rules, risk adjustment, and regional pricing.”
Rules: “Both the public and private plans should also have to abide by the same fundamental rules, the main purpose of which is to prevent plans from profiting by selecting healthy people rather than delivering value. These rules include: community rating, guaranteed issue, limits on marketing, standardized and defined benefits, reserve requirements, transparency…”
Risk adjustment: “…there is also a need for risk adjustment. That is, plans should be paid different amounts by the exchange based on the expected and realized risk of their enrollees. Enrollees and plans should not be penalized when a plan attracts less healthy enrollees. While prospective risk adjustment technologies have come a long way, they are still imperfect. Thus any risk-adjustment system should mix prospective risk adjustment with a retrospective risk-adjustment process at the end of the year that redistributes funds among the plans to ensure that those with very unfavorable mixes of risk are protected. Of course, the public health insurance plan must be part of this arrangement.”
Regional pricing: “… the bids made by both the public plan and private plans should be made on a regional basis. In other words, although the exchange should be nationally administered, the bids should be regionally specific. Many private plans will only wish to provide benefits in certain regions where they operate. The public health insurance plan will of course be truly national. Without regional bidding, the public plan will be disadvantaged in areas where private premiums are low and advantaged where they are high. Neither is conducive to a truly level playing field.”
DM: Merely to counter the attack that the government doesn’t play on a level field, we would have to establish a set of administratively complex rules of competition with which the government must comply, include the difficult task of determining and adjusting for the relative risks in the public and private pools in spite of the private insurers proclivity to game these risks, and then require our national public program to bid in each region to provide fairness for the government program? This adds considerable administrative inefficiency to a government program that should be offering greater efficiency. A single, universal national health program would not require these extra rules, risk adjustments and health plan competitive bidding processes.
How would the premium for the public plan be established?
From the report: “A strong argument can be made for the federal government setting subsidies on the basis of the average weighted premium of plans, as opposed to the cost of the least expensive plan. First, this would reduce the chance that lower-income enrollees would feel pressured by costs to enroll in the least expensive plan. Second, it would at least crudely adjust subsidies to reflect the variance of plan premiums as well as the level. In areas where the range of plan premiums is larger, subsidies based on the average will much better protect enrollees against premium costs than subsidies based on the lowest-cost plan. For these two reasons, the weighted-average-premium approach is preferable to the lowest-cost-plan approach for setting subsidies, and the graphics that follow focus on showing how this approach would work. However, either approach would create the necessary incentive for enrollees to prefer less expensive plans.”
DM: Instead of a complex process to determine a premium for a public program based on the actuarial value of the benefits provided, a single payer program would do away with premiums. The system would be financed with a simpler and much more equitable tax. Also, everyone who believes in health care justice should be deeply troubled by the statement that this approach “would create the necessary incentive for enrollees to prefer less expensive plans.”
Since premiums would be unaffordable for the majority, how would subsidies be administered?
From the report: “… the subsidy could vary with the income of the enrollee. Low-income enrollees would certainly receive even greater assistance, as well as help with cost-sharing. Because most enrollees through the exchange will be workers whose employers have contributed on their behalf, and because coverage should be kept affordable, the subsidies should cover a good portion of the premium for all enrollees. Since the average employer/employee split of health premiums is roughly 80/20 in the private market today, 80 percent seems a reasonable baseline contribution.”
DM: The purpose of government subsidies is to transfer payment for health care from the wealthy to those who cannot afford to pay for their full, evenly-divided allocation of our national health care bill. That now includes middle-income Americans. A subsidy system requires a separate administrative task for everyone included within the system of health care coverage, with further adjustments depending on out-of-pocket expenses, and periodic reevaluation of eligibility requirements. These administrative excesses are made necessary only because we couple the payment of health care to the specific benefit package – the insurance plan. A single payer system eliminates this administrative nonsense by replacing premiums and cost-sharing with tax financing – again, a much simpler and more equitable approach.
What about the all-payer alternative?
From the report: “…allow private plans that pay providers on a more or less fee-for-service basis to piggyback on the public plan in setting their own prices… In practice, all-payer rate setting of this sort would mean that private fee-for-service plans within the exchange would use the same fee schedule that the public plan did. Allowing private plans that use fee-for-service payment to piggyback on the public plan’s rate thus would have broader benefits than simply reducing the opposition of private insurers to the idea of a public plan. It would make cost control more effective, encourage administrative simplification and care improvement, and increase the degree of coordination in American health financing.”
DM: Okay. So we combine the public and private payers into an all-payer program. Then why would any individual in his/her right mind, other than an insurance executive or shareholder, want to keep this worthless, wasteful, expensive industry in play?
PNHP has been under attack by our friends in the progressive community for being opposed to the public Medicare-like option. That is a misstatement of our position. We are opposed to a fragmented, dysfunctional health care financing system that is causing financial hardship, physical suffering, and, all too often, death. Adding a public option will have only a negligible impact on the fundamental flaws that are causing so much personal grief.
Our friends and our enemies know what would fix our system: a single payer national health program. We think we understand the position of our enemies – largely based on greed. Why else would they support such a cruel system?
But our friends? Why do they attack us as they retreat to a secure position within the ranks of the private insurance industry? Besides, just wait and see what the insurers and their purchased representatives in Congress will do with Jacob Hacker’s “Healthy Competition” proposal. You’ll have to look quick because the window of opportunity for reform will have slammed shut.

Jacob Hacker provides details for public option

Institute for America’s Future and Berkeley Center on Health, Economic & Family Security
Policy Brief
April 2009

Healthy Competition: How to Structure Public Health Insurance Plan Choice to Ensure Risk-Sharing, Cost Control, and Quality Improvement

By Jacob S. Hacker, Ph.D.

Executive Summary

The debate over health care reform has increasingly centered on the issue of “public plan choice”–whether Americans younger than 65 who lack employment-based coverage should have the choice of enrolling in a new public health insurance plan modeled after Medicare. The central argument for public plan choice is that such a plan, offered as a choice within a new national insurance “exchange,” provides an essential set of security guarantees, ensuring that Americans without insurance from their place of work can find a plan that offers them quality, affordable health care through a broad choice of providers in all parts of the country.

For public plan choice to provide such guarantees, however, the public plan must be properly structured, compete on a truly “level playing field” with private plans, and have the authority to use its bargaining power as one of many tools to encourage greater value in health care delivery. The most effective and easily implemented model for the new public plan is a “Medicare-like” plan that builds on Medicare’s administrative infrastructure and basic framework of coverage but is separate from Medicare’s risk pool and departs from Medicare in a number of key respects regarding payment and benefits.

To create a level playing field requires attention to the “three R’s” of workable public-private competition: rules that are the same for both the public plan and private plans, risk adjustment that protects plans from being competitively disadvantaged if they enroll a less healthy group of people, and regional pricing that allows private plans and the public plan to compete within regions on the same terms, rather than having the public plan compete on a national basis with regionally based private plans (whose premiums may be lower or higher in any given region).

Finally, giving the public plan the authority to bargain for reasonable rates is an essential item on the menu of cost control — and one that the Congressional Budget Office (CBO) and other budget watchdogs are likely to “score” as producing savings (in contrast with many other currently favored cost-control strategies). Nonetheless, there are reasonable concerns about how the new public plan will use its bargaining power — concerns reflected in current proposals for a price-taking (rather than price-making) public plan that would have limited ability to secure fair rates. However, a watered-down public plan would be a grave mistake. Instead, the public plan should include safeguards designed to ensure that providers are fairly represented and that bargaining for lower prices does not negatively affect patients’ access to care or shift costs onto private insurers. Indeed, a better alternative to a public plan without price-setting authority would be allowing private fee-for-service-style plans to piggyback on the public plan in setting their own prices.

Public plan choice is rooted in existing precedents that have shown themselves to work, rather than speculative convictions about how a delicately balanced new system will operate. It must be part of any successful reform package. Without public plan choice, Americans without workplace insurance will be put in jeopardy, private insurers will lack an effective check on their actions, and the opportunity to place our crumbling framework of health financing on a secure foundation will be lost.

http://www.ourfuture.org/files/Hacker_Healthy_Competition_FINAL.pdf

Comment:

By Don McCanne, MD

This is a very important paper because addresses one of the most controversial issues in the current health care reform debate: Should a Medicare-like plan be offered in competition with a market of private health plans? UC Berkeley Professor Jacob Hacker adds to his previous contributions on the private plan/public option model of reform by describing in detail what a properly-designed Medicare -like option would look like.

To understand this fairly complex model, you really need to read this 31 page report. But looking at just a few of the problems that he addresses can give you an idea of where this approach is headed.

How would the public option control costs?

From the report: “The great virtue of public plan choice as a means of cost control is that it proposes relatively minimal disruption to existing arrangements compared with other comprehensive reform proposals. It only says that a public health insurance plan will be offered alongside private plans as a coverage option for those without insurance through their employer. It is the competition between private plans and public health insurance, with its distinctive cost-control advantages, that presses both public and private plans to provide more for less and ensures that the goal of affordable quality coverage can be maintained over time at a price the nation can bear.”

DM: In the Medicare Advantage program we have already tested this concept, and the private plans required more money, not less, than the “competing” traditional Medicare program. With a single, universal public program, cost efficiencies would apply to our entire health care system.

How would this proposal spur improved quality?

From the report: “… a new public health insurance plan for the nonelderly (and Medicare, through its association with the new plan) can and should be centrally involved in obtaining better information to improve physician and patient decisions, as well as insurer decisions about coverage, pricing, and benefit structure. Because of its broad and national reach, the stability of its enrollment, and the unparalleled opportunity for data collection and use, the new public health insurance plan is the player in the system that will have the largest incentives to make these investments.”

DM: So the public program would bear the costs on research and data collection. Would those costs be allocated exclusively to the patients in the public program? Would the private insurers have a free ride? Since the mission and income needs of the private insurers are different from the public plan, would they even use the results of the research, especially if greater spending would ensue? Would the government even have access to the proprietary information of these plans competing in the private marketplace? Obviously a single, universal public program would have a more complete and accurate information database that could be applied to improve the quality of our entire health care delivery system, rather than allowing private plans to pick and choose based on bottom line issues rather than optimal quality.

What should the public plan look like?

From the report: “More specifically, the new public plan should be national (with the same basic terms nationwide for patients and providers), governmental (a true public health insurance plan, not, say, a nonprofit insurer operating under federal charter), comprehensive (providing defined benefits on the same basic administrative platform), and built on Medicare’s infrastructure.”

DM: So a bona fide public program is proposed, but…

How could the public and private plans compete “on a level playing field”?

From the report: “… a level playing field requires a set of safeguards that are easily remembered as the “three R’s”: rules, risk adjustment, and regional pricing.”

Rules: “Both the public and private plans should also have to abide by the same fundamental rules, the main purpose of which is to prevent plans from profiting by selecting healthy people rather than delivering value. These rules include: community rating, guaranteed issue, limits on marketing, standardized and defined benefits, reserve requirements, transparency…”

Risk adjustment: “…there is also a need for risk adjustment. That is, plans should be paid different amounts by the exchange based on the expected and realized risk of their enrollees. Enrollees and plans should not be penalized when a plan attracts less healthy enrollees. While prospective risk adjustment technologies have come a long way, they are still imperfect. Thus any risk-adjustment system should mix prospective risk adjustment with a retrospective risk-adjustment process at the end of the year that redistributes funds among the plans to ensure that those with very unfavorable mixes of risk are protected. Of course, the public health insurance plan must be part of this arrangement.”

Regional pricing: “… the bids made by both the public plan and private plans should be made on a regional basis. In other words, although the exchange should be nationally administered, the bids should be regionally specific. Many private plans will only wish to provide benefits in certain regions where they operate. The public health insurance plan will of course be truly national. Without regional bidding, the public plan will be disadvantaged in areas where private premiums are low and advantaged where they are high. Neither is conducive to a truly level playing field.”

DM: Merely to counter the attack that the government doesn’t play on a level field, we would have to establish a set of administratively complex rules of competition with which the government must comply, include the difficult task of determining and adjusting for the relative risks in the public and private pools in spite of the private insurers proclivity to game these risks, and then require our national public program to bid in each region to provide fairness for the government program? This adds considerable administrative inefficiency to a government program that should be offering greater efficiency. A single, universal national health program would not require these extra rules, risk adjustments and health plan competitive bidding processes.

How would the premium for the public plan be established?

From the report: “A strong argument can be made for the federal government setting subsidies on the basis of the average weighted premium of plans, as opposed to the cost of the least expensive plan. First, this would reduce the chance that lower-income enrollees would feel pressured by costs to enroll in the least expensive plan. Second, it would at least crudely adjust subsidies to reflect the variance of plan premiums as well as the level. In areas where the range of plan premiums is larger, subsidies based on the average will much better protect enrollees against premium costs than subsidies based on the lowest-cost plan. For these two reasons, the weighted-average-premium approach is preferable to the lowest-cost-plan approach for setting subsidies, and the graphics that follow focus on showing how this approach would work. However, either approach would create the necessary incentive for enrollees to prefer less expensive plans.”

DM: Instead of a complex process to determine a premium for a public program based on the actuarial value of the benefits provided, a single payer program would do away with premiums. The system would be financed with a simpler and much more equitable tax. Also, everyone who believes in health care justice should be deeply troubled by the statement that this approach “would create the necessary incentive for enrollees to prefer less expensive plans.”

Since premiums would be unaffordable for the majority, how would subsidies be administered?

From the report: “… the subsidy could vary with the income of the enrollee. Low-income enrollees would certainly receive even greater assistance, as well as help with cost-sharing. Because most enrollees through the exchange will be workers whose employers have contributed on their behalf, and because coverage should be kept affordable, the subsidies should cover a good portion of the premium for all enrollees. Since the average employer/employee split of health premiums is roughly 80/20 in the private market today, 80 percent seems a reasonable baseline contribution.”

DM: The purpose of government subsidies is to transfer payment for health care from the wealthy to those who cannot afford to pay for their full, evenly-divided allocation of our national health care bill. That now includes middle-income Americans. A subsidy system requires a separate administrative task for everyone included within the system of health care coverage, with further adjustments depending on out-of-pocket expenses, and periodic reevaluation of eligibility requirements. These administrative excesses are made necessary only because we couple the payment of health care to the specific benefit package – the insurance plan. A single payer system eliminates this administrative nonsense by replacing premiums and cost-sharing with tax financing – again, a much simpler and more equitable approach.

What about the all-payer alternative?

From the report: “…allow private plans that pay providers on a more or less fee-for-service basis to piggyback on the public plan in setting their own prices… In practice, all-payer rate setting of this sort would mean that private fee-for-service plans within the exchange would use the same fee schedule that the public plan did. Allowing private plans that use fee-for-service payment to piggyback on the public plan’s rate thus would have broader benefits than simply reducing the opposition of private insurers to the idea of a public plan. It would make cost control more effective, encourage administrative simplification and care improvement, and increase the degree of coordination in American health financing.”

DM: Okay. So we combine the public and private payers into an all-payer program. Then why would any individual in his/her right mind, other than an insurance executive or shareholder, want to keep this worthless, wasteful, expensive industry in play?

PNHP has been under attack by our friends in the progressive community for being opposed to the public Medicare-like option. That is a misstatement of our position. We are opposed to a fragmented, dysfunctional health care financing system that is causing financial hardship, physical suffering, and, all too often, death. Adding a public option will have only a negligible impact on the fundamental flaws that are causing so much personal grief.

Our friends and our enemies know what would fix our system: a single payer national health program. We think we understand the position of our enemies – largely based on greed. Why else would they support such a cruel system?

But our friends? Why do they attack us as they retreat to a secure position within the ranks of the private insurance industry? Besides, just wait and see what the insurers and their purchased representatives in Congress will do with Jacob Hacker’s “Healthy Competition” proposal. You’ll have to look quick because the window of opportunity for reform will have slammed shut.

Insurers shun those taking certain meds

How health insurers secretly blacklist those with certain ailments.

By JOHN DORSCHNER
The Miami Herald
Saturday, 03.28.09

Trying to buy health insurance on your own and have gallstones? You’ll automatically be denied coverage. Rheumatoid arthritis? Automatic denial. Severe acne? Probably denied. Do you take metformin, a popular drug for diabetes? Denied. Use the anti-clotting drug Plavix or Seroquel, prescribed for anti-psychotic or sleep problems? Forget about it.

This confidential information on some insurers’ practices is available on the Web — if you know where to look.

What’s more, you can discover that if you lie to an insurer about your medical history and drug use, you will be rejected because data-mining companies sell information to insurers about your health, including detailed usage of prescription drugs.

These issues are moving to the forefront as the Obama administration and Congress gear up for discussions about how to reform the healthcare system so that Americans won’t be rejected for insurance.

It’s especially timely because growing numbers are looking for individual health insurance after losing their jobs. On top of that, small businesses, which make up the bulk of South Florida’s economy, are frequently finding health policies too expensive and are dropping coverage, sending even more people shopping for insurance.

The problem is, material available on the Web shows that people who have specific illnesses or use certain drugs can’t buy coverage.

”This is absolutely the standard way of doing business,” said Santiago Leon, a health insurance broker in Miami. Being denied for preexisting conditions is well known, but when a person sees the usually confidential list of automatic denials for himself, “that’s a eureka moment. That shows you how harsh the system is.”

A 50-year-old Broward County man, with two long-standing medical conditions, saw the harshness for himself when surfing the Web trying to learn why insurers kept denying him coverage. He was shocked to find several insurers’ instructions to sales personnel, usually called the Guide to Medical Underwriting and often marked “confidential and proprietary.”

”I think it’s atrocious what’s going on,” he said. “Basically, they’re taking only the healthy so they can get the fattest profits. If you really need insurance, then you can’t get it.”

The man, a self-employed consultant, didn’t want his name or preexisting conditions identified for fear that the information might frighten away potential employers.

CONFIDENTIAL GUIDE

Insurers don’t want to talk about the guides. Sunrise-based Vista , which has its 35-page ”confidential and proprietary” guide tucked away within its website, refused to make executives available for an interview and instead issued a brief statement:

“The medical underwriting guidelines used by VISTA are based on industry standards, comply with all regulations and are subject to review by the Florida Department of Insurance. VISTA’s Guide to Medical Underwriting is an educational tool intended to assist agents and brokers who are selling VISTA individual plans. We do not comment on our specific underwriting processes and practices.”

Sandra Foertsch, who sells individual policies, says the fundamental concern of insurers is clear: ”They don’t want to buy a claim,” meaning that they would start to collect $500 monthly premiums from a person and quickly pay out more than that to doctors and other providers.

Foertsch said she was surprised that any of the guides could be found on the Web. “I’d guess someone made a mistake.”

Physicians support health reform bill

From Staff Reports
Cumberland Times-News
Saturday, March 28, 2009

CUMBERLAND, MD — A single-payer health reform bill introduced in the U.S. Senate last week could cover 46 million Americans who lack coverage and improve benefits for others by eliminating co-pays and deductibles.

“The proposal in the Senate and its counterparts in the House are sure to be branded as socialized medicine,” said Dr. Wayne Spiggle, local doctor and member of the Physicians for a National Health Program. “They are nothing of the kind. Medicare is a single-payer program and it is not socialized medicine. Doctors are clearly less hassled by Medicare than by private insurance companies, and patients are better served.”

The proposed bill was introduced Wednesday by Independent Sen. Bernie Sanders of Vermont. The American Health Security Act of 2009 would cut private insurance overhead and bureaucracy in medical settings, with an estimated savings of more than $400 billion that could be directed to clinical care.

“This is excellent news for the nation’s health,” said Dr. Quentin Young, national coordinator of PNHP. “There is now an affordable cure for our dysfunctional health care system. In the face of our present economic calamity, this is an urgent necessity.”

The proposed program would be paid for by combining current sources of government health spending into a single fund with modest taxes that amount to less than what people pay for insurance premiums and out-of-pocket expenses.

It would be administered by the states, with hopes that would reduce the paperwork that people in the health care industry deal with.

Patients would be able to go to their own doctors and community health centers would be fully funded.
The program would provide resources to the National Health Service Corps to train an additional 24,000 health professionals to deal with the shortage of primary care physicians and dentists.

“We are confident that Sen. Sanders’ bill will accelerate the national drive for the only reform that we know will work,” Young said. “A majority of physicians endorse such an approach. … We remember well that President Obama once acknowledged that single-payer national health insurance was the best way to go. It still is.”

Copyright (c) 1999-2008 cnhi, inc.

Move to single-payer system is crucial

By Richard C. Dillihunt, M.D.
Bangor Daily News
4/8/09

As America prepares to reform our health care system, I wish to add some convictions reached while practicing surgery for nearly a half-century. Until about 15 years ago, doctors were powerful leaders in the health care system, taking their responsibilities seriously, and the system worked well. Then, dark clouds began to assemble and physicians began to lose their grip.

As the system faltered, physicians were not part of any changes except as pawns and bystanders. In short supply, we had crushing demands due to patient loads and were required to run practices of increasing complexity.

New arrivals appeared, calling themselves “health care professionals.” Seemingly overnight, they were “stakeholders,” and a metamorphosis occurred as medicine became big business. A new gold rush was on, lured by the attraction of the health care dollar.

The language of medicine changed with the arrival of HMOs, PPOs, surgicenters, for-profit hospitals and other schemes popping up like dandelions, fertilized by health care dollars totaling more than 15 percent of our GDP. Special interests arrived in the form of the health insurance and pharmaceutical industries, distributing lobby dollars in all directions and receiving free range in return. Multimillion-dollar salaries and billions in stock options were awarded while the steely-gray clenched faces of bankruptcy adorned middle America.

Hospitals joined in, finding a way to control pesky doctors — they hired them — spawning an undesirable side effect of antagonistic competition. Hospital bills joined inflation in the health care sector, and ear-popping predictions were heard that health care soon would become 20 percent of gross domestic product — up from 7.2 percent in 1970. The cost of all U.S. health care surged to top $8,000 per person annually while Canada’s cost for universal health care was half that, and our outcomes were no better than theirs.

Our system lacks social justice for some 45 million Americans without health insurance and more who are underinsured. Huge layoffs due to the current recession are adding to these alarming numbers daily, with workers and dependents suddenly uninsured. Another surge is expected soon, when unemployed new college graduates hit the streets. We are ready to improve this situation by passage of universal health care legislation now.

Beyond that is a way to really fix the health care system. It is called “single payer.” Call upon our federal government to implement such a program, recalling that it already runs some of the world’s best and most efficient health care programs including Medicare, the National Institutes of Health, the Centers for Disease Control and Prevention and military medicine.

Be aware that single-payer is not socialized medicine. Single payer just means the government is acting as an administrator and best understood as being “Medicare for all.” Note that only about 5 percent of Medicare dollars are used in administering the program, while private cost for the same service consumes 30 percent of premium dollars — largely due to profit.

The new administration seems set on reducing health care costs and instituting a system of universal health care while leaving the current system in place, and adding a new federal health care insurance option. This is not adequate. The prior administration wanted an income tax deduction for health care insurance costs, plus health savings accounts — both are flawed and inadequate.

In his June 13, 2005, column in The New York Times, “One Nation Insured,” Paul Krugman convincingly extols the virtues of single payer. Krugman, a Times writer and professor at Princeton, was recently awarded the Nobel Prize in economics. Ask Paul. If still skeptical, ask Joe. Joseph Stiglitz, when recently asked “Do you support single-payer health care?” answered. “I think I’ve reluctantly come to the view that it’s the only alternative.” Stiglitz is a Columbia professor — and also a Nobel Prize-winning economist.

Single payer could lead a powerful surge to recovery — sort of an economic wonder drug. Polls of Americans strongly favor single payer, yet our government seems reluctant to address this eye-to-eye preferring lesser action and tweaking along as before. We need to send a message to Washington, reminding it who their employers are. There is enough unemployment already, so we do not want to send pink slips to D.C. Feeling bad for the fat -cat special interests is intolerable, not after what they have done to us. Anything less may result in further collapse of a frail, teetering relic. We are near a solution of a serious issue confronting our economy. Doing the right thing now is crucial.

Richard C. Dillihunt, M.D., a retired general, vascular and transplant surgeon, lives in Portland. He may be reached at dillihunt8@aol.com.

Post office a reminder of our past successes

Pat LaMarche
Bangor Daily News
4/8/09

Ever been to Old Sturbridge Village? It’s a community in the town of Sturbridge, Mass., that has been pieced together out of the past. You can walk through buildings built when Uncle Sam was just an infant and see the way life was in Colonial America.

There is a bank that was a real bank, a law office that was a real law office, a tin shop was a real tin shop, a
tavern that was a real tavern, the home of the town’s wealthiest man that was the real home of a town’s wealthiest man. You get the picture.

The place isn’t a restoration of history but a collection of historic buildings that would have evolved or burned down or decayed out of existence if the curators had not relocated them to this re-enactment site and preserved them like snapshots in time.

If you lived then, your clothes would have been sewed by hand, you would have had limited access to books and to the light by which you could read them. The dollars in your pocket would be notes printed by a bank and could — at any time — become worthless. Banks were private businesses financed by wealthy individuals and if a bank were robbed or the backer went broke you lost the value of the scrip the bank had issued.

The fundamental premise on banking is the same today, except that now the banks are robbed from within, and the poorly run banks just stay in business.

But back to Sturbridge. This pristine village dramatizes life before modern conveniences. Fireplaces before central heating, mattresses held off the ground by ropes before box springs, outdoor cooking pits before the microwave and livestock instead of grocery stores.

Yet in the midst of all this toil and discomfort, efficiency and sensibility persisted. One of the most important features of our current lives existed back in the Sturbridge of old. In 1775, the United States Post Office was created under Benjamin Franklin by the Second Continental Congress. Government delivery of mail was considered such a priority that it was provided for in Article One of the Constitution.

Today that creation is one of our nation’s top three employers — the two larger entities are the Department of Defense and Wal-Mart, respectively. A separate arm of the government, under the jurisdiction of the executive branch, the Postal Service owns and operates 260,000 vehicles — made by either Ford or Chevrolet.

While the USPS faces healthy competition from other delivery companies such as FedEx or UPS, this government agency pays anywhere from $9,000 to $28,000 more to each of its full-time employees than the Social Security Administration’s national average of $40,405.

You can stand in the town square of Old Sturbridge Village and realize that Benjamin Franklin and his buddies who crafted our Constitution weren’t afraid of government delivering services. In fact, they wanted government to do so and used the Constitution to guarantee it. Consequently we now receive — free of charge — mail from all over the world; to include utility bills, advertisements, official correspondence and personal messages. But if we prefer to use a private currier to send our correspondence, we do not lose the right to receive our mail for free.

Too bad health care in Franklin’s time was leeches and bleedings. If health care had saved lives back then, Franklin and the other Founding Fathers would certainly have guaranteed the delivery of health care with the same enthusiasm they showed the mail.

But more smart people have been born since then. And many belong to the Maine Medical Association — an affiliate of the American Medical Association. Pick up a copy of its March-April 2009 newsletter and read about the poll it conducted of its members. It reads, “When asked the question, ‘When considering the topic of healthcare reform would you prefer to make improvements to the current public-private system or a single payer system such as a ‘Medicare for all’ system?” Members expressed a preference for a single-payer system 52.3 percent to 47.7 percent” The bill before Congress that provides this is HR 676.

Just call your members of Congress and ask for a copy. And our excellent governmental program, the Postal Service, will deliver one for you.

State lawmakers tout single-payer healthcare system

Associated Press
Sun Journal
Wednesday, April 8, 2009

AUGUSTA, Maine — Maine lawmakers have passed a resolution calling on President Obama and Congress to establish a single-payer health system that covers everyone.

The Senate passed the nonbinding resolution by a 20-15 vote on Wednesday, a day after the House did the same by a 91-52 vote.

The resolution cites the high costs of the present system and says managed care, health maintenance organizations and other reforms have failed to contain health costs.

The resolution was passed months after a poll of nearly 600 Maine physicians showed a majority in favor of a single payer or “Medicare for all” approach. The survey, conducted in November and December, showed 52 percent in favor and 48 percent against.

http://www.sunjournal.com/story/311640-3/MaineNews/State_lawmakers_tout_singlepayer_health

Lewin report on the public option

The Cost and Coverage Impacts of a Public Plan: Alternative Design Options

Prepared by John Sheils Randy Haught
The Lewin Group
April 6, 2009
President Obama has proposed to create a “public plan” that would compete for enrollment with the private insurance industry.
The public plan is difficult to evaluate because no one has specified in legislation how it would work.
Consequently, in this paper, we present impact estimates under several variations on the public plan model.
If Medicare payment levels are used in the public plan, premiums would be up to 30 percent less than premiums for comparable private coverage. On average, the monthly premium in the public plan for a typical benefits package would be $761 per family compared with an average of $970 per family in the private market for the same coverage.
If the public plan is opened to all employers as proposed by Senators Clinton and Edwards, at Medicare payment levels we estimate that about 131.2 million people would enroll in the public plan. The number of people with private health insurance would decline by 119.1 million people.
Medicare premiums would be lower than private premiums because of the exceptional leverage Medicare has with providers. Medicare pays hospitals about 30 percent less than private insurers pay for the same service. Physician payments are about 20 percent less than under private coverage. Also, because Medicare has no allowance for insurer profits or broker/agent commissions, administrative costs for this population are about one-third of administrative costs in private health plans.
Assuming Medicare reimbursement rates and eligibility for all individuals and employers, provider net income would decline under this public plan proposal, even after accounting for reduced uncompensated care and increased utilization for the newly insured. Net hospital revenues would fall by $36 billion (4.6 percent), and physician net income would fall by $33 billion (6.8 percent).
http://www.lewin.com/content/publications/LewinCostandCoverageImpactsofPublicPlan-Alternative%20DesignOptions.pdf

No details have been released by either Congress or the administration about the specifics of a potential public insurance option that could be offered in competition within a market of private health plans. Nevertheless, to provide an analysis of how such a plan might work, The Lewin Group used certain assumptions to prepare this simulation.
Under this analysis, hospitals would be paid 30 percent less than the reimbursement rates of private insurers, and physicians would be paid 20 percent less. Using these and other assumptions, premiums for the public plan would be 30 percent less than comparable coverage by private plans.
Supporters of the public option are likely to claim that it is an essential component of reform since it will lower the cost of insurance while expanding coverage to over 100 million more people.
Opponents of the public option are already claiming that the government would be an unfair competitor to the private plans because of its ability to dictate rates that are lower than what the private plans must charge.
This simulation may very well also increase the opposition by physicians and hospital administrators because of concern about the possibility of shifting large numbers of patients from the private plans to the government plan with its considerably lower reimbursement rates. In the heat of the debate, it may be forgotten that these fee reductions were an assumption made by the authors of this report for simulation purposes, and not a feature of any actual legislative proposal.
Unfortunately, this study only fuels a debate that has diverted us from the discussion that we should be having. Instead of arguing over a controversial, yet-to-be-defined measure that cannot possibly lead to the efficiencies, equity and effectiveness of the single payer model, we should be discussing what actually would work – true single payer reform.

Lewin report on the public option

The Cost and Coverage Impacts of a Public Plan: Alternative Design Options

Prepared by John Sheils Randy Haught
The Lewin Group
April 6, 2009

President Obama has proposed to create a “public plan” that would compete for enrollment with the private insurance industry.

The public plan is difficult to evaluate because no one has specified in legislation how it would work.

Consequently, in this paper, we present impact estimates under several variations on the public plan model.

If Medicare payment levels are used in the public plan, premiums would be up to 30 percent less than premiums for comparable private coverage. On average, the monthly premium in the public plan for a typical benefits package would be $761 per family compared with an average of $970 per family in the private market for the same coverage.

If the public plan is opened to all employers as proposed by Senators Clinton and Edwards, at Medicare payment levels we estimate that about 131.2 million people would enroll in the public plan. The number of people with private health insurance would decline by 119.1 million people.

Medicare premiums would be lower than private premiums because of the exceptional leverage Medicare has with providers. Medicare pays hospitals about 30 percent less than private insurers pay for the same service. Physician payments are about 20 percent less than under private coverage. Also, because Medicare has no allowance for insurer profits or broker/agent commissions, administrative costs for this population are about one-third of administrative costs in private health plans.

Assuming Medicare reimbursement rates and eligibility for all individuals and employers, provider net income would decline under this public plan proposal, even after accounting for reduced uncompensated care and increased utilization for the newly insured. Net hospital revenues would fall by $36 billion (4.6 percent), and physician net income would fall by $33 billion (6.8 percent).

http://www.lewin.com/content/publications/LewinCostandCoverageImpactsofPublicPlan-Alternative%20DesignOptions.pdf

Comment:

By Don McCanne, MD

No details have been released by either Congress or the administration about the specifics of a potential public insurance option that could be offered in competition within a market of private health plans. Nevertheless, to provide an analysis of how such a plan might work, The Lewin Group used certain assumptions to prepare this simulation.

Under this analysis, hospitals would be paid 30 percent less than the reimbursement rates of private insurers, and physicians would be paid 20 percent less. Using these and other assumptions, premiums for the public plan would be 30 percent less than comparable coverage by private plans.

Supporters of the public option are likely to claim that it is an essential component of reform since it will lower the cost of insurance while expanding coverage to over 100 million more people.

Opponents of the public option are already claiming that the government would be an unfair competitor to the private plans because of its ability to dictate rates that are lower than what the private plans must charge.

This simulation may very well also increase the opposition by physicians and hospital administrators because of concern about the possibility of shifting large numbers of patients from the private plans to the government plan with its considerably lower reimbursement rates. In the heat of the debate, it may be forgotten that these fee reductions were an assumption made by the authors of this report for simulation purposes, and not a feature of any actual legislative proposal.

Unfortunately, this study only fuels a debate that has diverted us from the discussion that we should be having. Instead of arguing over a controversial, yet-to-be-defined measure that cannot possibly lead to the efficiencies, equity and effectiveness of the single payer model, we should be discussing what actually would work – true single payer reform.

Universal health coverage in spotlight at L.A. forum

But the White House-organized event is light on details

By Lisa Girion and Noam Levey
Los Angeles Times
April 7, 2009

Reporting from Washington and Los Angeles — Even as President Obama toured Europe his administration pressed its healthcare reform campaign Monday in Los Angeles with a forum co-hosted by Gov. Arnold Schwarzenegger, who lost his bid in California to make many of the changes now on the table in Washington.

Reform is overdue, the governor said. “No one can look at our healthcare system and say that the system is fair or a good return on what we spend, and this consensus can help us pass significant bipartisan reforms into law.”


Andy Evano of the California School Employees
Association leads chanting by protesters
outside the forum.

A wide array of forum participants, including hospital and insurance company executives and the mother of a teenager who died from a preventable hospital-acquired infection, gave voice to the grow- ing desire for change. But the presentation was light on details.

Universal coverage — health insurance for all Americans — was widely touted, but there was no discussion of how to achieve that goal.

The forum, the fifth in a series the White House organized around the country over the last month, comes as senior Democrats on Capitol Hill move ahead on drafting legislation to be introduced later this spring to overhaul the nation’s healthcare system.

The president and his congressional allies have pledged that the bill will expand coverage to some 46 million uninsured people, rein in costs and improve the quality of care.

The White House billed the five forums as a way to get public input. But the invitation-only event in Los Angeles was clearly programmed to showcase the broad goals Obama has said he wants included in the legislation, including an emphasis on prevention, as well as secure and affordable coverage for everyone, regardless of age or preexisting conditions.

Schwarzenegger, who hosted the event with Washington Gov. Chris Gregoire, marveled at the White House support for reform. “Isn’t it nice to have a president who is passionate about healthcare?” Schwarzenegger said. “I love it.”

In making his case for a healthcare overhaul, Schwarzenegger took a swipe at the insurance company practice of canceling members’ coverage after they get sick over purported application misstatements about preexisting conditions. “That is unacceptable,” the governor said.

Schwarzenegger’s $14.9-billion proposal intended to provide medical insurance for nearly all Californians died in the state Senate last year.

Outside the forum, the California Nurses Assn., Physicians for a National Health Program and other groups drew hundreds to a rally in support of the so-called single-payer option, which would put government in charge of organizing and purchasing healthcare and leave the private insurance market in tatters.

Deborah Burger, co-president of the California-based nurses union, a Schwarzenegger foe, said she feared that the single-payer approach would not be considered in Washington because of heavy lobbying by the insurance industry. She said the forum, where no single-payer proponent spoke, was just more “window dressing.”

With the forums concluded, the action now shifts to Washington, where members of Congress also are working toward universal coverage through legislation that would modify the current private insurance market rather than replace it.

Congressional leaders are crafting a budget resolution that could allow Democrats to pass major healthcare legislation this year with a simple majority in the Senate, rather than the 60-vote supermajority necessary to head off a Republican filibuster.

House Democrats and some in the White House are pushing for this approach, though some senior Senate Democrats are more wary of employing a tactic that is sure to provoke a Republican revolt. Congress will take up the budget resolution when lawmakers return from spring recess in two weeks.

Doc organization pushes 'Medicare-for-all' system

By Andis Robeznieks
Modern Healthcare
April 6, 2009

Sarcastically describing them as “brilliant,” Physicians for a National Health Program National Coordinator Quentin Young warned that the legislative proposals currently being considered to improve access to healthcare are “a catastrophe in the making” and would rival the collapse of the financial markets.

Speaking at an outdoor rally today in downtown Chicago’s Federal Plaza, Young advocated for a publicly funded, privately operated “Medicare-for-all” health system, and he mocked proposals to mandate that everyone buy private insurance or face a fine.

The rally was timed to coincide with the White House forum on healthcare reform taking place in Los Angeles and was co-sponsored by the California Nurses Association/National Nurses Organizing Committee. Young noted that single-payer advocates were denied a seat at the table at today’s forum and that–in Los Angeles–“thousands were protesting outside because they could not get inside.”

Another source, however, estimated a smaller crowd. A news release issued by the Leadership Conference for Guaranteed Healthcare, a coalition that includes both the PNHP and CNA, noted that “hundreds” had gathered around a giant table representing how single-payer advocates had been shut out of the forum.

The Chicago rally was attended by about 30 people, and the California Nurses Association was represented by Frank Borgers, who told how the Los Angeles forum was being hosted by “our friend–not so much–Gov. Schwarzenegger.” Borgers also mocked proposals mandating the purchase of private insurance as “foolhardy” and “doomed.”

“The nation cannot afford to subsidize private health insurance,” Borgers said.

Young described the current political climate as a good-news/bad-news proposition, explaining that public support for a single-payer system has never been stronger, but that insurance companies have been working harder than ever to maintain their control. “They have not been asleep at the wheel,” he said.

Young also noted the “bitter realities” facing the city of Chicago’s healthcare system, including how the 553-bed University of Chicago Medical Center was working to redirect a significant number of its emergency department visitors to other facilities and how the 364-bed Michael Reese Hospital and Medical Center–whose staff he joined in 1952–is closing down.

University of Chicago Medical Center spokesman John Easton defended his institution’s program to reduce emergency room traffic and described it as an effort to find medical homes for patients who use the hospital’s emergency department as their main source of primary care rather than for treatment of true medical emergencies.