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“Of all the forms of inequality, injustice in health care is the most shocking and inhumane”
–Martin Luther King Jr.

Among the Wealthiest One Percent, Many Variations

By Shaila Dewan and Robert Gebeloff
The New York Times, January 14, 2012

The colossal gap between the very rich and everyone else – the 1 percent versus the 99 percent – has become a rallying point in this election season. President Obama positions himself as a defender of the middle class, and Mitt Romney, the wealthiest of the Republican presidential candidates, decries such talk as “the bitter politics of envy.”

The range of wealth in the 1 percent is vast – from households that bring in $380,000 a year, according to census data, up to billionaires like Warren E. Buffett and Bill Gates.

Most 1 percenters were born with socioeconomic advantages, which helps explain why the 1 percent is more likely than other Americans to have jobs, according to census data. They work longer hours, being three times more likely than the 99 percent to work more than 50 hours a week, and are more likely to be self-employed.

In one survey of wealthy Chicago families, almost twice as many respondents said they would cut government spending as those who said they would cut spending and raise revenue.

“I don’t mind paying a little bit more in taxes. I don’t mind putting money to programs that help the poor,” said Anthony J. Bonomo of Manhasset, N.Y., who runs a medical malpractice insurance company and is a Republican. But, he said, he did mind taking a hit for the country’s woes. “If those people could camp out in that park all day, why aren’t they out looking for a job? Why are they blaming others?”

Still, David Mejias, a divorce and personal injury lawyer who once served as a Democratic legislator for Nassau County, said that the system everywhere was skewed in favor of the self-employed and business owners who could deduct part of the cost of their cars, trips, dinners and even collectibles like art.

“Not only do we make more money, but if you do a lifestyle analysis, we make a lot more money,” he said. “Before we even get paid, most of our life has been paid for already.”

“I definitely see it around me,” said Anu Chandok, 36, an oncologist in Lake Success, referring to the country’s economic pain. “It just personally hasn’t affected me yet.”

Dr. Chandok said that her husband, also a doctor, was still paying off his student loans. The couple has a nanny, but Dr. Chandok’s father-in-law does the shopping and cooking.

Dr. Chandok said she had never heard the Occupy Wall Street slogan “We are the 99 percent.” Two children and 11-hour workdays, she said, do not leave much time for politics.

But when the slogan was explained as a complaint against the wealthy’s growing share of income, she shook her head. “I spent four years in undergraduate school, four years in medical school, three years as a resident and three years as a fellow,” she said. “You have to look at the people who are complaining.”

http://www.nytimes.com/2012/01/15/business/the-1-percent-paint-a-more-nuanced-portrait-of-the-rich.html?_r=2&hp=&pagewanted=all

New York Times Interactive

Of 360,785 physicians who practice in offices and clinics, 27.2 percent have incomes in the top 1 percent (over $380,000).

http://www.nytimes.com/packages/html/newsgraphics/2012/0115-one-percent-occupations/index.html

Comment: 

By Don McCanne, MD

On Martin Luther King Jr Day it seems appropriate to contemplate what he might say about the dramatic increase in flow of wealth from middle- and lower-income families to the 1 percent who constitute the uber-wealthy. It seems safe to assume that he would be concerned about the negative impact on the issues of social justice to which he devoted his life.

One of those issues was health care justice. What do you think he might say about the fact that 27 percent of physicians practicing in offices and clinics fall into the highest 1 percent of income? It is likely that he would not frame the problem narrowly as excess compensation for physicians but rather as the larger issue of an excess accumulation of wealth at the very top when there is so much unmet need amongst the masses.

But for many of us who have had experience in the trenches, we have been annoyed, to say the least, that many of these same high-income physicians refused to see our uninsured and Medicaid patients. Was it because they didn’t want to make the smallest of dents in their high incomes by using a small amount of office time on just a few patients that did not cover their costs? Or was it that they didn’t want “that element” to frequent their waiting rooms? Both, in my experience, and as Dr. Chandok’s views suggest.

One concern that many physicians have about single payer, or an improved Medicare for all, is that the government, as a monopsony, could reduce physicians’ incomes perhaps to the level of teachers’ salaries. Although incomes of physicians in most other nations are lower than in the United States, they still rank well above average. Physicians do very well, though most are not able to accumulate large amounts of wealth that a $380,000 or more income might bring.

Most physicians who are truly dedicated to serving patients would be satisfied with incomes in the top 20 percent if they were provided a practice environment conducive to optimal care for all of their patients. That, of course, is precisely a major goal of single payer.

Many if not most of those physicians who want to be in the top 1 percent might not be satisfied. When deciding on career choices they might reject medicine if it had government controls on spending, and choose an educational path that might lead to the financial services industry, corporate leadership, or entrepreneurial endeavors.

Opponents of government-financed medicine have warned that controls on health care spending might deprive health care of some of the finest and brightest minds. What? Do we really want more physicians whose primary interest is to accumulate wealth while demonstrating absolutely no compassion for the least amongst us? There isn’t much doubt about what Dr. King’s position would be.

When we are asked if single payer might reduce physicians’ incomes we don’t need to fumble around trying to craft an answer that would placate physicians with very high incomes. We should state frankly that if an individual’s goal is to have a personal fleet of luxury automobiles and a condo in every climate, then medicine isn’t the field for them, or at least shouldn’t be.

On the other hand, if the goal is to obtain the best attainable health care for everyone, while adjusting incomes to reinforce the primary care infrastructure and to provide fair but not excessive compensation for procedure-oriented specialists, then practicing medicine in a single payer environment is just what the compassionate doctor ordered.

By James W. Moser, PhD, Kimberly E. Applegate, MD, MS
Journal of the American College of Radiology, January 2012

Compared with non-Medicaid insured ED patients, uninsured ED patients were less likely to get any imaging services and to get lower value imaging RVUs (relative value units), results that held for nearly all modalities. Similar results regarding the number and value of imaging services, as well as health status, were found for Medicaid patients.

Even after controlling for health status and other measurable factors, the average number of imaging tests received by uninsured ED patients was ≥8% lower than that for non-Medicaid insured ED patients. The deficit for Medicaid ED patients was even greater, at about 10%. Uninsured ED patients and Medicaid ED patients also received fewer imaging-related RVUs per visit than non-Medicaid insured ED patients: 13% and 19%, respectively. These differences amplify the potentially serious health implications for persons lacking conventional health insurance. As the number of uninsured Americans continues to rise, the use of ED services will also rise.

The differences in imaging RVUs by insurance group stemmed from a bias toward lower valued imaging modalities for persons lacking coverage compared with insurance persons. Medicaid patients, perhaps underinsured, also received lower valued imaging and less imaging compared with insured patients. Other studies have found that the uninsured are less likely to get timely medical care and consequently are sicker upon being admitted to the hospital.

http://www.jacr.org/article/S1546-1440(11)00445-5/fulltext

Comment:

By Don McCanne, MD

Fully predictable. Uninsured and Medicaid emergency department patients receive fewer imaging tests, and when they do receive them, they are more likely to be lower valued tests. Under the Affordable Care Act, many individuals will remain uninsured and many more will be enrolled in Medicaid. Thus this is a problem that is not going away.

We can do better than this.

By Alicia L. Cooper, M.P.H., and Amal N. Trivedi, M.D., M.P.H.
The New England Journal of Medicine, January 12, 2012

This study examined the consequences of adding a fitness-membership benefit on the self-reported health status of enrollees in Medicare Advantage plans. Using a quasi-experimental design, we found that persons enrolling in plans after the addition of a fitness-membership benefit reported significantly better general health, fewer limitations in moderate activities, less difficulty walking, and higher PCS scores than did persons who enrolled in the same plan before the fitness benefit was added and in matched control plans that never offered a fitness benefit. These patterns persisted in the analyses of 2-year follow-up responses for all measures except self-reported general health. Our findings suggest that there is an association between the adoption of fitness-membership benefits in Medicare Advantage plans and the enrollment of healthier Medicare beneficiaries.

Risk-adjusted payments are designed to reduce incentives for plans to avoid high-cost patients. However, the enhanced Medicare risk-adjustment model has the power to explain only 11% of the total variation in health spending. Furthermore, the model overpredicts costs for persons in good health and underpredicts costs for persons in poor health, yielding overpayments for healthy enrollees and underpayments for less-healthy enrollees. Therefore, the continued limitations of the CMS payment model may not discourage Medicare Advantage plans from engaging in risk-selective activities. Our findings are consistent with the notion that Medicare managed-care plans have continued to selectively market their benefits to healthier beneficiaries, even after the improved risk-adjustment program was instituted.

http://www.nejm.org/doi/full/10.1056/NEJMsa1104273?query=TOC#t=articleTop

Comment: 

By Don McCanne, MD

This study further confirms what we have known all along – that private insurers selectively market to the healthy, further cushioning their profits by being paid at rates for those with only average health. Although risk adjustment has been introduced to correct overpayments due to their use of favorable selection, the insurers have found devious ways to use risk adjustment to further expand their profits, even though technically prohibited. It is the nature of private insurers to always work the system to their own advantage, and that will never change.

How many times do we have to say it? It is time to dismiss the private insurers and establish our own single payer national health program in which the benefits accrue to the patients/taxpayers and not to the expensive, intrusive, wasteful insurance intermediaries.

By Anu Partanen
The Atlantic, December 29, 2011

(Excerpts)

Everyone agrees the United States needs to improve its education system dramatically, but how? One of the hottest trends in education reform lately is looking at the stunning success of the West’s reigning education superpower, Finland. Trouble is, when it comes to the lessons that Finnish schools have to offer, most of the discussion seems to be missing the point.

So there was considerable interest in a recent visit to the U.S. by one of the leading Finnish authorities on education reform, Pasi Sahlberg, director of the Finnish Ministry of Education’s Center for International Mobility and author of the new book Finnish Lessons: What Can the World Learn from Educational Change in Finland? Earlier this month, Sahlberg stopped by the Dwight School in New York City to speak with educators and students, and his visit received national media attention and generated much discussion.

Yet one of the most significant things Sahlberg said passed practically unnoticed. “Oh,” he mentioned at one point, “and there are no private schools in Finland.”

This notion may seem difficult for an American to digest, but it’s true. Only a small number of independent schools exist in Finland, and even they are all publicly financed. None is allowed to charge tuition fees. There are no private universities, either. This means that practically every person in Finland attends public school, whether for pre-K or a Ph.D.

The irony of Sahlberg’s making this comment during a talk at the Dwight School seemed obvious. Like many of America’s best schools, Dwight is a private institution that costs high-school students upward of $35,000 a year to attend — not to mention that Dwight, in particular, is run for profit, an increasing trend in the U.S. Yet no one in the room commented on Sahlberg’s statement. I found this surprising. Sahlberg himself did not.

From his point of view, Americans are consistently obsessed with certain questions: How can you keep track of students’ performance if you don’t test them constantly? How can you improve teaching if you have no accountability for bad teachers or merit pay for good teachers? How do you foster competition and engage the private sector? How do you provide school choice?

The answers Finland provides seem to run counter to just about everything America’s school reformers are trying to do.

For starters, Finland has no standardized tests. The only exception is what’s called the National Matriculation Exam, which everyone takes at the end of a voluntary upper-secondary school, roughly the equivalent of American high school.

As for accountability of teachers and administrators, Sahlberg shrugs. “There’s no word for accountability in Finnish,” he later told an audience at the Teachers College of Columbia University. “Accountability is something that is left when responsibility has been subtracted.”

And while Americans love to talk about competition, Sahlberg points out that nothing makes Finns more uncomfortable. In his book Sahlberg quotes a line from Finnish writer named Samuli Puronen: “Real winners do not compete.” It’s hard to think of a more un-American idea, but when it comes to education, Finland’s success shows that the Finnish attitude might have merits. There are no lists of best schools or teachers in Finland. The main driver of education policy is not competition between teachers and between schools, but cooperation.

Finally, in Finland, school choice is noticeably not a priority, nor is engaging the private sector at all. Which brings us back to the silence after Sahlberg’s comment at the Dwight School that schools like Dwight don’t exist in Finland.

“Here in America,” Sahlberg said at the Teachers College, “parents can choose to take their kids to private schools. It’s the same idea of a marketplace that applies to, say, shops. Schools are a shop and parents can buy what ever they want. In Finland parents can also choose. But the options are all the same.”

Herein lay the real shocker. As Sahlberg continued, his core message emerged, whether or not anyone in his American audience heard it.

Decades ago, when the Finnish school system was badly in need of reform, the goal of the program that Finland instituted, resulting in so much success today, was never excellence. It was equity.

Since the 1980s, the main driver of Finnish education policy has been the idea that every child should have exactly the same opportunity to learn, regardless of family background, income, or geographic location. Education has been seen first and foremost not as a way to produce star performers, but as an instrument to even out social inequality.

In the Finnish view, as Sahlberg describes it, this means that schools should be healthy, safe environments for children. This starts with the basics. Finland offers all pupils free school meals, easy access to health care, psychological counseling, and individualized student guidance.

In fact, since academic excellence wasn’t a particular priority on the Finnish to-do list, when Finland’s students scored so high on the first PISA survey in 2001, many Finns thought the results must be a mistake. But subsequent PISA tests confirmed that Finland — unlike, say, very similar countries such as Norway — was producing academic excellence through its particular policy focus on equity.

That this point is almost always ignored or brushed aside in the U.S. seems especially poignant at the moment, after the financial crisis and Occupy Wall Street movement have brought the problems of inequality in America into such sharp focus.

“When President Kennedy was making his appeal for advancing American science and technology by putting a man on the moon by the end of the 1960’s, many said it couldn’t be done,” Sahlberg said during his visit to New York. “But he had a dream. Just like Martin Luther King a few years later had a dream. Those dreams came true. Finland’s dream was that we want to have a good public education for every child regardless of where they go to school or what kind of families they come from, and many even in Finland said it couldn’t be done.”

Clearly, many were wrong. It is possible to create equality. And perhaps even more important — as a challenge to the American way of thinking about education reform — Finland’s experience shows that it is possible to achieve excellence by focusing not on competition, but on cooperation, and not on choice, but on equity.

The problem facing education in America isn’t the ethnic diversity of the population but the economic inequality of society, and this is precisely the problem that Finnish education reform addressed. More equity at home might just be what America needs to be more competitive abroad.

http://www.theatlantic.com/national/archive/2011/12/what-americans-keep-ignoring-about-finlands-school-success/250564/

Comment: 

By Don McCanne, MD

When you read these excerpts from this article on the education system in Finland, what is striking is how much the philosophy behind their vastly superior system contrasts sharply with ours. What is really mind-boggling is that if you re-read the same excerpts, except substitute “health care system” for “education system,” you then will have an inkling of what we are doing wrong in both education and health care.

One fundamental concept that has appeared repeatedly on the pages of Physicians for a National Health Program (PNHP) is that excellence is a product of cooperation, not competition. It is not choice between private for-profit and public systems, but rather it is equity within public
systems that facilitates excellence.

In both education and health care, Americans emphasize testing, accountability, merit rewards, competition, and choice. Yet Finland does not use standardized testing (analogous to HEDIS testing in health care), nor do they demand accountability – they don’t even have a word for it – but rather they expect responsibility. In Finland, all teachers are given prestige, decent pay, and a lot of responsibility. Finns are very uncomfortable with the concept of competition, especially since that interferes with the productivity induced in an environment of cooperation. Nor do they even consider choice – choice between publicly-financed and privately-financed schools – since the latter do not even exist.

So their secret is to establish equity and cooperation within the public sector. Now that it’s no longer a secret, we also can have high quality education and health care systems right here in the United States. We just have to shove the MBAs aside and place control in the hands of our own publicly chosen advocates of social justice.

The Local – Germany’s News in English
January 8, 2012

Shocked by premium increases of as much as 50 percent, many Germans with private health insurance are seeking to switch to a national health plan, the news magazine Der Spiegel reported Sunday.

Many private health insurance plans pushed through hefty premium increases at the beginning of the year and that’s behind the move to switch, the magazine said.

“We’ve gotten increased telephone inquiries from those privately insured who want to come to the AOK,” Wilfried Jacobs, the head of the AOK in Rheinland/Hamburg, told the magazine. The AOK, with 15 regional branches and some 24 million members, is Germany’s largest public health insurance organisation. The magazine said other public health insurers have received similar inquiries.

But it’s not so easy to switch once you’ve opted for private insurance. German law only allows people to change from public to private in exceptional situations.

These include when someone has lost their job. You can also switch if you are an employee whose salary falls below the € 45,900 level. Workers who used to be self-employed but now have a full-time position with a similar salary may also change.

But a public health organization manager said, “There are tricks that we can use to help private patients, providing the employer cooperates.”

The Barmer GEK public health organization reported that 27,600 people switched from private competitors in 2011 – nine percent more than in 2010.

http://www.thelocal.de/national/20120108-39989.html

And…

Social Insurance and Individual Freedom

By Uwe E. Reinhardt
The New York Times, December 9, 2011

By law, every German must have coverage for a prescribed benefit package. German employees and pensioners earning less than 49,500 euros ($66,350) per year (in 2011) are compulsorily insured under the statutory system.

Employees and pensioners above that threshold are free to opt out of the statutory system and purchase private, commercial coverage, but if they do, they cannot ever return to the statutory system unless they are paupers. The intent is to minimize gaming of the insurance system by individuals.

http://economix.blogs.nytimes.com/2011/12/09/social-insurance-and-individual-freedom/

Comment: 

By Don McCanne, MD

It’s only January, yet Germany already is providing us one of the most important policy lessons of 2012. It may be great politics to allow more affluent citizens to opt out of public health insurance and to express their personal faith in private markets by selecting private plans, but they may decide that it’s terrible policy when the private plans come back to bite them.

In the United States, conservatives continue to push policies that would promote private plans that appeal to the healthier and wealthier sectors of our society. Consumer-directed plans with high-deductibles combined with health savings accounts are such options. Even with Medicare, conservatives have established the private Medicare Advantage plans for Medicare beneficiaries who would prefer to opt out of the public program.

If you just look at the Medicare Advantage plans, we have already seen that the private insurers have gamed the system such that they are receiving $3000 more per patient than the costs for comp[arable patients in the public Medicare program. What if the government required individuals to pay an extra $3000 for the “private upgrade”? It is likely that only the wealthiest and the most passionate anti-government ideologues would stay in the program.

What if, in addition, health care costs increased at rates well in excess of the growth in GDP, and the differences between the higher premiums that would have to be charged by the private plans compared to the more efficient public insurance program had to be paid in full by those enrolled in the private plans? You would see a massive exit from the private plans. Witness the current experience in Germany.

This is not hypothetical policy theory. The Germans fully understand the principles of social insurance. There are clear policy risks in allowing private options to government insurance plans. That is why they did not permit low- and middle-income individuals to make the foolish decision of exiting the public plans. They wanted to ensure both financial security and health security for these more vulnerable populations. If politically-influential wealthier individuals wanted to have the choice of private plans, then so be it, and Germany allowed it.

But no games. If wealthier Germans chose the private plans, then, as long as they maintained their higher incomes, they could not game the system by moving back into the public plan should they lose their bet that they would be better off in the private sector. Many Germans who made that choice are now facing skyrocketing premiums in the private sector. They want back into the public program, but many will have to continue to live with their ill-advised decision to go private.

Another sign of how flawed the private insurance concept is that they are now considering “tricks” that can be used to help private patients. Although tricks may produce winners, they automatically produce losers as well. There is no place for “tricks” in a public insurance program.

What is Germany to do now? It doesn’t seem fair to allow those who made this unwise decision to escape the consequences when it would expose the public program to adverse selection. There would be no problem had the government prohibited the wealthy from making an imprudent decision to go private in the first place, which they could have done simply by requiring everyone to participate in the public program.

For those who say that it is unfair to not allow choice, as mentioned the Germans were smart enough to prohibit that choice for low- and middle-income individuals, saving them from potential exposure to financial hardship. Ensuring security is fair; permitting the choice of insecurity is not fair for those who end up losing.

There may be less sympathy for the wealthy caught in a financial bind of their own making, but there are two important reasons why the wealthy also should be required to participate in the public program: 1) the insurance risk pools (sickness funds) benefit from including the contributions of this wealthier and generally healthier population, and 2) the influence of the wealthy provides greater political support for the public program in which they would be required to participate. Consider the great support for Medicare as opposed to the meager political and financial support for Medicaid.

The obvious lesson for the United States is that we should eliminate the over-priced private insurers and establish a single national health program that covers everyone. We still may have some compassion even for those who want to play their ideological games but then run into trouble when they really need health care, but we should not allow them to escape their obligation to contribute equitably, in advance, to a financing system that many of them someday would have to rely upon.

P.S., Canada, listen up!