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The Sheriff of Nottingham rides again, but this time through our Medicare funding

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The Sheriff of Nottingham rides again, but this time through our Medicare funding

By Samuel Metz, M.D.
The Oregonian, May 24, 2011

Robin Hood was legendary for stealing from the rich and giving to the poor. Now Rep. Paul Ryan proposes to do the opposite: He will rob poor seniors of their health care dollars and give tax breaks to the rich.

Rep. Ryan’s gallantly titled “Path to Prosperity” proposal will convert government Medicare spending to a lump-sum voucher program. This looks like a heck of a deal if you are rich enough to pay for your family’s current health care (and rich enough to pay for your own when you are old, gray, retired and living on a fixed income). But if you already struggle to pay your health insurance premiums (presuming you are lucky enough to have coverage at all) and have no money left to pay for deductibles, co-pays, excluded conditions and medications, Sherwood Forest starts to look like your best retirement home.

Ryan’s proposal is so simple that even the Sheriff of Nottingham would envy it. By reducing federal spending on the health care needs of our seniors, well, we reduce federal spending. What’s not to love about that?

If you’re not among the privileged nobility, there’s a lot not to like. Remember that even under current Medicare rules, seniors who need health care (roughly all of them) pay 40 percent of their health care expenses with out-of-pocket dollars. Under the Sheriff of Nottingham plan — sorry, Ryan’s “Path to Prosperity” plan –seniors in the year 2030 (that’s all of us who are at least 48 years old) will pay half our total incomes on health insurance premiums. The other half will pay for deductibles, co-pays, excluded conditions and medications.

And where will we get money to pay for food, rent, heat and clothes? The way the poor burghers in old Nottingham did: We won’t.

Even the purchase of a policy won’t guarantee health care. There’s nothing in the “Path to Prosperity” that requires an insurance company to offer anything other than a one-page statement, “This is a health insurance policy.” If that’s all you can buy for your lump sum, you might as well use the policy for compost. The Center for Economic Policy and Research estimates that under this plan, our soon-to-be starving, homeless, freezing, dressed-in-rags seniors will cough up an extra $20 trillion of their own money to get health care in the next 75 years. We better start selling our chickens at yard sales right now.

The Sheriff of Nottingham would be insanely jealous of this revolutionary plan. Tax the poor and give them no services? Spare yourself and other wealthy nobles any taxes at all? Brilliant!

But when the sheriff celebrates his 65th birthday, he might find himself roasting hot dogs around the campfire with Friar Tuck, Little John and Robin if he wants to get health care.

Samuel Metz, an anesthesiologist who lives in Portland, is a member of Mad As Hell Doctors and the Portland chapter of Physicians for a National Health Program.

http://www.oregonlive.com/opinion/index.ssf/2011/05/the_sheriff_of_nottingham_ride.html

Spending more doesn’t improve health in U.S.

Dr. Tom Duncan provides The Daily Astorian with this report from a meeting at the Clatsop County (Ore.) Medical Society, where Dr. Paul Gorman spoke about single-payer health reform

By Tom Duncan, M.D.
The Daily Astorian (Ore.), June 2, 2011

Even though Americans spend twice as much on medical care than people in any other industrialized country, our health outcomes are consistently worse. Life expectancy at birth in the United States is rated 36th in the world, lower than Chile or Cuba, and only slightly higher than Portugal or Slovenia. U.S. infant mortality rate falls in 33rd place, well below all of continental Europe, the UK, Ireland, Slovenia, Cyprus and Cuba.

At its May meeting, the Clatsop County Medical Society hosted Dr. Paul Gorman, an internal medicine specialist at Oregon Health & Science University, who spoke about the ongoing health care crisis and the future of American medicine.

Gorman, who formerly practiced internal medicine in Astoria, has become a proponent of the Medicare for All or “single-payer health plan,” which he defines as “publicly financed, privately delivered” medical care. He contrasted the different systems of various industrialized countries with the U.S. system, and pointed out that although U.S. technology and expertise is second to none, our ability to organize and deliver medical care to our people is severely deficient, resulting in major and unnecessary inequalities. The most successful countries have figured out how to combine private and public resources to provide better care for less money.

Gorman points out that although the values of “free choice” and “free markets” are admirable and are touted as the strengths of the American system, most Americans do not have free choice in health care because our employers choose it for us. 

If we are unemployed, we may be eligible for a government plan (if we qualify,) or simply go without if we cannot afford the market price of health insurance.

Theoretically, we all have free choice of our doctor, but the reality is that our only practical choice is a doctor who belongs to the same health plan we do, or if we have no health plan, we may simply go to the emergency room in a crisis. We supposedly can choose, together with our doctors, the treatment we think will work best, but in reality, the treatment we receive is that which the insurance company “allows.”

“The medical insurance and pharmaceutical industries have such huge influence in the government – three lobbyists to every congressman in Washington, D.C.,” Gorman says, “that even discussing a reasonable medical care system is difficult in the U.S.” 

Many people, including physicians, have been arrested in Washington, D.C., and other American cities for simply trying to speak in support of a single-payer-type system.

Gorman argues that the “market forces” which bring efficiency to other economic endeavors – like selling bananas, for instance – do not usually apply to the provision of medical care. He reminds us that when people are ill, they are not able to hunt for the best bargains, and must rely on experts to help them navigate through the system. 

What is more, the government/insurance payment system essentially fixes prices, so there is no price correction – efficient providers who have lower costs are penalized in this system, not rewarded as in a true free market. The basic requirement of a free market, that is – an informed and willing seller, informed and willing buyer – does not apply to the American system, because both the patients and the physicians are effectively excluded from the market by the intermediaries, leading, as expected, to higher costs and poorer performance.

Gorman believes there should be market competition, but there must be an actual market of doctors, patients and hospitals, and not the present market of insurance companies and the government. The proof of this contention is the demonstrable success of health-care provision in Japan, Germany, France, Canada and many other countries, with better outcomes at far less cost than the United States.

There is no lack of resources, and there is plenty of money in the system, Gorman insists. At the present time, the U.S. already spends as much or more public money per capita on health care as any European country – we just have to figure out how to use it more effectively. 

Many people would be surprised to know that we already have a cost-effective system in America, called Medicare  – a system of medical care that is publicly financed, but privately administered through contractors, and privately delivered by participating physicians. While there are obvious deficiencies, we should build on its strengths, not tear it apart because of its weaknesses, Gorman said.

The Clatsop County Medical Society is an association of physicians, nurse-practitioners and physicians’ assistants engaged in the ongoing assessment and improvement of health care in Clatsop County. It is a component part of the Oregon Medical Association.

http://www.dailyastorian.com/opinion/columns/guest-column-spending-more-doesn-t-improve-health-in-u/article_cb5eba6a-8d4b-11e0-841d-001cc4c002e0.html

Vermont's first steps toward single payer

By Tristin Adie
The Indypendent (N.Y.), June 1, 2011

On May 26, Vermont Gov. Peter Shumlin signed into law H. 202, a bill that is intended to set the state on the road to a single-payer health care system. While the legislation puts off the creation of such a system for a number of years, this is an important initial victory for thousands of activists in the state who have been agitating for years for a truly universal system.

James Haslam, director of the Vermont Workers’ Center and the Healthcare Is a Human Right Campaign, called the bill “a victory for our movement, for all Vermonters and for the country as a whole …. Our success shows that when people come together, make their voices heard and demand their rights, we can overcome well-funded special interests and change what’s politically possible.”

The bill establishes that “all Vermont residents shall be eligible for Green Mountain Care, a universal health care program that will provide health benefits through a single payment system.”

However, Green Mountain Care would not go into effect for several years. And the law’s initial effects will be quite modest: The legislation empowers Shumlin to create a five-member board that will “lay the groundwork” for a state-run system. The board is charged with crafting proposals for funding the system, determining what types of benefits will be covered and setting payment rates for health care providers.

The law also mandates that the state set up a health care “exchange” of various insurance plans by January 2014, to conform with the requirements of President Obama’s Patient Protection and Affordable Care Act (PPACA).

The exchange would then be replaced by Green Mountain Care sometime between 2014 and 2017, depending on when — and if — federal officials grant the state a waiver to “innovate” its own system. This would enable Vermont to utilize whatever funds are provided by PPACA in the creation and maintenance of a single-payer system.

As many activists have pointed out, including leaders of Physicians for a National Health Program (PNHP), this is far from the ideal of establishing a single-payer system in the immediate future. PNHP President Garrett Adams called attention to the fact that the law will allow private insurers to operate in the state indefinitely, even when Green Mountain Care is put in place: “Allowing multiple insurers in the system will deny Vermonters the enormous administrative savings they would otherwise get under a true single-payer plan. Having multiple insurers also nullifies the potential bargaining power of a ‘single payer’ to negotiate reduced prices for pharmaceutical drugs and other goods and services.”

And while it may be seen as an interim measure until Green Mountain Care kicks in, the exchange created by 2014 will be a “marketplace” of competing private insurance plans — hardly a step forward for the thousands of people in the state currently paying high premiums, co-pays and deductibles for inadequate coverage.

The exchange would only be phased out once Vermont has obtained a waiver from the federal government to proceed with a single-payer system, in addition to waivers that will fold Medicare, Medicaid and veterans’ benefits recipients into this system.

The inclusion of the exchange in the law and the slow timeline for the creation of a single-payer system reflect the current national reality, which is a product of the federal health care law championed by the Obama administration that bargained away genuine reform measures under pressure from the insurance industry. Establishing single payer on a statewide basis will be very expensive and can only succeed if the state receives federal money to supplement its own revenues.

Vermont Sens. Bernie Sanders and Patrick Leahy have introduced a bill to move the timeline for the waivers up to 2014, but this effort has gained little momentum so far.

This leaves Vermont hamstrung for the time being by the disastrous compromises enshrined in the federal health care law. The Obama administration is clearly uninterested in helping any state establish a single-payer system, and is likely to grant necessary waivers only if pressure is brought to bear by activists, both within the state and nationally.

This pressure must be organized through the creation of grassroots networks that can demand single-payer health care in their own states, while also calling for national reform. As an important first step, PNHP has launched an online petition drive to call on the Obama administration to grant these waivers and “provide the state of Vermont with maximum flexibility to help achieve affordable health care for all.”

Activism will continue to be important as the process moves forward in Vermont.

A majority of the state’s residents expect to get a single-payer system. This is because thousands of activists have spent the last several years holding rallies, forums, town hall meetings and debates, as well as sharing hours of health care horror stories in testimony to legislators. They have made an effective case for single payer, and now legislators have raised hopes further that we will win such a system with this latest legislation.

Grassroots activism also helped beat back efforts to include right-wing provisions in the bill, such as a last-minute add-on by state senators that would have excluded undocumented immigrants from coverage under the new system.

The backers of this addendum withdrew their proposal within days after diverse groups throughout the state peppered legislators with calls, e-mails and faxes. Particularly moving was the fact that a May 1 rally of 2,000 people organized by the Healthcare Is a Human Right Campaign was dominated by calls for the inclusion of undocumented workers in the new legislation.

The health care needs of Vermonters will be met only if activism continues. The bill calls for 80 to 87 percent of health care expenses to be paid by Green Mountain Care, for example. We need to demand 100 percent payment, so that money is never an impediment to obtaining needed care.

In addition, the bill leaves open the question of whether mental health and dental care will be covered under a single-payer system. Such care is every bit as necessary to people’s well-being as colonoscopies and immunizations, and must be covered in full.

Many Vermont activists have recognized that the fight is likely to intensify as the details of creating a new system are worked out. As physician Deb Richter, a longtime fighter for single-payer health care, said: “We’re going to hear all kinds of scare stories that this is a thoughtless experiment or that it is too bold. But I would remind you that every other industrialized country is doing what we are trying to do. And they do it for far less money, they live longer and they get better-quality care.”

The challenge for activists in Vermont and across the country is to crank up the pressure until we win the kind of health care system we need and deserve.

Tristin Adie is a nurse practitioner in Vermont and member of the Vermont Federation of Nurses and Health Professionals. This article first appeared at socialistworker.org.

http://www.indypendent.org/2011/06/01/vermonts-first-steps-toward-sngle-payer/

Medicare for All!

By the Editors
The Nation, June 20, 2011

The day after Democrat Kathy Hochul scored an upset victory in a special election deep in upstate New York’s Republican territory, former President Bill Clinton was getting real chummy with Congressman Paul Ryan, whose plan to privatize Medicare was widely seen as costing the Republicans the race and imperiling as many as a hundred GOP House seats in next year’s Congressional elections. Backstage at an event on national debt at the Peter G. Peterson Foundation, Clinton told Ryan, “I hope the Democrats don’t use it [the election] as an excuse to do nothing” on Medicare. Clinton may be right — but not in the way he seemed to mean.

The Democrats do need a winning Medicare plan, but they’re not going to find it by meeting Republicans in the middle (as Clinton’s former budget chief Alice Rivlin does with her Ryan-lite voucher proposal). And they’re not going to find it by only running against Republican ideas.

Indeed, the main strategy Democrats seem to have adopted in the wake of Hochul’s victory is to force Republicans to double down on Ryan’s agenda and pray that voters, particularly seniors, remain alarmed enough about the right’s shock doctrine tactics to throw the bums out. That might be a winning electoral formula, but how about some leadership and a plan to deal with rising healthcare costs? Where Democrats should look is Medicare itself — Medicare for all.

The chief lesson Democrats should take from the backlash to Ryan’s Medicare privatization scheme is that when faced with a choice between a market-based healthcare system and a government-run plan, voters overwhelmingly favor the latter. Nearly 80 percent oppose cutting Medicare benefits and two-thirds support raising taxes to continue to fund them. That’s because Medicare works — not perfectly, but compared with private health insurance, it’s far more efficient at keeping down costs while ensuring a baseline of coverage.

Contra Ryan, the problem with Medicare is that it’s not big enough; in countries like France and Canada as well as the United Kingdom, where government plays a much bigger role in financing healthcare and bargaining down prices, healthcare costs are about half what we currently spend, and they have comparable or better health outcomes.

Instead of just hoping that Republicans continue to play to their Tea Party base and implode in a general election, Democrats should be taking this moment to lead and to educate, not just on the practical virtues of Medicare for all but on the principle of social solidarity behind it.

They have the perfect opportunity now that Vermont Governor Peter Shumlin signed a single-payer healthcare plan on May 26. Vermont’s plan isn’t the single-payer system die-hard advocates want (there’s no funding for it yet, for example) — but it’s a start. If Vermont succeeds in providing its citizens with quality healthcare while keeping costs below market rates, other states may emulate its pioneering plan.

But in order to act as a national model, Vermont will need a federal waiver to bypass some of the requirements of the Affordable Care Act, passed in 2010. Obama has said he supports granting such waivers, but under current law he can’t do so until 2017. Vermont Senators Bernie Sanders and Patrick Leahy and Congressman Peter Welch have proposed legislation that would move the window up to 2014. That’s a bill worth going to the mat for.

http://www.thenation.com/article/161084/medicare-all

The 2011 WellPoint/Anthem Shareholders' Show: "One Thing You Can't Hide is When You’re Crippled Inside."

By Rob Stone, M.D.
Counterpunch, June 3, 2011

Tuesday, May 17, 2011.  The traffic in downtown Indianapolis was moving  slower than an insurance company clerk preparing a reimbursement check, backed up for blocks, and if we were one second late the doors to the WellPoint annual shareholders meeting would be sealed, protected by armed guards.  We jumped out of the car, leaving it our friend Donna Smith to find a parking spot, and started running up the street, dodging traffic, past the phalanx of police cars and into the Hilton.

Breathlessly rushing through the lobby we asked which floor for the WellPoint meeting, and luckily didn’t wait long for an elevator.  When we reached the 9th floor with minutes to spare, the WellPoint staff at the registration desk greeted us like old friends, “Dr. Stone, we were afraid you weren’t going to make it.”

My wife and I bought 5 shares of WellPoint (or Anthem, or Blue Cross) in 2005 and have been coming to these annual meetings since.  We’re all getting to know each other.  Many of the WellPoint employees seem to genuinely like us.  But not all.

WellPoint holds its annual brouhaha in a drab meeting room high up in the Hilton.  Security is easier there than at their corporate headquarters a block away.  WellPoint employees outnumber the stockholders, but most of the chairs are empty.  The Board and the brass fill the first three rows.  This year there were more stern faces with ear buds standing around than ever, including, as we later learned, plainclothes officers from the Indianapolis Police Department. 

The Robotic Barbie Doll

At the dais, Angela Braly, CEO and Chair of the Board, ruled over the meeting like a robotic Barbie doll, smiling as she nodded and looked around the room, mouth moving but nothing meaningful emerging.  Wendell Potter, author of Deadly Spin, calls it “being obscure clearly.”  She’s been well coached. 

This 2011 meeting was as tightly scripted as a professional wrestling match.  The outcome was never in doubt. Years past it was more informal, with a reception afterward where common stockholders could actually mix with the elite.  Now the Directors come and go through a separate door.  This time they didn’t even introduce the Board, which includes luminaries like Susan Bayh, wife of former Indiana Senator Evan Bayh, Don Riegle, former Senator from Michigan, and William “Bucky” Bush, brother of the first President Bush and uncle of GW.

WellPoint finds itself trapped within its internal contradictions, afraid of its own stockholders who speak truth to power and dare to say the Empress wears no clothes.  This year’s meeting felt like a siege, like those in control were clenching their teeth and couldn’t wait to for it to be over.

Those brave ones who dared to ask a question were faced with a massive flat screen hanging in the front, counting down 120 seconds like a shot clock.  Once the two minutes was up, the mike was turned off.  Ms Braly, on the other hand, was free to wax on in her clear obscurity, unlimited by time.  Another first this year – WellPoint planted shills in the audience to ask softball questions.

John Lennon sang, “One thing you can’t hide is when you’re crippled inside.” 

WellPoint is the for-profit monstrosity created from the mergers and acquisitions of 14 formerly nonprofit state Blue Cross and Blue Shield plans.  The crown jewels are the former Blues in California and New York, but as history would have it, the national HQ is just up the road from me in Indianapolis.

In 1937, in the early days of American health insurance, Blue Cross plans were required to be nonprofit and have a mission that was “charitable and benevolent.”  In the late 1980’s Indiana’s Anthem Inc. began a series of transformations culminating in 2001 with “demutualization,” followed by an initial public stock offering.  Anthem subsequently merged with WellPoint, the former Blue Cross of California in 2004.  WellPoint covers more lives than any other health insurance corporation in the world.

Lying With a Straight Face

Although WellPoint/Anthem loves the Blue Cross brand and uses it in advertising today, in this year’s proxy statement they lied with a straight face.  Our group, Hoosiers for a Commonsense Health Plan, sponsored a shareholder resolution calling on WellPoint to fund a feasibility study for returning to its nonprofit roots.  In their statement advising a shareholder vote against our resolution they said, “The proposal states that we were formerly a nonprofit entity.  That is not correct,” followed by legalistic gobbledygook which attempts to obscure their Blue Cross ancestry. 

Contradictions abounded during this meeting.   Lip service only was given to the needs of patients (“customers” in their lingo), but the main course served was for their Wall Street masters.  WellPoint is making record profits and sitting on record piles of cash.  What are they doing with it?  Like so many other Fortune 500 companies these days, they are buying up smaller companies, not insurance companies this time, but health-related companies involved in things like medical information technology and expanding their presence in China. 

In 2011, for the first time in their history they paid a dividend, which Ms. Braly explained would make the stock more attractive to investors. 

While they claim to be investing in “infrastructure, new products and programs that improve the quality of service to customers and members,” data suggest otherwise.  Since 2008 the company has spent $66.9 million on federal lobbying as well as millions on campaign donations.  Over the past 10 years WellPoint’s total compensation to its CEO’s has totaled over $164 million.

If they are spending on infrastructure, why did they announce in June 2010 that a security breach may have exposed the social security numbers and medical records of 470,000 people?  The same month the Indiana State Medical Society reported that WellPoint has the worst claims accuracy rating among the largest health insurers.   

Most outrageous of all, from 2003 through 2010, WellPoint spent $21.6 billion (that’s billion with a “B”) of patients’ premium dollars to buy back its own stock.

Spending billions on stock buybacks benefits a tiny elite of CEOs and top officers who are compensated with stock options which increase in value as the share price is manipulated upward.  This is an enormous transfer of wealth from hard-pressed employers and patients to CEOs and Wall Street. Not only do the stock buybacks allow executives to line their own pockets, the process strips companies of resources that could otherwise be used reduce premiums, improve benefits, create jobs and bring innovation to the business of health insurance.   

The only thing Ms. Braly made clear and unobscure during her comments was that this is a company committed to growth, growth in profits, growth in stock price, and there was
nary a mention about the uninsured, the underinsured, medical bankruptcy, denial of care and coverage, or WellPoint’s signature profit-making ploy:rescission, policy cancellation after an insured patient becomes ill.

A Stunning Vote of No Confidence

At the 2010 shareholder meeting our shareholder resolution caught WellPoint with their pants down.  In this year’s proxy statement they claimed “an overwhelming majority of our shareholders voted against this proposal last year.”  That’s one way to look at it.  Thirty million shares, 9.6% of the shares voted, were in support of our return to nonprofit.  A more accurate description might be “a stunning vote of no confidence in the company leadership.”

This year there were three shareholder resolutions, all opposed by the Board.  At the close of the meeting they announced all three had been defeated, but the official vote tallies weren’t released until three days later.  This time our resolution polled “only” 1.2 million votes.  By the rules governing shareholder resolutions set by the Securities and Exchange Commission, we would have needed 17 million shares voted in our favor in order to bring our resolution back for a third round at the 2012 meeting.

What happened this year?  There is healthcare “issue fatigue.” The Tea Party is on the rampage. The unions have been diverted, fighting for their lives.  This spring I wasn’t able to generate nearly as much interest in supporting the resolution. 

After the meeting I was no longer in a rush as I passed through the Hilton’s lobby. I saw a local reporter speaking to a well-groomed man wearing a WellPoint ID badge.  The WellPoint fellow was telling the reporter that he was confident our resolution would not meet the SEC threshold this year.  When he realized I was listening, he was only flustered for a second before regaining his composure.  I introduced myself (although he clearly recognized me), and he adroitly avoided revealing anything about his duties at WellPoint.  After he left, the reporter answered my questions.  His name was David Palombi, Senior Vice President for Corporate Communications, the top PR guy in the company.

The subtitle of Wendell Potter’s book Deadly Spin is An Insurance Company Insider Speaks Out on How Corporate PR Is Killing Health Care and Deceiving Americans.  Mr. Potter was the VP for Corporate Communications at the giant insurance company CIGNA until he saw the error in his ways and came over to our side.  For anyone who has read Deadly Spin, it’s not hard to imagine that one of Mr. Palombi’s tasks this spring was to make certain that the shareholders who voted in our favor in 2010 were “educated” to follow the Board’s urging this time around.

David versus Goliath

Our resolution was crushed, but we not need shed any tears.  WellPoint was never going to return to nonprofit. We were a David-sized fly to their Goliath.  But we’re not done yet. 

The lesson to be learned from the last few years is that the health insurance industry cannot be reformed.  Not from the inside by shareholder resolutions or from the outside by the Affordable Care Act.  They are just too powerful.  They have amassed too much money and own too many politicians.

They will not be reformed.  They can only be counted on to protect their profits over their patients.  They must be replaced by a simple single payer plan like an expanded Medicare For All, guaranteeing health care, not just “coverage,” starting at birth. 

These behemoth health insurers may be powerful and appear invincible, but they are deeply unpopular with patients, physicians and hospitals.  They are corrupt and parasitic middlemen who add no value to our healthcare system, only layers of cost, aggravation and bureaucracy, covered over with a shiny gloss of PR.  

David sometimes wins.  Think colonists against the British. Cesar Chavez against the grape plantation owners. Si, se puede.  Ask the good people at Tahrir Square.  Ask Hosni Mubarak. 

Wall Street is for Wealth Care, not Health Care.  All around the country, people are figuring that out. Vermont’s governor has signed a bill to move that one small state toward guaranteed health care for all, without insurance companies.

Imagine a world without health insurance corporations sucking out huge profits.  It’s easy if you try.

It will take pressure from every point, from the grassroots right up to Congress.  There is a new pressure point growing, divestment.  Begin by checking your savings investments and retirement funds.  Then examine the portfolios of your church and alma mater.  Divest from these immoral companies.  Be like David and let it fly. 

http://www.counterpunch.org/stone06032011.html

Vermont’s Move Toward Single-Payer Health Insurance

By NANCY FOLBRE
The New York Times Economix blog, June 6, 2011

New England seems to be the testing ground for health insurance reform. The Affordable Care Act, now often called Obamacare by its critics, was modeled on health-insurance mandates put into place in Massachusetts under the governorship of Mitt Romney, a Republican, who announced last week that he was formally seeking his party’s presidential nomination in 2012.

Now Vermont has passed legislation moving the state toward a Canadian-style universal, single-payer health-insurance system, to be phased in alongside national health-care changes. The plan relies heavily on the prospect of waivers that will allow it to reallocate some federal Medicaid funds and on other sources of money that have not yet fully specified.

The new law calls for establishment of a five-member board to set reimbursement rates for health-care providers and streamline administration into a single, unified system called Green Mountain Care that will cover all Vermont residents. In the long run, it aims to replace fee-for-service payment with a system that will pay health-care providers a specific amount of money to care for a specific population, providing incentives for preventive care.

The basic outlines represent a left-wing alternative to the health-insurance changes being put in place under the Obama administration, with a stronger commitment to equitable public financing, a single insurance pool and less reliance on the market.

Why has Vermont moved into the vanguard? The possible explanations range from the structural to the personal.

Vermont has less income inequality and racial and ethnic diversity than Massachusetts (despite increasing inequality and diversity in recent years) and probably has higher levels of “social capital.”

It is a small state, with a population of less than 650,000. Private health-insurance companies have less to lose in Vermont than elsewhere, and their lobbyists may have been distracted by the national debate.

Single-payer advocates organized effectively around a “health care is a human right” campaign. The Vermont Workers’ Center, affiliated with the national organization Jobs With Justice, played a vital role in building a robust political coalition in support of change.

Vermont has long been represented in Congress (first as a representative, currently as a senator) by Bernard Sanders, who calls himself a democratic socialist and is a longtime advocate of universal single-payer health insurance.

Gov. Peter Shumlin, a successful small-business owner, was elected in November after he made a strong case during his fall campaign for the positive impact that single-payer insurance could have on small businesses and job creation.

All these factors enhanced the political impact of economic evidence, which shows that single-payer health insurance can create a simpler, more streamlined payment system, cut administrative costs and expand access to high-quality care.

In testimony before the Vermont State Legislature, William Hsiao, a professor at the Harvard School of Public Health, described his experience designing single-payer health-care systems in several countries, most recently Taiwan. He also presented the results of a detailed analysis of the health-care system of Vermont, providing estimates of potential savings from three different strategies and making a strong case for the single-payer option. (A report written by Professor Hsiao, Steven Kappel and Jonathan Gruber provides more detail.)

My University of Massachusetts Amherst colleague Gerald Friedman, active in efforts to promote a single-payer system in this state, estimates that similar changes in Massachusetts could sharply reduce the cost of billing and processing insurance claims, generating savings of 17 percent. As he puts it, a universal single-payer approach is not just more affordable; in the long run, it may be the only affordable option.

The current Massachusetts health-insurance system, like that emerging on the national level, requires residents to buy health insurance and provides subsidies only to low-income families. As a result, it leaves many people vulnerable to increases in the cost of insurance and may also create political resentments among those with incomes just above the subsidy eligibility level, who are forced to buy insurance they can ill afford.

The system is not “wildly unpopular,” as some conservatives assert, but it’s not wildly popular either.

As Vermont moves forward with its plan, a fascinating standard of comparison should emerge. The Canadian single-payer system grew out of successful innovations in the province of Saskatchewan, which led other provinces to follow suit. Here in Massachusetts, many of us are looking hopefully over our shoulder at the Green Mountain State.

Nancy Folbre is an economics professor at the University of Massachusetts Amherst.

http://economix.blogs.nytimes.com/2011/06/06/vermonts-move-toward-single-payer-health-insurance/

It's now time for significant change in U.S. health care

By David E. Drake
Des Moines Register, June 3, 2011

As a physician I am regularly faced with patients who have inadequate or no health insurance. A person may call my office to discover that their health “insurance” does not cover mental health or they have such a high deductible they can’t afford to see me. In both cases my office may refer the person to a clinic with a sliding scale, to the same place where I might refer someone who had no insurance at all.

The provision of health care in the U.S. is neither a system nor is it “insurance” of health. What we have is an increasingly broken and costly disconnected patchwork of private insurance plans that are tied to employment or retirement benefits, the latter of which have also been in jeopardy.

Once one loses their job, within a short time health coverage goes with it. Then if the person fails to meet the poverty guidelines for Medicaid, they might qualify for some coverage by Iowa Cares. Iowa Cares can work well for folks living in Polk County or Iowa City, but the many counties distant from those facilities can find persons traveling a day for a routine medical appointment.

The need for a single-payer of health care is more pressing than ever.

Recently, I was overwhelmed to learn what my own health insurance was going to cost. Having switched from providing coverage to my own family and my one employee in a group to an individual plan — as my one employee went on Medicare — I was astounded to learn that the “insurance” carrier had denied me coverage and had listed me as having multiple pre-existing conditions — 90 percent of which were not accurate.

When corrected in a letter by my primary care physician, the “insurance” company accepted me but at a rate of $700 per month for my own plan and another nearly $800 for my wife and two adult kids. The total premium has come to $1,473.15.

What we need in this state and in the U.S. in a true system of health care coverage – not one plagued by hundreds of separate health plans with different deductibles, co-pays, and co-insurances.

While traveling in the United Kingdom and France recently I stopped and talked to people about their health care. And while it’s true that folks will complain about the waiting time to see a specialist not one person wanted to give up their system of health care in exchange for the craziness we find in the United States. In fact several U.K. residents were astounded and disbelieving when I described to them what I face everyday in my office as patients present to me in need of care. Residents of Scotland told me they don’t even carry an insurance card.

Vermont is the first state to have the support of its legislature and governor to begin proceeding to develop our nation’s first universal health care system of payment. As in Canada, physicians and other health care providers, will be able to remain in private practice and will be able to bill one source for their fees. Vermont is expected to have its single-payer system in effect, using Medicare-for-all as its model, by 2017. In the meantime Blue Cross and Blue Shield, Vermont’s main provider of insurance, has not fought the change but sees itself as the possible intermediary between the government and health care providers.

I currently hire a billing service to deal with the complicated challenges of billing and a half-time person in my office who mostly calls insurance companies to verify and clarify benefits. This is a great cost to any medical practice, and I would gladly have staff to only bill one source of payment for my services and to know that everyone who called my office was covered.

We all deserve competent and comprehensive health care – including mental health. Health care should not be tied to employment. I believe it is a right and not a privilege. I know the change will come. I just hope it comes sooner than later.

David E. Drake, D.O., is a physician specializing in family psychiatry. He is in private practice in Des Moines.

http://www.desmoinesregister.com/apps/pbcs.dll/article?AID=2011106050310

The Politics of Doctors

Letter to the Editor
The New York Times, June 2, 2011

To the Editor:

According to your article, “there are no national surveys that track doctors’ political leanings.” There is, however, one statistically valid survey of doctors’ opinion that backs up the idea of a leftward shift.

An article in Annals of Internal Medicine in 2008 showed that support for government establishment of a national health insurance system among doctors nationwide had jumped to 59 percent from 49 percent in 2002.

There was, of course, variation by specialty, with higher support among primary care doctors and less in subspecialties.

STEVEN B. AUERBACH
New York, May 31, 2011

The writer is a pediatrician.

Victory Lap

Editorial
Rutland (Vt.) Herald, May 29, 2011

This is the triumphal phase of the first term of Gov. Peter Shumlin.

Last week his office released a schedule describing the long list of signing ceremonies he will hold throughout the state. Shumlin did not do it alone. Strong Democratic majorities in the House and Senate pushed through an impressive array of legislation on matters great and small. It is a sign of what can happen when voters set a clear direction and elect leaders eager to follow through. The Democratic successes this year also mean that the Democrats will be accountable for the success or failure of their ambitious program.

Shumlin signed the health care reform bill in a ceremony at the Statehouse on Thursday, cheered on by a throng of legislative leaders, advocates and supporters who have been working for years to establish a single-payer system.

One of the principal speakers at the rally was Dr. Deb Richter, who has been a tireless advocate for a single-payer system, meeting with hundreds of groups, publishing books that describe her ideas in comprehensible language and never compromising on her large idea.

Her idea is that health care is a public good that can be provided to everyone, just as we provide education or police protection, and it can be provided more cheaply if we establish a system that reduces the waste of the present haphazard system and the profit-taking of insurers and health care providers.

Hospitals at present maintain staff at particular levels based on anticipated need. Their cardiac departments, for example, estimate a certain number of heart attacks and are prepared to deal with them. Hospitals budget accordingly — for cardiac, oncology, obstetrics, emergency room and other needs. A single-payer system would provide budgets to meet those needs.

The difference is that the individuals who come to the hospitals at a moment of need would not be required to shoulder the load of paying for services. Everyone would pay. That’s because the cardiac and other departments are on stand-by and available for all of us when the need arises. It does not make sense to finance hospitals and other services by bankrupting individuals or feeding profits to insurance companies.

Over the years, Richter has presented this idea convincingly and clearly, sometimes exasperating politicians who felt compelled to water down the idea of a single-payer system. After he signed the single-payer bill on Thursday, Shumlin gave the pen he used to Richter.

Republicans are annoyed because the new law does not specify how the state will pay for the new system and what kind of benefits it will provide. The triumphal talk is premature, Republicans say, because the new system is far from reality.

House Speaker Shap Smith acknowledged that work on the new system is just beginning. “There are definitely people who want to see this fail,” Smith told the crowd on Thursday. “We cannot let that happen. We need to work together to show the way for the entire country.”

The administration has formed “core teams” of officials throughout the government to gather information to be used by the new Green Mountain Care Board, which will oversee establishment of the new system. Everyone, Republican and Democrat, acknowledges that the job of reshaping one-sixth of the state’s economy will not be an easy one.

Shumlin’s victory tour of bill signing ceremonies was curtailed late last week by the flooding in central Vermont that hit many businesses and offices. But the list of bills to be signed remains an impressive one. It includes a jobs bill, a telecommunications bill, a DUI bill and even a bill resolving the contentious issue of Pete the Moose. Pete, it seems, will survive.

There are also bills dealing with human trafficking, transparency in government, hospice and palliative care, registered nurses and marijuana dispensaries.

The marijuana dispensary bill is an example of a law that cuts across the usual conservative-liberal divide to put in place a bill responding to a difficult and complex reality. The bill had the cooperation and support of law enforcement, which will oversee the operations of a limited number of dispensaries that will make available marijuana for those with a compelling medical need.

Vermonters presumably knew what they were doing when they elected a Democratic governor and a strong majority of Democratic lawmakers. That the majority is following through with the promises it made suggests that democracy is working. If the results are less than satisfactory, then the voters will know whom to blame.

What? Increased Medicare spending improves health status?

Medical Spending and the Health of the Elderly

By Jack Hadley, Timothy Waidmann, Stephen Zuckerman, Robert A. Berenson
HSR, May 24, 2011

Abstract

Objective. To estimate the relationship between variations in medical spending and health outcomes of the elderly.

Data Sources. 1992–2002 Medicare Current Beneficiary Surveys.

Study Design. We used instrumental variable (IV) estimation to identify the relationships between alternative measures of elderly Medicare beneficiaries’ medical spending over a 3-year observation period and health status, measured by the Health and Activity Limitation Index (HALex) and survival status at the end of the 3 years. We used the Dartmouth Atlas End-of-Life Expenditure Index defined for hospital referral regions in 1996 as the exogenous identifying variable to construct the IVs for medical spending.

Data Collection/Extraction Methods. The analysis sample includes 17,438 elderly (age >64) beneficiaries who entered the Medicare Current Beneficiary Survey in the fall of each year from 1991 to 1999, were not institutionalized at baseline, stayed in fee-for-service Medicare for the entire observation period, and survived for at least 2 years. Measures of baseline health were constructed from information obtained in the fall of the year the person entered the survey, and changes in health were from subsequent interviews over the entire observation period. Medicare and total medical spending were constructed from Medicare claims and self-reports of other spending over the entire observation period.

Principal Findings. IV estimation results in a positive and statistically significant relationship between medical spending and better health: 10 percent greater medical spending over the prior 3 years (mean=U.S.$2,709) is associated with a 1.9 percent larger HALex value (p=.045; range 1.2–2.2 percent depending on medical spending measure) and a 1.5 percent greater survival probability (p=.039; range 1.2–1.7 percent).

Conclusions. On average, greater medical spending is associated with better health status of Medicare beneficiaries, implying that across-the-board reductions in Medicare spending may result in poorer health for some beneficiaries.

http://onlinelibrary.wiley.com/doi/10.1111/j.1475-6773.2011.01276.x/abstract;jsessionid=14960293163E6619EF2994F69320629A.d03t01

Comment: 

By Don McCanne, MD

Does spending more on Medicare beneficiaries improve health status? This study concludes that, on average, it does. This is an important finding because current innovative efforts to control Medicare spending are based on the Dartmouth studies that conclude that variations in Medicare spending are not correlated with improved health outcomes.

As the authors of this new study indicate, arbitrary across-the-board reductions could result in poorer health for some beneficiaries. Even arbitrarily reducing spending in high cost areas could have detrimental effects if that higher spending were appropriate for the health status of the local population.

Medicare funds belong to all of us, so there is a responsibility for our stewards to spend those funds wisely and properly. They should pay for beneficial care but not pay for detrimental care nor for outrageously expensive care that is of no benefit. That means that we need more information about the benefits and risks of health care. We need comparative effectiveness studies and, yes, cost effectiveness studies. We need the type of information that is being collected, organized and disseminated by the British National Institute for Health and Clinical Excellence (NICE). We need scientific input free of commercial interests such as that provided by our National Institutes of Health.

It is not only Medicare that needs this input.  All care provided by our entire health care delivery system should benefit from this input. Obviously a single payer monopsony would have the ability and power to move funds from detrimental care to beneficial care.

What is Washington doing about this? The Republicans want to give up on government control of Medicare spending and instead shift more of that responsibility to individual Medicare beneficiaries through a defined contribution scheme (premium support). Medicare beneficiaries of limited means and with limited medical sophistication do not make good health care shoppers. The Democrats want to show the Republicans that they can be tough on deficit reduction by including Medicare in the negotiations for budgetary spending cuts – trying to find cuts that inflict the least pain, though painful nevertheless.

Come on. Put away the guillotines, machetes, axes and cleavers. Let’s start spending the right way. Let’s direct our resources to quality care that benefits us all.

About NICE
http://www.nice.org.uk/aboutnice/

About NIH
http://www.nih.gov/about/

About Single Payer
https://pnhp.org/facts/single-payer-resources

Means testing Medicare

Ryan Says Rich Should Pay More as Sanders Defends Entitlements for Wealthy

By Brian Faler
Bloomberg, May 30, 2011

Bernie Sanders, the U.S. Senate’s only avowed socialist, may be the chamber’s fiercest advocate of taxing the rich to cut the federal deficit. That doesn’t mean he wants to reduce their Social Security and Medicare benefits.

Representative Paul Ryan, the Republican chairman of the House Budget Committee, wants to give the wealthy big tax breaks to encourage them to invest and create jobs. He also wants to take away many of their retirement benefits.

Democrats say Social Security and Medicare have endured because they offer benefits to people of all incomes, and accuse Republicans of trying to kill the programs by stripping away their beneficiaries, beginning with the rich. Republicans say the fairest way to curb the deficit is to scale back the programs for those who need them least.

With polls showing the public supports limiting benefits to the wealthy, and some Democratic leaders signaling a willingness to consider the idea, the rich may face cuts as lawmakers debate how to curb the national debt.

Sanders, 69, said the debate isn’t just about numbers.

“The strength of Social Security and Medicare is that everybody is in,” the Vermont independent said in an interview. “Once you start breaking that universality and you say that if you’re above a certain income, two years later that income goes down and 10 years later it becomes a welfare program.”

Republicans say the waves of retiring baby boomers, as well as increasing health-care costs, are the real threats to the programs because the benefits are unsustainable.

“The thing that tears the social contract is insolvency,” said Ryan, 41, a Wisconsin Republican. “Means-testing is an obvious solution to our fiscal problems,” he said. “The alternative is everybody gets cut, so why don’t we put the money where it should go — to the people who need it.”

Representative James McDermott, a Washington Democrat, said providing benefits to those who don’t need them is a small price to pay to ensure the programs are available to everyone else.

“I don’t worry about paying a few benefits to Warren Buffett or Bill Gates,” he said. “As long as we make absolutely sure we got public support” for the programs.

http://www.bloomberg.com/news/2011-05-31/ryan-says-rich-should-pay-more-as-sanders-defends-entitlements-for-wealthy.html

Comment: 

By Don McCanne, MD

Paying for health care and receiving health care are two different issues.

Under an ideal system, everyone should receive all essential health care services that they need without having to face financial barriers that might prevent them from accessing that care.

Since health care now has become so expensive that many cannot afford it, an ideal system would also finance that care based on the ability to pay. Those with greater means would pay more. Also, since the need for health care is very unevenly distributed, an insurance function of pooling the costs is absolutely essential.

Assuming that everyone gets the care that they need, there are two fundamental ways of paying for it. You can fund the entire costs in advance through a single risk pool. That is the simplest administratively and certainly would be the most equitable if each person contributed a given amount based on their means – most easily accomplished through progressive taxes.

The other way would be to establish a catastrophic risk pool through taxes or premiums that only partially fund care, and then assess cost-sharing payments (deductibles, co-payments, coinisurance) based on services received, at the time they are received. Since ability to pay remains an issue, to ensure access each individual would have to be means tested to determine what subsidies would be required (as in the Affordable Care Act). This greatly increases the administrative complexity and costs of financing care. The health care provider, the payer, and the patient each must account for each and every service and the allocation of responsibility for payment.

Although insurance premiums are normally thought of as a method of financing the risk pool, they have taken on a new twist in Medicare Part B (physician services) and Part D (drug benefit). Although these programs are partially funded through the tax system, the additional Part B and Part D premiums assigned to the individual beneficiaries are now means tested. In a sense, they are now accounted for as a means tested but negative benefit. The greater one’s means, the less the benefit. This is an important strategy  of the opponents of Medicare because it weakens the support of the more affluent members of our society and risks converting Medicare into a welfare program.

If all health care has already been prepaid by taxes paid into into a common risk pool, then none of this is necessary. The patient simply receives needed care, and that’s it.

Professor Leonard Rodberg, from Queens College/CUNY, has described this concept in these insightful comments (personal communication):

“The central feature of the Canadian health care system is not that it is a single payer system; it is that financial considerations do not enter into the patient’s decision to seek medical care, nor in the doctor’s decision on what treatment to recommend for the patient. It is not only that there is no exchange of money between patient and doctor; the patient has to pay no money for the visit at any time. There is no fighting with the insurance company to get a claim paid, and no complicated bookkeeping on the part of either the patient or the doctor.”

“We in PNHP have often observed that the term ‘single payer’ is not helpful in explaining what we mean by a national health program. I learned in Canada that it also doesn’t describe the essence of what we are seeking. We tend to treat the absence of cost-sharing as simply a feature of the single payer plan we want. I am now convinced that, instead, we should view the removal of financial barriers to care as the core of what we advocate: no billing of patients, no cash exchange between patient and provider, no checking with insurance companies, etc.

“Too often, we speak as if our goal is a single payer system. I believe that is a mistake. Our goal should be the removal of all financial barriers to care; a single payer system is simply a means, and not the only means, to that goal. What makes the Canadian system, and others, work so well is not its single payer character, but the fact that funding of the system is completely separated from the delivery of care. That should be what we seek through a national health program.”

Eliminate Unneeded Overhead

By David Himmelstein and Steffie Woolhandler
Room for Debate Blog
New York Times, June 1, 2011

David Himmelstein and Steffie Woolhandler are internists and professors of public health at the City University of New York. They are co-founders of Physicians for a National Health Program.

Eliminating unneeded overhead would save Medicare nearly $100 billion annually. A thicket of insurance and hospital bureaucrats and profiteers distort medical priorities and drain money from care. The most obvious are private insurers who run Medicare Advantage plans that extract overhead, averaging 15 percent, or $1,000 per senior more than overhead in traditional Medicare.

Hospitals also devote a quarter of their revenue to overhead, nearly twice what’s needed. Vast marketing departments and whole buildings that house highly paid financial schemers are the norm in our medical centers. Their goals: attract patients for profitable high tech procedures (whether needed or not); avoid the unprofitably ill (e.g. most psychiatric patients); and jack up billings by exaggerating patients’ illnesses and gaming reimbursement rules.

Rev up your scanner and you’ll find many impressive-sounding (but unimportant) diagnoses that can add thousands to a Medicare bill. Would hospitals do such a thing? Research demonstrates that such overdiagnosis is epidemic. An M.R.I. will find nasty looking knee and spine abnormalities in many Medicare-aged patients who don’t (and won’t) suffer from serious knee or back pain. Most men over 80 have a few abnormal prostate cells that will never make them sick (and won’t be helped by treatment) but can be profitably labeled “cancer.” Such overdiagnosis will bring big bonuses under Medicare’s proposed new payment rules; the risk adjustment formula will reward hospitals that label patients with more diagnoses.

Uprooting the bureaucrats will require taking the profit out of health care and simplifying our payment system. Let’s pay hospitals as we currently pay fire departments: one check each month to cover their entire operating budget, with no profit taken out and hence little reason for financial scheming. Of course, this would require a single payer reform that eliminates the need to keep track of who got each aspirin. That kind of reform has allowed Canada’s Medicare program to simultaneously cover everyone and hold down costs.

http://www.nytimes.com/roomfordebate/2011/06/01/what-medicare-services-to-cut-starting-today/eliminate-unneeded-overhead