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Talking Points: Impact of the federal health law after one year

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Talking Points: Impact of the federal health law after one year

By PNHP
 
1. Number of Americans who lack any health coverage still exceeds 50 million, although perhaps 1 million children up to age 26 are now covered on their parents’ policies, and up to 70,000 are covered because of the ban on pre-existing condition exclusions for children.
 
2. Over 45,000 excess deaths annually due to lack of health insurance.
 
3. Over 40 million Americans, including over 10 million children, are underinsured.  Although insurers can no longer rescind policies and must raise the cap on lifetime benefits to $750,000, over 900 plans and 4 states (affecting 2.4 million people) have been exempted from the cap, and insurers can still rescind policies for alleged “fraud” (which they claim in the majority of cases already).
 
4. Perhaps 12,000 people have gained coverage in new state high risk pools, not the 325,000 expected.

5. Seniors get a 50 percent discount on brand name drugs in the donut hole as well as some key preventive services without cost-sharing, such as an annual physical.
          
6. The bill has not reduced medical inflation or bankruptcies due to medical costs (although medical inflation slowed the year before the bill passed to its lowest rate of increase in five decades due to the recession).  Data from Massachusetts indicate that even when the federal health law is fully implemented it is unlikely to have much impact on medical costs and medical bankruptcy, which affects over 1 million families annually.
 
7.  On the bright side, debate over the Obama plan opens up some space for ongoing national debate over health reform (compared to the decade of silence after the defeat of the Clinton plan) that we can take advantage of, such as the upcoming one year anniversary of the plan’s passage.  As the plan fails to have much impact, more people acknowledge that we do really need single payer.

Jacob Hacker had a useful chart in the New York Times:
http://www.nytimes.com/interactive/2011/02/17/opinion/20110217_oped.html

Reform in Massachusetts fails to reduce medical bankruptcies

Medical Bankruptcy in Massachusetts: Has Health Reform Made a Difference?

By David U. Himmelstein, MD, Deborah Thorne, PhD, Steffie Woolhandler, MD, MPH
The American Journal of Medicine
March 2011

Despite a marked declined in the uninsurance rate in Massachusetts since the implementation of health reform, the proportion of bankruptcies that occurred in the wake of medical problems has not decreased significantly, and the absolute number of medical bankruptcies has actually increased by one third.

What accounts for the seemingly paradoxical trends of increasing coverage yet stable, or even increasing (on a per capita basis), medical bankruptcy rates? Health costs in the state have increased sharply since reform was enacted. Even before the changes in health care laws, most medical bankruptcies in Massachusetts, as in other states, affected middle-class families with health insurance. High premium costs and gaps in coverage — copayments, deductibles, and uncovered services — often left insured families liable for substantial out-of-pocket costs. None of that changed.

Conclusions

The recently enacted national health reform law closely mirrors Massachusetts’ reform. That reform expanded the number of people with insurance but did little to upgrade existing coverage or reduce costs, leaving many of the insured with inadequate financial protection. Our data do not suggest that health care reform cannot sharply reduce the number of medical bankruptcies. Indeed, medical bankruptcy rates appear lower in Canada, where national health insurance provides universal, first dollar coverage. Instead, these data suggest that reducing medical bankruptcy rates in the United States will require substantially improved — not just expanded — insurance, as well as better disability insurance programs to provide income support to ill individuals and family caregivers.

https://pnhp.org/docs/2011/AJM_Mass-Reform-hasnt-stopped-med-bankruptcies.pdf

Comment: 

By Don McCanne, MD

“Unaffordable underinsurance” is rapidly becoming the new standard in the United States. Even with subsidies, insurance premiums are ever less affordable, and for those who need health care, out-of-pocket spending creates significant financial hardships. Since reform under the Affordable Care Act closely mirrors that of Massachusetts, their current experience with medical bankruptcy portends the future of medical bankruptcy throughout the United States.

The Massachusetts experience shows that merely providing insurance coverage to the majority of the population is not enough. The quality of the insurance coverage is crucial. In 2009, 89% of Massachusetts debtors and all their dependents had health insurance at the time of filing, yet the insurance was not effective in reducing the rate of medical bankruptcy below levels that already existed before the full implementation of the Massachusetts health reform program.

Other nations with first dollar coverage do not see medical bankruptcies, even though they cover everyone at a much lower cost. We could do the same here. In fact, we most likely will once the nation understands that “unaffordable underinsurance” is rapidly becoming the new national norm – now carved in stone by the Affordable Care Act. We just need more highly skilled artisans to rework that stone.

Mass. Health Reform Hasn't Halted Medical Bankruptcies

Researchers also say those once uninsured now have coverage that is 'skimpy' and 'defective'

U.S. News and World Report
March 8, 2011

(HealthDay News) — The percentage of personal bankruptcies caused by medical bills or personal illness has changed only slightly since Massachusetts began requiring people to buy health insurance in 2006, a new study finds.

The finding challenges the Obama administration’s claim that medical bankruptcies will decline under the new U.S. health care law, which is largely patterned after the Massachusetts law, according to the Harvard University researchers.

They found that the proportion of bankruptcies in Massachusetts that were medical-related dropped from 59.3 percent to 52.9 percent between early 2007 and mid-2009. This 6.4 percent decrease is non-significant, according to the study authors.

They also found that the actual number of medical bankruptcy filings in the state rose from 7,504 in 2007 to 10,093 in 2009.

“Health costs in the state have risen sharply since reform was enacted. Even before the changes in health care laws, most medical bankruptcies in Massachusetts — as in other states — afflicted middle-class families with health insurance. High premium costs and gaps in coverage — co-payments, deductibles and uncovered services — often left insured families liable for substantial out-of-pocket costs. None of that changed. For example, under Massachusetts’ reform, the least expensive individual coverage available to a 56-year-old Bostonian carries a premium of $5,616, a deductible of $2,000, and covers only 80 percent of the next $15,000 in costs for covered services,” the researchers wrote.

“Massachusetts’ health reform, like the national law modeled after it, takes many of the uninsured and makes them underinsured, typically giving them a skimpy, defective private policy that’s like an umbrella that melts in the rain: the protection’s not there when you need it,” lead author Dr. David Himmelstein said in a Physicians for National Health Reform news release.

He was an associate professor of medicine at Harvard Medical School when he conducted the research and is now professor of public health at City University of New York.

The study is published March 8 in the American Journal of Medicine.

http://health.usnews.com/health-news/managing-your-healthcare/insurance/articles/2011/03/08/mass-health-reform-hasnt-halted-medical-bankruptcies

Massachusetts reforms had no impact on medical bankruptcy, liberal researchers say

By Jason Millman
The Hill, March 8, 2011

An individual mandate has done little to stem the rate of medical bankruptcies in Massachusetts, boding poorly for the federal healthcare reform law enacted almost a year ago, according to a new liberal study.

The number of medical bankruptcies in Massachusetts increased from 7,504 in 2007 to 10,093 in 2009, while the state’s rate of medical bankruptcies experienced a “non-significant” decrease from 59.3 percent to 52.9, said researchers Dr. David Himmelstein and Dr. Steffie Woolhandler in the American Journal of Medicine.

The authors, both affiliated with single-payer advocate Physicians for a National Health Program, said medical bankruptcies continue to plague Massachusetts because the 2006 reform, pushed by then-Gov. Mitt Romney (R), covered more people but provided them with weak insurance. The researchers said this raises the same concern with the federal healthcare overhaul because it was modeled after the Massachusetts reform, including the requirement for all individuals to purchase insurance by 2014.

“Massachusetts’ health reform, like the national law modeled after it, takes many of the uninsured and makes them underinsured, typically giving them a skimpy, defective private policy that’s like an umbrella that melts in the rain: the protection’s not there when you need it,” Himmelstein said in a statement.

President Obama and Democrats often cited the need to end medical bankruptcies as they made their case for healthcare reform. However, the liberal advocates say the reforms do not go far enough.

“[R]educing medical bankruptcy rates in the United States will require substantially improved — not just expanded — insurance, as well as better disability insurance programs to provide income support to ill individuals and family caregivers,” the researchers wrote.

The Massachusetts medical bankruptcy rate is actually on the lower end of the scale when compared to national figures. The study’s authors attributed this to the state’s relatively high prosperity, older population and robust social safety net.

http://thehill.com/blogs/healthwatch/health-reform-implementation/147971-massachusetts-reforms-had-no-impact-on-medical-bankruptcy-liberal-researchers-say

Medical bankruptcies a continuing problem, study finds

By Kay Lazar
The Boston Globe, March 8, 2011

The 2006 Massachusetts law that required nearly everyone to buy health insurance has not significantly staunched residents’ pain from medical bankruptcies, according to a new study.

A survey of Massachusetts residents who filed for bankruptcy in July 2009 found that 53 percent cited a medical cause, down from 59 percent who blamed a medical cause in a survey done in early 2007, before the state law had been fully implemented. But because of the small number of people surveyed, the difference was not statistically significant, according to the study in today’s American Journal of Medicine.

Lead study author Dr. David Himmelstein said medical bills are still causing bankruptcies because health costs in the state have continued rising sharply. High premium costs, along with large co-payments and deductibles, often expose families with insurance to substantial out-of-pocket costs, said Himmelstein, a professor of public health at City University of New York.

“People think they have reasonable insurance until they try and use it,” Himmelstein said. “You are carrying an umbrella and it starts to rain and you put it up and it’s full of holes. For most people, it just hasn’t rained yet.”

Himmelstein, who conducted the research while working as an associate professor of medicine at Harvard Medical School, is co-founder of Physicians for a National Health Program, an organization that pushes for national health insurance.

He said his findings suggest that the national health overhaul, which was largely modeled on the Massachusetts law and will take full effect in 2014, will not ease the number of medical bankruptcies, either.

http://www.boston.com/news/health/blog/2011/03/medical_bankrup.html

Healthcare reform may not reduce medical bankruptcies, study suggests

By Eryn Brown
Los Angeles Times, March 8, 2011

Studying medical bankruptcies in Massachusetts, whose recent healthcare reform was a model for national reform, researchers found that while new insurance rules increased the number of people who had coverage, those rules did not improve coverage — leaving many still struggling with medical debt.

Proponents of the national healthcare reform passed into law last year have claimed that it would reduce medical bankruptcy in the United States by helping more Americans get insurance. This new study, which was published Tuesday in the American Journal of Medicine, suggests that a reduction in bankruptcies is unlikely.

“These data suggest that reducing medical bankruptcy rates in the United States will require substantially improved — not just expanded — insurance,” they wrote.

To gauge whether healthcare reform in Massachusetts had eased bankruptcies, the researchers looked at a random sample of Massachusetts bankruptcy filers in July 2009, sending surveys to almost 500 households. They compared their results to national and Massachusetts data collected in 2007, before the Massachusetts reform was implemented in 2008.

They found that while the percentage was down slightly, medical bills still contributed to 52.9% of all bankruptcies in the state. Absolute numbers of medical bankruptcies were up by a third. Total bankruptcies in Massachusetts went up 51% between 2007 and 2009.

Families still faced substantial medical debt, they wrote, because healthcare costs continued to rise.

While there is no agreed-upon standard to measure who’s underinsured, said co-author Dr. Steffie Woolhandler, “it’s a little like the line about porn. You know it when you see it.”

The paper cited the example of the least expensive coverage available to a 56-year-old Bostonian in 2009. Such a policy carried a premium of $5,256 and a deductible of $2,000, and covered only 80% of the next $15,000 in costs for covered services. The authors calculated that an insured couple with an income greater than $44,000 (above the eligibility threshold for subsidies) could pay $20,512 for covered annual medical expenses.

Woolhandler said insurance in Massachusetts had become even more expensive in the two years since. “It’s really too much money for the average family — especially if the breadwinner is the one who gets sick,” she said. Uncovered services could make costs even greater, the study reported.

“We need to reduce limits on deductibles and out-of-pocket costs,” Woolhandler said.

Woolhandler and lead author Dr. David Himmelstein are professors of public health at City University of New York, but were professors at Harvard University when the research was conducted. They are co-founders of Physicians for a National Health Program, which advocates for single-payer health insurance in the United States. The organization was not involved with funding for this study.

http://www.latimes.com/health/boostershots/la-heb-obamacare-insurance-costs-03082011,0,7832154.story

Massachusetts reform hasn't stopped medical bankruptcies: Harvard study

Skimpy health insurance policies are likely culprit in continuing problem; findings indicate national reform law won’t stop bankruptcies

EMBARGOED until
March 8, 2011, 12:01 a.m., Eastern time

Contact:
David Himmelstein, M.D.
Steffie Woolhandler, M.D.
Mark Almberg, PNHP, (312) 782-6006, mark@pnhp.org

The percentage of personal bankruptcies linked to medical bills or illness changed little, and the absolute number actually increased in Massachusetts after the implementation of its landmark 2006 law requiring people to buy health insurance, a Harvard study says.

The new study, which appears in today’s American Journal of Medicine, found that between early 2007 and mid-2009, the share of all Massachusetts bankruptcies with a medical cause went from 59.3 percent to 52.9 percent, a non-significant decrease of 6.4 percentage points. Because there was a sharp rise in total bankruptcies during that period, the actual number of medical bankruptcy filings in the state rose from 7,504 in 2007 to 10,093 in 2009.

The findings have national implications because the Obama administration’s health law is largely patterned after the Massachusetts plan, including its individual mandate. One of the administration’s arguments in support of the new federal law was that it would significantly reduce medical bankruptcies nationwide. The findings in Massachusetts cast doubt on that claim.

Moreover, the president’s recent proposal to let states opt out of the national health reform threatens to further weaken the inadequate standards for coverage that were included in the 2010 reform law. The result may well be the growth of skimpier plans nationwide, leading to even higher rates of medical bankruptcy than in Massachusetts.

To explain why medical bankruptcies persist in Massachusetts, the authors of the new study write: “Health costs in the state have risen sharply since reform was enacted. Even before the changes in health care laws, most medical bankruptcies in Massachusetts – as in other states – afflicted middle-class families with health insurance. High premium costs and gaps in coverage – co-payments, deductibles and uncovered services – often left insured families liable for substantial out-of-pocket costs. None of that changed. For example, under Massachusetts’ reform, the least expensive individual coverage available to a 56-year-old Bostonian carries a premium of $5,616, a deductible of $2,000, and covers only 80 percent of the next $15,000 in costs for covered services.”

The study’s lead author, Dr. David Himmelstein, said, “Massachusetts’ health reform, like the national law modeled after it, takes many of the uninsured and makes them underinsured, typically giving them a skimpy, defective private policy that’s like an umbrella that melts in the rain: the protection’s not there when you need it.”

In the case of Massachusetts, “while we can’t completely rule out the possibility that the reform reduced medical bankruptcies, any reduction is certainly small,” he said. Himmelstein conducted the study as associate professor of medicine at Harvard Medical School; he currently is professor of public health at City University of New York.

In 2007, the last year for which national estimates are available, medical issues contributed to 62.1 percent of bankruptcies nationally, according to a 2009 study by the same group of researchers. That study, which was frequently cited by the president and congressional reform advocates, also found that 77.9 percent of those bankrupted were insured at the start of their illness, including 60.3 percent who had private coverage.

The authors note that Massachusetts has historically had fewer medical bankruptcies than the rest of the nation, presumably reflecting, among other things, the state’s more robust social safety net, including public hospitals and a system of free medical care for the poor that predated the recent reform. Massachusetts’ 51 percent increase in total bankruptcies between 2007 and 2009 was slower than the increase in the majority of other federal jurisdictions.

The state’s health law was passed in 2006 and was fully implemented by early 2008. According to the U.S. Census Bureau, the share of state residents who were uninsured fell by 58 percent between 2006 and 2009, from 10.4 percent to 4.4 percent, and remains the lowest rate of any state.

Because bankruptcies lag many months behind a financial shock, the early 2007 and mid-2009 surveys provide a good “before and after” look at the effects of the health reform, the researchers said.

Study co-author Dr. Steffie Woolhandler, a professor of public health at City University of New York who was professor of medicine at Harvard when the research was conducted, said, “American families need the kind of comprehensive coverage that protects people in nations with single-payer national health insurance, such as Canada.” Although recent data are lacking, an older study found few medical bankruptcies in Canada, she said.

*****

“Medical bankruptcy in Massachusetts: Has health reform made a difference?” David U. Himmelstein, M.D., Deborah Thorne, Ph.D., and Steffie Woolhandler, M.D., M.P.H. Deborah Thorne is associate professor of sociology at Ohio University. American Journal of Medicine, March 2011 (print edition).

A copy of the manuscript of the study is available here.

*****

Physicians for a National Health Program (www.pnhp.org) is an 18,000-member organization advocating single-payer national health insurance for the United States. PNHP had no role in funding the study mentioned above. To speak with a physician/spokesperson in your area, visit www.pnhp.org/stateactions or call (312) 782-6006.

Single-payer health legislation on the move in Vermont

By Nancy Remsen
Burlington (Vt.) Free Press, March 6, 2011

MONTPELIER, Vt. — By the end of this week, the House HealthCare Committee will vote on a bill that authorizes the building blocks for a future single-payer health care system.

The bill will largely follow the template provided to the Legislature by Gov. Peter Shumlin, who set transformation of health care as a priority for his first term in the state’s top job.

“It is not a vote that we are jumping off a cliff to a single-payer system,” Anya Rader Wallack, Shumlin’s special assistant for health reform, said to assure those worried the administration and Legislature might be moving too fast. “This is a multi-year process. We are proposing we just get on the road toward a system.”

“Single payer we think is where you experience the greatest cost savings and allow people to have the simplest interaction with the health system,” Wallack said. “We think it is worth heading for.”

Shumlin is leading Vermont in the opposite direction of many in Congress — especially in the newly elected House of Representatives that voted to repeal the more modest reforms of the federal Accountable Care Act.

Although Democratic majorities in the Vermont House and Senate are expected to be supportive of the health care bill, it has plenty of opponents inside and outside the Statehouse.

House Republicans, for example, are expected to balk at the provisions that establish Green Mountain Care, the entity that would eventually become a health insurance program for all Vermont residents.

“This drastic change to our health care system will affect every Vermonter, every family, every employer, and every health care provider in this state,” House Republican Leader Turner of Milton warned a week ago.

He appealed to Vermonters to press their representatives to slow down the legislation so dozens of questions could be answered now — before the state commits to a single-payer track.

“With the health care industry at 20 percent of our economy, we have a responsibility to address the details, crunch the numbers, and get it right,” Turner said. “Setting a date of March 11 to get this done is a little aggressive.”

House Health Care Chairman Mark Larson, D- Burlington, countered that “slowing down just subjects Vermonters to rapidly increasing costs.”

“If we lose sight of the crisis in our current system, that can make us think it isn’t essential to act swiftly,” Larson said. He cited the skyrocketing growth in health care spending in recent years. It jumped from $3.9 billion in 2006 to $4.7 billion in 2009 and is projected to hit $5.9 billion in 2010 — a jump of $2 billion in five years.

Larson acknowledged people’s worries about making big changes, but offered his assessment that “Scary is doing nothing.”

Rep. George Till of Jericho is a doctor and a Democrat who, unlike many in his party, has many questions about the pending legislation — starting with the fundamental assertion that health care is too expensive.

As a member of the House Health Care Committee, he will be one of those casting a vote Friday.

“If we had a different industry growing at the rate health care is, that would be really celebrated in the Statehouse,” Till said. “Nonetheless, the general consensus is we can’t afford it. I do want people to just consider that it isn’t like the money is headed off to China or India. That money stays here.”

Wallack, Shumlin’s health reform assistant, countered, “There is a lot of evidence that the cost growth isn’t getting us any benefit.” By benefit, she said she means better health outcomes.

She noted, too, that the growing cost of health care crowds out other spending priorities — at businesses faced with escalating insurance expenses, for individuals socked with bigger premiums and co-payments or in government as it juggles multi-million dollars increases in its subsidized health expenditures and the impact of a recession.

Till worries proposed legislation banks too much on administrative savings from consolidating claims processing and payments, and doesn’t tackle the real cost drivers.

“The administrative savings, I think, are terribly overstated,” he said. A single-payer system in a single state “can’t be a true single-payer system,” he argued.

“The focus on who writes the check is a “What can we do about these?” Till asked.

Larson said the ideal solution to the health cost crisis would curb costs, provide universal access and improve quality.

“We are moving in the direction of the governor’s proposal because it has the most potential for success in all these areas,” Larson said. “I haven’t heard anybody propose anything that would accomplish close to what Gov. Shumlin proposes.”

Wallack said the bill has three components:

• It sets up a mechanism for cost control — the Vermont Health Reform Board.

• It creates a health benefit exchange or marketplace for health insurance as required by the federal health reform law.

• It sets out a work plan to lead the state to a single-payer system that would be known as Green Mountain Care.

House Republicans and other skeptics writing in the blogosphere aren’t ready to make the same leap of faith as Larson.

Republican leader Turner isn’t persuaded to throw out the current system yet. “We have very good health care,” he said. “We don’t want to lose that.”

Till complained that the bill “puts this stake in the ground that we are going to single payer” without spelling out how it would be financed or what the insurance benefit would be. The bill gives the administration until January 2013 to provide the financing plan.

“You can’t have a rational discussion about that right before it is going to happen,” Till said. Wallack said the administration needed more time to research financing.

Larson said the bill will state that Green Mountain Care won’t be implemented until the new board has approved a benefit package, the Legislature and the governor have approved a financing plan and the federal government has granted a waiver.

Vermont’s congressional delegation introduced bills in the U.S. House and Senate to move up the date when waivers could be granted from 2017 as set out in the federal health reform law to 2014. President Barack Obama signaled his support for the date change a week ago during remarks to the National Governors Association.

John O’Kane, manager of governor programs with IBM, spoke for many in the business community when he advised the House Health Care Committee on a recent afternoon to pay attention to the employers’ worries about the potential impacts of “an unfavorable design of a reformed health care system.”

“Private sector for-profit companies operate in highly competitive, global markets where the lack of cost competitiveness can mean extinction,” O’Kane said.

Companies that operate in multiple states want to offer uniform health packages to their workers, O’Kane said. They shouldn’t be forced to abandon company-wide health insurance programs by rules or coercive taxation, he said.

Some providers of health care — doctors and hospitals — worry about the track record of government medical care programs. Medicaid and Medicare both pay less than care costs.

“Within the health care community there is a not a lot of trust government can run things well,” Till said.

Melinda Estes, president and CEO of Fletcher Allen Health Care in Burlington, has lots of questions about how the health care reform board would work. This board will make decisions affecting hospital budgets and provider reimbursements.

Estes rattled off a list of concerns such as whether the board would have staff with expertise on technical topics? What would its relationship be to the Legislature which would have authority over the dollars for a government-financed health care system?

She also voiced concerns about the effect of the big change on the state’s ability to recruit and retain physicians. “Physicians are a notoriously risk averse lot,” she said.

She also wondered whether a single-payer system would result in “an in-migration of the sickest of the sick. I don’t know the answer, but it is something we have thought about.”

Despite concerns, Estes said, “both the administration and the Legislature have been very open and willing to listen.”

There are lots of reasons why a single-payer health care initiative would be on a fast-track this year.

The obvious political explanation is the election of a governor who made the issue a priority and sympathetic majorities in the House and Senate.

There are the bundles of federal dollars that come with the federal health care reform law — money that Wallack acknowledged would make it easier to carry out reforms. For example, the state will be eligible for a 90 percent federal match on money used to upgrade its Medicaid systems. “That will be hundreds of millions of dollars,” Wallack said.

Vermont’s community sensibility makes the tough discussions easier, Wallack said. “There are other opportunities because Vermont is Vermont and we have a health care system that isn’t highly competitive and isn’t influenced by the kind of money in other states.”

Many interest groups “are working with us. They are making suggestions,” Wallack said.

Although the bill still has many hurdles yet to clear in the Legislature, Wallack said she was optimistic. “I think we will get something good out of this.”

http://www.burlingtonfreepress.com/article/20110306/NEWS03/110305007/Single-payer-health-legislation-on-the-move-in-Vermont

Nonprofit health care: It’s alive!

Single-payer health care is back on the table

By Samuel Metz, M.D.
Portland (Ore.) Alliance, March 2011

Here are two facts to disturb your coffee break.

1. Oregonians already pay enough in health insurance premiums to provide every Oregonian with comprehensive, no deductible, no co-pay, all medications included health care.

2. We aren’t getting it.

Where’s the disconnect?

It’s not the usual suspects: undocumented immigrants, medical malpractice, insurance fraud, government waste, or fee-for-service reimbursement. The answer is that private health insurance is the most inefficient method of financing health care known to man.

Any health care financing agency must keep administrative costs low. Single-payer agencies like Medicare and the VA are under 4 percent. Private single-payer agencies like Taft-Hartley multiemployer heath plans are less than that.

The private health insurance industry, sacred cow of Democrats and Republicans alike, produces a 40 percent administrative loss. This is not a misprint. Private health insurance financing is 10 – repeat – 10 times more costly than all known single-payer agencies.

Grip your coffee cup for the obvious question. How on earth can this happen? First, private health insurance companies keep 20 percent for lobbying, marketing, and profit plus executive salaries and other overhead expenses.

Of the 80 percent passed on to health care providers, another 20 percent is spent by providers to collect money owed them by insurance companies in the first place. After all, this industry denies 30 percent of all claims, not because they are bad people, but because denying claims is good business.

This staggering 40 percent administrative loss totals $4 billion in Oregon. How much additional money do we need to pay for comprehensive care for every Oregonian? Less than that, $3.5 billion. Clearly if we finance this with private health insurance, Oregonians must cough up another $3.5 billion in premiums, taxes, and out of pocket expenses. If we use single payer financing, the money is already there.

So there you are, with your coffee cup frozen an inch from your lips, realizing the solution to our health care crisis is so simple: single payer health care. And it has arrived in Oregon. Yes, the Oregon House is considering health care legislation as we speak, HB 3510 submitted by Michael Dembrow, and Senate SB 888 submitted by Chip Shields.

You are not the only one who should know about this legislation; your legislators should as well. Write, call, e-mail, or corner your legislators. Tell them single-payer health care is important and they should learn why. Do not let this historic opportunity pass.

But finish your coffee first.

Health reform: Doctor sees single-payer as the best medicine

By Nancy Remsen
Burlington (Vt.) Free Press, Sunday, March 6, 2011

For Dr. Robert Penney, a primary care physician who has practiced in Vermont for 25 years, there isn’t any question about the need to reform health care.

“What we are doing now is just stupid and everyone says it’s not sustainable,” Penney said during a noontime break from seeing patients at the Pine Street office for Burlington Primary Care.

The skyrocketing cost of health care may be problem most visible to the public, Penney said, but he prefers to focus on the quality of the care that all the money buys.

“We ought to be healthier,” he said. “If that is done well, it will cost less.”

Penney said he believes a publicly funded health care system that eliminates the current financial fragmentation would be “more efficient and more fair.”

“What we are doing now just doesn’t make sense,” he said. In his office of four part-time physicians and two part-time nurse practitioners, Penney said coping with the tangle of insurance requirements “diverts a lot of resources into areas that have nothing to do with patient care.”

Penney argues that a consolidated health insurance coverage and payment system would allow primary care doctors “to take care of our patients and to help them take care of themselves, without the obstacles that we now jointly face.”

He’s not alone in this view. The 382-member Vermont Academy of Family Physicians, of which he is president, voted in January to endorse the conclusion of Harvard economist William Hsiao in a report for the Vermont Legislature entitled “Achieve Affordable Universal Health Care in Vermont.” The report recommended that Vermont move to a single-payer health care system.

Penney is optimistic dramatic change is possible.

“This is certainly right now the best opportunity. We finally have a governor who is interested in health care reform,” he said. “All the governmental entities are on the same page,” he added, referring to Democratic leaders in the House and Senate.

Like many in the public, Penney tempered his enthusiasm about what government could accomplish. “The worry is they will really screw it up,” he said. The big fear of a government-run system is that it will be a government-run system.”

That’s why Penney liked Hsiao’s recommendation that a quasi-independent board make some of the critical decisions about health benefits and payments. Such a board would be a step away from the political arena.

Penney dismissed a concern that doctors would leave Vermont if it moved to a single-payer system.

“I think there will be a migration in here by physicians, particularly primary care doctors,” he said. “It will be a much nicer place to practice. We could have a very attractive environment here. It could be unique in the country.”

http://www.burlingtonfreepress.com/article/20110306/NEWS03/103060303/Health-reform-Doctor-sees-single-payer-as-the-best-medicine

Lesson for U.S.: Canada's Medicare remains fully sustainable

Neat, Plausible, and Wrong: The Myth of Health Care Unsustainability

Canadian Doctors for Medicare
February 2011

The “Sustainability” Myth

Critics of Medicare assert that the cost of our public health care system is growing at an alarming pace. They are joined by provincial Premiers who are concerned that health care is taking up an increasing proportion of provincial budgets. They claim that the cost of health care is rising faster than the pace of inflation and taking up an increasing share of provincial budgets.

The Facts:

Any crisis in health care funding has nothing to do with Medicare. The costs of Medicare – medically necessary hospital and physician services – are not growing significantly and can easily be sustained.

Over the last 35 years, Medicare costs have remained remarkably stable at 4 to 5% of Canada’s gross domestic product (GDP).

Total government health care spending, which includes costs that are not part of Medicare, such as public health, publicly funded dental care and prescription drugs, have risen faster than Medicare spending alone so that total public spending on health care has increased from about 5% of GDP in 1980 to about 7% in 2009. But still, this hardly reflects spending that should be considered “unsustainable.”

Provincial Budgets

None of this is meant to imply that health care is not making up an increasing portion of provincial budgets. It clearly is. The change in the share of provincial budgets however, is not primarily due to increased health care spending. It is the result of decreases in other provincial spending to accommodate political decisions to cut taxes.

… almost all of the growth in health care’s share of provincial budgets can be attributed to the simple arithmetic of an essentially constant numerator and a decreasing denominator. Deep cuts in federal transfers to the provinces in the mid‐1990s were compounded by provincial tax cutting policies in the latter part of the decade, causing significant reductions in total provincial budgets. Provincial revenues have fallen almost $30 billion since 1997, causing decreases in other government program spending through cuts to education, social services, and municipalities.

But it is tax cuts that have “crowded out” these priorities, not Medicare. Medicare spending has remained stable for more than three decades. That stability, in an environment of shrinking budgets, means Medicare inescapably makes up a larger share of that smaller total budget, but Medicare costs are not the part of the equation that is changing at an alarming pace. If the “runaway” growth of Medicare’s share of provincial spending is of genuine concern to provinces, they could simply address the real cause of that development by choosing not to reduce their total tax revenues each year.

Which Costs Are Rising?

While the cost of Medicare has not grown as a percent of GDP over the last 35 years, there have been significant increases in total health care system costs over the same period, and those increases have accelerated in the last decade. Overall health spending in Canada has risen from about 7% of GDP in 1975 to about 10.7% in 2008. In 2010, health care spending was estimated to be about 12% of GDP.

If Medicare costs are stable, and public sector costs are rising slowly, why are total health care costs increasing rapidly? The real cost driver is precisely the thing that critics of Medicare tout as the solution: private health care.

Currently 30% of all health spending is in the private sector, up from 24% in 1975. That growth is a result of significant increases in costs in the private health care sector, including out‐of‐pocket spending and the costs of private insurance. Pharmaceuticals and private prescription drug insurance are the most significant driver of these costs, followed by dental care and private dental insurance.

The Private Funding Option

Those “concerned about sustainability” recommend breaking the “monopoly” Medicare has on insuring medically necessary hospital and physician services and allowing private health insurance for these services. But increased private financing offers no relief to Canadians concerned about the rising costs of health care. The private insurance market, if anything, makes the system less sustainable, as well as less equitable.

Canada’s private insurance system has seen some sharp increases in costs. Private health insurance spending has grown rapidly since the late 1980s, rising from $139 per capita in 1988 to $591 per capita in 2007. Even adjusted for inflation, (giving a per capita constant dollar cost of $377) this represents an impressive 369% increase, outpacing almost all other categories of health care. It is hard to see how this increasingly costly system can be expected to reduce cost in health care overall.

Competing private sector insurance providers have not been able to achieve the same efficiencies as the public insurance system because they are burdened by the inefficiencies of redundant administrative infrastructure, lack of coordination, fragmented purchasing power, personnel costs and corporate profit.

More Effective Options Within Medicare

a) Curb the growth of pharmaceutical costs

Regulating the prices of prescription drugs more effectively is one such opportunity.

Policy makers can also institute more effective assessment systems to identify the best and most cost effective drugs.

The rising costs are also due in part to the fact that private sector drug plans impose unnecessary administrative costs on the health care system.

The relative efficiency of single‐payer health care financing, whether for medical care or pharmacare, is well documented internationally, and benefiting from that efficiency would certainly play a role in reversing the rise in costs that the growth of private drug plans has caused.

b) Ensure more appropriate use of resources

The Health Council of Canada suggests clinical practice guidelines and more effective rules for ensuring the appropriateness of tests and prescriptions would be an effective remedy for overuse, again indicating that more coordinated management may be more useful to reducing costs.

c) Continue to make the delivery of Medicare services more efficient

More fruitful are the many opportunities to improve our Medicare system by drawing on its strengths and building the changes that advance it. To name but a few, such reforms include: greater emphasis on primary prevention and health promotion; integrated patient‐centred primary care by multi‐disciplinary teams; enhanced scope of practice for allied health professionals; shared care with increased coordination between family doctors and specialists; national pharmacare including national procurement processes; better uptake of evidence‐based guidelines for diagnosis and treatment; stronger patient safety protections; and deployment of the long‐awaited electronic health record.

Health System Transformation

Reforms, such as the ones outlined in this paper, would foster healthy partnerships between physicians, other health practitioners, public policy decision‐makers and the public, regardless of their political outlooks, focused not on rehashing the public/private debate that Canadians have settled countless times, but on improving the public health care system. The distraction caused by recycling the old debates has taken up far too much of o
ur policy efforts. It’s time we got down to the real process of improving health care.

Full report (9 pages):
http://www.canadiandoctorsformedicare.ca/images/stories/Neat_Plausible_and_Wrong.pdf

Comment: 

By Don McCanne, MD

Conservatives in Canada have been fairly successful in disseminating the concept that their Medicare program is unsustainable, and that only privatization can save it. Their campaign has been downright dishonest.

This report from Canadian Doctors for Medicare shows that Medicare has been very stable through the decades and that the increasing cost pressures have occurred in the private sector. The Canadian health care system clearly needs more government involvement, not less.

There are lessons here for the United States. Our much higher costs have been due to unconstrained pressures in the private sector. Our health care prices are by far the highest, and our private insurers have been ineffective in constraining these escalating costs. Since our Medicare program covers only selected populations (elderly, long-term disabilities, end-stage renal disease) it has not had the leverage to control spending as effectively as the Canadian Medicare system. Also, being only a part of a highly fragmented financing system, Medicare is forced to deliver within a system steeped with wasteful administrative excesses.

In the United States, we need a Medicare system that administers financing for our entire health care delivery system, while eliminating the privatizers who continue to drive up health care pricing to unsustainable levels. Canada has shown us that a single payer system works just fine, as long as you don’t give free rein to the privatizers.

N.H. hospital watches Vt. single-payer debate

Adam Sullivan
WCAX News, Lebanon, New Hampshire – March 2, 2011

Dartmouth-Hitchcock Medical Center’s Frank McDougall knows a lot of people who impact the health care industry in New Hampshire and Vermont, and all the way to the White House.

“We can’t go on the way we are going,” said McDougall, the VP of government relations at DHMC. “The system is significantly broken, the financing system. The percentage of our Gross National Product is getting to the point where we can’t afford this, can’t sustain it.”

Dartmouth-Hitchcock is located in New Hampshire, but Vermont is a big player.

“About 40 percent of everything that happens at our Lebanon campus, for Dartmouth-Hitchcock Medical Center is Vermont,” McDougall said.

Over 300,000 Vermont patients visited the facility last year alone. And 2,300 Vermonters work at the medical center, which has an annual payroll– solely to Vermonters– upwards of $160 million.

“The fact is the Green Mountains pretty much divide the market,” McDougall said.

So as the Shumlin administration moves forward drafting a single-payer health plan for Vermont, DHMC has a keen interest.

“Theoretically, it makes all the sense in the world,” McDougall said. “Last year Dartmouth-Hitchcock, we billed 650 unique insurers. There were 650 unique insurers that got separate bills with separate codes at separate addresses for patients that had health insurance here. That’s not counting private payers, that’s not counting Medicare or Medicaid, so clearly there is a significant bureaucracy around the whole payer mechanism.”

McDougall says savings– from an administrative perspective– make sense. But a key question remains: Who will end up footing the bill for a single-payer system? A payroll tax has been offered as a possibility.

“DHMC would not be subjected or could not be subjected to a Vermont payroll tax, but we may have the option of our Vermonters, the 2,300 DHMC employees who are Vermonters, we may have the option of covering them in the Vermont plan through a contribution to the Vermont plan,” McDougall said.

But what about small business owners who struggle to pay for their own insurance, let alone thousands of employees in the case of this hospital?

“If I got employees I’d be concerned,” said Ken Blaisdell of White River Junction. “I’m not sure exactly what the cost would be.”

Reporter Adam Sullivan: Because right now you don’t pay for employees, but the question is if you were to hire employees would you be required to pay for them?

Blaisdell: Right, right. And that would be difficult especially if I would have to pay something similar to what I have to pay.

Blaisdell runs a small shop in downtown White River Junction. He buys his own medical insurance at a cost of about $5,000 a year. If a single-payer system would lower that, Blaisdell says he’s on board.

“Simplify the system and hopefully the costs would go down for small businesses,” Blaisdell said.

Cost concerns on the state level are impacted by Medicaid reimbursements, which are administered through the states. In New Hampshire, reimbursement rates are about the lowest in the nation.

“We lost about $57 million last year to cost to New Hampshire Medicaid and that number is only growing,” McDougall said.

A gap that McDougall says highlights the need for reform, and yet another reason why he’s watching the single-payer debate in Vermont closely. He says making care more cost effective is a good idea, but will Vermont’s choices be good for the hospital?

“We are absolutely at a crossroads with regard to health care reform,” he said. “And whether it is at the state level or at the federal level, we are all in agreement that something has to give.”

McDougall says he has been a part of about four attempts to reform the health care system in the past and each time he says there has always been a loud voice lobbying for the status quo. But he says he’s not hearing that this time around, which he offers as proof that everyone is calling for reform– no matter what party.

http://www.wcax.com/global/story.asp?s=14175346