PNHP

Health Insurers Hedge Bets With Fast Food Stock

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Health Insurers Hedge Bets With Fast Food Stock

Researchers Lambast Health Insurance Companies; Not All Convinced Investment Is Irresponsible

By TODD NEALE
MedPage Today Staff Writer
ABC News, April 16, 2010

Companies providing life and health insurance owned $1.9 billion worth of stock in the fast-food industry as of June 11, 2009, researchers reported online in the American Journal of Public Health.

The investments were in the five largest fast-food corporations — Jack in the Box, McDonald’s, Burger King, Yum! Brands (KFC, Taco Bell, Pizza Hut, and others), and Wendy’s/Arby’s, according to J. Wesley Boyd of Harvard Medical School and Cambridge Health Alliance in Massachusetts and colleagues.

“The insurance industry, ostensibly, appears to be concerned about people’s health and well-being,” Boyd said.

But, he said, “If the insurance industry is willing to invest in products known to be harmful and/or kill people then, prima facie, this is not an industry that actually cares about health and well-being.”

Although Boyd acknowledged that fast food can be consumed responsibly, he said the aggregate evidence points toward a negative effect on public health.

“We argue that insurers ought to be held to a higher standard of corporate responsibility,” he and his co-authors wrote in their paper.

All of the study authors are members — and two are co-founders — of Physicians for a National Health Program, a nonprofit organization advocating for universal, single-payer national health insurance.

“PNHP opposes for-profit control, and especially corporate control, of the health system and favors democratic control, public administration, and single-payer financing,” the organization’s mission statement reads.

Boyd said that the passage of healthcare reform makes the issue of owning stock in fast-food companies especially important.

“The health insurance industry is going to have a much bigger stake in providing healthcare, and what we’re doing in our paper is reminding people that [the industry’s] primary interests are in earning money and generating profit, not in insuring people’s health,” he said.

Pauline Rosenau, a professor of management, policy, and community health at the University of Texas School of Public Health, said the investment strategy of these insurance companies is not ethical.

“They are placing themselves in a situation of substantial conflict of interest — especially starting in 2014,” she said.

“Starting in 2014, insurers will have an even greater incentive to encourage their customers to pursue healthy food choices,” she continued. “However, this is only with respect to their own customers, not those insured by other companies. As long as insurers are largely private, for-profit entities, they are unlikely to identify with a public health orientation.”

To determine the extent to which insurance companies invested in the fast-food industry, Boyd and his colleagues analyzed shareholder data from the Icarus database, which contains information from Securities and Exchange Commission filings and reports from news agencies.

Their data were “vetted during the peer-review process by outside referees,” according to a spokesperson for the American Public Health Association, which publishes the American Journal of Public Health.

The $1.9 billion worth of stock in the five leading fast food companies represented 2.2 percent of the total market capitalization of those companies on June 11, 2009.

Most of the investments ($1.2 billion) were in McDonald’s, followed by Yum! Brands ($404.2 million), Burger King ($165.5 million), Jack in the Box ($120 million), and Wendy’s/Arby’s ($15 million).

The insurer investing the most in fast food — $422.2 million — was Northwestern Mutual, which offers life, disability, and long-term care insurance.

Next highest at $406.1 million was ING, a Dutch investment company selling life and disability insurance.

Massachusetts Mutual, which offers life, disability, and long-term care insurance, and Prudential Financial, which sells life insurance and long-term disability coverage, ranked third and fourth at $366.5 million and $355.5 million, respectively.

At first glance, it would appear that there is an inconsistency with insurance companies that have an interest in protecting health investing in the fast-food industry, although Boyd said that it makes sense financially.

“They’re hedging their bets,” he said. “First of all, they’re making money by directly investing in fast food, and, secondly, they’re making money by often charging higher premiums to people who’ve eaten a little too much fast food and are obese, have diabetes, cardiovascular disease, high blood pressure, etc.”

He said that he would like to see insurance companies sell their stakes in the fast-food companies.

“But if they don’t divest, at a minimum they could use their position as owners of fast food to insist on higher quality products, lower calories, [and] better information about how many calories are in different foods,” he said.

Dr. David Orentlicher of the William S. and Christine S. Hall Center for Law and Health at Indiana University agreed that insurers should be held to a higher standard of corporate responsibility.

“That said,” he said, “it is very difficult in a capitalist society to expect people or companies to act against their self-interest. If we want people to act responsibly, we have to create financial incentives for them to do so.”

Theodore Marmor, a professor emeritus of public policy and management at Yale School of Management, did not agree that health and life insurers should be held to a different standard than other companies.

“I think this is a foolish approach to improving the health of the public,” Marmor said.

“It would be hard to find any corporation that did not have some effect on the public’s health. Why are insurers to be held to a higher standard? We have more important worries about health insurers than improving their stock portfolios — e.g., their behavior as insurers.”

Northwestern Mutual and ING did not respond to a request for comment.

A spokesperson for Massachusetts Mutual said the reported investments were “absolutely incorrect.” He said that as of Dec. 31, the company owned about $1.4 million worth of stock in fast-food-related companies, which was “less than one-hundredth of one percent of cash and total invested assets of $86.6 billion.”

A Prudential Financial spokesperson said, “We can’t discuss specific investments within Prudential portfolios or those managed for third parties. That said, we have a fiduciary duty to manage assets in a way that provides the opportunity for consistently strong investment performance to our individual and institutional clients, while managing risk and investing responsibly.”

A spokesperson for America’s Health Insurance Plans (AHIP), a trade group for health insurers, said he could not comment on the investments of individual companies.

“Our industry is strongly committed to health and wellness,” he said. “Health plans have pioneered programs to promote prevention and encourage people to live healthier lifestyles.”

Copyright Ā© 2010 ABC News Internet Ventures

http://abcnews.go.com/Health/w_DietAndFitness/health-insurance-companies-invest-billions-fast-food-stock/story?id=10392603&page=1

Health, life insurers hold $1.88 billion in fast-food stocks: AJPH article

Harvard researchers say insurers put profits over health

EMBARGOED until:
April 15, 2010, 5 p.m. Eastern time    

Contact:
Arun Mohan, M.D., M.B.A.
J. Wesley Boyd, M.D., Ph.D.
Steffie Woolhandler, M.D., M.P.H.
Mark Almberg, PNHP, (312) 782-6006, mark@pnhp.org

Just weeks after the passage of a health bill that will dramatically increase the number of Americans covered by private health insurers, Harvard researchers have detailed the extent to which life and health insurance companies are major investors in the fast-food industry.

Although fast food can be consumed responsibly, research has shown that fast-food consumption is linked to obesity and cardiovascular disease, two leading causes of death, and contributes to the poor health of children. The evidence is so compelling that as part of the new law more than 200,000 fast-food and other chain restaurants will be required to include calorie counts on their menus, including their drive-through menus.

A new article on insurance company holdings, published online in today’s [Thursday, April 15] American Journal of Public Health, shows that U.S., Canadian and European-based insurance firms hold at least $1.88 billion of investments in fast-food companies.

“These data raise questions about the opening of vast new markets for private insurers at public expense, as is poised to happen throughout the United States as a result of the recent health care overhaul,” says lead author Dr. Arun Mohan.

Among the largest owners of fast-food stock are U.S.-based Prudential Financial, Northwestern Mutual and Massachusetts Mutual Life Insurance Company, and European-based ING.

U.S.-based Northwestern Mutual and Massachusetts Mutual Life Insurance Company both offer life insurance as well as disability and long-term care insurance. Northwestern Mutual owns $422.2 million of fast-food stock, with $318.1 million of McDonald’s. Mass Mutual owns $366.5 million of fast-food stock, including $267.2 in McDonald’s.

Holland-based ING, an investment firm that also offers life and disability insurance, has total fast-food holdings of $406.1 million, including $12.3 million in Jack in the Box, $311 million in McDonald’s, and $82.1 million in Yum! Brands (owner of Pizza Hut, KFC and Taco Bell) stock.

New Jersey-based Prudential Financial Inc. sells life insurance and long-term disability coverage. With total fast-food holdings of $355.5 million, Prudential Financial owns $197.2 of stock in McDonald’s and also has significant stakes in Burger King, Jack-in-the-Box, and Yum! Brands.

The researchers also itemize the fast-food holdings of London-based Prudential Plc, U.K.-based Standard Life, U.S.-based New York Life, Scotland-based Guardian Life, Canada-based Manulife and Canada-based Sun Life. (See table; all data current as of June 11, 2009.)

“Our data illustrate the extent to which the insurance industry seeks to turn a profit above all else,” says Dr. Wesley Boyd, senior author of the study. “Safeguarding people’s health and well-being take a back seat to making money.”

Mohan, Boyd and their co-authors, Drs. Danny McCormick, Steffie Woolhandler and David Himmelstein, all at the Cambridge Health Alliance and Harvard Medical School, culled their data from Icarus, a proprietary database of industrial, banking and insurance companies. Icarus draws upon Securities and Exchange Commission filings and news reports from providers like Dow Jones and Reuters. In addition, the authors obtained market capitalization data from Yahoo! Finance.

The authors write, “The health bill just enacted in the Washington will likely expand the reach of the insurance industry. Canada and Britain are also considering further privatization of health insurance. Our article highlights the tension between profit maximization and the public good these countries face in expanding the role of private health insurers. If insurers are to play a greater part in the health care delivery system they ought to be held to a higher standard of corporate responsibility.”

Several of these same researchers, all of whom are affiliated with Physicians for a National Health Program, have previously published data about the extent to which the insurance industry is invested in tobacco. They say that because private, for-profit insurers have repeatedly put their own financial gain over the public’s health, readers in the United States, Canada and Europe should be wary about insurance firms’ participation in care.

Insurance industry holdings in fast-food companies (in millions of U.S. dollars) as of June 11, 2009.

Insurance
Company		 Jack in
the Box		 McDonald’s Burger King Yum! Brands Wendy’s/
Arby’s Group		 Total
Prudential plc       80.5  
80.5
Prudential Financial 34.1 197.2 43.7 80.5  
355.5
Mass Mutual 23.1 267.2 58.8 17.4  
366.5
New York Life 2.4        
2.4
Northwestern Mutual 40.9 318.1   63.2  
422.2
Sun Life       26.8   26.8
Standard Life   63.0      
63.0
ING 12.3 311.7   82.1   406.1
Manulife   89.1   53.7 3.3
146.1
Guardian Life 7.2       9.5
16.7
MetLife         2.2 2.2
Total 120.0 1,183.3 165.5 404.2 15.0 1,888.0

“Life and Health Insurance Industry Investments in Fast Food,” Arun V. Mohan, M.D., M.B.A.; Steffie Woolhandler, M.D., M.P.H.; David U. Himmelstein, M.D.; and J. Wesley Boyd, M.D., Ph.D. American Journal of Public Health, April 15, 2010.

Physicians for a National Health Program (www.pnhp.org) is an organization of 17,000 doctors who support single-payer national health insurance. To speak with a physician/spokesperson in your area, visit www.pnhp.org/stateactions or call (312) 782-6006.

Ohio's lesson for Medicare Part D

State, patients, doctors like new Medicaid drug plan

By Catherine Candisky
The Columbus Dispatch
April 14, 2009

When the state took back control of Medicaid’s prescription-drug program last year, there was a lot of talk about how the move would save millions.

It has.

But it’s also making it easier for patients to get the medications they need.

An analysis by the Ohio Coalition for Patient Rights found that Medicaid patients have improved access to “quality and appropriate” treatments and medications.

On Feb. 1, the state created a single, statewide drug formulary for all Medicaid programs, replacing eight different managed-care pharmacy plans.

At the time, state officials said the so-called carve-out would save money because the state is eligible for savings programs such as drug-company rebates.

The Coalition for Patient Rights’ analysis compared access to 122 drugs for health conditions including asthma, heart disease, diabetes and mental illness. It found that the state formulary, in many instances, placed fewer restrictions on patients’ ability to obtain medications prescribed by their doctor.

Such restrictions include the need for prior authorization from the insurer before a drug can be obtained and requiring patients to try different drugs before medications prescribed by their doctors can be made available.

Physicians also are applauding the change.

“We supported the idea of the carve-out because each managed-care company had its own formulary, and from an administrative perspective, it was a nightmare,” said Ann Spicer of the Ohio Academy of Family Physicians.

“It’s much simpler dealing with a single formulary, and the number of prior authorizations have been drastically reduced.”

http://www.dispatch.com/live/content/local_news/stories/2010/04/14/state-patients-doctors-like-new-medicaid-drug-plan.html?sid=101

Comment:

By Don McCanne, MD

Enactment of Medicare Part D – the Medicare drug program – was a gift to the pharmaceutical industry and the private intermediaries managing the drug benefits. The government was even explicitly prohibited from negotiating drug prices in a competing plan. Many of us at the time objected to the rejection of the broader concept of having the government as the exclusive administrator of the Part D pharmaceutical benefit. We could have had greater savings and less third party intrusion if we had adopted a public program instead.

The story from Ohio is a vindication for those of us who still insist that the Medicare Part D program should be revamped into a public program that would better serve patients, without wasting funds on the excesses of the pharmaceutical firms and the pharmacy benefit managers.

Think of how this compares with the recent health care financing reform process. The debate ended up being over a competing public insurance option, after totally rejecting any consideration of a single publicly administered insurance program for everyone. Eventually even the public option was rejected, just as a competing public Part D option had been rejected. The Republicans established the flawed policy principles with Part D, and the Democrats have now followed the same path.

The Ohio experience demonstrates not only that Medicare drug benefits should be administered by the government, but also, by extrapolation, that our entire health care financing infrastructure should be converted into an improved Medicare for everyone. We can still do that.

Ohio’s lesson for Medicare Part D

State, patients, doctors like new Medicaid drug plan

By Catherine Candisky
The Columbus Dispatch
April 14, 2009

When the state took back control of Medicaid’s prescription-drug program last year, there was a lot of talk about how the move would save millions.

It has.

But it’s also making it easier for patients to get the medications they need.

An analysis by the Ohio Coalition for Patient Rights found that Medicaid patients have improved access to “quality and appropriate” treatments and medications.

On Feb. 1, the state created a single, statewide drug formulary for all Medicaid programs, replacing eight different managed-care pharmacy plans.

At the time, state officials said the so-called carve-out would save money because the state is eligible for savings programs such as drug-company rebates.

The Coalition for Patient Rights’ analysis compared access to 122 drugs for health conditions including asthma, heart disease, diabetes and mental illness. It found that the state formulary, in many instances, placed fewer restrictions on patients’ ability to obtain medications prescribed by their doctor.

Such restrictions include the need for prior authorization from the insurer before a drug can be obtained and requiring patients to try different drugs before medications prescribed by their doctors can be made available.

Physicians also are applauding the change.

“We supported the idea of the carve-out because each managed-care company had its own formulary, and from an administrative perspective, it was a nightmare,” said Ann Spicer of the Ohio Academy of Family Physicians.

“It’s much simpler dealing with a single formulary, and the number of prior authorizations have been drastically reduced.”

http://www.dispatch.com/live/content/local_news/stories/2010/04/14/state-patients-doctors-like-new-medicaid-drug-plan.html?sid=101

Comment:

By Don McCanne, MD

Enactment of Medicare Part D – the Medicare drug program – was a gift to the pharmaceutical industry and the private intermediaries managing the drug benefits. The government was even explicitly prohibited from negotiating drug prices in a competing plan. Many of us at the time objected to the rejection of the broader concept of having the government as the exclusive administrator of the Part D pharmaceutical benefit. We could have had greater savings and less third party intrusion if we had adopted a public program instead.

The story from Ohio is a vindication for those of us who still insist that the Medicare Part D program should be revamped into a public program that would better serve patients, without wasting funds on the excesses of the pharmaceutical firms and the pharmacy benefit managers.

Think of how this compares with the recent health care financing reform process. The debate ended up being over a competing public insurance option, after totally rejecting any consideration of a single publicly administered insurance program for everyone. Eventually even the public option was rejected, just as a competing public Part D option had been rejected. The Republicans established the flawed policy principles with Part D, and the Democrats have now followed the same path.

The Ohio experience demonstrates not only that Medicare drug benefits should be administered by the government, but also, by extrapolation, that our entire health care financing infrastructure should be converted into an improved Medicare for everyone. We can still do that.

No Time to ‘Wait and See’ on Health Law

Dr. Quentin Young
The Huffington Post, April 14, 2010

Building the Single-Payer Movement

Having just gone through a grueling, frequently raucous debate on health reform, capped by the narrowest of votes to pass the Obama administration’s bill, many activists are now tempted to adopt a “wait and see” attitude on how the new law plays out.

A few others are putting their emphasis on helping the administration implement the law, in some cases enthusiastically trumpeting their strange-bedfellow partnership with the profit-hungry health insurers and Big Pharma.

Still others – the hostile, noisy Know-Nothings associated with the Republicans and Tea Party crowd – continue to rail against President Obama’s “socialized medicine” plan (a misnomer if there ever was one), and pledge to obstruct or overturn it. Conservatives vow to make political hay out of the law in the run-up to the midterm elections.

Wall Street, on the other hand, is very comfortable with the new legislation. Mutual fund analysts now say it’s increasingly clear that the law is beneficial for health industry stocks, particularly for pharmaceutical and medical equipment companies, because there are no “onerous cost controls” in the law. And health insurance company stocks continue to a yearlong trend upward, and the industry’s CEO salaries continue to be astronomical.

After all, the health insurers wrote the bill. Sen. Max Baucus was recently caught on tape heaping effusive praise on his aide Elizabeth Fowler for her pivotal role in crafting the legislation. Fowler is a former vice president of WellPoint, the giant health insurer.

Baucus himself, a key actor in this bad movie, was surrounded by health industry lobbyists from the very beginning, and has received over $2.8 million in campaign contributions from these toxic sources over the past few years. That he earned his payoff was demonstrated when Karen Ignagni, the president of America’s Health Insurance Plans, congratulated him (during this week’s episode of “Frontline”) on his handling of the single-payer nonviolent disruption of his Senate Finance Committee hearing after single-payer advocates like Dr. Margaret Flowers were excluded from giving testimony.

Supporters of single-payer national health insurance face several challenges, the chief of which is how to transform the various efforts of single-payer Medicare-for-All activists into a movement for political and legislative success. Among the key tasks are these:

* Educating candidates for political office (and current officeholders) from all political parties about the merits of the single-payer proposal, and offering to advise them on health policy matters.

* Ensuring the reintroduction and largest possible legislative sponsorship for national single-payer bills like Rep. John Conyers’ H.R. 676 and Sen. Bernie Sanders’ S. 703.

* Supporting efforts (including a change in the new law) to permit states to experiment with their own, independent single-payer models of reform right away.

* Defending Medicare from harmful budget cuts and educating Medicare beneficiaries about their self-interest in improving and expanding the program to cover everyone, i.e. embracing the slogan, “Everybody in, nobody out.”

* Continuing our educational work about the merits – nay, the necessity – of adopting a single-payer system. The sooner we initiate a truly universal, egalitarian, humane and efficient system, the sooner the American people will enjoy the high-quality health care our nation and our health professionals are capable of providing.

A major burden the enactment of the new law imposes on single-payer advocates is its timeline. Specifically, major elements in the legislation do not kick in for two, four or even eight years’ time.

But “wait and see” is not an option for us. The legislation just passed is completely inadequate to the task at hand.

Under the new law, the suffering and financial hardship imposed on Americans by our private-insurance-based system will largely continue unabated for four more years, and only then be subject to very modest regulation. (Loopholes in the law abound.) Over 50 million people will remain uninsured each year until 2014, which translates into 50,000 preventable deaths annually. A comparable number will remain underinsured, with many vulnerable to medical bankruptcy when serious illness strikes, even after 2014.

Even if the new law works as planned, at least 23 million people will remain uninsured at 2019. So “universal health care” remains a dream deferred.

That spells human misery. This week a new Harvard-based study showed that people with migraine who lack health insurance, or who are on Medicaid, disproportionately suffer from their condition because they can’t get access to the standard medications they need to reduce their pain and other symptoms. And that’s just one example of the unnecessary suffering that lies in wait.

Meanwhile costs, including for health insurance premiums, will continue to escalate.

The unrelenting advocacy of single payer by Physicians for a National Health Program also stems from a careful study of repeatedly unsuccessful experiments with state-based reforms based on private insurance, including the Massachusetts plan (upon which the new law is modeled). The evidence is clear: incremental reforms of this type – based on the private-insurance model – will not work. They invariably succumb to skyrocketing costs.

Single-payer Medicare for All is the reform that’s required. Just like almost all other major areas of progress in American life, fundamental health reform requires a movement based on equity, justice, prudence and science that is free of market greed. That movement today is single payer.

http://www.huffingtonpost.com/dr-quentin-young/no-time-to-wait-and-see-o_b_537958.html

No Time to 'Wait and See' on Health Law

Dr. Quentin Young
The Huffington Post, April 14, 2010

Building the Single-Payer Movement

Having just gone through a grueling, frequently raucous debate on health reform, capped by the narrowest of votes to pass the Obama administration’s bill, many activists are now tempted to adopt a “wait and see” attitude on how the new law plays out.

A few others are putting their emphasis on helping the administration implement the law, in some cases enthusiastically trumpeting their strange-bedfellow partnership with the profit-hungry health insurers and Big Pharma.

Still others – the hostile, noisy Know-Nothings associated with the Republicans and Tea Party crowd – continue to rail against President Obama’s “socialized medicine” plan (a misnomer if there ever was one), and pledge to obstruct or overturn it. Conservatives vow to make political hay out of the law in the run-up to the midterm elections.

Wall Street, on the other hand, is very comfortable with the new legislation. Mutual fund analysts now say it’s increasingly clear that the law is beneficial for health industry stocks, particularly for pharmaceutical and medical equipment companies, because there are no “onerous cost controls” in the law. And health insurance company stocks continue to a yearlong trend upward, and the industry’s CEO salaries continue to be astronomical.

After all, the health insurers wrote the bill. Sen. Max Baucus was recently caught on tape heaping effusive praise on his aide Elizabeth Fowler for her pivotal role in crafting the legislation. Fowler is a former vice president of WellPoint, the giant health insurer.

Baucus himself, a key actor in this bad movie, was surrounded by health industry lobbyists from the very beginning, and has received over $2.8 million in campaign contributions from these toxic sources over the past few years. That he earned his payoff was demonstrated when Karen Ignagni, the president of America’s Health Insurance Plans, congratulated him (during this week’s episode of “Frontline”) on his handling of the single-payer nonviolent disruption of his Senate Finance Committee hearing after single-payer advocates like Dr. Margaret Flowers were excluded from giving testimony.

Supporters of single-payer national health insurance face several challenges, the chief of which is how to transform the various efforts of single-payer Medicare-for-All activists into a movement for political and legislative success. Among the key tasks are these:

* Educating candidates for political office (and current officeholders) from all political parties about the merits of the single-payer proposal, and offering to advise them on health policy matters.

* Ensuring the reintroduction and largest possible legislative sponsorship for national single-payer bills like Rep. John Conyers’ H.R. 676 and Sen. Bernie Sanders’ S. 703.

* Supporting efforts (including a change in the new law) to permit states to experiment with their own, independent single-payer models of reform right away.

* Defending Medicare from harmful budget cuts and educating Medicare beneficiaries about their self-interest in improving and expanding the program to cover everyone, i.e. embracing the slogan, “Everybody in, nobody out.”

* Continuing our educational work about the merits – nay, the necessity – of adopting a single-payer system. The sooner we initiate a truly universal, egalitarian, humane and efficient system, the sooner the American people will enjoy the high-quality health care our nation and our health professionals are capable of providing.

A major burden the enactment of the new law imposes on single-payer advocates is its timeline. Specifically, major elements in the legislation do not kick in for two, four or even eight years’ time.

But “wait and see” is not an option for us. The legislation just passed is completely inadequate to the task at hand.

Under the new law, the suffering and financial hardship imposed on Americans by our private-insurance-based system will largely continue unabated for four more years, and only then be subject to very modest regulation. (Loopholes in the law abound.) Over 50 million people will remain uninsured each year until 2014, which translates into 50,000 preventable deaths annually. A comparable number will remain underinsured, with many vulnerable to medical bankruptcy when serious illness strikes, even after 2014.

Even if the new law works as planned, at least 23 million people will remain uninsured at 2019. So “universal health care” remains a dream deferred.

That spells human misery. This week a new Harvard-based study showed that people with migraine who lack health insurance, or who are on Medicaid, disproportionately suffer from their condition because they can’t get access to the standard medications they need to reduce their pain and other symptoms. And that’s just one example of the unnecessary suffering that lies in wait.

Meanwhile costs, including for health insurance premiums, will continue to escalate.

The unrelenting advocacy of single payer by Physicians for a National Health Program also stems from a careful study of repeatedly unsuccessful experiments with state-based reforms based on private insurance, including the Massachusetts plan (upon which the new law is modeled). The evidence is clear: incremental reforms of this type – based on the private-insurance model – will not work. They invariably succumb to skyrocketing costs.

Single-payer Medicare for All is the reform that’s required. Just like almost all other major areas of progress in American life, fundamental health reform requires a movement based on equity, justice, prudence and science that is free of market greed. That movement today is single payer.

http://www.huffingtonpost.com/dr-quentin-young/no-time-to-wait-and-see-o_b_537958.html

UnitedHealth usurping role of primary care provider

UnitedHealth to Pay Walgreens, YMCA, for Progress on Diabetes

By Katherine Hobson
The Wall Street Journal
Health Blog

UnitedHealth Group and Walgreens say theyā€™re teaming up with the YMCA on a program that will reimburse pharmacists and lifestyle coaches to help insured patients prevent and control diabetes.

The program, which will be announced Wednesday at the CDC Diabetes Conference in Kansas City, Mo., will have two parts, says Tom Beauregard, executive vice president of UnitedHealth and executive director of the UnitedHealth Center for Health Reform and Modernization. The prevention arm will use UnitedHealth claims data and other demographic information to flag people at risk of developing diabetes and invite them to a free, 16-session exercise and nutrition class at a local YMCA. Theyā€™ll have monthly follow-up after the class is over, and instructors will be paid bonuses if participants meet certain modest weight-loss goals.

The control part of the program will be administered with Walgreens. Participants who already have diabetes will receive a 45-minute assessment and then other health-care coaching sessions, covering both medical and lifestyle management, says Colin Watts, chief innovation officer at Walgreens.

(Beauregard) said UnitedHealth would pay the YMCA around $300 for someone who completed the program and it could rise to $500 for someone who met weight-loss goals. Neither he nor Watts would disclose the reimbursements to Walgreens, but Watts says it includes a strong pay-for-performance element.

http://blogs.wsj.com/health/2010/04/13/unitedhealth-to-pay-walgreens-ymca-for-progress-on-diabetes/

Comment: 

By Don McCanne, MD

One of the most important goals of health care reform was to reinforce the primary care infrastructure to provide for everyone a medical home that would ensure access to the highest quality care reasonably attainable.

That would have been easy through a universal publicly administered health care financing program such as an improved Medicare that included everyone. Instead reform was based on an expansion of a chronically underfunded welfare program – Medicaid – plus an infusion of taxpayer funds into an expansion of the private insurance industry.

Think about it. UnitedHealth is using its proprietary data bank to glean information about primary care patients, and then using that information to pull the patients out of their primary care homes and referring them on to the YMCA and Walgreens, effectively fragmenting their health care management. If the programs are appropriate, the decision to use them should be made in the primary care home, and not usurped by middlemen money managers.

With the need to demonstrate a medical loss ratio of 80 percent (individual and small groups) to 85 percent (large groups), we can anticipate that UnitedHealth, WellPoint and the other for-profit insurers will make every effort they can to establish other similar programs outside of the mainstream of health care that would satisfy their medical loss ratio requirements. Of course these programs will draw funds away from primary care professionals, hospitals and other health care providers.

We do need a much stronger primary care infrastructure, but we need to get UnitedHealth and the others out of the way so that we can do it right. A publicly-owned financing system would place patients first, ensuring that they would have the coordinated care that they need.

Insurance CEO compensation 2008-2009


Publicly disclosed compensation of CEOs of selected health insurance companies, 2008-2009

Company Name CEO Name Year Compensation
Aetna Inc. Ronald A. Williams 2008 $24,300,112
Cigna Corp. H. Edward Hanway 2009 $18,818,467
Humana Inc. Michael B. McCallister * 2009 $6,509,452
UnitedHealth Group Inc. Stephen J. Hemsley ** 2008 $3,241,042
Wellpoint Inc. Angela F. Braly 2008 $9,844,212
Health Net Inc. Jay M. Gellert 2008 $4,425,355
Centene Corp. Michael F. Neidorff 2009 $6,077,900
Wellcare Health Plans Inc. Heath Schiesser 2008 $8,077,718

* Upon retiring on Dec. 31, 2009, H. Edward  Hanway received a $73 million bonus in addition to the compensation cited above

** According to the Minneapolis Star Tribune, Stephen Hemsley’s 2009 total compensation was $101,959,866. This figure includes his exercise of 4.9 million stock options in February 2009 at a gain of $98.6 million.

Source: http://www.aflcio.org/corporatewatch/paywatch/, and salary.com

Click here for a PDF of this table.

Health Care Bill Does Not Fix Health Care System

By Peter Shapiro
4/12/2010

Peter Shapiro is a member of the National Association of Letter Carriers (NALC) Branch 82 in Portland, Oregon.  He also co-chairs the Health Care Committee of Portland Jobs with Justice. This article was originally distributed by FightBack News Service at fightbacknews.org.

Passage of President Obama’s health care reform in late March made for great political theater.  Here was House Speaker Nancy Pelosi, skillfully maneuvering the bill through Congress after many had given it up for lost.  Here was House minority leader and Republican point man John Boehner, reduced to ranting about ‘Armageddon’ and predicting the end of civilization as we know it if the bill passed.  Here were Republican legislators egging on the mob of teabaggers who massed outside the Capitol, hurling racist and homophobic slurs at Representatives John Lewis and Barney Frank as they went inside.

I’ll admit the scene worked on my emotions. The Republicans’ tactics were ugly and cynical and I was happy to see them fail.

Now that the dust has settled, however, a hard look at the legislation that prompted all the fuss suggests that, far from ‘fixing our broken health care system,’ it merely reproduces some of its worst features.

The bill does nothing to lessen the grip of the private insurance industry on our health care system. It won’t bring exploding health care costs under control. It does little to change the shameful disparities in access to treatment in a society that treats medical care as a commodity to be bought and sold, rather than as something all of us need and deserve.

What it will do is require everybody to buy health insurance, with federal subsidies for those who can’t afford the premiums on their own. The price tag of these subsidies is $447 billion over the next ten years. That’s money that could have gone to pay directly for medical treatment but which will, instead, wind up in the pockets of the insurance industry – one more corporate bailout at taxpayers’ expense.

To help pay for it, public hospitals that treat the uninsured will have their federal funding slashed by $36 billion. Eight years down the road, union health plans and other job-based health insurance will be slapped with a 40% ‘excise tax.’ Protests from organized labor succeeded in getting this tax modified somewhat, but not eliminated from the bill.

The bill does expand eligibility for Medicaid, the federal health care program for the poor. And it is supposed to make it harder for insurance companies to deny legitimate claims or refuse to cover ‘high-risk’ patients.  Insurance industry lobbyists, who actually helped draft the bill, swallowed these reforms in part because they’ll get 30 million new customers out of the deal, and in part because over the years the industry has proved adept at evading every government attempt at regulation.

Physicians for a National Health Program, which has led the fight for a single payer system comparable to what other developed countries have, likens the bill to morphine for a cancer patient. It lessens the pain for a while, but it doesn’t stop the cancer from spreading. Health care in the U.S. costs twice as much as in most other countries, mainly because the administrative costs of maintaining a private insurance system soak up nearly one in every three dollars we spend on it.  And a big chunk of that money goes to buy politicians. The health care industry spent a record $266.8 million last year making sure nothing got into the bill that would seriously threaten its profits.

I’ve heard some interesting arguments over whether we’re better or worse off with this law on the books, but it’s really beside the point. The battle for universal, equal access to care still lies ahead, and it won’t be won until those of us who are victimized by the health care system have more political clout than those who profit from it.

The law’s shortcomings will provide ample organizing opportunities in the fight for true reform.  Here are a few:

1.  Medicaid. It’s financed with matching state and federal funds, and while the federal government may have the money to pay for expanded eligibility, most states don’t. Oregon, where I live, already has a very liberal program of health care for the poor, but the state is so strapped for cash that it actually has to hold a lottery to determine which eligible people get benefits. And because an underfunded Medicaid program compensates doctors so poorly, many doctors are already reluctant to take Medicaid patients. The new law promises to make it easier for poor people to get care; we should be prepared to hold politicians’ feet to the flames if it doesn’t happen.

2.  Rate hikes. Since everyone will now be required to buy insurance or pay a fine, insurers are likely to take advantage of their captive market by jacking premiums up even more. There should be organized, angryprotests every time it happens.

3.  Underinsurance. Before the law passed, a woman with ‘pre-existing’ breast cancer was apt to be refused coverage. Now she can’t be denied coverage – but she may find that her new policy won’t pay for the extra round of chemotherapy or surgery she needs. Nothing in the law spells out what benefits must be offered for insurance plans to qualify for the government-run ‘health insurance exchanges’ that will be set up in 2014. The requirement that everybody buy insurance will mean a proliferation of cut-rate policies that are of no use when you most need them. When policies like that go on the market, we should read the fine print and expose them for what they are.

4.  Inadequate regulation. Supporters of the new law boast that it outlaws ‘rescissions,’ the practice of canceling a policy as soon as a policyholder files a claim. But rescissions were already illegal! State regulators simply didn’t enforce the law. We need to keep a close eye on them and demand that they do their job.

5.  Employer mandates. “If you like the coverage you have, you can keep it,” says Obama.  But it’s really your boss’s decision, not yours. The penalties for employers who cancel their coverage are too small to discourage them from canceling or cutting back on increasingly costly employee benefits.  Unions can expect continued brutal fights over health insurance at contract time.  Whenever it happens, they shouldn’t hesitate to point out that health benefits shouldn’t even be on the bargaining table – the government should be picking up the tab for everybody, regardless of where they work or how much they make. Only by advocating for health care for all can unions win public sympathy when their own coverage is under attack.

6.  Penalizing the uninsured. A lot of people who can’t afford to buy coverage, even with federal subsidies, will get stuck with stiff fines for remaining uninsured. They need to become organized and visible and demand relief.

7.  Discrimination. Denying coverage to immigrants is a particularly ugly and pointless feature of the new law. Preventing sick people from going to the doctor doesn’t ‘secure our borders’ or discourage people from coming here, as anti-immigrant propagandists claim. It just means more needless and untreated illness and more pressure on overburdened hospital emergency rooms. Full access to health care is a key component in the battle for immigrant rights.

8.  Federal deficits. As costs keep rising, subsidizing insurance premiums will inevitably add to an already huge federal deficit. There will be intense pressure to cut necessary social programs, including Medicare, to pay for it. In defending those programs, we should be prepared to raise the issue of single payer – pointing out that a universal government-funded health care system would save the taxpayers billions and make those cuts unnecessary.

It’s common for
politicians like President Obama to say they support single payer ‘on principle’ but don’t consider it ‘realistic.’  The truth is that it’s the only realistic solution.  Nothing else will solve our health care crisis.  We have to keep the heat on until we get it. 

Distributed by:

Kay Tillow
All Unions Committee For Single Payer Health Care–HR 676
c/o Nurses Professional Organization (NPO)
1169 Eastern Parkway, Suite 2218
Louisville, KY 40217
(502) 636 1551
Email: nursenpo@aol.com

http://unionsforsinglepayerHR676.org

04/12/10

Healthcare overhaul won't stop premium increases

Healthcare overhaul won't stop premium increases

By Noam N. Levey
Los Angeles Times
April 13, 2010

Public outrage over double-digit rate hikes for health insurance may have helped push President Obama’s healthcare overhaul across the finish line, but the new law does not give regulators the power to block similar increases in the future.

And now, with some major companies already moving to boost premiums and others poised to follow suit, millions of Americans may feel an unexpected jolt in the pocketbook.

At least in the short term, regulators will be able to do little more than require insurers to publicly explain why they want to raise rates. Consumer advocates think that will not be an effective deterrent against premium increases such as the 39% hike that Anthem Blue Cross sent some California customers last year.

“It is a very big loophole in health reform,” Sen. Dianne Feinstein (D-Calif.) said. Feinstein and Rep. Jan Schakowsky (D-Ill.) are pushing legislation to expand federal and state authority to prevent insurance companies from boosting rates excessively.

But more intensive oversight would not begin until 2014, when states set up new regulated insurance markets, or exchanges, where consumers who do not get insurance at work would shop for coverage.

The healthcare bill allows regulators to ban insurers from the exchanges if their rates are deemed unjustified.

http://www.latimes.com/news/la-na-health-premiums13-2010apr13,0,3121779,full.story

Comment: 

By Don McCanne, MD

The health insurance overhaul that is now law does not include significant regulatory control of private insurance premiums. At most, plans can be excluded from the state insurance exchanges if their premiums are considered to be excessive. Thus the call for more legislation to increase oversight of premium increases. But would this really address the problem?

Actually the bill does require that 75 to 85 percent of premium dollars must be spent on health care. As long as the insurers demonstrate that they are complying with that requirement, the premium increases are not deemed to be excessive as far as excluding them from the exchanges. Of course they will be excessive, but that is because health care costs will continue to rise at excessive rates.

There are two questions we should be asking. One is why we should consider 15 to 25 percent of the premium to be a reasonable share for the private insurers to consume for their own intrinsic purposes, especially when they place an administrative burden of another 12 percent or so on the providers of health care, amounting to an administrative cost of 27 to 37 percent of the insurance premiums. You would think that this would be a prime target in our efforts to improve health care spending.

The other question we should be asking is why we should finance health care using using a market model that has a half century track record proving that it is ineffective in controlling costs, when we could be using a public insurance model that would use proven economic tools that can actually slow health care increases to sustainable rates.

Regardless of the hoopla, we didn’t reform health care financing, we only expanded our existing dysfunctional system. We don’t have to accept this. We can still do it right.

Healthcare overhaul won’t stop premium increases

Healthcare overhaul won’t stop premium increases

By Noam N. Levey
Los Angeles Times
April 13, 2010

Public outrage over double-digit rate hikes for health insurance may have helped push President Obama’s healthcare overhaul across the finish line, but the new law does not give regulators the power to block similar increases in the future.

And now, with some major companies already moving to boost premiums and others poised to follow suit, millions of Americans may feel an unexpected jolt in the pocketbook.

At least in the short term, regulators will be able to do little more than require insurers to publicly explain why they want to raise rates. Consumer advocates think that will not be an effective deterrent against premium increases such as the 39% hike that Anthem Blue Cross sent some California customers last year.

“It is a very big loophole in health reform,” Sen. Dianne Feinstein (D-Calif.) said. Feinstein and Rep. Jan Schakowsky (D-Ill.) are pushing legislation to expand federal and state authority to prevent insurance companies from boosting rates excessively.

But more intensive oversight would not begin until 2014, when states set up new regulated insurance markets, or exchanges, where consumers who do not get insurance at work would shop for coverage.

The healthcare bill allows regulators to ban insurers from the exchanges if their rates are deemed unjustified.

http://www.latimes.com/news/la-na-health-premiums13-2010apr13,0,3121779,full.story

Comment: 

By Don McCanne, MD

The health insurance overhaul that is now law does not include significant regulatory control of private insurance premiums. At most, plans can be excluded from the state insurance exchanges if their premiums are considered to be excessive. Thus the call for more legislation to increase oversight of premium increases. But would this really address the problem?

Actually the bill does require that 75 to 85 percent of premium dollars must be spent on health care. As long as the insurers demonstrate that they are complying with that requirement, the premium increases are not deemed to be excessive as far as excluding them from the exchanges. Of course they will be excessive, but that is because health care costs will continue to rise at excessive rates.

There are two questions we should be asking. One is why we should consider 15 to 25 percent of the premium to be a reasonable share for the private insurers to consume for their own intrinsic purposes, especially when they place an administrative burden of another 12 percent or so on the providers of health care, amounting to an administrative cost of 27 to 37 percent of the insurance premiums. You would think that this would be a prime target in our efforts to improve health care spending.

The other question we should be asking is why we should finance health care using using a market model that has a half century track record proving that it is ineffective in controlling costs, when we could be using a public insurance model that would use proven economic tools that can actually slow health care increases to sustainable rates.

Regardless of the hoopla, we didn’t reform health care financing, we only expanded our existing dysfunctional system. We don’t have to accept this. We can still do it right.

Finding Good Migraine Care a Headache for the Uninsured

They are twice as likely to resort to ERs for help rather than a doctor's office, study finds

By Amanda Gardner, HealthDay Reporter
U.S. News and World Report, April 12, 2010

MONDAY, April 12 (HealthDay News) — People who are uninsured or who are on Medicaid are much less likely to receive adequate care for their migraines than people who have private coverage.

In fact, more than 5.5 million Americans may be at risk of receiving inadequate care for their migraines because of their insurance status, a new study suggests.

“Left untreated or undertreated, as a result of being uninsured, will cause millions of Americans with migraine to suffer needlessly and place them at greater risk for developing more frequent migraine headaches,” said Dr. Brian M. Grosberg, director of the Inpatient Headache Program at Montefiore Medical Center and assistant professor of neurology at Albert Einstein College of Medicine in New York City. He was not involved in the study.

The lag in care may stem from the fact that the uninsured tend to seek care at hospital emergency rooms rather than a doctors’ office, according to findings published in the April 13 issue of Neurology.

“This study is really about the need to improve the healthcare system so everybody has access to a physician in an office so they don’t have to go to an emergency department — where we know they’re not going to get the best treatment,” added the study’s senior author, Dr. Rachel Nardin, chair of neurology at Cambridge Health Alliance and assistant professor of neurology at Harvard Medical School in Boston.

“It’s a sad situation because we actually have pretty good treatments that can help a lot of people, but what we don’t have is a functioning healthcare system that allows us to get treatment to people who need it,” continued Nardin, who is also chair of the Massachusetts chapter of Physicians for a National Health Program.

According to background information in the article, some 18 percent of women and 6 percent of men suffer from migraines.

“Migraines are a whole-system disease. People with migraines are really out of commission,” Nardin said. “They have to lie down and sleep for several hours. People with migraines lose an average of four days of work a year, and that doesn’t include the toll it takes on them as productive members of their family or church.”

Meanwhile, more than 45 million Americans have no health insurance at all, and an additional 58 million are underinsured, according to the latest federal data from the National Center for Health Statistics.

In the study, researchers looked at results from two surveys on visits to doctors’ offices, hospital outpatient visits and trips to the emergency room over a period of 11 years.

They estimated a total of 68.6 million such visits nationally during that time period for migraine complaints.

People with no insurance were twice as likely to receive inadequate therapy, either to treat or prevent migraines, as those with private coverage. Those with Medicaid were 50 percent more likely.

If migraine care was received in an emergency room, uninsured and Medicaid patients were almost five times more likely to receive inadequate care for their migraine.

“Migraine can be treated very effectively in a physician’s office,” Nardin said. “We all suffer when people need to use the emergency room because it then becomes less available for true emergencies. Migraines are a great example of where the system is not set up to get the right care in the right place at the right time. If we could do that, we would all benefit.”

http://www.usnews.com/health/family-health/brain-and-behavior/articles/2010/04/12/finding-good-migraine-care-a-headache-for-the-uninsured.html