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Health care agency's payroll bloated

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Health care agency's payroll bloated

Staff, salary has ballooned since inception

By Hillary Chabot and Joe Dwinell
The Boston Herald
Thursday, August 6, 2009

The payroll at the agency steering the state’s controversial universal health care effort has swollen to more than four times its original size in just 18 months – with a top-heavy bureaucracy led by dozens of high-paid managers, newly released records show .

The Commonwealth Health Insurance Connector’s staff and salary explosion – including 17 managers now paid more than $100,000 a year and numerous contracted employees – has continued despite protest from Beacon Hill lawmakers.

“At a minimum, all of the salaries need to be frozen and reviewed with an eye towards cutting them, and there should be a hiring freeze,” said Sen. Mark Montigny (D-New Bedford), vice chairman of the Legislature’s public health committee. “We’re in a crisis. That’s what happens when we’re in a crisis.”

The Massachusetts universal health coverage mandate – the creation of former Gov. Mitt Romney – is being ripped by critics of President Obama’s health care plan as a glaring example of out-of-control costs, jacked-up insurance rates and failed goals.

In a recent letter to the Minnesota congressional delegation, Gov. Tim Pawlenty compared Obama’s plan to the Bay State’s, noting: “That state’s experience should caution Congress against this approach” because “costs have been significantly higher than expected.”

Despite the national spotlight on its first-in-the-nation work, the Connector agency has in just a year and a half larded its bureaucracy with a dozen directors and assistant directors, and 14 bosses with the word “manager” in their titles. It also doled out 3 percent raises this year. The agency has 89 staffers on its payroll and is headed by Executive Director Jon M. Kingsdale, who makes $238,703.

Richard Powers, spokesman for the Connector, defended the salaries, saying they are in line with the employees’ “experience, knowledge and responsibilities.”

“There are people who came here from the private sector who took a cut in pay just to be involved in something that’s cutting edge,” Powers said.

Saying the agency was in “ramp-up mode” when there were only 22 employees in 2007, Powers said they had always projected a roughly 50-member staff.

The Connector has signed up 439,000 newly insured Bay State residents since it was created by the Legislature in 2006. Customers pay between 3.5 to 4.5 percent from their insurance costs for the agency’s salaries, Powers said.

The state, which has struggled with subsidizing the new law, spent $800 million to insure low-income residents last year.

In some cases, the Connector’s titles appear redundant. There is, for example, a chief communication officer, chief information officer, director of public affairs and chief marketing officer – all at six-figure salaries.

“The agency has exceeded my worst expectations. It’s clearly bloated and top-heavy with a number of positions that seem to be expendable,” said David Tuerck of the Beacon Hill Institute, a conservative think tank.

Rick Lord, head of Associated Industries of Massachusetts, who sits on the unpaid board that oversees the Connector, said he would be open to re-examining the higher payroll now that the state has insured all but 2.6 percent of the population. “It’s always good to revisit these issues on some kind of regular basis,” Lord said.

The Connector is just one of 52 quasi-state agencies under review by Gov. Deval Patrick, who announced the study after his disastrous push to install Sen. Marian Walsh as the $175,000 assistant director of the Health and Education Facilities Authority.

“The very life of these quasis should be in jeopardy,” said Montigny. “Their only purpose is to provide inflated salaries and bury patronage hires, and they’re generally less accountable and less effective.”

Article URL: http://www.bostonherald.com/news/politics/view.bg?articleid=1189479

GOP doesn't dare challenge this government health care

By Eric Zorn
Chicago Tribune
Friday, August 07, 2009

Nice poker play last week by U.S. Rep. Anthony Weiner.

As the House Energy and Commerce Committee was marking up health-care reform legislation, the New York Democrat offered up an amendment to abolish Medicare.

His point? Not to get rid of the program that provides insurance for America’s seniors on the 44th anniversary of President Lyndon Johnson’s signing of the Medicare Act of 1965, as he explained in his speech. But “to clarify one of the great, enduring mysteries.” Where do “my Republican friends stand on the issue of government-run health-care?”

Members of the GOP do carry on quite a bit about how awful it is, he observed, quoting several of them arguing that publicly funded health plans such as those now being proposed will lead to inefficiencies, rationing and the breaking of the doctor-patient bond.

But Medicare — along with comprehensive coverage for active military, veterans and American Indians — “is not only government-run health care, but it’s remarkably efficient,” Weiner said. Imperfect in some ways, of course, but “a pretty darn good model of what a public plan [covering everyone] might look like.”

His voice moist with sarcasm, Weiner addressed Republicans on the committee: “This is your opportunity . . . to eliminate the Medicare Act. Once and for all, stamp out the scourge of public, government-run, government-administered, single-payer health care. This is your chance. . . . I dare ya. I double dare ya. Vote ‘yes’ on this and then go home and explain to your constituents, how you’re so philosophically opposed to publicly funded health care that you voted to eliminate Medicare.” (Read or watch his whole five-minute speech here)

Lacking a triple-dog dare, the Republicans on the committee — along with the Democrats — unanimously voted no on Weiner’s amendment.

See, Medicare, despite its faults, is an extremely popular and entrenched program. I could find no public opinion polls in the modern era that have even bothered to ask if it should be abolished and grandma and grandpa dumped back into the private health-care insurance market. Similarly, I couldn’t find any recent polls in Canada that asked Canadians if they wanted to abandon their national health-care program in favor of an American-style system.

A Harris-Decima poll released last month showed 82 percent of Canadians prefer their nation’s health-care delivery system to ours.

A June, 2008, poll commissioned by the Globe and Mail newspaper and the CTV Television Network found 91 percent of Canadians saying the same.

An Ipsos/McClatchy poll last month found 65 percent of Canadians (and 49 percent of Americans) tending to agree with the statement “I currently have access to all of the health-care services I need without it costing me more than I can afford.”

Admittedly, that same poll found 74 percent of Canadians (and 53 percent of Americans) saying they had to “wait a long time for an appointment when . . . referred to a specialist.” Few would deny that there are gaps and delays in Canada’s system, and a Health Council of Canada report on public perceptions found 54 percent of Canadians in 2004 saying the health system north of the border needs “some fairly major repairs.”

Yet an unscientific Canadian Broadcasting Corp. poll taken that same year named Tommy Douglas — who led that nation’s fight for universal health care in the 1960s — as the Greatest Canadian of all time.

What this suggests is that if, somehow, the Democrats overcome the well-funded campaign against significant health-care reform and create a Medicare-style program for everyone, it, too, will eventually become untouchably popular.

Forty-four years from now, to prove a point, some wag in Congress will raffishly, ironically rise to propose a return to the pre-2010 health-care system in which more than 40 million Americans were uninsured and those who were fortunate enough to be covered had private bureaucrats standing between them and their doctors.

His proposal will go down to unanimous defeat. And some other wag in what used to be called a newspaper will praise him for his poker play.

Obama gives powerful drug lobby a seat at healthcare table

The pharmaceutical industry, once condemned by the president as a source of healthcare problems, has become a White House partner.

By Tom Hamburger
From the Los Angeles Times
August 4, 2009

Reporting from Washington — As a candidate for president, Barack Obama lambasted drug companies and the influence they wielded in Washington. He even ran a television ad targeting the industry’s chief lobbyist, former Louisiana congressman Billy Tauzin, and the role Tauzin played in preventing Medicare from negotiating for lower drug prices.

Since the election, Tauzin has morphed into the president’s partner. He has been invited to the White House half a dozen times in recent months. There, he says, he eventually secured an agreement that the administration wouldn’t try to overturn the very Medicare drug policy that Obama had criticized on the campaign trail.

“The White House blessed it,” Tauzin said.

At the same time, Tauzin said the industry he represents was offering political and financial support for the president’s healthcare initiative, a remarkable shift considering that drug companies vigorously opposed a national overhaul the last time it was proposed, when Bill Clinton was president.

If a package passes Congress, the pharmaceutical industry has pledged $80 billion in cost savings over 10 years to help pay for it. For his part, Tauzin said he had not only received the White House pledge to forswear Medicare drug price bargaining, but also a separate promise not to pursue another proposal Obama supported during the campaign: importing cheaper drugs from Canada or Europe. Both proposals could cost the industry billions, undermine its ability to develop new cures and, in the case of imports, possibly compromise safety, industry officials contend.

Much of the bargaining took place in July at a meeting in the Roosevelt Room, just off the Oval Office, a person familiar with the discussions said. In attendance were Tauzin, several industry chief executives — including those from Abbott Laboratories, Merck and Pfizer — White House Chief of Staff Rahm Emanuel and White House aides.

White House officials acknowledge discussing the importation question with Tauzin but had no comment on whether there was an agreement to block future Medicare price negotiations.

Yet everyone agrees that drug companies — Washington’s leading source of lobbyist money — now have “a seat at the table” at the White House and on Capitol Hill as healthcare legislation works its way through Congress. If nothing else, a popular president who six months ago criticized drug companies for greed now praises their work on behalf of the public good.

“I think the pharmaceutical industry has been quite constructive in this debate,” Obama told a small group of regional reporters last week. “And the savings that they’ve put on the table are real and significant and are appreciated.”

The pharmaceutical industry’s political transformation provides an example of Obama’s approach to achieving his healthcare goals, which includes negotiation and compromise, even with those he and his allies have painted as a source of the problem.

The benefits to the White House go beyond budget savings. Tauzin’s trade association, the Pharmaceutical Research and Manufacturers of America, or PhRMA, is helping to underwrite a multimillion-dollar TV advertising campaign touting comprehensive healthcare legislation.

One ad resurrects Harry and Louise, the fictional couple whose caustic kitchen-table comments in ads sponsored by the health insurance industry helped sink Clinton’s plan in 1994. This time, with the drug companies paying the bill, Harry and Louise have changed their view.

“A little more cooperation, a little less politics, and we can get the job done this time,” Louise says in the commercial, a joint project of PhRMA and Families USA, a health reform advocacy group with which the drug industry used to be at odds.

In an interview, Tauzin said he carefully negotiated his agreements with the White House, offering the $80-billion discount program in return for assurances that there would be no government price-setting in Medicare Part D, the drug program for seniors.

It was important, he said, to block the threat of Medicare price negotiations, which he called tantamount to price-setting and a threat to the industry. In addition, Tauzin said the industry asked the administration not to allow the import of cheaper drugs because of safety concerns.

Linda Douglass, a White House spokeswoman, said that when drug company executives brought up the import plan, they were told that the administration believed that health reform would reduce drug prices so significantly that the legislation once backed by Obama would “not be necessary.”

It’s far too early to tell whether the pharmaceutical industry’s decision to back Obama’s health initiative will pay off.

“Since Obama came into office, the drug industry has received everything it wants, domestic and foreign,” said James Love, who leads an international nonprofit promoting low-cost distribution of drugs to fight the world’s most devastating diseases.

“Yes, the drug companies are getting tremendous sweetheart deals” from Obama, said Lawrence Jacobs, a University of Minnesota political scientist who studies the history of health reform and other major social and economic changes. “But these bargains are the price of admission for achieving substantial reform.”

Tauzin, a Democrat who helped found the conservative Blue Dog coalition in the House before switching to the Republican Party in 1995, was chairman of the House committee that helped shepherd Medicare drug legislation through Congress, including the provision that the government not interfere with price negotiations.

Tauzin said PhRMA’s support for Obama’s initiative represented no shift in the industry’s basic philosophy.

“Our principles haven’t changed, but we are looking at a different situation today,” he said. “There’s an opportunity now to get a health bill passed that doesn’t provide for government control of healthcare. We are participating as fully as we can now because we see an economic and moral imperative to do something when so many millions of people don’t have access to healthcare.”

The prescription for PhRMA’s partisan activities has changed recently along with the political landscape.

In 2005 and 2006, during Tauzin’s first two years at PhRMA, just a third of the industry’s $19.5 million in campaign donations went to Democrats. Tauzin came into the organization, he said, determined to make it more bipartisan and more generally appealing to the public.

This year, for the first time in two decades, Democrats have so far picked up more of the industry’s campaign cash — 54% — than Republicans, according to the Center for Responsive Politics.

And PhRMA, a reliable backer of conservative candidates and causes in the past, has shifted allegiance in other ways, including joining labor leaders in a high-priced ad campaign to build grass-roots support for Obama’s health plan.

Besides the new “Harry and Louise” ads, the industry is underwriting commercials that praise potentially vulnerable Democratic incumbents.

Other things haven’t changed, including the industry’s unrivaled investment in lobbying.

In just the last four months, the industry has spent $68 million on lobbying in Washington, assuring its continued standing atop the nation’s lobbyist spending list.

Sen. Bernie Sanders (I-Vt.), a champion of importing drugs from Canada and reducing the cost of pharmaceuticals, professes continued suspicion of the industry, including its deals with the White House.

“The drug companies form the most powerful lobby in Washington,” he said. “They never lose.”

tom.hamburger@latimes.com

http://www.latimes.com/features/health/la-na-healthcare-pharma4-2009aug04,0,4078424,full.story

Health care agency’s payroll bloated

Staff, salary has ballooned since inception

By Hillary Chabot and Joe Dwinell
The Boston Herald
Thursday, August 6, 2009

The payroll at the agency steering the state’s controversial universal health care effort has swollen to more than four times its original size in just 18 months – with a top-heavy bureaucracy led by dozens of high-paid managers, newly released records show .

The Commonwealth Health Insurance Connector’s staff and salary explosion – including 17 managers now paid more than $100,000 a year and numerous contracted employees – has continued despite protest from Beacon Hill lawmakers.

“At a minimum, all of the salaries need to be frozen and reviewed with an eye towards cutting them, and there should be a hiring freeze,” said Sen. Mark Montigny (D-New Bedford), vice chairman of the Legislature’s public health committee. “We’re in a crisis. That’s what happens when we’re in a crisis.”

The Massachusetts universal health coverage mandate – the creation of former Gov. Mitt Romney – is being ripped by critics of President Obama’s health care plan as a glaring example of out-of-control costs, jacked-up insurance rates and failed goals.

In a recent letter to the Minnesota congressional delegation, Gov. Tim Pawlenty compared Obama’s plan to the Bay State’s, noting: “That state’s experience should caution Congress against this approach” because “costs have been significantly higher than expected.”

Despite the national spotlight on its first-in-the-nation work, the Connector agency has in just a year and a half larded its bureaucracy with a dozen directors and assistant directors, and 14 bosses with the word “manager” in their titles. It also doled out 3 percent raises this year. The agency has 89 staffers on its payroll and is headed by Executive Director Jon M. Kingsdale, who makes $238,703.

Richard Powers, spokesman for the Connector, defended the salaries, saying they are in line with the employees’ “experience, knowledge and responsibilities.”

“There are people who came here from the private sector who took a cut in pay just to be involved in something that’s cutting edge,” Powers said.

Saying the agency was in “ramp-up mode” when there were only 22 employees in 2007, Powers said they had always projected a roughly 50-member staff.

The Connector has signed up 439,000 newly insured Bay State residents since it was created by the Legislature in 2006. Customers pay between 3.5 to 4.5 percent from their insurance costs for the agency’s salaries, Powers said.

The state, which has struggled with subsidizing the new law, spent $800 million to insure low-income residents last year.

In some cases, the Connector’s titles appear redundant. There is, for example, a chief communication officer, chief information officer, director of public affairs and chief marketing officer – all at six-figure salaries.

“The agency has exceeded my worst expectations. It’s clearly bloated and top-heavy with a number of positions that seem to be expendable,” said David Tuerck of the Beacon Hill Institute, a conservative think tank.

Rick Lord, head of Associated Industries of Massachusetts, who sits on the unpaid board that oversees the Connector, said he would be open to re-examining the higher payroll now that the state has insured all but 2.6 percent of the population. “It’s always good to revisit these issues on some kind of regular basis,” Lord said.

The Connector is just one of 52 quasi-state agencies under review by Gov. Deval Patrick, who announced the study after his disastrous push to install Sen. Marian Walsh as the $175,000 assistant director of the Health and Education Facilities Authority.

“The very life of these quasis should be in jeopardy,” said Montigny. “Their only purpose is to provide inflated salaries and bury patronage hires, and they’re generally less accountable and less effective.”

Article URL: http://www.bostonherald.com/news/politics/view.bg?articleid=1189479

GOP doesn’t dare challenge this government health care

By Eric Zorn
Chicago Tribune
Friday, August 07, 2009

Nice poker play last week by U.S. Rep. Anthony Weiner.

As the House Energy and Commerce Committee was marking up health-care reform legislation, the New York Democrat offered up an amendment to abolish Medicare.

His point? Not to get rid of the program that provides insurance for America’s seniors on the 44th anniversary of President Lyndon Johnson’s signing of the Medicare Act of 1965, as he explained in his speech. But “to clarify one of the great, enduring mysteries.” Where do “my Republican friends stand on the issue of government-run health-care?”

Members of the GOP do carry on quite a bit about how awful it is, he observed, quoting several of them arguing that publicly funded health plans such as those now being proposed will lead to inefficiencies, rationing and the breaking of the doctor-patient bond.

But Medicare — along with comprehensive coverage for active military, veterans and American Indians — “is not only government-run health care, but it’s remarkably efficient,” Weiner said. Imperfect in some ways, of course, but “a pretty darn good model of what a public plan [covering everyone] might look like.”

His voice moist with sarcasm, Weiner addressed Republicans on the committee: “This is your opportunity . . . to eliminate the Medicare Act. Once and for all, stamp out the scourge of public, government-run, government-administered, single-payer health care. This is your chance. . . . I dare ya. I double dare ya. Vote ‘yes’ on this and then go home and explain to your constituents, how you’re so philosophically opposed to publicly funded health care that you voted to eliminate Medicare.” (Read or watch his whole five-minute speech here)

Lacking a triple-dog dare, the Republicans on the committee — along with the Democrats — unanimously voted no on Weiner’s amendment.

See, Medicare, despite its faults, is an extremely popular and entrenched program. I could find no public opinion polls in the modern era that have even bothered to ask if it should be abolished and grandma and grandpa dumped back into the private health-care insurance market. Similarly, I couldn’t find any recent polls in Canada that asked Canadians if they wanted to abandon their national health-care program in favor of an American-style system.

A Harris-Decima poll released last month showed 82 percent of Canadians prefer their nation’s health-care delivery system to ours.

A June, 2008, poll commissioned by the Globe and Mail newspaper and the CTV Television Network found 91 percent of Canadians saying the same.

An Ipsos/McClatchy poll last month found 65 percent of Canadians (and 49 percent of Americans) tending to agree with the statement “I currently have access to all of the health-care services I need without it costing me more than I can afford.”

Admittedly, that same poll found 74 percent of Canadians (and 53 percent of Americans) saying they had to “wait a long time for an appointment when . . . referred to a specialist.” Few would deny that there are gaps and delays in Canada’s system, and a Health Council of Canada report on public perceptions found 54 percent of Canadians in 2004 saying the health system north of the border needs “some fairly major repairs.”

Yet an unscientific Canadian Broadcasting Corp. poll taken that same year named Tommy Douglas — who led that nation’s fight for universal health care in the 1960s — as the Greatest Canadian of all time.

What this suggests is that if, somehow, the Democrats overcome the well-funded campaign against significant health-care reform and create a Medicare-style program for everyone, it, too, will eventually become untouchably popular.

Forty-four years from now, to prove a point, some wag in Congress will raffishly, ironically rise to propose a return to the pre-2010 health-care system in which more than 40 million Americans were uninsured and those who were fortunate enough to be covered had private bureaucrats standing between them and their doctors.

His proposal will go down to unanimous defeat. And some other wag in what used to be called a newspaper will praise him for his poker play.

Bending the cost curve

Health Debate: Costs and Benefits

The New York Times
Letters
August 4, 2009

To the Editor:

Universal coverage and cost control are not conflicting aims.

Canada spends 10 percent of gross domestic product on health care, and everyone is covered. The United States spends 16 percent of G.D.P., but tens of millions lack coverage. The cost difference is almost entirely due to higher administrative costs and higher prices, which are directly related to the economics of a multi-payer system.

The lessons from Canada and other countries are clear. If you focus on cost control, you will fail. If you cover everyone because it’s decent and just, you will also achieve economic sustainability.

America, it’s time to do the right thing and then reap the rich rewards of moral public policy.

Michael M. Rachlis
Toronto, Aug. 2, 2009

The writer, a doctor, is a health policy consultant.

http://www.nytimes.com/2009/08/05/opinion/l05health.html?ref=opinion

And…

U.S. Health Spending Breaks From the Pack

By Catherine Rampel
Economixl
The New York Times
July 8, 2009

The following graph shows that the United States is the only nation that has failed to slow the growth in health care costs in spite of also being the only nation of those listed that has not provided universal coverage.

health spending per capita in US 2000 PPP dollars, OECD countries

If there is no image in this message, the graph can be accessed at this link:
http://economix.blogs.nytimes.com/2009/07/08/us-health-spending-breaks-from-the-pack/

And…

Senators Closer To Health Package

By Shailagh Murray and Lori Montgomery
The Washington Post
August 6, 2009

The emerging Finance Committee bill would shave about $100 billion off the projected trillion-dollar cost of the legislation over the next decade and eventually provide coverage to 94 percent of Americans, according to participants in the talks. It would expand Medicaid, crack down on insurers, abandon the government insurance option that President Obama is seeking and, for the first time, tax health-care benefits under the most generous plans. Backers say the bill would also offer the only concrete plan before Congress for reining in the skyrocketing cost of federal health programs over the long term.

Spurred by the CBO director’s startling assertion last month that measures drafted by other committees would not bend the “cost curve,” negotiators on the finance panel are also studying a plan to fine insurance companies that do not pay providers electronically, a plan to reduce payments to providers to force them to increase efficiency and a plan to study the comparative effectiveness of various medical treatments.

http://www.washingtonpost.com/wp-dyn/content/article/2009/08/05/AR2009080503996.html?hpid=topnews

Comment:

By Don McCanne, MD

Once again. The stated goals of health care reform are 1) to cover everyone, and 2) to slow the growth in health care costs so that health care is affordable. So what is Congress doing?

The Senate Finance Committee now would leave 6 percent without coverage, and none of the other bills are truly universal either. Based on the policies contained in the bills, it is likely that the estimates of individuals that would be left out are very conservative, and many more will remain uninsured. So much for universal coverage.

What about bending the cost curve? Most of the legislative measures are aimed at controlling federal spending on health care. Very few of the policies would have any real impact on slowing the growth of our total national health expenditures. This means that more health care costs will be shifted from the government to individuals and employers. Bending the cost curve of the federal budget is of no value if the cost curve of our national health expenditures continues on its current trajectory.

Will private insurance reform slow cost increases? All Congress is asking of the insurance industry is that they guarantee the availability and renewability of insurance coverage. That can have no impact whatsoever on total health care costs, but it does increase health insurance premiums since those high-cost individuals who are currently shut out would then be allowed to purchase coverage in the private plan risk pools. Higher private insurance premiums is not exactly what most Americans want.

Michael Rachlis is right. Look at the curves. Every other nation has adopted health care financing systems – social insurance programs – which have allowed them to moderate the trajectory of health care spending, while providing universal coverage. The United States remains the outlier on both counts.

The members of Congress are diddling with policies that they wish would control costs, but at best will only sanitize the federal budget, while they insist in leaving in place our unique, American-style multi-payer system that can never provide affordable health care for all of us.

An improved Medicare-for-all program would bend our cost curve into the sustainable path shared by all other nations, and would take care of all of us. Let’s go for it!

Health Insurance Exchange? Lessons from California

Building a National Insurance Exchange: Lessons from California

California HealthCare Foundation
Issue Brief
July 2009

Among the deliberations now taking place in the nation’s capitol regarding federal approaches to expanding health coverage, virtually all incorporate the idea of an insurance exchange – an entity to which people can go to select a health plan from a broad range of offerings. Over the past 15 years, California gained extensive experience in designing and operating just such an exchange, an effort that ultimately proved unsustainable.

The California Exchange

The Expectation

1. Provide an easy to navigate single point of entry where people could go to choose among several health plans.

2. Reduce the cost of coverage, using three primary mechanisms:

* Reduce administrative costs by achieving economies of scale
* Command lower prices
* Foster market competition

3. Enhance portability of coverage

The Reality

The actual experience of the California exchange taught some hard lessons. It showed that none of theses objectives is easily achieved.

The Participation Problem

… as long as the exchange is not the exclusive source of coverage for some populations, health plans may be reluctant to participate…

Insurers do not particularly like the head-to-head competition that is a feature of the exchange concept… Insurers always prefer to insure whole groups directly rather than compete in the exchange.

The Elusiveness of Savings

* Few administrative efficiencies
* A lack of pricing power
* Exposure to adverse selection

People involved in the operations of the California exchange agreed that when there is competition for the same customers within and outside the exchange, the exchange is in “extreme peril” of becoming a victim of adverse selection… Eventually the exchange will fail.

Choosing the Right Model

But once individual choice is part of the exchange design, insurers will prefer to generate business outside of the exchange, as occurred in the California experience… The insurers will still have an incentive to direct higher-risk people to the exchange rather than insuring them directly, in hopes that they might pass off some of the “bad” risks to other insurers.

http://www.chcf.org/documents/insurance/BuildingANationalInsuranceExchange.pdf

For a description of the Health Insurance Exchange proposed in the House Tri-Committee bill, insert H.R.3200 in the Thomas search box and read Title II:
http://thomas.loc.gov/

Comment:

By Don McCanne, MD

Most progressive policy wonks observing the reform process taking place in Washington have been quite smug. As the battles take place over a public option, over taxing employer-sponsored plans, or over the eligibility thresholds for government subsidies, these wonks are complacent knowing that the really important reform taking place is the establishment of the Health Insurance Exchange. Or so they believe.

Within the Exchange the regulated private insurance industry will have to provide standard benefit packages, at affordable premiums made possible by competition, and without the intrusive perversities that currently permeate the industry and its products. What could be wrong with this?

President Obama and the Democrats in Congress are currently facing a barrage of criticism for supporting the government takeover of health care. To fend off this criticism, what are the very first words out of President Obama’s mouth? “You can keep the insurance you have!” So much for an insurance exchange market of comprehensive, affordable private health plans.

Why would a phenomenally successful private insurer ever want to compete with itself by offering a heavily regulated Health Insurance Exchange product that has unaffordable premiums because of adverse selection? Because of the requirement of risk adjustment within the Exchange, and because individuals and employers with high health care costs will seek relief in the Exchange, all products offered by the Exchange will be too expensive.

The Health Insurance Plan of California (later PacAdvantage) was designed not unlike the current federal proposals – an insurance exchange especially geared for small businesses. Because of adverse selection, it became a victim of the death spiral, and closed in 2006.

The only way a Health Insurance Exchange could work would be if we moved all existing private plans into the Exchange, and established a system that would effectively pool risk. Even then it would be very expensive, partly because of the profound administrative inefficiencies, and it would still fall short on universality and equity. And at that we would still have to address the problem of the very large sector of our population who would not qualify for subsidies but who still could not afford the high premiums and out-of-pocket expenses of private insurance.

The least expensive, most efficient, and most effective method of ensuring that everyone has affordable access to the health care that they need is a single payer, Medicare-for-all, national health program. There will be a lot of noise on health care reform during the August recess. Just make sure that our noise is the loudest!

Health Debate: Costs and Benefits

Letter to the Editor
New York Times
August 5, 2009

To the Editor:

Universal coverage and cost control are not conflicting aims.

Canada spends 10 percent of gross domestic product on health care, and everyone is covered. The United States spends 16 percent of G.D.P., but tens of millions lack coverage. The cost difference is almost entirely due to higher administrative costs and higher prices, which are directly related to the economics of a multi-payer system.

The lessons from Canada and other countries are clear. If you focus on cost control, you will fail. If you cover everyone because it’s decent and just, you will also achieve economic sustainability.

America, it’s time to do the right thing and then reap the rich rewards of moral public policy.

Michael M. Rachlis
Toronto, Aug. 2, 2009

The writer, a doctor, is a health policy consultant.

House vote on single payer will be historic first, doctors group says

Physicians call on lawmakers to 'do the right thing' on health reform

FOR IMMEDIATE RELEASE Aug. 5, 2009 Contact: Quentin Young, M.D., (312) 782-6006, info@pnhp.org Mark Almberg, PNHP, (312) 782-6006, mark@pnhp.org David Lerner or Karmen Ross, Riptide Communications, (212) 260-5000 Hailing last week’s pledge by House Speaker Nancy Pelosi to hold a floor debate and vote on single-payer health reform this fall, a group of 16,000 physicians is launching an intensified campaign to educate lawmakers about the urgency of a “Medicare-for-All” solution to the nation’s health care crisis. Leaders of Physicians for a National Health Program (PNHP) say their campaign includes a stepped-up program of visits by doctors to House members in their home districts during the August recess. Last Friday’s commitment by Pelosi (D-Calif.) to Rep. Anthony Weiner (D-N.Y.) to put his single-payer amendment to H.R. 3200, the House leadership’s health reform bill, to an up-or-down vote before the full House has set the stage for first-ever floor vote of its kind. The House debate on the amendment could begin as early as September. “Single payer has gone from being ‘off the table’ to ‘on the floor,'” said Dr. Quentin Young, national coordinator of PNHP. “This dramatic turn of events is a striking indicator of our success. It shows the House leadership recognizes the strong public support – including among doctors – for removing the wasteful insurance company middlemen from our health system and redirecting the resultant savings into care.” Weiner’s amendment would delete most of the language in the House bill and instead substitute language from H.R. 676, the single-payer bill introduced by Reps. John Conyers Jr. (D-Mich.) and Dennis Kucinich (D-Ohio). The Weiner amendment, unlike the House leadership’s bill, assures universal, comprehensive, and high-quality coverage, free choice of doctor and hospital, and no co-pays or deductibles through a publicly financed system similar to Medicare. Young said that because of massive savings on private insurance overhead and paperwork, the amendment would entail no increase in U.S. health spending, in contrast to the House bill’s $1 trillion price tag over 10 years. “By recapturing the administrative waste associated with our present multi-payer, for-profit private insurance system, estimated to be $400 billion annually, a single-payer program would have more than enough resources to cover everyone who lacks insurance now and to upgrade everyone else’s coverage,” he said. “A single-payer system would also possess strong cost-control tools like bulk purchasing of drugs, negotiation of fees and global hospital budgeting, controls that are notably absent in the House bill,” he said. Young says many union, civic and faith-based groups will be watching how lawmakers vote with an eye to the 2010 election cycle. “Lawmakers now have a golden opportunity to stand up for the best interests of their constituents, to rebuff the private, for-profit health insurance industry, and to assure the health of our nation,” he said. He continued: “Many members of Congress – including Speaker Pelosi – have told constituents that they personally support a single-payer, Medicare-for-all approach, but claim they can’t vote for it because it’s not politically feasible. Yet polls that show they would have the public’s support for such a stand. Now we’ll be watching to see whether their votes match their words.” Single-payer bills have been introduced in Congress repeatedly over the past 60 years – starting with the Wagner-Murray-Dingell bill in the 1940s, and including the Kennedy-Griffiths bill of the 1970s and the Wellstone, McDermott and Russo bills of the 1990s – but none has ever reached the floor of the House or Senate.

Physicians for a National Health Program (www.pnhp.org) is an organization of 16,000 doctors who advocate for single-payer national health insurance. Several leaders of PNHP have testified before congressional committees in the current health reform debate. (See links below). To interview any of these or other spokespersons, please call (312) 782-6006. Testimony of Steffie Woolhandler, M.D., M.P.H., on medical bankruptcy and health reform before the House Judiciary Committee’s Subcommittee on Administrative and Commercial Law, July 28, 2009 https://pnhp.org/news/2009/july/testimony_of_steffie.php Testimony of Dr. Woolhandler before the Health Subcommittee of the House Energy and Commerce Committee, July 24 https://pnhp.org/news/2009/june/testimony_of_steffie.php Testimony of Quentin Young, M.D., M.A.C.P., before the House Ways and Means Committee, June 24 https://pnhp.org/news/2009/june/testimony_of_quentin.php Testimony of Margaret Flowers, M.D., before the Senate Health, Education, Labor and Pensions Committee, June 11 https://pnhp.org/news/2009/june/testimony_of_margare.php Testimony of Dr. Walter Tsou before the House Subcommittee on Health, Employment, Labor and Pensions, June 10 https://pnhp.org/news/2009/june/single_payer_bold_.php Testimony of David U. Himmelstein, M.D. before the Health, Employment, Labor and Pensions Subcommittee of the House Committee on Education and Labor, April 23 https://pnhp.org/news/2009/april/testimony_of_david_u.php

Why Single Payer Advocacy Matters Now More Than Ever

John Nichols
The Beat, a Nation blog
08/04/2009

How should serious supporters of health-care reform spend the month of August?

Not by getting trapped in the narrow “debate” between “party of no” Republicans who favor no reform at all, and Blue Dog Democrats, whose “reform” is to make a bad system worse.

And not by campaigning for “buzz words — “public option,” “employer mandates” — or whatever President Obama or Speaker Pelosi happen to favor this week. There will be plenty of advertising and organizing to that end, including a $15 million expenditure by the AFL-CIO.

Americans who want to tip the debate in the most progressive direction should take advantage an opening provided at the last minute during negotiations to get a bill approved by the House Energy and Commerce Committee.

And they should do so by advocating even more aggressively for single-payer health care.

One of the many side deals that House Speaker Nancy Pelosi, D-California, and Energy and Commerce chair Henry Waxman, D-California, had to cut to get the votes they needed for the compromise reform measure that was approved before the House broke for its August recess will allow a floor vote on real reform.

Waxman sidetracked a move by New York Congressman Anthony Weiner to replace his proposal with a single-payer plan by agreeing — with Pelosi’s approval — to schedule a vote by the full House on the plan to replace the current for-profit system with a Medicare-style plan that covers all Americans and controls costs.

“A lot of members on our committee want a vote on that,” Waxman, a California Democrat who has worked closely with the Speaker to advance a moderate reform agenda, said of single-payer. “I believe their wishes will be accommodated.”

Weiner is declaring a sort of victory, saying that: “Single-payer is a better plan and now it is on center stage. Americans have a clear choice. Their Member of Congress will have a simpler, less expensive and smarter bill to choose. I am thrilled that the Speaker is giving us that choice.”

Of course, getting a September vote on single-payer does not mean that single-payer will get the votes.

With the Obama administration and congressional leaders determined to compromise rather than fight, it is unlikely in the extreme that the current debate will end with the adoption of a single-payer plan. Even if the House approved one, it would still face a fight in the Senate.

But just as Republicans are willing to just say “no” to any reform, progressives should just say “yes” to real reform.

Campaigning for single-payer in August — by demanding that members of the House agree to support such a plan when it comes up for a vote, and by urging senators to schedule and support a similar vote in their chamber — is the best was to assure that whatever reform ultimately comes will err on the side of Americans who need health care rather than insurance companies that would deny them that care.

At the very least, single-payer advocacy should preserve an amendment sponsored by Congressman Dennis Kucinich, D-Ohio, which would allow states to experiment with single-payer programs even if the federal government refuses to do so. That’s a significant matter, since Canada’s national health care program began with single-payer experiments at the provincial level.

The worst mistake that progressives could make in August would be to put their time and energy into getting members of Congress to agree to back a barely-acceptable compromise that could end up being unacceptable by the time the lobbyists and their political handmaidens finish with it.

Better to get representatives and senators to commit to back single-payer bills.

That does not prevent them from ultimately agreeing to compromise measures.

But it gets them to begin on the side of real reform, and lessens the likelihood that the eventual deals will be as bad as the schemes that the Blue Dogs tried to impose before the break.

Perhaps just as importantly, a strong vote for single-payer will remind the Obama administration that the president was right when he said six years ago that single-payer was the right response to the mess that private insurers and their allies have made of our health-care system.

Groups that back single-payer are gearing up for August activism.

Keep track of the most important advocacy on the health care issue by following the work of Physicians for a Natonal Health Program at www.pnhp.org, the California Nurses Association at http://www.pdamerica.org.

Activist David Swanson is suggesting that this should be “Single-Payer Summer.”

Swanson’s right.

Only if Americans who favor real reform make this “Single-Payer Summer” will we have anything worth considering in the fall.

http://www.thenation.com/blogs/thebeat/458046/why_single_payer_advocacy_matters_now_more_than_ever

We need a single payer

By Laura McClure
The Daily Star (Oneonta, NY)
Published: August 01, 2009

People in our area, and across the country, desperately need health-care reform. If the reforms President Obama is urging pass Congress, many uninsured people will get access to some kind of insurance, and that could be a great thing for them. But it’s hard to exaggerate what a hash Congress and Obama have made of fixing our famously dysfunctional health-care system.

What we need is a single federal insurance plan that covers everyone from birth to death. An improved version of Medicare that stays with you no matter where you work — and once you’ve retired. We’d have complete choice of doctors and the full range of private and public hospitals to choose from.

What we wouldn’t have is 1,200 private insurance companies feeding off our need for health care — forcing hospitals and doctors to hire paper-pushers instead of people who actually provide care. Almost a third of the money we spend on health care in the U.S. can be attributed to insurance industry-generated waste.

One of the great virtues of such a “single-payer” system is that it would actually be cheaper than what we have now — and way cheaper than the trillion-dollar plan our politicians are now cooking up. Every industrialized country with a version of single-payer spends about half what we do — or less — for health care, and they have better health outcomes and more satisfied citizens.

Obama knows this. He used to be a vocal supporter of single-payer health care. He still says it would be the best system if we were starting from scratch. Instead, we’re starting with an antiquated employment-based system, a cobbled together mishmash of private and public health plans.

The sheer bureaucracy of it is driving us all insane. Yet now we’re thinking we should shovel a trillion more into this system to prop it up for awhile.

This is a staggering failure of political leadership. What are the politicians so afraid of? Well, the insurance industry. Republicans and Democrats, including Obama (big-time), were elected in part through the massive support of the insurance companies and other corporate interests with a stake in our current system. The guy who is ferrying legislation through the Senate to finance health-care reform, Max Baucus of Montana, a Democrat, is swimming in a sea of health industry money.

But I think it’s more than just money. It’s timidity — fear of real change. And that’s not just a problem politicians have. We’ve all got it. We get locked into our mind-sets and can’t get out.

Republicans tend to be imprisoned by their idea that government can’t do anything right and that all it does it waste money. Dear Republicans: If you are concerned about fiscal responsibility, please examine single-payer health care. It’s a bargain — and it’s the only way to cover everyone well without spending more money.

Republicans and some Democrats are also stuck on the idea that “competition” is always good.

They hope that competition _ including between private insurance companies and a public insurance plan — will save us money. Hmm. Don’t we already have plenty of insurance company competition — and a health-care system that costs way more than any other on the planet?

As for private-public competition, we’ve got that in the Medicare Advantage program, which allows private companies to pick off some Medicare recipients. This has caused the cost of Medicare to spiral up. Two international agencies _ the World Health Organization and the Organization for Economic Cooperation and Development — did studies of what happened when different countries tried introducing private competition into their health care systems with the aim of reducing cost. Both studies found that it increased costs and decreased the level of fairness in the system.

But there’s a larger philosophical problem here, Republicans. (I’ll get to Democrats soon!) Imagine someone is breaking into your house. You flip desperately through the yellow pages for private cops who will accept your crime insurance plan. You call seven of them. Unfortunately, they’ve all got data on you, and it turns out you were recently laid off from your job and aren’t that great a prospect. So only one private cop shows up (way too late), and makes a bid to provide some law enforcement — for a huge sum you can’t afford.

Thank goodness for our publicly funded, universal police force! There’s only one number to call, and the service is free at point of use. Yes, we pay taxes to support our cops. But we’re glad to, because they help keep us safe. Everyone’s covered. And nobody is making a calculation about whether you “deserve” police protection or not.

So what’s so different about a medical crisis? Instead of someone breaking into your house, you’ve got cancer or heart disease stalking you. You need care. You don’t need bills, deductibles, co-pays, or competing private companies angling for your money — or worse, denying you care.

But Republicans aren’t the only ones locked inside an ideological box. Many Democrats have the idea that any amount of money is okay to spend on “human needs.” We just need to swallow that bitter trillion-dollar pill in the interests of health care for all.

But this is one case where spending more money is not the answer. We need to spend less money — or at least no more than we are right now. The average family health care premium has jumped to almost $13,000. How much higher can it go? Health care is literally eating up the budget on the national level as well: The U.S. now spends 16 percent of its GDP on health care — compared to, say, less than 6 percent for education. By comparison, Canada spends 10 percent. Taiwan, which adopted a single-payer system in 1995 after a lot of shopping around, spends 6 percent of GDP on health care and has better health outcomes than we do. I wish we were that smart!

We’ve got to ask where all our money will be going. The current health-care proposals will use our tax dollars to help people buy private health insurance. This may increase the number of people who are considered “insured,” but it will also increase exponentially the profits and paper-pushing of insurance companies — which is why the insurance industry largely supports this reform. Providing more money for this system is like continually putting change in a pocket with a hole.

Another question we have to ask: Who suffers most from continually spiraling health-care costs? Even if the plan is partly financed through a tax on the very rich (which I’d be for), the real victims of rising costs will be poor and working class people. Just look at the state of Massachusetts, which passed a health reform bill not unlike the ones Congress is now considering. More people now have some kind of insurance coverage, but the plan is busting the budget.

The state has had to cut social services and ramped up premiums and co-pays for the health plan. The out-of pocket costs are so high, many of the newly “insured” can’t afford to go to the doctor or get their prescriptions filled. In a 2009 survey, 44 percent of low-income residents said they were hurt by the plan; 33 percent said they were helped. (Question: Are you “insured” if you don’t get that lump in your breast checked out because you just can’t swing the $1,000 deductible?)

Obama and others maintain that their reform plans will lower costs through things like computerized record-keeping and moving away from a fee-for-service approach. These are good ideas, but there’s little evidence they will save money any time soon. And unfortunately trying to implement any rational money-saving plan under our current system is like herding cats. There are so many players, many of whom are in it for themselves, and no one has sufficient clout to enforce the rules. Under a single-payer plan, money-saving reforms would be a lot easier to implement and ultimately more effective.

Some people — both Democrats and Republicans — just can’t fathom a reform that would involve eliminating an entire industry, namely the health insurance industry. What would happen to all those workers?

It’s a good question, and one that has been raised by Obama and many others, including local Rep. Michael Arcuri. Any Medicare-for-All program we enact needs to include a major transition plan for workers in this industry. The bill I support, HR 676, would give displaced insurance workers first dibs on jobs in the new health-care system and two years of unemployment benefits if they don’t find one. (Note: Even a more generous transition plan would be a drop in the bucket compared to the costs the insurance industry now imposes on us all.)

But is that really what our fear of true reform comes down to? An insistence on a jobs program for health insurance industry workers? Personally, I would support a major jobs program. But I’d want the jobs to be useful ones. And though I’m sure most insurance company employees are good people who do the best job they can, their role in our health-care system is to help their company make a profit off people’s desperate need for medical care. And we just can’t have that. We can’t afford it, and it’s wrong.

Whether the current health-care reform plans pass or fail, when it’s all over, we’re still going to have a big health-care mess on our hands. Someday we’re going to have to summon up all our courage and go for the real thing.

Laura McClure is a member of the Healthcare Work Group of the Coalition for Democracy of Central New York.