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Private insurance companies push for 'individual mandate'

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Private insurance companies push for 'individual mandate'

By Lisa Girion
Los Angeles Times
June 7, 2009

One in an occasional series on healthcare reform.

Some may find it hard to believe that the U.S. health insurance industry supports making major changes to the nation’s healthcare system.

The industry, after all, scuttled President Clinton’s healthcare overhaul bid with ads featuring “Harry and Louise” fretting about change.

But this time, it turns out, the health insurance industry has good reason to support at least some change: It needs it.

Private health insurance faces a bleak future if the proposal they champion most vigorously — a requirement that everyone buy medical coverage — is not adopted.

The customer base for private insurance has slipped since 2000, when soaring premiums began driving people out. The recession has accelerated the problem. But even after the economy recovers, the downward spiral is expected to continue for years as baby boomers become eligible for Medicare — and stop buying private insurance.

Insurers do not embrace all of the healthcare restructuring proposals. But they are fighting hard for a purchase requirement, sweetened with taxpayer-funded subsidies for customers who can’t afford it, and enforced with fines.

Such a so-called individual mandate amounts to a huge booster shot for health insurers, which would serve up millions of new customers almost overnight.

“I think that’s why we’ve seen the industry basically trying to play the administration’s game,” said Jane DuBose, an analyst with industry tracking firm HealthLeaders-InterStudy. “They really could be licking their chops over the potential here.”

The industry says its interest in change flows not from narrow self-interest but from broader concerns.

“What’s driving this is we have 47 million people who don’t have access to the system, who get help through emergency rooms, and that results in higher costs and inefficient care,” said Robert Zirkelbach, a spokesman for industry trade group America’s Health Insurance Plans. “There’s both a social and economic reason to get everybody in the healthcare system.”

Jay Gellert, chief executive of Woodland Hills-based Health Net, said industry support for certain changes is driven by “a recognition that public frustration with many of the problems in the system [is] increasing pretty significantly. So I think there’s as much of a commitment to this because we’ve seen other industries where they haven’t dealt with issues early enough, like financial services and auto, and that’s not a happy place.”

Still, industry observers say, private insurers need the government’s help to transform some of the nation’s 45 million uninsured residents into paying customers.

Private insurers lost an estimated 9 million customers between 2000 and 2007. In many cases, people lost coverage because they or their employers could no longer afford it as premium increases outpaced wage growth and inflation.

Recession job losses are adding to the toll. Some economists estimate that every percentage-point increase in the jobless rate adds 1 million people to the ranks of the uninsured.

The industry’s real trouble begins in 2011, when 79 million baby boomers begin turning 65. Health insurers stand to lose a huge slice of their commercially insured enrollment (estimated at 162 million to 172 million people) over the next two decades to Medicare, the government-funded health insurance program for seniors.

“The rate of aging far and away exceeds the birth rate,” said Sheryl Skolnick, a CRT Capital Group healthcare investment analyst. “That’s got to be very scary. . . . This is the biggest fight for survival managed care has ever faced, at least since they went bankrupt in the late ’80s.”

With Democrats in power and public sentiment in favor of change, the industry can’t afford to flatly oppose it, said Julius Hobson, a Washington lobbyist for hospitals and insurers with the law firm Bryan Cave.

“This time, you get the sense something is going to happen,” he said. “So to stand up and just say no is probably not wise, because politically you could get run over.”

For insurers, getting “run over” would be the adoption of a so-called single-payer plan, in which the government pays all medical bills. Such a plan, though widely viewed as politically unfeasible this year, would wreak havoc on the private insurance market.

The best way for the industry to preserve the private insurance market — and derail the campaign for a single-payer system — may be to go along with more palatable proposals on the table now, said Jeffrey Miles, a healthcare analyst and president of the Miles Organization, a Los Angeles insurance brokerage firm.

“If healthcare goes down this year, you are going to end up with single-payer care much sooner than anyone expected,” he said.

But there is a limit to how much change the industry will abide. It draws the line at proposals, supported by President Obama and others, to offer consumers a public insurance alternative to private coverage.

The idea is that consumers could buy into a government-run health plan, such as or similar to Medicare or the federal employees insurance program.

Proponents say that if consumers are required to buy coverage, it is only fair to give them a public option.

In a recent letter to Senate Finance Committee Chairman Max Baucus (D-Mont.), for example, Jerry Flanagan of the Santa Monica-based advocacy group Consumer Watchdog wrote that adopting an individual mandate without a public alternative would amount to “a bailout for HMOs — whose greed, waste and indifference to our health have created the current mess.”

The industry fears that the government would force lower fees on hospitals and physicians, enabling a public health insurance plan to offer consumers a better bargain.

That, they say, would make it hard for private companies to compete for customers. Insurers also fear that a public option could easily be converted later into a single-payer healthcare system.

Health insurers don’t see a public plan “as the nose of the camel under the tent; they see it as the front half of the camel under the tent,” said Robert Laszewski, a former insurance company executive and industry consultant.

“They are interested in 45 million new customers,” he said, “but the first thing in everybody’s mind is preserving their right to do business in a way that can be profitable and meet shareholder needs.”

lisa.girion@latimes.com

Testimony of Margaret Flowers, M.D., to the Senate HELP Committee

[The following testimony is the prepared text of the remarks given by Dr. Margaret Flowers at a hearing on “Health Care Reform” conducted by the Senate Health, Employment, Labor and Pensions Committee on June 11 in Washington.]

By Margaret Flowers, M.D.

Dear Chairman Kennedy and Senators,

Thank you for inviting me to speak to you today from the perspective of a physician and activist. I am a pediatrician with experience both as the director of a hospitalist program and chair of pediatrics at a rural hospital and in community-based private practice. I am currently co-chair of the Maryland chapter of Physicians for a National Health Program. PNHP has over 16,000 members nationwide. I also sit on the steering committee of the Leadership Conference for Guaranteed Health Care/National Single Payer Alliance which represents over 20 million people nationwide. I know that today I am speaking on behalf of the majority of people living in America who desire a national health program.

For several decades now we have seen the health care situation in this country deteriorate. Health care providers have struggled to provide care in this increasingly difficult environment and it has taken a toll. We are seeing doctors, like myself, leaving practice, doctors who are refusing to accept health insurance, and a new category of doctors, disruptive physicians. These disruptive physicians are expressing the dysfunction of a health care situation that places obstacles between them and the treatment of their patients.

The greatest obstacle is the private health insurance industry. This industry detracts from the health of our nation rather than adding value.

We have reached a unique point in American history and we have an opportunity for real health care reform. The economic downturn, the millions of Americans who can’t get needed care and the election of a President who understands that health care is a human right place us in the position to finish what President Franklin Delano Roosevelt hoped to accomplish almost 75 years ago in the Social Security Act: a national health system. The lack of a coordinated and comprehensive national health system sets us apart from the other industrialized nations and we see the results in markedly increased costs and poor health outcomes.

Current expectations are high. People are craving change. For decades, reliance on the market and efforts to patch together a system using a public and private mix have failed to guarantee quality health care to every person in America. The reliance on the market dates back to the 1960s when there was a strong belief that America was so different from the other nations that our uniquely American market would solve our health care problems. We were wrong then and it is disappointing to see us continue to cling to this idea. This is not the time for more tinkering, yet that is what we are seeing. This is the time to step back and look at the big picture.

The health care market has produced a situation in which private health insurers rake in obscene profits while millions of Americans suffer from a lack of needed care. We are ranked the worst of 19 industrialized nations in terms of preventable deaths, over 101,000 each year. We have the highest infant and maternal mortalities. Health care is rationed based upon ability to pay. Patients have to wait months to get in to see a doctor and many patients never even make it through the door. We are the country that provides little in terms of employment security and support compared to other nations, yet we tie health insurance to employment. As a result, when people become ill and cannot work or when people lose their jobs because of the economic downturn, they lose their health insurance. There are an estimated 14,000 people losing their jobs every day at present. This means that when our people are most vulnerable, they are the least protected. We are the only nation in which people hold bake sales in order to pay for lifesaving treatment. We are the only nation that allows millions of people to go into bankruptcy because of medical debt.

In 1809, 200 years ago, Thomas Jefferson said, “The care of human life and happiness, not their destruction, is the legitimate responsibility of good government.” It is time to end the destruction of human life in this nation. We have a moral imperative to create a health system that provides health care to all people. Senator Kennedy, I know that you and others who are seated here today understand this and hold this same belief.

The briefing paper put forth by this committee contains reform ideas that would improve health outcomes if they were part of a national system. However, the current reforms will not reach the goals of providing affordable high quality care for all people in America. These reforms will not be universal and will increase health care costs. I have outlined the reasons for this in my submitted testimony.

The plan being put forth at present may be considered to be politically feasible, although I question even that. It will not be practically feasible in that it will not address the fundamental problems in America today. In order to create a national health system that improves health, we need to have a full, open and honest discussion about it. I am thankful that we will start this discussion today. However, there is much to be considered and many people who can provide you with the data that you need in order to have a full deliberation about a national health program based on single payer financing. The LCGHC respectfully requests that your committee and the Senate Finance Committee hold a joint hearing on the merits of a national single-payer health system in order to accomplish this.

The market has been very successful in providing enormous income to the few who administer and invest in the health industry. The price we pay for this is the squandering of our economic, mental and physical health as a nation. The market has failed to improve health and control costs because it is the wrong model. Health care is not a commodity, it is a human right. The United States signed the Universal Declaration of Human Rights in 1948. The other industrialized nations who have followed this human rights approach spend less and have better outcomes.

We must ask ourselves, as we go through this process of reviewing health legislation today, what are the results that we want to see? Will we continue down this path that has failed us for decades? Will we continue to fear the power of the medical-industrial complex? Or will we grasp this opportunity for real change? Will we create a health system based upon these few principles: that everybody has access to the same standard of care, that there are no financial barriers to care or financial consequences as a result of getting needed care and that medical decisions are made by patients in consultation with their medical providers based upon what is best for the patient rather than what they can afford? Will we provide health security, as embodied in the American Health Security Act of 2009, S. 703, so that every person will wake up in the morning knowing that if they need health care, they can get it, plain and simple, because it is their right and not a privilege?

Wrong Turns on the Road to Health-Care Reform

Letter to the Editor
The Washington Post
Wednesday, June 10, 2009

The June 6 news story “‘Single-Payer’ Supporters Challenge Democrats” put single- payer health care into the headlines where it belongs. But Sen. Max Baucus (D-Mont.) still won’t put it on the table. It’s viewed as not being politically feasible, even though it’s favored by huge numbers of doctors, nurses and members of the public. Who’s in charge here, lobbyists and special interests, or the public?

A private insurance company’s mission is to make a profit. Profit is best made by insuring the healthy, screening out the sick and denying health care to anyone unfortunate enough to get sick after enrolling. Managing all this wastes a significant portion of every dollar spent on health care.

It is time to demand meaningful health-care reform, and single-payer is the only proposal that can provide medical and dental care for everyone while saving hundreds of billions of dollars.

JERRY M. EARLL
Washington

The writer is a member of the advocacy group Physicians for a National Health Program.

End Insurance's Bad Incentives

By Steffie Woolhandler and David Himmelstein
The New York Times
Room for Debate
June 18, 2009

There are a variety of bad ways of paying doctors, but no particularly good ones. Fee-for-service health care rewards the overprovision of care; capitation (a set monthly fee per patient) rewards underprovision; and salaries reward just showing up. The minority of physicians (and hospital administrators) who are motivated mostly by money will find a way to game an incentive system rather than do the hard work of providing excellent care.

Even paying doctors based on quality measures (using data from medical records that the doctors themselves create) can be fudged. For example, if you pay doctors more for care of patients with diabetes with extra incentives for controlling blood sugar, some doctors will neglect to properly instruct patients to fast before their morning blood tests, falsely diagnosing them as ill. These false diabetics will appear to have superb outcomes since they weren’t sick to begin with.

At the same time, most of the myriad details of care and small kindnesses that make for good doctoring would inevitably go unrewarded, making their neglect essential to a doctor’s financial success.

The Medicare payment system illustrates the false hope of financial savings or improved quality through manipulating financial incentives. The system, which pays health care providers based on “diagnosis-related group,” altered hospitals’ incentives, rewarding short hospital stays instead of long ones. But hospitals quickly adapted, and while Medicare patients’ length of stay plummeted, costs continued to skyrocket.

Financial incentives are not necessary for cost control, and are expensive to administer. A single payer system like Canada’s — in which individuals choose their doctors and other health care providers, but the providers bill one agency for their services — limits entrepreneurial rewards and penalties, covers everyone, and saves much on bureaucracy and profits.

Many American doctors now support a single payer approach because it would improve health and remove the crushing paperwork burden that private insurers impose. Paperwork consumes 31 percent of U.S. health spending, nearly double that of Canada. Our nation wastes $400 billion annually on insurance overhead and useless bureaucracy, money that single-payer reform could shift to patient care. That’s enough to cover all of the uninsured, and to eliminate copayments and deductibles for everyone else. A single payer system would allow doctors to return to the patient-centered care that motivated us to go to medical school in the first place.

In contrast, the Senate Democrats’ proposal to require the purchase of coverage would leave private insurers in charge, and hence sharply increase costs while leaving millions uninsured, or covered by skimpy policies. In 2007, illness and medical bills contributed to 62 percent of personal bankruptcies; most of the medically bankrupt were middle-class families with private insurance. Copayments, deductibles, and loopholes that let insurers deny claims leave millions of Americans in financial ruin. The individual mandate now popular in Congress would merely force the uninsured to buy defective policies – boosting revenues for insurers but not protecting patients.

Unfortunately, adding a public plan option would not correct these flaws. The bureaucratic savings would be minuscule. Moreover, a public plan would be forced to either emulate the bad behavior of its private insurance competitors, or fail in the marketplace — swamped by private insurers that dumped sick, expensive patients onto the public. This kind of tinkering around the edges of our insurance company-dominated system won’t fix it.

Steffie Woolhandler and David Himmelstein are associate professors of medicine at Harvard Medical School, primary care doctors in Cambridge, Mass., and co-founders of Physicians for a National Health Program.

http://roomfordebate.blogs.nytimes.com/2009/06/18/better-medical-care-for-less/

More 'Skin in the Game' May Give Perverse Result

Letters
Wall Street Journal
June 17, 2009

You completely discount any administrative savings from a single-payer system.You also ignore the rising number of bankruptcies related to medical care. Every other country covers its citizens, the way it should be here.

Physicians for a National Health Program estimates savings of over $300 billion yearly in a single-payer plan. Why not debate its proposal on its merits and costs, not the derisive dismissal now taking place in Congress?

Thomas Clairmont, M.D.
Portsmouth, N.H.

Canadians contrast their health care to U.S.'s

Cheaper rates cause debate

By Barry Brown
Washington Times
Thursday, June 11, 2009

TORONTO | For a Canadian facing emergency surgery in the United States, a ride on a privately chartered Lear jet back to Canada is a whole lot cheaper than having the operation in a U.S. hospital.

Canada’s universal health care system will pay for urgent medical care outside the country, but at Canadian rates of about $360 a day for a hospital stay.

That compares with daily rates of up to $5,000 to $6,000 a day in Florida, where tens of thousands of well-to-do Canadian retirees spend each winter.

Before stepping across the border, “the first thing a Canadian thinks about is supplemental health insurance,” said Michael MacKenzie, a spokesman for the Canadian Snowbird Association, which represents about 80,000 migratory citizens from the land of ice and snow.

No wonder President Obama’s plan to expand American health coverage to the uninsured has become such a hot topic north of the border.

If Mr. Obama succeeds, the U.S. could draw even more Canadian doctors and nurses to the U.S., exacerbating a shortage of medical professionals, said Dr. Brian Day, a Canadian health care critic and former head of the Canadian Medical Association.

If Mr. Obama fails, perhaps Canada could open its system to “medical tourism” from the U.S., Dr. Day said.

About 500,000 Americans annually travel to other counties such as India, Thailand and the Philippines for high-quality but much cheaper medical care, he said. Few of them go to Canada, where the notion of funding public hospitals with money from U.S. patients has been politically unacceptable.

The Canadian system insures everyone, and all Canadians have access to basic and critical health care without ever seeing a doctor or hospital bill.

Nevertheless, the demands on the system have led to waiting lists for treatments such as MRI scans, cataract and artery bypass surgeries and hip replacements.

That’s one reason why 70 percent of Canadians have some form of supplemental health insurance, whether or not they plan to visit the United States.

The Canadian system needs fixing, said Dr. Robert Ouellet, president of the Canadian Medical Association.

“We have improved waiting times from years to months in most areas, but people still wait too long even in emergency rooms,” he said.

Dr. Ouellet suggests that the U.S. look elsewhere for models of universal health care.

Both the U.S. and Canadian governments, he said, would do well to examine systems such as one in the Netherlands, which provides universal and broader-based health care through a small number of regulated, private health insurers and government funding at a slightly lower cost than in Canada.

Dr. Catherine Kurozu, a Canadian doctor who has been practicing obstetrics and gynecology in the U.S. and Guam for 13 years, said, “In Canada, there’s an egalitarian attitude I admire. Medical treatment in America depends almost entirely on what insurance company you have and what state you live in.

“In Massachusetts, you get four days in hospital after a C-section birth; in California it’s one day and out the door,” she said.

For Canadian Raymond McEwan, American hospitals are among the best in the world but are focused on making as much money as they can per patient, while in Canada the goal is good medical care for everyone.

In December, he was wintering in Port Richie, Fla., when he checked into a hospital with stomach cramps and pain.

“I’d worked in an auto repair shop for years so I knew all about insurance,” said Mr. McEwan, 68, who had a supplemental policy from a private company.

Over the next several hours, Mr. McEwan said, doctors and nurses came and went, he was given blood tests and an ultrasound and was moved from room to room. He said he was “terrified” that the hospital hadn’t contacted his insurance company: Would he be stuck with an American hospital bill?

Once diagnosed with an infected gallbladder, the hospital was all set to operate and possibly add some repairs to Mr. McEwan’s colon. Before that happened, the hospital apparently got around to notifying his private Canadian insurance company, which put an end to everything.

“A few hours later, I was strapped in a stretcher and my wife and I were on a Lear jet being flown back to Canada,” he said. There, the doctors confirmed the gallbladder infection, deadened the pain and successfully performed Mr. McEwan’s surgery four weeks later.

To save money, Mr. McEwan’s insurance company paid $20,000 for the private flight home and his brief stay in an American hospital.

Mr. MacKenzie of the Snowbird Association said it is not uncommon for U.S. hospital bills to top $100,000, especially when surgery is involved.

Once Mr. McEwan was back in Canada, his insurance company was relieved of responsibility because there are no hospital bills.

“In Canada, the first thing I was asked coming off the plane was, ‘Are you in pain?’ ” he said. In the American hospital, he said, he waited an hour in the emergency room and then five hours more in various rooms without ever being asked whether he needed pain relief.

“It seemed like everyone in the American hospital was working on commission and trying to get me to sign for this and that treatment,” he said. “In Canada, it’s not about making money.”

http://washingtontimes.com/news/2009/jun/11/canadas-health-plan-contrasted-with-us/

Doctors drawing battle lines on health care debate

By Liv Osby
The Greenville News
June 13, 2009

The 64-year-old man with a family history of colon cancer working two jobs has insurance, but can’t afford the co-pays for tests to analyze his rectal bleeding. So he says he’ll wait a year until he’s eligible for Medicare.

Dr. Richard Lucarelli says the solution to this dilemma is a single-payer government health plan that covers everyone.

Dr. John Black says the answer is expanding private insurance to everyone and spreading the risk to make it affordable.

That disagreement is at the heart of the debate over health care reform that began in earnest last week with the introduction of bills to overhaul the system.

Some 47 million Americans are uninsured and millions more have inadequate coverage or go without care because their out-of-pocket costs are too high. Most of them are working.

New research shows that medical bills are implicated in more than 60 percent of bankruptcies and that more than three-quarters of those families were insured.

Experts agree the system needs reform, but are divided over how to do it. And that includes doctors.

Proposed legislation would establish a public insurance plan as an alternative to private insurance, with the government paying health care providers much the way Medicare operates now.

The American Medical Association opposes that idea. Physicians for a National Health Program say that should be the law of the land.

Black, a primary care physician and the newly elected president of the South Carolina Medical Association, says many physicians fear government getting between them and their patients.

In 29 years of practice, he says, he’s watched an easy office visit transform into a Medicare paperwork nightmare that jeopardizes payment if there’s a clerical error.

“That’s a difficult situation when trying to take care of a patient,” he said.

In a letter to SCMA members last week, Black and SCMA board chairman Dr. Gary A. Delaney, wrote that the proposal is “kicking us down the road toward indentured servitude.”

They added that the federal government will dictate which patients to see and which treatments to provide under such a system, and that members should consider measures, short of a strike, to make their concerns known.

“We are sounding the alarm,” he told The Greenville News. “We know things need to be fixed, but if the federal government gets involved, we fear that we will become basically employees of the federal government.”

Lucarelli, a family physician in Duncan and member of PNHP, says that over the past 16 years of practice he’s grown increasingly frustrated by the payment system.

“Patients can’t come to see me because they lack medical insurance and even patients who have insurance can’t afford the deductibles,” he said. “That’s something that most family doctors struggle with on a daily basis.”

Under single-payer, government won’t employ doctors, he said, adding single-payer socializes insurance, not providers.

“That is a misnomer that’s used to scare people…(by) politicians and others with money at stake,” he said. “The government is not going to employ physicians or own hospitals.”

Single-payer advocate speaks to Blue Dogs on health reform

FOR IMMEDIATE RELEASE
June 19, 2009

Contacts:
Robert Stone, M.D., cell: (812) 369-6414, (812) 333-8085, grostone@gmail.com
Mark Almberg, (312) 782-6006, cell: (312) 622-0996, mark@pnhp.org

Dr. Robert Stone, a leader of Physicians for a National Health Program, an organization of 16,000 physicians who advocate for single-payer national health insurance, spoke to the Health Care Task Force of the Democratic Blue Dog Coalition on Capitol Hill Thursday.

In his remarks, Stone emphasized how single-payer health reform, as embodied in the U.S. National Health Care Act, H.R. 676, is the most fiscally responsible way of addressing the nation’s health care woes.

Stone said that by replacing the for-profit, private health insurance companies with a single-payer program — an improved Medicare for All — the United States would save more than $400 billion in administrative costs annually. He also said that single payer is only reform proposal that includes effective cost-containment provisions.

“In fact, the strongest argument for Medicare for All is that it is the most efficient reform proposal with the greatest ability to control costs,” Stone said. “That is exactly why so many members of the ‘medical-industrial complex’ oppose such a plan, because, as the Nobel Prize-winning economist Paul Krugman has said, ‘Remember that what the rest of us call health care costs, they call income.’

“In short, single payer is the only plan that pays for itself and covers everyone. It’s fiscally conservative and socially responsible,” Stone said.

The Blue Dog Coalition’s Health Care Task Force was launched in March at the time of President Obama’s White House summit on health care reform. It is chaired by Rep. Mike Ross of Arkansas, and its members include Rep. Jim Cooper of Tennessee, Rep. John Barrow of Georgia, Rep. Earl Pomeroy of North Dakota and Rep. Baron Hill of Indiana, among others. Like the Blue Dog caucus itself, the task force emphasizes fiscal conservatism.

Rep. Hill helped arrange the invitation for Stone to speak to the group.

Several members of the Blue Dog caucus were co-sponsors of the single-payer bill, H.R. 676, in the 110th Congress.

Stone is the director and co-founder of Hoosiers for a Commonsense Health Plan (HCHP) and the state coordinator of Indiana for Physicians for a National Health Program. He has been an emergency department physician at Bloomington (Ind.) Hospital since 1983, and was the medical director of the Community Health Access Program Clinic in Bloomington from 2005 to 2007, until it was transformed into the Volunteers in Medicine Clinic. He continues to volunteer at the new clinic. He is assistant clinical professor of emergency medicine at Indiana University School of Medicine.

Born and raised in Evansville, Ind., Stone graduated from Dartmouth College and the University of Colorado Medical School. He is a Diplomat of the American Board of Emergency Medicine.

Scrushy and the medical-industrial complex: a lesson for reformers

Judge orders Scrushy to pay $2.8B to shareholders

By The Associated Press
The Washington Post
June 18, 2009

(An Alabama) state judge on Thursday ordered former HealthSouth CEO Richard Scrushy to pay about $2.8 billion to shareholders who sued over accounting fraud at the rehabilitation chain.

Circuit Judge Allwin E. Horn, who heard the case without a jury, ruled in favor of HealthSouth shareholders who filed a civil suit claiming Scrushy was involved in a massive fraud that nearly sent the company into bankruptcy.

The Alabama suit accused Scrushy of unethical dealings with the company while it was going broke and complicity in $2.6 billion in fraudulent earnings and asset reports it filed with regulators from 1996 to 2002. The amount shareholders sought included money they claimed he pocketed through sweetheart deals.

Five former HealthSouth finance chiefs gave testimony implicating Scrushy in a scheme to fraudulently inflate earnings. Scrushy, who hired all five when he ran the company, blamed them and described them as having personal weaknesses.

Scrushy wore a dark business suit in court, but his leg shackles jingled as he arrived for his first day of testimony.

During the lawsuit trial, an attorney for shareholders, John W. Haley, repeatedly confronted Scrushy over what Haley described as obvious conflicts of interest. Among them was HealthSouth’s purchase of 19 acres of land next to Scrushy’s suburban Birmingham estate for $1.9 million, then giving him the land three years later. Scrushy said he got the land instead of a bonus one year.

Haley, sounding incredulous, recounted how Scrushy took an $82 investment in a company that purchased property at a discount from HealthSouth and turned it into a personal profit of some $12 million in four years by leasing the property back to the corporation.

“That’s the way it works in America,” Scrushy said.

http://www.washingtonpost.com/wp-dyn/content/article/2009/06/18/AR2009061801985.html

“A Second Opinion,” by Arnold Relman, M.D.:
http://www.publicaffairsbooks.com/publicaffairsbooks-cgi-bin/display?book=9781586484811

Comment:

By Don McCanne, MD

In a landmark 1980 New England Journal of Medicine editorial, former Editor-in-Chief Arnold Relman warned us of the new “Medical-Industrial Complex,” referring to “a medical care system that had begun to attract investors, and in which business interests had started to reshape the behavior of doctors and health care facilities.”

Three decades later, he updated these views in his book, “A Second Opinion.” He writes, “market forces, investors, for-profit corporations, and entrepreneurs are now at the center of the U.S. system, and generation of income is a dominant consideration for most private providers of health care – including those that are not investor owned.” (Not-for-profits must adopt the same perverse behaviors of the for-profits to remain competitive with them.)

With the two great problems to address – 1) the uninsured and underinsured, and 2) skyrocketing health care costs, why should we concern ourselves now with the medical-industrial complex?

First, the medical-industrial complex seeks money, serving those with more money, and shunning those with less money. Theoretically, the private insurance industry would correct this problem by providing the medical-industrial complex with money that many individuals with health care needs simply don’t have. But we’ve all seen how this works. The private insurance industry takes the money from the largest, healthiest sector of our population, and then spends a significant amount of it on administrative services designed to ensure that they can keep as much of that money as possible. The medical-industrial complex has no motivation to try to defeat its money-seeking and money-retaining behavior by increasing the outflow of money to those with health care needs. Thus the problem of the uninsured and underinsured grows worse every year.

Second, the medical-industrial complex, in its drive to fulfill its money-seeking role, does everything that it possibly can to add booster rockets to our skyrocketing health care spending. The culture of the medical-industrial complex provides an economic environment in which the industry thrives, and patients and payers suffer.

Several members of the PNHP leadership have provided decades of well documented, peer review studies confirming that the medical-industrial complex has caused great damage to our health care system, resulting in financial hardship, physical suffering and even death. Although much of our recent advocacy has been around reforming our health care financing system, we have always supported a change from the medical-industrial culture to a culture of a caring health care delivery system that places patients first.

Listening to the national dialogue on reform, you would think that this problem is being ignored. It isn’t. Congressman John Conyers’ HR 676, “United States National Health Care Act or the Expanded and Improved Medicare for All Act,” includes the following language:

“No institution may be a participating provider unless it is a public or not-for-profit institution. Private physicians, private clinics, and private health care providers shall continue to operate as private entities, but are prohibited from being investor owned… For-profit providers of care opting to participate shall be required to convert to not-for-profit status.”

Richard Scrushy, an animal of the medical-industrial complex, now facing a $2.8 billion judgement against him, reminds us of the slogan of the medical industrial complex: “That’s the way it works in America.”

Let’s do all we can to see that it doesn’t work that way anymore.

Gutting the Health Care Plan: The Scorpion and the Congress

By Paul Loeb
Huffington Post
June 8, 2009

Will serious health reform meet the fate of the scorpion and the turtle? In that fable, the scorpion pleads with the turtle to carry him across a river. The turtle resists, fearing the scorpion’s sting, but the scorpion reassures him that he’d do nothing so foolish, since both would drown if he did. Finally the turtle agrees. Halfway across, the scorpion betrays his promise with a lethal sting. As the turtle begins to drown, he asks why he took both their lives. “It’s just who I am,” the scorpion replies.

I fear we’re about to get stung again. When people look back at the failure of the Clinton-era health care initiative, they point, accurately, to an opaque process that produced a baroque Rube Goldberg mess that satisfied no one. That happened even before the insurance industry went on the attack with their Harry and Louise ads. But another element parallels our current challenge–appeasement of the insurance companies as the plan’s centerpiece, and the inevitability that these same interests will betray us again.

The Clintons assumed the insurance companies were too powerful to confront, so the plan had to go along with them. But once they assumed any bill had to get the companies’ approval, no plan could work, because it had to build in ways for the companies to maintain their profit margins and the immensely wasteful overhead they spend on advertising, processing claims, and turning down as many sick people as they can. Their approach also creates corollary wastes, like the third of the expenses of the average medical office that go toward dealing with insurance company paperwork.

Our health care crisis is so dire that the simple single-payer approach, as in Canada, should be at least seriously debated. Compared with us, most Canadians are satisfied with their system, in contrast with a recent US poll where 49 percent said our health system needed fundamental changes and 38 percent said it should be completely rebuilt. Canadians get a full choice of doctors (unlike in the US, where households have to switch doctors when employers change their insurance or insurance companies change their preferred provider lists). Tommy Douglas, the Canadian New Democratic Party leader who pushed through national health care in the mid-60s (replacing a system like ours), was recently voted Greatest Canadian in a recent contest, beating hockey star Wayne Gretzky and Prime Minister Pierre Trudeau.

Even if single payer isn’t politically achievable yet, there’s no reason to take it off the table from the beginning. Doing so means most Americans never get to hear the contrast in cost savings, in allocation ease, in impact on ordinary citizens and their health outcomes. They never get to hear the story that might allow them to overcome current fears about losing the health care they have, being unable to see their preferred doctor, or being condemned to the Purgatory of endless waiting. Maybe we’ve been so conditioned that we can’t quite get the support for a full-fledged switch. A recent Kaiser Foundation poll still gives single-payer a narrow 49 to 47 percent majority, vs 67 percent for including a fully competitive public option, and maybe that isn’t enough. But at least we need to tell the story, so the probably inevitable compromise works down from full public coverage, as opposed to considering options that gut even the option of serious public coverage entirely.

Instead, because we’ve accepted the premise that the private insurance companies have to be included, we’re now starting to consider including a public option only if it includes poison pills that will doom it to fail, like requiring it be triggered by a set of exceedingly unlikely circumstances deferred to the indefinite future. Or requiring it to play by rules so onerous that it can’t achieve its straightforward cost savings. Or turning it over to the states, so Big Pharma and Big Insurance interests can simply, as Robert Reich warns in one of the best summaries of the game, “buy off legislators and officials as they’ve been doing for years.”

But why assume that the insurance companies are our friends? Why appease them at all? It’s not as if they’ve played a helpful role in our current system. Rather, they’ve gamed it in every possible way, leaving our country with the highest health care costs in the world and worst health outcomes of any advanced industrial country. While they’ve made promises to cut costs, their promises are only that (like the scorpion’s), and they’re already lobbying with everything they have to gut any seriously competitive public option. Add in examples like former HCA/Columbia CEO Rick Scott. after his company paid a $1.7 billion fine (the largest in US history) for defrauding Medicare, Medicaid, and the program that serves our armed forces, he is now organizing attacks on any public program (hiring the PR firm that coordinated the “Swift Boat” attacks on John Kerry). We need to challenge the insurance companies, not appease them. There’s no evidence that suggests they’re constructive players, or are likely to do anything except defend their own parochial interest.

The insurance companies and other major financial interests are talking a good line of late. They have no choice if they don’t want to be cut out of the game. But ultimately, they are who they are, and their behavior reflects this. It makes no sense to embrace a partner who you know will ultimately betray you.

Maybe the public private mix is the best compromise we can get at the moment. But we must raise our voices now to demand a full debate on the other alternatives, like single payer, and then if necessary settle for something that gives a public option a chance, under equitable rules, to see how it plays out in efficiency, service, and cost. Trusting the insurance companies and stacking the deck to guarantee that private options will prevail merely assures we continue our dysfunctional system until its human and financial costs drown us all.

Sen. Bernie Sanders' Petition to Congress

Sign the Petition

Senator Bernie Sanders
June 16, 2009

For a quick and painless way to express your support for a single-payer Medicare-for-all program, click on this link to co-sign Senator Bernie Sanders’ petition to Congress, and then share this link with others who care.

http://sanders.senate.gov/petitions/index.cfm?uid=7fd59f2e-88e1-477a-8eaf-762a5b050809

Comment:

By Don McCanne, M.D.

Let’s let Congress know how many of us there are who really care.

Dr. Farley's Rx — single-payer — is the cure

Editorial
Capital Times (Madison, WI)
6/10/2009

Dr. Linda Farley, the local physician and nationally recognized advocate for health care reform who died this week, had long championed the replacement of the current for-profit health care system with a single-payer plan. Such a plan would guarantee that all Americans have access to quality care while at the same time cutting costs associated with insurance and health care industry profiteering.

We have taken our counsel from Dr. Farley, and her husband, Dr. Gene Farley, on these issues for a number of years.

Our confidence in the experience and wisdom of these veteran physicians, who worked in a variety of public and private settings, has informed this newspaper’s commitment to the view that only a single-payer system will achieve the stated goals of President Barack Obama and congressional leaders. The Obama administration and Democrats and most Republicans in Congress say they want more and better care for all, with real flexibility for patients who want to keep the same doctor and genuine savings.

But we have also been informed over the years by Farley’s reminders that our current broken system does not merely make it harder for ailing Americans to get care and for healthy Americans to maintain their fitness. It also imposes incredible economic hardship on Americans who fall ill.

The extent of that hardship was revealed last week in a study that will be published this summer by the American Journal of Medicine. According to the study, medical problems contributed to almost 62.1 percent of all bankruptcies in 2007.

Worse yet, the data from the study show that, from 2001 to 2007, the proportion of all bankruptcies attributable to medical problems rose by 49.6 percent.

That’s a particularly unsettling notion, as the current economic meltdown is all but sure to have caused an expansion of the crisis. Thus, as many as two-thirds of the 1.5 million Americans who are being forced into bankruptcy annually end up there because they made the “mistake” of getting sick.

And here is where things get downright scary. According to the study:

• Most of those bankrupted by medical problems had health insurance. More than three-quarters (77.9 percent) were insured at the start of the bankrupting illness.

• Most of the medically bankrupt fell into income categories that the authors of the study identify as “solidly middle class before financial disaster hit.” Two-thirds were homeowners, and three-fifths had gone to college.

• In a substantial number of instances, high medical bills coincided with a loss of income as illness forced breadwinners to lose time from work. Often illness led to job loss, and with it the loss of health insurance.

“Our findings are frightening,” says Dr. David Himmelstein, the lead author of the study and an associate professor of medicine at Harvard. “Unless you’re Warren Buffett, your family is just one serious illness away from bankruptcy. For middle-class Americans, health insurance offers little protection. Most of us have policies with so many loopholes, co-payments and deductibles that illness can put you in the poorhouse. And even the best job-based health insurance often vanishes when prolonged illness causes job loss — precisely when families need it most. Private health insurance is a defective product, akin to an umbrella that melts in the rain.”

Elizabeth Warren, the Leo Gottlieb professor of law at Harvard and one of the leading experts on personal bankruptcy, explains: “For many families, bankruptcy is a deeply shameful experience. People arrive at the bankruptcy courts exhausted — financially, physically and emotionally. For most, bankruptcy is a last choice to deal with unmanageable circumstances.”

And more often than not, notes Warren, a co-author of the report, they arrive because they fell ill or suffered from a chronic condition.

Thus bankruptcy is not for the most part a matter of personal responsibility — or the lack thereof. It is a matter of bad health and a broken health care system.

How should we respond at a point when the United States is preparing to enter into another national health care debate?

Not with the gimmicks that members of Congress on both sides of the aisle and the Obama administration have been proposing, which leave most Americans in the grip of insurance companies that don’t provide adequate or humane coverage when people need it the most.

“We need to rethink health reform,” says Dr. Steffie Woolhandler, an associate professor of medicine at Harvard and a primary care physician in Cambridge, Mass., who is another co-author of the study. “Covering the uninsured isn’t enough. Reform also needs to help families who already have insurance by upgrading their coverage and assuring that they never lose it. Only single-payer national health insurance can make universal, comprehensive coverage affordable by saving the hundreds of billions we now waste on insurance overhead and bureaucracy. Unfortunately, Washington politicians seem ready to cave in to insurance firms and keep them and their counterfeit coverage at the core of our system. Reforms that expand phony insurance — stripped-down plans riddled with co-payments, deductibles and exclusions — won’t stem the rising tide of medical bankruptcy.”

Woolhandler is right.

Only the creation of a single-payer national health insurance system will address not just the health care crisis but the bankruptcy crisis.

As Dr. Linda Farley told us for years: “Single-payer is the cure.”

So how do we prescribe it?

The best way is by supporting the efforts of the group with which Farley was long associated: Physicians for a National Health Program, the real reform group that has won the support of more than 16,000 doctors nationwide.

To learn more about Physicians for a National Health Program, visit the group’s website at www.pnhp.org or call 312-782-6006.

http://www.madison.com/tct/opinion/454232