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Universal health care: Private enterprise can’t fix our ailing system

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Universal health care: Private enterprise can’t fix our ailing system

By PAUL DeMARCO
Spartanburg (S.C.) Herald-Journal
Sunday, May 17, 2009

I live in a town with a population of 7,000. I own a pair of shotguns, and I know how to use them — a wood duck and a turkey are mounted on my office wall. I drive a 2001 Dodge Dakota pickup with 150,000 miles on it.

I wear a coat and tie every day to work. I’m in church each Sunday and am not embarrassed to tell you that Jesus is my Savior. I believe in chivalry; I open doors for women and expect my teenage daughter’s dates to come into the house when they visit.

My usual TV-watching dilemma is “The Andy Griffith Show” or “M*A*S*H.” I’m about as old-fashioned, square and conservative as they come.

So where do I get off backing a single-payer national health plan, a plan where everybody’s covered in one big risk pool and health care is publicly financed (but privately delivered)? Shouldn’t I be a rugged individualist, telling people that if they want good health insurance they can pay attention in class, go to college and get a good job with full benefits just like I did?

Well, part of me could do that. No country can survive unless individual responsibility is at the core of its ethos.

But to the other part of me, the go-it-alone attitude just sounds downright mean.

That puts me in about the same mind-set as a Midwestern farmer in the mid-19th century. Farmers then and now are often independent, self-sufficient

and hesitant to incur a debt. But when a neighboring family needed a barn raised, that was a different story. No matter how hearty the farmer, he couldn’t raise a barn alone. And there was a healthy dose of self-interest in the proposition. If I help raise your barn, then when mine needs repairs, I’ll have your help.

So I look at single-payer health care in that conservative light. I recognize that a significant portion of America’s chronic disease burden is self-induced (e.g., some people eat, drink or smoke too much and make themselves sick). But I also know that much of your health is beyond your control — it’s either in your genes or not significantly altered by lifestyle. Think breast cancer and many other malignancies, flu and many other infectious diseases, Alzheimer’s dementia or rheumatoid arthritis.

I don’t suspect that farmers of yore did any research on the family who they helped. Whether the family was industrious or lazy, a barn was built because everyone needed a barn. Without a place to store hay and protect animals in the upcoming winter, livestock would die and the family would soon follow. No farmer, no matter how stoic, would consign his neighbor to that fate.

I support single-payer health care in this tradition. A single-payer program, which would expand Medicare to all Americans (rather than just those 65 and over), would create one large barn-raising community, 300-million strong. We would all chip in our share so that all families could have health care. Almost all of us would end up paying less than we do now (there would be no co-pays or deductibles), and we could choose any doctor or hospital we wanted.

Under our present setup, it’s hit and miss. Money typically dictates who gets care and who doesn’t.

A carpenter who works for a big company with insurance may get care; another who works for a small one can only dream about it.

A woman with lupus loses her job and her insurance and then becomes uninsurable because of her pre-existing condition.

A 60-year-old man with a bad knee is laid off when a plant closes in his rural hometown. Lame and unskilled in a region with rising unemployment, he will limp for five years until he qualifies for Medicare and can have his knee replaced.

Barn-raising worked because it is was a nonprofit enterprise. A farming community bound itself in a social contract. Many countries have single-payer social contracts, including our neighbor Canada, to ensure the health of all their citizens. There are many ways to inject a profit motive into the process, but they all taint it. Until the 1960s, medicine was also primarily a nonprofit endeavor. In recent decades, the huge profits available to for-profit insurance companies and hospitals have often elevated shareholders above patients, resulting in higher costs and inferior care.

All my instincts call for problems to be solved by individuals operating in a free-market economy. But private enterprise cannot solve this one. We have 40 years of evidence of the free market’s failure to control costs or cover everyone.

The plain truth is that the public single-payer systems we already have (Medicare, Medicaid and the VA) provide better coverage with less overhead than private companies. I know that statement is hard for many, including me, to swallow, but it’s true.

Medicare for all will not be a perfect system, but it will be far better than the fragmented, profit-warped system we have.

When America was younger, we knew not to turn our backs on new neighbors in need of a barn. In this older — and I hope wiser — America, we should not turn our backs on those who need health care. Tell your representative and senators to put single payer on the table in Washington.

Paul DeMarco, MD is a general internist who lives in Marion. He is a member of Physicians for a National Health Program (www.pnhp.org).

What Is ‘Socialized Medicine’?: A Taxonomy of Health Care Systems

By Uwe E. Reinhardt
New York Times
Economix Blog
May 8, 2009, 6:48 am

With another “national conversation” about health reform upon us — as it is every decade or so — we will hear a lot of derisive talk about the evils of “socialized medicine.”

The term is regularly confused with “social health insurance,” which is not at all the same concept. The chart below may be helpful in appreciating the distinction.

Socialized medicine refers to health system in which the government owns and operates both the financing of health care and its delivery. Cell A in the chart represents socialized medicine.

Social health insurance, on the other hand, refers to systems in which individuals transfer their financial risk of medical bills to a risk pool to which, as individuals, they contribute taxes or premiums based primarily on ability to pay, rather than on how healthy or sick they are.

Socialized medicine is one form of social insurance. More typically, however, social insurance is coupled on the health-care delivery side with a mixture of government-owned facilities (e.g., municipal hospitals), private nonprofit hospitals (roughly 90 percent of all American hospital beds) or private for-profit facilities (investor-owned hospitals, private medical practices, pharmacies and so on). It follows that one cannot simply treat social insurance as socialized medicine. In principle, one could have social insurance with 100 percent private for-profit delivery facilities.

Under private commercial insurance, individuals also transfer the financial risk of bills for health care to a risk pool, but the premium the individual contributes to the risk pool reflects that individual’s health status. These premiums are, as actuaries put it, “medically underwritten” and “actuarially fair.” The risk pools under private insurance can be operated by not-for-profit or for-profit insurers. And like social insurance, private insurance typically is coupled with a mixed private and public delivery system.

In the chart, cells A, B, C jointly represent single-payer social insurance — e.g., traditional Medicare. Cells D, E, F jointly represent multiple-payer social insurance — e.g., Medicaid Managed Care. Cells G to L jointly represent individually purchased private insurance with actuarially fair premiums. Finally, cells M, N and O represent the uninsured or the cost-sharing portion of insured persons.

In between these distinct systems falls employment-based health insurance.

Large employers typically self-insure and use private insurers only to procure health care on behalf of employees (e.g., negotiate fees with the providers of health care) and administer claims. Other employers do not self-insure and instead purchase so-called group health insurance policies for all their employees jointly, as if they were one large family. The premium for a group policy is “experience rated” over the covered group of employees, which means that they reflect the average actuarial cost of all of one company’s employees.

The individual employee’s own contribution toward his or her employment-based insurance, however, is divorced from the individual’s (or the attached family’s) health status. In this sense, then, employment-based insurance could be described as “private social insurance,” as distinct from “government-run social insurance.”

Former Mayor Rudolph Giuliani of New York has exemplified the perennial confusion in this country over socialized medicine. In his ill-fated presidential bid, and subsequently as a supporter of Senator John McCain’s bid for the presidency, Mr. Giuliani routinely decried as socialized medicine (or “socialist”) any proposal presented by Democratic candidates, because typically the latter advocated tax-financed subsidies toward the purchase of health private insurance or expansions of public insurance programs. But technically none of them advocated socialized medicine.

Perhaps Mr. Giuliani was unaware that Americans all along the ideological spectrum reserve the purest form of socialized medicine — the V.A. health system — for the nation’s veterans. I find this cognitive dissonance amusing. Indeed, if socialized medicine is so evil, why didn’t Republicans privatize the V.A. health system when they controlled both the White House and the Congress during 2001-06?

Mr. Giuliani also seems to forget that, in 1996, he found social health insurance a perfect solution to the financial problems faced by former Mayor John V. Lindsay, who fell on financially hard times during the 1990s as a result of chronic illness.

In a fit of compassion, then Mayor Giuliani rushed to his friend’s assistance with — you guessed it — taxpayers’ money, rather than with a private sector solution. He did so by appointing Mr. Lindsay to two no-show city jobs that came with tax-financed municipal health insurance and a tax-financed pension.

It seems fair, then, to ask Mr. Giuliani why it was perfectly fine to bail out a financially distressed man who had been wealthy enough in his younger years to provide adequately for his old age, when proposals to extend the same kind of assistance to hard-working, uninsured members of lower-income families are decried by him as “socialism.”

One can only hope that our members of Congress and the typical American voter can make the right distinctions.

Uwe E. Reinhardt is an economics professor at Princeton.

Senate Finance report on financing health care reform

Baucus, Grassley Release Policy Options for Financing Comprehensive Health Care Reform

United States Senate
Committee on Finance
News Release
May 18, 2009

The options released today are the third and final round of policy options for discussion before the Finance Committee marks up legislation in June. The options for financing health reform follow the release of policy options for reducing costs in the health care delivery system and for expanding quality, affordable health care coverage to all Americans. Three areas of potential funding sources explored in the financing options are: savings achieved from within the health care system from reductions in current levels of spending; reevaluating current health tax subsidies; and changing non-health tax provisions.

Reducing Geographic Variation

Researchers at Dartmouth and elsewhere have found that health care spending varies widely across the United States. Moreover, higher health care spending does not correspond to better quality care of care. The portion of total spending on health care items and services that do not produce better health outcomes is estimated to be as high as 30 percent of Medicare spending. The policy options explore ways to reduce geographic spending variation by reducing Medicare payments in areas where spending is above the national average. Adjustments would be made to reflect differences in input prices and beneficiary health status.

Exclusion for Employer-Provided Health Insurance

Under current law, employer-provided health insurance is not counted as income for tax purposes and the amount of health care benefits that are counted as tax free is unlimited. This tax-free status encourages employers to offer “Cadillac plans,” or overly generous health care plans that promote the overuse of health care services and drive up health care costs. Moreover, the plans are subsidized by taxpayers as a result of being tax free. The policy options explore five changes to make the exclusion more equitable and efficient. These options include capping the exclusion based on the value of health insurance policy or the income level of the employee eligible for the exclusion. A third option would be to cap the exclusion based on both the value of the health insurance policy and income level. Another option would be to convert the employer-provided health insurance exclusion to an individual tax deduction or credit. The options also consider whether to grandfather in existing plans so that benefits provided under existing collective bargaining agreements are not limited.

http://finance.senate.gov/press/Bpress/2009press/prb051809.pdf

Financing Comprehensive Health Care Reform: Proposed Health System Savings
and Revenue Options (41 pages):
http://finance.senate.gov/sitepages/leg/LEG%202009/051809%20Health%20Care%20Description%20of%20Policy%20Options.pdf

The two previous reports:

Transforming the Health Care Delivery System: Proposals to Improve Patient
Care and Reduce Health Care Costs (52 pages):
http://finance.senate.gov/sitepages/leg/LEG%202009/042809%20Health%20Care%20Description%20of%20Policy%20Option.pdf

Expanding Health Care Coverage: Proposals to Provide Affordable Coverage to
All Americans (63 pages):
http://finance.senate.gov/sitepages/leg/LEG%202009/051109%20Health%20Care%20Description%20of%20Policy%20Options.pdf

Comment:

By Don McCanne, MD

Tomorrow the members of the Senate Finance Committee will retreat to a closed-door session, taking this report with them to walk through their options for financing comprehensive health care reform. Sen. Baucus and others have said that the success of the reform effort is dependent on their ability to find ways to pay for it. What are their prospects for success?

Most of the options discussed in this report are merely tweaks to our current system of financing health care and can have very little impact in overall health care spending. Some of the changes would be beneficial and some are problematic, but most would fall far short of the financing needs of the multi-payer model that the committee has selected.

There are two potential sources that involve real money, though one is quite explicit and the other is not much more than an abstraction.

Reducing the 30 percent of spending in Medicare that does not improve outcomes (Dartmouth Atlas) would seem like a logical source of funds to pay for reform, but recapturing those funds would be very difficult. Merely reducing payments in regions where spending is above average is a very blunt instrument that can have serious negative impacts even if there were some reduction in waste. Also, no mention is made in this report of the Medicare underpayment in other regions.

A much more appropriate use of any wasted funds that could be recovered would be to increase payments in regions that are underfunded, and to shift funds to services that would improve the quality and efficiency of the system, especially by expanding primary care. If these changes were made not only in Medicare, but in our entire health care system, that would entail a large shift in spending, but only as a redistribution of funds. It is merely an abstraction to think of this as a new source of additional funds to finance the other components of the reform proposal.

The real money is in the tax subsidy we provide by making employer-sponsored insurance a tax deductible benefit. That amounts to about $137 billion. A table in the report lists many other tax subsidies for a total of $194 billion, plus another $93 billion for reduced payroll taxes to make a grand total of $287 billion. It is really the $137 billion that is important since the other numbers are primarily accounting issues. For instance, the $93 billion in reduced payroll taxes must be offset by payroll taxes on the balance of income and/or by other taxes if the Medicare and Social Security programs are to remain solvent.

Can we simply eliminate the tax deductibility of employer-sponsored plans and shift that $137 billion to the reform proposals? No. Since premiums for employer-sponsored plans are paid by employees in the form of forgone wage increases, workers could not collectively afford to pay the additional 137 billion in premium costs. If the deductibility is eliminated, that $137 billion would have to be returned to the workers in the form of tax credits,vouchers, or personal tax deductions. Poof! There goes the real money that the committee is counting on finding somewhere.

The report suggests that since the tax deductibility of employer-sponsored coverage represents a regressive tax policy (the wealthy have more of their premium subsidized with taxes than do lower-income individuals) some of the $137 billion could be recovered from higher-income individuals, even if it would result in more administrative complexities. But then how much are you recovering to pay for reform? Maybe $20 billion? That doesn’t help much with our $2.5 trillion health care budget.

The tragedy is that the report that they are taking into closed session gives them very little to work with. At the hearing leading up to this report, they had arrested the individuals who would explain that we very easily could free up maybe $400 billion in pure waste merely by replacing our dysfunctional multi-payer system with a single payer national health program. Even for those who contend that the amount would not be that great, it would still be far, far more than any other proposal on the table.

To keep single payer off the table, to exclude it from their report, and to slam the door on it as they retreat to their secret sessions constitutes legislative malpractice. We should sue them for triple damages. $1,200 billion would certainly pay for a lot of health care. We can pretend that they can come up with $1,200 billion just as they are pretending that they can come up with the funds to pay for the most expensive model of health care reform ever devised, and, at that, one that falls far short on equity, efficiency and universality.

Put single-payer on the table

Editorial
Times Union (Albany, NY)
Tuesday, May 19, 2009

Earlier this month, eight courageous doctors, lawyers and other activists interrupted a Senate Finance Committee meeting on health care reform to ask why there wasn’t one advocate of a single-payer health care system at the table. Chairman Max Baucus, a Montana Democrat, had them arrested. Shame on Senator Baucus, and shame on Congress if it continues to stifle debate on one of the biggest issues facing this country.

To claim, as they have, that “everything is on the table” except a nationalized health insurance system, similar to what many other modern, industrial Western nations have, is much like saying the Thanksgiving meal is complete, except for the turkey.

We are not saying single-payer is necessarily the answer. We are saying that a full discussion of the future of health care in America can’t take place if all credible potential solutions aren’t examined.

We are mindful that there are powerful pressures on President Obama and Congress against discussing a government-run health care program — whether it is one that coexists with a private insurance market or one, like single-payer, that replaces it entirely. There are the inevitable charges from critics on the right of the S-word — socialism — at any hint of the government suggesting it could do a better job than the private sector.

And then there’s the vast and entrenched health care industry, looking to scuttle mere talk of a plan that might help the nation gain control of spiraling health care costs and provide decent, affordable coverage to the 50 million people without it. Hence its vague offer last week to trim an astounding $2 trillion in costs over 10 years. That the industry could shave $2 trillion, just like that, would seem to only hint at the excess there is in the current health care system.

And what exactly was this offer?

To trim future growth from a crushing 7 percent a year to a still-unsustainable 5.5 percent. And if costs grow faster anyway? Will we be told, well, it’s still less than it might have been?

We recognize that Democrats would want to avoid the more uncomfortable discussion. There are many — including New York’s own Sen. Charles Schumer — who agree a single-payer system is the solution America needs, but that it isn’t practical right now.

Well, if we can’t even discuss it now — when the country is in a recession and the ranks of the uninsured are growing; when major industries like automakers are buckling, in no small measure because of health care costs; when Americans are poised for change and the party that promised it is in power — then when?

Perhaps those who prefer to shy away from the uncomfortable yet absolutely necessary discussion could take courage from 75 members of Congress, including 10 from New York — among them freshman Democrat Paul Tonko of Amsterdam — who signed on to Rep. John Conyers Jr.’s single-payer bill. Or from the people who earlier this month, at the risk of arrest, went to Washington to say what they thought was best for the nation.

We’d like to imagine we sent our representatives there for the same reason.

The issue:

Congress shut down debate on a single-payer health care system before it even started.

The Stakes:

A solution that many believe is the best for the nation needs to at least be discussed.

May 30th: National Day of Action

Nationwide Rallies for Improved Medicare for All

Join thousands of single-payer supporters in a nationwide week of action to support improved Medicare for all (HR 676). Single-payer activists will be gathering all over the country to say, “Healthcare, yes; Insurance companies, no,” and to show solidarity with demonstrations at the AHIP (American Health Insurance Plans, a private health insurance lobby) conference in San Diego.

If an action isn’t already in your city, plan your own day of action! It can be a town hall meeting, demonstration in front of a local insurance company, film showing, vigil, or your own unique idea. Let us know what you’d like to start planning by contacting info@healthcare-now.org.

47 million Americans are uninsured. Private insurance rates are rising faster than inflation and our incomes. By 2025 the cost of private health insurance will exceed our projected income.

A national, single-payer healthcare system is the only healthcare reform option that will cover every American resident while saving us billions of dollars. The majority of Americans want it. The majority of physicians want it. The only thing missing is the political will in Washington.

Improved Medicare for All: We can do it!

Sponsored by:

The Leadership Conference for Guaranteed Health Care
Healthcare-NOW!
Progressive Democrats of America
CNA/National Nurses Organizing Committee
Physicians for a National Health Program
Americans for Democratic Action

Relman/Angell letter in The New York Times

Taming Runaway Health Care Costs

Letters
The New York Times
May 16, 2009

To the Editor:

David Leonhardt, in his May 13 column (“Health Care, a Lesson in Pain,” Economic Scene), is quite right that “the only way to have a sustainable universal health care system is to control costs.” But in analyzing the experts’ testimony before the Senate Finance Committee on how to pay for health care, he did not mention a solution that neither the experts nor the committee wants to consider: major reform of the system.

Runaway costs are due largely to high overhead expenses throughout the system, and to the excessive use of expensive technology. Both of these result from a health care system that is organized like a profit-seeking industry instead of a social service.

If we want health care to be a universal entitlement, it cannot be controlled by market forces and the financial interests of insurers and providers (and the investors who own such a large part of the system).

Some kind of government-regulated single-payer insurance plan and a reorganized nonprofit medical care delivery system may be “off the table” for policy makers right now, but we will never achieve affordable universal coverage without major reform that deals with the real causes of medical inflation.

We don’t need more money; we need a new system.

Arnold S. Relman
Marcia Angell
Cambridge, Mass.

The writers, medical doctors, are former editors in chief of The New England Journal of Medicine.

http://www.nytimes.com/2009/05/16/opinion/l16health.html

Comment:

By Don McCanne, MD

Although single payer advocates were not allowed to testify at the Senate Finance Committee roundtable on reform, the New York Times seems to agree that the concept of comprehensive reform is worthy of their Letters page.

When will the opinion editors decide that the concept is worthy of a guest op-ed? More importantly, when will the news editors decide that the the suffering, financial hardship, and death is worthy of a news report on the political suppression of policies that would greatly improve the health and financial outcomes of those who face significant medical problems? Shouldn’t that be an above-the-fold front page story?

Addendum: Today “single payer health care” was discussed on The Diane Rehm Show by guests Dr. David Himmelstein, Sen. Bernie Saunders, Roger Hickey, and Susan Dentzer. The program is archived at:
http://wamu.org/programs/dr/09/05/18.php#26151

Baucus Healthcare Plan: Arrest Doctors, Nurses

by John Nichols
The Nation
05/13/2009

Senate Finance Committee chairman Max Baucus, the insurance industry-friendly Democrat who is managing show hearings on healthcare reform, has come up with a novel way to express his commitment to care for the almost 50 million Americans who have no healthcare and roughly equal number who have inadequate care.

The senior senator from Montana is ordering the arrest of doctors and nurses.

Medical practitioners who have shown up at Baucus-chaired “roundtable discussions” to demand consideration of a real fix — the single-payer, genuinely-public reform that assures all Americans will have health care while at the same time holding down costs — are being taken into custody and removed from the hearing rooms.

At the first Finance Committee session last week, Dr. Margaret Flowers and seven others were taken into custody when they urged Baucus to include witnesses who support single-payer.

Dr. Flowers discussed her arrest on Ed Schultz’s MSNBC show, explaining that physicians, nurses and reform groups representing more than 20 million Americans had repeatedly asked to be heard by Baucus and his colleagues.

But the answer from Baucus, who has been charged by the Obama administration with shaping a health-care plan, has been to call in the cops.

“They just don’t want to hear from single-payer,” explained Dr. Flowers, a pediatrician from Maryland. “We’ve been trying for months now, meeting with members of Congress, to be included in the hearings at the events that they are holding and they keep excluding us.”

After reviewing the details of the Baucus overreaction, Schultz asked: “President Obama: Do you support excluding people from the discussion?”

Obama has not responded.

But Baucus has.

On Tuesday, at the second Finance Committee session, dozens of California Nurses Association/National Nurses Organizing Committee members and their allies showed up to protest the heavy-handed tactics. At the opening of the hearing, roughly thirty of them rose and turned their backs to Baucus. On their backs were signs reading: “Pass Single-Payer” and “Nurses Say: Patients First.” Other signs, reading “Stop AHIP,” protested the collaboration by the Obama administration and Baucus with the country’s most powerful industry lobby, the America’s Health Insurance Plans group.

While the health-insurance lobby has been welcomed to the roundtable discussions organized by Baucus, the nurses and their allies were told to leave. When five objected to their exclusion from the hearing, and to the the exclusion of single-payer from the debate about how to fix a broken private healthcare system, they were arrested. Among those taken into custody were Dr. Judy Dasovich, Dr. Steven Fenichel and California nurses DeAnn McEwen and Sue Cannon.

Their crime? As healthcare professionals, they dared to dissent from the Baucus-led attempt to impose an insurance company approved plan under the guise of “reform.”

Dr. Dasovich, a physician from Springfield, Missouri, dared to say, “We request that single-payer advocates be allowed at the table. Healthcare should be for patients, not for profits.” Nurse Cannon said, “People at the table have failed Americans for 30 years. We want single-payer at the table. We want guaranteed health care so we can give the care we need, when we need to give it.”

When the doctors, nurses and their allies left the Capitol, activist David Swanson reported, members of the CNA/NNOC, Progressive Democrats of American, Code Pink and allied single-payer advocates chanted: “Lock Up Baucus!” and hoisted a sign reading: “Most Physicians Want a Single-Payer National Health System.”

At the White House, reporter Helen Thomas asked Obama administration spokesman Robert Gibbs: “Did anyone represent single-payer at this meeting today?”

Gibbs tried to spin it.

“Well, I don’t think it was a full meeting of those that might be at the table,” the scrambling spokesman said. “I believe that people of varying opinions have been here for different meetings, have been part of the larger healthcare reform summit that was done earlier this year, and I don’t doubt that in the coming days differing viewpoints about how to achieve cost savings in increased coverage will be part of that discussion.”

If that sounded like a dodge, it was.

But single-payer advocates weren’t fooled.

They’re raising the banner of real reform higher, with events such as Tuesday’s Florence Nightingale Day Protest organized by the California Nurses Association/National Nurses Organizing Committee and Physicians for a National Health Program. Explained CNA/NNOC: “May 12 is Florence Nightingale’s Birthday – an opportunity to honor her advocacy of healthcare by protesting Congressional hearings that have been stacked in favor of the big insurance companies while silencing the voices of nurses and doctors who favor guaranteed healthcare, as in a single-payer, expanded Medicare-for-all system with a single standard of quality care.”

Those physicians and nurses groups, along with Progressive Democrats of America and other members of the Leadership Conferences for Guaranteed Health Care rallied Wednesday with feature key congressional advocates for single-payer healthcare, including Vermont Senator Bernie Sanders and Michigan Congressman John Conyers, as well as CNA/NNOC executive director Rose Ann DeMoro, Dr. Flowers and actor Mike Farrell.

The rally was held at Washington’s Upper Senate Park, a location outside the Capitol where doctors and nurses are able to talk about curing what ails American healthcare without facing arrest.

Doctor: Single-payer system would solve health-care woes

By Allison Ryan
News Tribune (LaSalle, Ill.)
Thursday, May 14, 2009

Anne Scheetz, a Chicago-area doctor, is dedicated to single-payer health care as the only pragmatic solution for the nation’s health care problems.

A member of Physicians for a National Health Care Progam and its Illinois chapter, Health Care for All Illinois, Scheetz is the Chicago co-chairmanl of Illinois Single Payer Coalition.

“I’ve been in practice for more than 25 years and I’ve watched the health care system collapse around me, and really I’m ashamed. I’m ashamed to be an American physician,” Scheetz told a small group at a Wednesday night event sponsored by Illinois Valley Center for Independent Living.

The shame hits when she’s waiting for appointments with her own doctor, or taking her mother to the eye doctor, and seeing people with Medicaid or with no insurance get refused treatment, or when she herself has to turn down a patient whose Medicaid does not cover home visits.

Single-payer health care means all health care services are billed to the government and paid with funds collected from taxpayers. Under such a system, everyone in the country would have access to health care, regardless of income.

Scheetz said it’s a social justice issue. Members of the movement rally behind the slogans, “Everybody in, nobody out” and “One nation, one plan.”

“We consider ourselves to be in the tradition of the great human rights movements — the abolition of slavery, votes for women, civil rights, all of those… We cannot live in a country where some people make billions of dollars out of depriving people of medical care and leaving them homeless from their medical bills,” Scheetz said. “I think the single-payer people are pragmatists. We’re sometimes accused of being ‘pie-in-the-sky’ers. It’s pie in the sky to say you can regulate the insurance industry,” Scheetz said.

Sheetz and her husband, Jim Rhodes, said the current system hurts employers and municipalities, too, because of the amount they have to pay for employees or retirees. She pointed to the financial trouble at large companies such as GM and Caterpillar, which she said involves the high cost of health care for union employees. Jim said municipalities, for whom employee benefits are often a heavy burden, could benefit from a single-payer system, too.

Medicare beats employer-sponsored plans

Meeting Enrollees' Needs: How Do Medicare And Employer Coverage Stack Up?

By Karen Davis, Stuart Guterman, Michelle M. Doty, Kristof M. Stremikis
Health Affairs
May 12, 2009

One key issue in health reform concerns the relative roles of coverage offered through private insurance and public programs. This paper compares the experiences of aged Medicare beneficiaries with those of people under age sixty-five who have private employer coverage. Compared with the employer-coverage group, people in the Medicare group report fewer problems obtaining medical care, less financial hardship due to medical bills, and higher overall satisfaction with their coverage. Although access and bill payment problems increased across the board from 2001 to 2007, the gap between Medicare and private employer coverage widened.

http://content.healthaffairs.org/cgi/content/abstract/hlthaff.28.4.w521v1

Comment:

By Don McCanne, MD

Very few individuals, especially those already covered by Medicare, will be surprised by this study. It demonstrates that, compared to people under 65 with private employer-sponsored coverage, Medicare beneficiaries over 65 have fewer problems with access to care, have less financial hardship due to medical bills, and have higher overall satisfaction with their coverage.

The private insurance industry has been taking quite a beating lately, and appropriately so. Much of the criticism has been targeted to the individual and small group insurance market, especially since these more innovative plans have been quite ineffective in preventing financial hardship for those who need care.

In contrast, policy makers and legislators in Washington are claiming that the employer-sponsored segment of the private insurance market is working quite well for us, and reform should include policies to expand this market. But this study isolated the employer-sponsored segment and compared it specifically with Medicare. No contest. Medicare is clearly superior to employer-sponsored plans.

This study will be cited by those who support a Medicare-like option within a market of private plans. But what is the implication for the taxpayers?

An employer-sponsored plan is no longer affordable for average-income workers, and already is subsidized through the tax system. It is absolutely inevitable that additional taxpayer subsidies would be required to pay for private plans, whether through tax credits, tax deductions or vouchers. It is morally wrong to require taxpayers to subsidize inferior private health plans when they could be replaced with a superior, more efficient public insurance program – an expanded and improved Medicare for all.

It’s our tax money. We have a right to demand higher value in health care purchases made by our public stewards – precisely the value that a single payer national health program would bring us.

Health Insurance Exchange and private plan behavior

Expanding Health Care Coverage: Proposals to Provide Affordable Coverage to All Americans

Description of Policy Options

Senate Finance Committee
May 14, 2009 (released May 11)

Health Insurance Exchange

Proposed Options

Plan Participation. All state-licensed private insurers in the non-group and small group markets, and the public health insurance option if applicable, operating nationally, regionally, statewide, or locally would be required to participate in the Health Insurance Exchange. Private insurers would also be permitted to sell these policies directly to purchasers.

http://finance.senate.gov/sitepages/leg/LEG%202009/051109%20Health%20Care%20Description%20of%20Policy%20Options.pdf

And…

What Health Insurance Exchanges or Choice Pools Can and Can’t Do About Risks and Costs

By Rick Curtis and Ed Neuschler
Institute for Health Policy Solutions
May 2009

Health Plan Participation and Perspectives

Where health insurance pools or exchanges are an optional coverage venue, and there are no incentives or requirements for their use, exchanges that are expected to offer licensed health insurance plans need those plans more than the health plans need the exchange.

Most health plans strongly prefer direct contracts with with whole employer groups over enrollment through such purchasing pools. Their reasons include:

* Maintaining their business role. Many plans do not want to cede — to pools or to anyone else — administrative functions such as premium collection and enrollment. …they are concerned about losing revenues and functions that are a key component of their resource base and their value-added role as a business.

* Resistance to being “commoditized.” Health plans generally do not like competing head-to-head on price for the same benefit package.

* Fear of adverse selection where the pool, rather than the plan, controls marketing, eligibility, rating, enrollment, etc. Plans fear that, overall, purchasing pools will attract less healthy groups that can’t get coverage elsewhere — at least not as easily.

For these reasons, health plans are reluctant to participate in a pool or exchange that largely competes against plans’ own direct contracting with small employers or individuals. If they agree to participate, they likely will not offer lower prices to the pool/exchange than they charge for their outside business. Further, the general point made earlier is worth repeating: Most established health plans are unlikely to cooperate in helping a pool that competes for their direct enrollment. They generally have no desire to create a larger purchaser with more bargaining clout out of smaller, weaker employer groups or individuals.

http://www.allhealth.org/briefingmaterials/WhatHealthInsuranceExchangesorChoicePoolsCanandCantDoAboutRisksandCosts-1459.pdf

Comment:

By Don McCanne, MD

What was the campaign rhetoric? Something like, “You can keep the insurance you have if that’s what you want, and, if you prefer, you can choose a plan like the members of Congress have.”

Although no final decisions have been made, our congressional leaders have made it clear that reform will be built on the existing model of private plans and public programs. Although the private insurance industry has promised full cooperation with reform, most moderates and progressives understand that legislated insurance market reforms will be essential if the industry is expected to live up to its promises.

Rather than a revolutionary transformation of the private insurance industry into a highly regulated social insurance program, Congress seems intent on establishing a Health Insurance Exchange, as described in the Senate Finance policy option paper. So that “you can keep the insurance you have,” the private insurance industry would be allowed to continue to offer their products directly to individuals and employers.

But think about that. Private insurers will continue to do what private insurers do well. They will do whatever is necessary to continue to insure the large numbers of individuals who are healthy, while shunning those with greater health care needs.

Employer-sponsored plans are often touted as the sector of health care coverage that is working well for us, though rising costs are a growing threat to the stability of these plans. These plans do work fairly well for some of us because they cover the low-cost healthy workforce and their young healthy families, they spread risk through larger, less expensive pools, and they have lower administrative costs than the individual and small group plans. The private insurance industry, either as insurers or as administrators for self-insured plans, will continue to thrive in this market.

So what is the purpose of the Health Insurance Exchange? It is a way of requiring plans to provide coverage to the much neglected individual and small group markets. The private insurance industry is already very wary of this market, and has responded with risk-avoidance behaviors that we find to be so repulsive. As Curtis and Neuschler explain in their report, the insurance industry will be “unlikely to cooperate in helping a pool that competes for their direct enrollment.” Again, private insurers being what they are, they will make every effort to be certain that their own subsidiaries in the Exchange will fail in their efforts to compete successfully with their private plans sold directly to purchasers.

Now step back and think about this. The comments here discuss only one paragraph in a 61 page report about policy options for reform, and this is only one of three reports that the Senate Finance Committee is releasing. The complexities of building reform on the U.S. business model of private plans make it absolutely impossible to create an equitable, efficient and affordable health care financing system for everyone. And the House leaders pledged today that they will pass a comprehensive reform bill by July 31! If you think the Clinton proposal was a
disaster, just wait!